fbpx 51036-002: Khyber Pakhtunkhwa Cities Improvement Project | Asian Development Bank

Pakistan: Khyber Pakhtunkhwa Cities Improvement Project

Sovereign (Public) Project | 51036-002 Status: Proposed

In July 2018, the Islamic Republic of Pakistan elected a new government. Its development priorities emphasize providing access to safe water and sanitation, and a healthy living environment for all. The population in Khyber Pakhtunkhwa Province (KPK) is expected to grow from 35 million people in 2017 to about 58 million people by 2035. By 2035, it is estimated that 27.3% of the population of Khyber Pakhtunkhwa Province (KPK) will be concentrated in cities, up from 16.5% in 2017. The rapid growth rate of urban populations in KPK (approximately 3.4% per) is placing tremendous strain on its cities. Inadequate infrastructure and limited capacity to manage municipal water, sanitation services, and solid waste management (SWM) are creating major health risks for the population, and threaten the resilience of cities to the effects of climate change.

Project Details

Project Officer
Nakamitsu, Kiyoshi Central and West Asia Department Request for information
Country
  • Pakistan
Sector
  • Water and other urban infrastructure and services
 
Project Name Khyber Pakhtunkhwa Cities Improvement Project
Project Number 51036-002
Country Pakistan
Project Status Proposed
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Loan: Khyber Pakhtunkhwa Cities Improvement Project
Ordinary capital resources US$ 200.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Water and other urban infrastructure and services / Other urban services - Urban flood protection - Urban policy, institutional and capacity development - Urban sewerage - Urban water supply

Gender Equity and Mainstreaming Effective gender mainstreaming
Description

In July 2018, the Islamic Republic of Pakistan elected a new government. Its development priorities emphasize providing access to safe water and sanitation, and a healthy living environment for all. The population in Khyber Pakhtunkhwa Province (KPK) is expected to grow from 35 million people in 2017 to about 58 million people by 2035. By 2035, it is estimated that 27.3% of the population of Khyber Pakhtunkhwa Province (KPK) will be concentrated in cities, up from 16.5% in 2017. The rapid growth rate of urban populations in KPK (approximately 3.4% per) is placing tremendous strain on its cities. Inadequate infrastructure and limited capacity to manage municipal water, sanitation services, and solid waste management (SWM) are creating major health risks for the population, and threaten the resilience of cities to the effects of climate change.

The project will benefit about 3.6 million people in the five target cities (2017 population, by 2035 the urban population in these target cities is projected to increase to around 8.0 million) and will support the governments development priorities, established in (i) the National Water Policy (2018), (ii) the Local Government Act (2019), and (iii) Pakistan Vision 2025.

Project Rationale and Linkage to Country/Regional Strategy

Rapid Urbanization and Municipal Services. Cities in the KP province have been experiencing high rates of urbanization and rapid population growth. By 2033, it is estimated that more than 72% of KPs population will live in these five cities. Urban development in KP is characterized by lateral expansion of the urban area rather than densification such that the unplanned urban sprawl severely stretches cities services beyond its capacity. This has led to the suboptimal uses of urban spaces, over-extension of public utilities and services resulting in wastage of resources, long distance commutes, inefficiencies and reduced livability. While cities planning continued, there is a need to address challenges of rapid urbanization include aggravating urban deficit, degrading urban ecology, and eroding livability.

Infrastructure challenges. Urban development in KPK has been characterized by unplanned sprawl rather than densification. Suboptimal use of space has contributed to resource inefficiency and the inability of infrastructure development to keep pace with population growth. Piped water reaches 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%. 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 agricultural irrigation purposes which poses a significant health risk to the local farmers and communities. Solid waste management in KPK is also poor due to lack of proper infrastructure, equipment, and technical capacity. Less than 30% of municipal solid waste is collected at all, and uncollected waste is typically burned, disposed of in drains, or used to fill low-lying land. Furthermore, since there are no large-scale sanitary landfills or incineration systems, collected waste is disposed of in open dumps, which lack controls to mitigate polluting the surrounding environment. The overall green space allocation is 3.5%, which is below the recommended international norm of 15-20%.

The Government of Khyber Pakhtunkhwa (GOKP) is promoting the decentralization and corporatization of municipal services. In 2015, the GOKP established seven independent utility companies to take over water supply, wastewater, and solid waste management from local government institutions in the seven administrative districts of KPK. The water and sanitation services companies (WSSCs) are contracted under asset management arrangements and have begun introducing reforms to improve the operations of municipal services. They have publicly disclosed their corporate decisions and operational performance to enhance transparency and accountability. However, the WSSCs are a relatively new initiative in KPK and the companies still lack enough financial, technical, and physical resources they need to optimize their operational effectiveness. Current tariffs are too low to fully recover costs, and although the government provides subsidies, the total revenue collected by the WSSCs is insufficient to maintain existing assets, let alone invest in new ones. Furthermore, the WSSCs lack technical capacity in operations and maintenance, and in planning and implementing new projects. These constraints, paired with the lack of water and sanitation infrastructure, impair current operations and will become more severe as urban populations increase. Overall, the WSSCs need support to (i) reform tariffs to encourage cost recovery for operations and maintenance; (ii) improve operational effectiveness and commercial performance; (iii) develop sustainable business models and identify new opportunities for PPPs; and (iv) strengthen capacity in the areas of planning, budgeting, resource allocation, and human resources management.

The project will finance physical investments in urban infrastructure and capacity building for WSSCs in five KPK cities, including Abbottabad, Kohat, Mardan, Mingora, and Peshawar. All five cities are (i) divisional capitals in KPK, within the top ten most populous cities of KPK, and have a functioning WSSC in place. Mardan and Peshawar are two of the largest cities in KPK, and drive its economy as central hubs for trade, services, and industry. Abbottabad is a tourist and educational center of KPK, located on the Peoples Republic of China-Pakistan Economic Corridor. Kohat is a major node along the N-55 Indus Highway that connects Peshawar to Karachi and the N-80 highway that connects Kohat to Islamabad. Mingora was one of the most popular tourist destinations in Pakistan until security concerns slowed the industry. As the security situations recently improves and tourism recovers, there is a growing need to fill the infrastructure investments gaps in Mingora. The five target cities have good track records in implementing urban projects with development partners such as the Japan International Cooperation Agency and the United States Agency for International Development. During the implementation of the ongoing project readiness financing (PRF), additional cities may be included upon agreement between ADB and the government.

Impact Impact of the Project is improved livability and community health for environmental sustainability, and socio-economic development in urban areas of Khyber Pakhtunkhwa Province Pakistan.
Outcome By 2026, Residents in the five Khyber Pakhtunkhwa Province cities have improved access to sufficient, safe and affordable water sanitation, and hygiene services for health and livelihoods.
Outputs

Urban infrastructure and public spaces improved and expanded.

Institutional capacities of urban service providers, provincial government, and city governments strengthened.

Geographical Location Nation-wide, Khyber Pakhtunkhwa
Safeguard Categories
Environment A
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects Safeguard due diligence assessment will be completed in late July 2020.
Involuntary Resettlement Safeguard due diligence assessment will be completed in late July 2020.
Indigenous Peoples Safeguard due diligence assessment will be completed in late July 2020.
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Nakamitsu, Kiyoshi
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Urban Development and Water Division, CWRD
Timetable
Concept Clearance 26 May 2020
Fact Finding 01 Sep 2020 to 11 Sep 2020
MRM 13 Oct 2020
Approval -
Last Review Mission -
Last PDS Update 27 May 2020

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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Tenders

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