MANILA, PHILIPPINES (12 December 2003) -ADB approved
a US$200 million loan to help improve basic urban services in six of the
largest cities in Madhya Pradesh,
India.
The Urban Water Supply and Environmental Improvement project will improve
and expand infrastructure and services for water supply, sanitation and
sewerage in Bhopal, Gwalior, Indore, Jabalpur, Ratlam, and Ujjain.
It will also strengthen the cities' capacity to better plan and manage
their water supply and sanitation systems.
"Poor infrastructure and inadequate services increase the potential
for residents, especially children, to contract waterborne and bacterial
diseases. It also hampers the cities' ability to become trading and commercial
hubs for their regions," says Hun Kim, an ADB Principal Urban Economist.
Madhya Pradesh has almost 40% of its population living below the poverty
line.
Inadequate water supply is the foremost deficiency reported by residents.
While available surface water and groundwater sources can meet demand,
this water fails to reach residents due to problems of delivery.
Over 40% of households lack in-house water supplies, 15% have no access
to piped water, and over 40% receive water only on alternate days.
Sanitation is another major problem, resulting in unhygienic living conditions
and public health problems. Almost 20% of households lack a private toilet,
and few of the ones who do are connected to septic tanks.
Residents also perceive the garbage problem as serious, with streets,
drainage, and open areas littered with waste. Around 40% of the garbage
isn't collected and finds its way to streets and sewers.
"All the cities are centers for trading and commercial activity but
improved urban services are needed for any significant improvement in
business or economic growth," says Mr. Kim.
The project includes two community-level funds to finance planning for
the integration of slum improvements with citywide infrastructure.
The Water for Asian Cities Program, a collaborative framework between
ADB and the United Nations Human Settlements Programme (UN-HABITAT) will
be implemented under the project for awareness campaigns and capacity
building in urban water conservation and demand management.
In preparation for the project, the six municipal governments received
a US$520,000 TA grant earlier this year to develop capacity to manage,
coordinate, and monitor initiatives under this project.
This innovative move was prompted by experience that showed the necessity
of working with state and local governments even before loan effectiveness,
especially in places new to ADB-backed urban projects.
The total cost of the project is US$303.5 million equivalent, with the
ADB loan covering 66% of the cost. The loan comes from ADB's ordinary
capital resources and carries a 25-year term, including a grace period
of five years. Interest is determined in accordance with ADB's LIBOR-based
lending facility.
UN-HABITAT will provide and administer parallel grant cofinancing of US$0.5
million, the Government of Madhya Pradesh will contribute US$50.6 million,
and the project cities will cover the remaining US$52.4 million.
The Urban Administration and Development Department is the executing agency
for the project, which is due for completion in March 2009.
http://www.adb.org/Media/Articles/2003/3906_India_Urban_Services/default.asp?RegistrationID=89
For further inforamtion, please contact: K. E. Seetharam,
Transport and Communications Division, South Asia Department, Asian Development
Bank, 6 ADB Avenue, Mandaluyong City, PO Box 789 0980 Manila Philippines,
Tel 632-632-5328, 632-632-5610; Fax 632-636-2340, ADB's Website: http://www.adb.org
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