Pakistan : Khyber Pakhtunkhwa Cities Improvement Project

Water and other urban infrastructure and services / Urban flood protection - Urban hazardous waste management - Urban policy, institutional and capacity development - Urban sewerage - Urban solid waste management - Urban water supply

The Khyber Pakhtunkhwa Cities Improvement Project will help provincial and city governments of Khyber Pakhtunkhwa Province (KPK) to improve the livability of five cities (Abbottabad, Kohat, Mardan, Mingora, and Peshawar) by (i) expanding physical investments in urban water, sewerage, solid waste disposal, and green infrastructure; (ii) providing institutional support to improve service delivery and the performance of municipal companies, and (iii) promoting gender-friendly municipal services through empowerment and capacity development. The project will benefit up to 3.5 million people in the five target cities of KPK. The project supports the government's development priorities, established in (i) the KPK Water Act (2020), (ii) the amended Local Government Act (2019), (iii) the Integrated Water Resource Management Strategy for KPK, and (iv) Pakistan's Nationally Determined Contributions (NDCs).

This is the first urban project being categorized as Gender Equity Theme (GEM) in Pakistan. This is also the urban project that is contributing most to ADB's commitment to Climate Financing with over $ 30 million climate adaptation and $ 100 million climate mitigation in 2021/2022. The proejct is being prepared with ADB's first project readiness financing (PRF) approved in March 2019. Thanks to PRF, the government has achieved a high level of project readiness including (i) 100% completion of detailed engineering designs (DEDs), (ii) 100% preparation of draft bidding documents and consultants TORs and approval by the provincial government, (iii) preparation and disclosure of over 30 safeguard documents based on DEDs, (iv) establishment of fully staffed core PMU with additional recruitments to follow, (v) issuance of 7 procurement packages worth over $300 million or about 75% of ADB financing as advance procurement.

-

BACKGROUND: KPK is one of the four administrative provinces of Pakistan, located about 130 kilometers (km) northwest of Islamabad, the country's capital. KPK accounts for about 11% of Pakistan's gross domestic product with the fastest annual growth rate of about 5% among all four provinces over between 2000 and 2017. KPK has a population of around 32 million (50% women) but this is expected to reach about 58 million by 2035. By the same year, it is also estimated that 35% of KPK's population will be concentrated in cities, up from 16% in 2017. KPK's rapid urban population growth rate (approximately 3.4% per annum) is placing a tremendous strain on its cities. Inadequate infrastructure and limited capacity to manage municipal water, sanitation, and solid waste services are creating major health risks for the population and threatening the resilience of cities to the effects of climate change. KPK province shares its border with Afghanistan and is located only about 200 km away from Kabul, the capital city of Afghanistan. The investment to social infrastructures will reduce the burden of Pakistan for possible new influx of Afghan refugees.

ISSUES: Basic urban services such as water supply, wastewater collection and treatment, storm water drainage, solid waste management (SWM), and green urban spaces (e.g., parks) have failed to meet the increasing urban domestic and commercial demand, leading to gradual degradation of the urban environment and living standards. Piped water is available to only 42% of the urban population, and typically for only 6 hours a day. Poor maintenance and leakages contribute to significant losses in piped water networks and contamination of the water supply. In 2014, 75% of supplied water in Abbottabad was unsafe for consumption, and in 2015, water loss in Peshawar was estimated at 67%. This adversely affects households' access to clean water supply, putting added burden on women who have to procure, store, and treat water. Operational sewerage systems serve less than 5% of urban areas, and where networks exist, they are poorly maintained and prone to overflow. Most wastewater moves via open drains, and there are no functional wastewater treatment plants in KPK. Wastewater and sewage are discharged, untreated, into surface water drains or agricultural land where they are used for irrigation purposes which poses a significant health risk to the local farmers and communities. SWM in KPK is poor due to lack of proper infrastructure, equipment, management, and technical capacity. Less than 30% of municipal solid waste produced is collected, and uncollected waste is typically burned, disposed of in drains, or used to fill low-lying land. As women are the primary managers of water, solid waste disposal and health hygiene at the household level, unreliable and inadequate water supply and sanitation services increase women's time poverty and drudgery, and restrict their ability to access economic opportunities and social benefits offered by urbanization. Pakistan is one of the top 10 countries with the highest mismanagement of plastic waste in the Asia and Pacific region. Cities in KPK are highly polluted with plastic waste trapped in rivers and drains. Furthermore, since there are no large scale and properly engineered sanitary landfills, collected waste is disposed of in open dumps, which lack controls to mitigate pollution of the surrounding environment. The overall green urban space allocation in KPK cites is estimated at 3.5%, which is below the recommended international norm of 15-20%. This is a missed opportunity to provide intrinsic environmental and aesthetic benefits to urban lives. The cities in KPK are highly vulnerable to disasters triggered by natural hazards and climate change. Since 2010, KPK has experienced at least four major floods due to extreme climate events, causing economic loss, physical damage of urban infrastructure, and health hazards. Additionally, the coronavirus disease (COVID-19) pandemic has revealed serious inadequacies in the current delivery models of public health, emphasizing the need to address the gaps in service delivery.

CHALLENGES: The Government of Khyber Pakhtunkhwa (GOKP) is promoting the decentralization and corporatization of municipal services to improve municipal services. In 2015, the GOKP established seven independent utility companies to take over the provision of water supply, wastewater, and SWM from local government institutions in seven primary cities in KPK. These water and sanitation services companies (WSSCs) are contracted under asset management arrangements. The WSSCs have begun introducing changes to improve operation by strengthening client relationships, increasing accountability in municipal services provision, and improving both quality and coverage of services through performance enhancement measures. Experience with such companies elsewhere in Pakistan have shown substantial improvement in urban services. The WSSCs in KPK are, however, relatively new and face a number of start-up challenges. Current tariffs are insufficient to sustain their operations, and the WSSCs require further assistance to improve the quality and coverage of their services. Furthermore, in the absence of technical and financial resources, the WSSCs have limited capacity to prepare and implement new projects, which ha contributed to the low quality of feasibility studies, safeguards, and engineering designs for their municipal operations. Although the WSSCs have started reforming tariffs to support cost recovery on a trial basis, they will require additional support to rationalize tariffs, improve revenue collection, and strengthen commercial performance. Women's participation in WSSCs is negligible, with only 1-2 women recruited at the junior administrative level positions, which restricts their ability to effectively engage with women clients. Overall, the WSSCs need support to (i) strengthen governance and develop sustainable business models; (ii) promote effective public-private partnerships; (iii) build capacity of WSSC staff; and (iv) turn into women-friendly organizations to improve their gender balance and better cater to the needs of their clients.

ADB ENGAGEMENT: In November 2017, the Asian Development Bank (ADB), in partnership with the Urban Climate Change Resilience Trust Fund (UCCRTF) and Cities Development Initiatives for Asia, completed prefeasibility studies and climate change risk and vulnerability assessments. In March 2019, ADB and UCCRTF financed ADB's first project readiness financing facility (PRF) to complete (i) detailed engineering designs, (ii) government reform plans, (iii) advance procurement, and (iv) establishment and staffing of project management unit and city implementation units. Because of PRF, the project meets all the project readiness requirements for immediate project implementation upon approval. ADB also processed a technical assistance to prepare medium- to long-term urban road maps and regional development plans with multiple innovations. In May 2020, ADB approved the allocation of the Asian Development Fund (ADF) 13 Thematic Pool resources that will enable the project to directly address SDG5 transformative gender agenda, especially in the areas of reducing unpaid care and domestic work, and ensuring women's access to economic and productive resources. The project will improve households' access to water and sanitation services, which will ease women's domestic work, as well as provide them with safe access to urban green spaces. The project will also facilitate institutionalization of gender-sensitive policies and programs to enable the recruitment and retention of female technical workers in WSSCs. The ADF 13 grant enables the project to go beyond its project scope to (i) provide women with scholarship and internship support and enlarge the pool of female technical and professional workers in urban governance and WSS sector, (ii) rehabilitate and upgrade the women's business development center in Kohat that will provide livelihood training and support to women entrepreneurs, (iii) establish a women's technical training center that will provide women with formal technical skills to enable them to gain employment in the sector, and (iv) facilitate the establishment of childcare facilities in WSSCs.

ALIGNMENT WITH STRATEGIES. The project is alighed with ADB's Strategy 2030 priority areas as well as 2021-2025 Country Partnership Strategy for Pakistan. In addition, the project is aligned with ADB Action Plan for Healthy Oceans and Sustainable Blue Economies through its focus on circular economy (recycle and reuse) reducing riverine and marine plastic pollution and to the priorities identified under the country's the NDCs that include focus on use of renewable energy and building climate resilient infrastructure.

Livability and community health in urban centers of KPK improved

Access to reliable and resilient urban services improved in Abbottabad, Kohat, Mardan, Mingora, and Peshawar

Climate-resilient and gender-friendly urban infrastructure improved

Institutional capacities of gender-inclusive urban service providers strengthened

Women's role in urban development increased

Four EIAs were prepared based on detailed engineering designs (DEDs) and disclosed in March 2021. The reports were slightly updated in June 2021.

Eight IEEs were prepared based on DEDs and disclosed in August 2021.

Nine EMPs were prepared based on DEDs and disclosed in August 2021.

Social safeguards due diligence report was prepared and disclosed in August 2021.

Four LARPs were prepared based on DEDs and disclosed in August 2021.

Three CAPs were prepared based on DEDs and disclosed in August 2021.

Resettlement Plan and Framework were prepard and disclosed in August 2021.