|Project Rationale and Linkage to Country/Regional Strategy
Unprecedented urban growth coupled with inadequate urban infrastructure has resulted in a shortfall of basic urban services for Bhutan's urban residents. Infrastructure requirements across urban centers vary, but access to water, sanitation, solid waste management, and urban transport are often inadequate. The government's Tenth Five-Year Plan identifies the need to invest in urban infrastructure and management in Bhutan's two major municipalities, Thimphu and Phuentsholing, and other larger urban centers to ensure sustainable urban management.
Thimphu Municipality is Bhutan's capital, with a population of 92,000 making up 40% of Bhutan's urban population. This population is expected to double by 2025. Thimphu's development strategy identifies four primary issues in the infrastructure and environment sector: (i) water supply; (ii) wastewater collection and treatment; (iii) drainage and flood protection; and (iv) solid waste collection and disposal. The completed Urban Infrastructure Development Project (UIDP) supported by the Asian Development Bank (ADB) covers water supply, solid waste management, and wastewater collection and treatment. The UIDP and Thimphu''s local area plan identifies wastewater management as a priority issue in Thimphu, with water pollution from wastewater discharge, solid waste, and effluent from workshops and industries degrading the urban environment.
Following Thimphu Municipality, Phuentsholing Municipality is the second largest urban center in Bhutan. The 2005 urban population of 21,000 is expected to increase to 32,000 by 2025. It is the busiest commercial hub where most of the country's cross-border trade takes place. Its urban development plan identifies congestion and poor urban mobility as a key issue that restricts the municipality''s growth. The UIDP has contributed to rehabilitating and improving roads and other municipal services in Phuentsholing but there are further investment needs.
SJM has recently been designated the fourth municipality of Bhutan. The urban population of 6,000 in 2005 is expected to almost triple by 2025. In addition, the satellite town of Deothang with a current population of about 2,000 was subsumed under SJM when it was designated a part of the municipality. While the municipality serves as the gateway to six districts of eastern Bhutan and is one of the oldest urban areas, there has been considerably less investment in urban infrastructure compared with the other three municipalities (Gelphu, Phuentsholing and Thimphu). This burdens existing infrastructure in an area that is rapidly expanding and has large growth potential as a trade node with the development of the Asian Highways Project and the proposed east-west transnational highway.
Nganglam, which was designated the growth center of southeastern Bhutan and identified as a nationally important urban center with large industrial development potential, has not adequately invested in urban infrastructure. Nganglam''s investment plan identifies urban expansion to the planned Rinchenthang town with water supply and urban transport as priority urban infrastructure needs.
The project is consistent with government plans and strategies, and with the inclusive social development objective of ADB''s Bhutan country partnership strategy, which aims to improve urban infrastructure services, upgrade city planning, and strengthen the planning and management functions of municipalities. It is consistent with ADB''s Strategy 2020 as it contributes to regional outcomes in terms of Millennium Development Goal 7; Bhutan''s infrastructure, specifically urban infrastructure, which is one of ADB''s five core areas of specialization; and environmentally sustainable development. Lessons learned from past and ongoing urban projects and the country assistance program evaluation are incorporated in the project.