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WAC News May 2006

WAC News May 2006

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Published by: UN-HABITAT Nepal on May 24, 2010
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Volume II - Issue 07

Urbanization levels are closely related to levels of income and better performance on social indicators, including health and literacy. The achievement of the Millennium Development Goals is, therefore, more likely in cities. Conversely, urban economic growth provides the basis on which cities can contribute to the achievement of the Goals, particularly in the area of poverty reduction.
—State of the World’s Cities 2006/7

May 2006

Mayor of Jabalpur City Inaugurates the CMWSS in Bagra Dafai
On 15th May 2006, the Community Managed Water Supply Scheme (CMWSS) at Bagra Dafai was inaugurated by the Mayor of Jabalpur City, Mrs. Susheela Singh. The Mayor appreciated the initiative of the residents of the locality for solving their water problems and taking up the responsibility of implementation of the water supply scheme in collaboration with the Jabalpur Municipal Corporation (JMC) and their commitment for post implementation operation and maintenance of the scheme. She advised the residents of Bagra Dafai to run this scheme in such a manner that it becomes an example for others to emulate. On this occasion, CTA, UNHABITAT as well as President, Secretary and other members of the Bagra Dafai Development Society and officials of JMC were present. The notified slum of Bagra Dafai, located in Guarighat Ward of Jabalpur Municipal Corporation, have more than 1200 households, almost totally below the poverty line. At present the locality is being supplied water free through public stand posts from three tube wells of the JMC. There is no house to house piped water supply system in this locality. People queue up for substantial period in the morning, when the tube wells are operated for a short period, fill up water in buckets for their houses. On account of disputes regarding water distribution amongst the residents around 30-40 First Information Reports (FIRs) have been filed in the police station in the past. On top of this, the water from the tube wells have a high content of fluoride which as is commonly known is harmful for health, especially for teeth and bones. The households are, however, drinking this water due to lack of any other alternative. In view of this, JMC in consultation with UN-HABITAT and the community has identified Bagra Dafai, for piloting the Community Managed Water Supply Scheme (CMWSS). It has been decided that JMC would provide treated water in bulk quantities sourced from the perennial ‘Narmada’ river, 4 hours in the morning and 4 hours in the evening, to 800 household connections for the community, if the distribution network in the locality was developed. The purpose of this scheme is to demonstrate that it is possible to quickly improve the lives of the urban poor and disadvantaged by connecting them to piped water. The residents of Bagra Dafai have constituted Community Water & sanitation Committee (CWASC) named Bagra Dafai Development Society, which was officially registered as an legal entity on 4th February 2006. The CWASC has entered into an agreement with the JMC for supply of treated water @ 70 litres per capita per day to the 1200 households of the locality from its overhead tank located near by at Poly Pather. The Community will create the water distribution system with loan from JMC. The total capital cost of the project is Rs. 22 Lacs, which is being provided by the UNHABITAT to the JMC as an one time grant, which in turn loan it to the community. The Community will pay the amount in easy installments. As against normal connection charges of Rs. 1375 and Rs. 60 per month user charges, only Rs 100 per household per month will be charged. The capital works execution is expected to take 3-6 months. Operation and maintenance of distribution lines will be done by the CWASC. The CWASC will collect connection and user charges from the resident members and pay the water charges to the JMC as per the bulk rates agreed upon between the CWASC and the JMC.

Community-led Infrastructure Financing Facility Mobilizing MPLAD / MLALAD Resources Financing Urban Infrastructure: Tamil Nadu Urban Development Fund

2 3 4

PAGE - 2

May 2006

Community-led Infrastructure Financing Facility (CLIFF) and Bottom-up Neighbourhood Development
The Community-led Infrastructure Financing Facility (CLIFF) is an urban poor fund capitalized by donors that has been designed to act as a catalyst in slum upgrading through providing strategic support for community-initiated housing and infrastructure projects that have the potential for scaling up. The overall goal is to reduce urban poverty by increasing the access of poor urban communities to commercial and public-sector finance for medium to large scale infrastructure and housing initiatives. The first initiative is in India with the Society for the Promotion of Area Resource Centres (SPARC), the National Slum Dwellers Federation (NSDF) and Mahila Milan. Scaling up citywide requires an engagement with the formal development process and the establishment of working relationships with formal-sector institutions. This is usually problematic, largely because public-sector financing is severely constrained and has a proven record of being reluctant to lend to the poor. A further problem is that the formal sector has continued to be unable to adapt their systems to accommodate non-formal investment processes. In December 2002, Cities Alliance approved a proposal to establish CLIFF with a seed capital of US$ 10 million from the UK Department for International Development (DFID) and an additional US$ 2 million from the Swedish government. Prince Charles meets members of Mahila Milan and the National Homeless International (a UK Slum Dwellers Federation to learn how they plan, implement and manage complex slum upgrading projects NGO) is the implementing agent and works with Samusisted to develop a track record in daya Nirman Sahayak. The main funcdelivering urban rehabilitation; tion of CLIFF is to:

• • •

provide bridging loans, guarantees • and technical assistance; initiate medium-scale urban rehabilitation in cities in the South; work in partnership with community- • based organisations (CBOs) and non-governmental organisations (NGOs) who have or can be as-

seek to attract commercial, local and public-sector finance for further schemes, thus accelerating or scaling up the response to the challenge of urban renewal; and establish local CLIFF agencies that can operate as lasting local institutions.

Pro-poor Reforms on Slum Upgrading in India
In India, national policy guidelines on housing are being finalized, drawing on the Urban Land Ceilings and Regularization Act from the 1970s, which allowed municipalities to set aside land for the shelter needs of the urban poor. Individual states and cities have undertaken innovations such as the use of transferable development rights to free up land for low-income housing. In 1996, India’s Slum Rehabilitation Act allowed state authorities to offer land development rights to slum and pavement dwellers. India is also implementing reforms that go beyond the housing sector, but which have the potential to significantly improve the lives of slum dwellers. India’s five-year development plan aims to promote universal coverage of water supply and sanitation. In pursuit of this goal, several central government sponsored schemes and programmes have been implemented. Under this programme, a total of 5 million sanitation units were constructed. Similarly, the National Slum Development Programme (NSDP) looks specifically into upgrading of urban slums by combining physical infrastructure with social services, including water supply, community latrines, storm water drainage, community bathrooms, sewers and other amenities. The government has also recently launched a new programme, the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), that aims to bring about mandatory reforms both at State and Municipal levels to improve basic service provision and secure tenure in urban poor neighbourhoods. The programme, the single largest national government initiative in the urban sector, was launched in December 2005 and is to be implemented over a period of 7 years. The programme’s special components include water supply and sanitation, sewerage and solid waste management, construction and improvement of drains and storm water drainage. However, because of high levels of urbanization, these important programmes may prove insufficient in the face of the huge challenges that they need to address, particularly with regard to annual slum growth rates that are estimated to be 1.72 per cent per annum.
Significant gaps and deficiencies exist in urban management in terms of provision and delivery of services. Municipal Action for Poverty Reduction (MAPP) is a new tool for municipal planning to promote participation, transparency, responsiveness and strategic vision. It seeks to address this gap with the participation of various stakeholders. The tool earlier used in Andhra Pradesh is now proposed to be used in Madhya Pradesh.


PAGE - 3

Mobilizing MPLAD / MLALAD Resources for Improving Water & Sanitation Facilities in Madhya Pradesh
Today, India's urban population is second largest in the world after China, and is higher than the total urban population of all countries put together barring China, USA and Russia. Over the last fifty years, while the country’s population has grown by 2.5 times, in the urban areas it has grown by five times. This has resulted in deterioration in the physical environment and quality of life. The situation in the cities of Madhya Pradesh is not good, in fact in some cases the conditions are alarming, needing proper attention to address the problems. The growth of slums in the 4 major cities, where the Water for Asian Cities Programme is being implemented in support of the ADB financed Urban Water Supply & Environmental Improvement Project of Government of Madhya Pradesh is as follows:
City Total Population (2001 Census) (in thousand) Recognized Slums (No.) Estimated Slum Population (As per MCs) (in thousand) Slum Population to total Population Percentage Illegal colonies (No.)

this, the sanction for the water and sanitation sector in the cities is quite low. The average sanction of MPLAD fund for water supply and sanitation projects in the cities during 2000-05 ie as follows:
Particulars Bhopal Indore Jabalpur Gwalior

Sanction of fund for the district (Rs. In Lakhs) Share of city as against total sanction for the district (%) Share of water & sanitation works as against sanction for the city (%)

470.02 60.8

290.65 57.2

159.75 42.1

245.37 40.7





Bhopal Gwalior Indore Jabalpur

1433.88 826.92 1597.44 951.47

487 149 406 331

432 478 260 400

30.1 57.8 16.3 42.0

131 265 349 47

2. MLA Local Area Development Scheme (MLALAD): Operational since 1994, this scheme allows for a fixed amount to be placed at the discretion of the MLA for development of his or her constituency. In Madhya Pradesh, the annual amount per MLA constituency has been increased from Rs. 20 Lakhs in 2002–03 to Rs. 60 Lakhs in 2005-06. However, the amount available under this scheme is not being utilized in full in the financial year, and the amount spent on water sanitation projects are quite low. The sanction of MLALAD fund for water supply and sanitation projects in the four cities during 2000-05 is as follows:
Particulars Bhopal Indore Jabalpur Gwalior

There is need for urban reforms to streamline infrastructure facilities to improve living conditions in the expanding cities matching with their growth. However, for doing so there is need for mobilization of adequate financial resources.

Sanction of fund for the City (Rs. In Lakhs) Total sanction for water & sanitation works (Rs. In Lakhs) Share of water & sanitation works as against sanction for the city (%)

96.00 22.40

169.73 100.55

109.80 5.62

147.56 58.72






UN-HABITAT had recently conducted a study on financial resource mapping using data for the five year period and drafted a strategy During 2003-05, about 90 to 93 % in Indore, 54 to 60 % in Jafor greater convergence of available resources in the 4 cities to balpur and 67 to 87 % in Gwalior were not sanctioned. On achieve the Millennium Development Goals. analysis, it become evident that out of entire amount available, at In this study, the untied locally available central and state govern- least 50 % can be exclusively kept aside for water and sanitation ment funds not necessarily pertaining to the urban administration works. Thus, additional funds can be generated to the extent of department, funds available with the local bodies and non govern- 64.40 Lakhs for Bhopal, Rs 49.45 Lakhs for Indore, Rs 114.38 mental sources have been analysed. Special emphasis is on the Lakhs for Jabalpur and Rs 61.28 Lakhs for Gwalior. The possibilMember of Parliament Local Area Development (MPLAD) and ity of mobilisation of funds per annum from various untied reMember of Legislature Local Area Development (MLALAD) sources are summarized below: schemes, public contribution schemes, funds available with the ULBs and from international and non government organisations funding. The trend of flow of fund for the water and sanitary sector were discussed and possibility of convergence of untied resources for development for these sectors have been suggested.
Amount (Rs in Lakhs) Source MPLAD Scheme MLALAD Scheme Bhopal 43.42 64.40 Indore 9.35 49.45 Jabalpur 37.63 114.38 Gwalior 40.21 61.28

Scope for Mobilisation of Untied Fund
1. Member of Parliament Local Area Development Scheme (MPLAD): Each of the 4 project cities are represented by one Member Parliament (Lower House). Thus at least Rs. 20 million from MPLAD fund are available for the development works in these cities. Besides these, there are 11 MP (Upper House) from Madhya Pradesh. Some funds, hence, are also available from MPLAD fund of MP (Upper House) for these cities. However, entire available funds are not being utilized. As per the Ministry of Statistics & Programme Implementation, Government of India, the utilization of MPLAD fund in Madhya Pradesh is only 60-80%. Out of

The Government of India initiated the Urban Basic Services Programme (UBSP) during the 7th Five year Plan period for urban poverty alleviation. Establishing linkages between community and city level planning and management structures through a systematic devolution of resources and responsibilities to match with community needs, capacities and efforts at resource mobilization is one of its major objectives. For effective implementation of the programme, the state government has constituted the State Urban Development Agency (SUDA) and District Urban Development Agencies (DUDA). The UN-HABITAT study has recommended that the existing system can facilitate the convergence of the untied resources available at the city level with DUDA.

PAGE - 4

Financing Urban Infrastructure: Tamil Nadu Urban Development Fund
The Tamil Nadu Urban Development Fund (TNUDF) has evolved from a municipal trust fund to one established and managed by the public and private sectors. The initial fund— the Municipal Urban Development Fund—was financed entirely by the public sector to reduce the massive backlog of infrastructure investment and improve the delivery of basic urban services. It was launched in 1988 with a concession loan from the International Development Association (IDA). In 1996, with the aim of achieving managerial efficiency and attracting private capital for urban infrastructure, it was converted into an autonomous financial intermediary. Established as a trust fund with private equity participation, it was the first public-private partnership in India that provided longterm municipal financing for infrastructure without guarantees. Instead of merely channeling public funds, its purpose it to attract financing from the private sector. It also manages a separate grant fund owned by the state government to finance poverty alleviation projects.
Bridges and Roads 65% Sewerage & Sanitation 22% Water Supply 6% Bus Stations & Markets 5% Storm Water 1% Others 1%

the surpluses of the municipal borrowers, a situation similar to revolving funds in Europe and the US. The TNUDF is making an important contribution to capital investment needs for large, lumpy and non-revenue generating projects. For many small local governments tat are unable to access to the market, together with enhanced credit. Such arrangements can The TNUDF is managed by a private corporation: Tamil be especially useful for sewerage projects that require subNadu Urban Infrastructure Financial Services Ltd. Financial stantial funds with repayment periods of 20 years or more. institutions have committed to contribute an amount equal to Despite these constraints, the fund is quite creative, launching 44 per cent of the initial contribution of the Tamil Nadu state new financial products to tap the capital market for special government and participating financial institutions. Borrowers purposes, such as the Water and Sanitation Pooled Fund. A are required to follow conservative financial management municipal bond issued for a road development, initially practices and to meet performance targets, including for debt funded by TNUDF, was re-financed from the bond proceeds, service reserves and making appropriate sinking fund contri- thus releasing funds for other capital investment. butions. The TNUDF’s debt financing depends mainly upon

Mumbai’s Quest for ‘World City’ Status
Mumbai, the capital of the state of Maharashtra and India’s most important financial capital, has a population of 18.3 million people, making it the fourth largest urban agglomeration in the world, after Tokyo, Mexico City and New YorkNewark. The city hosts one of the world’s largest slum populations: more than 5 million of the city’s residents are slum dwellers. More people live in Mumbai’s slums than in the entire country of Norway. Despite the daunting conditions in its slums, Mumbai is a magnet for Indians, not only from neighbouring cities and villages but also from the rest of the country. According to “Vision Mumbai”, a 2003 report by the private consultancy firm McKinsey & Co. the city urgently needs to be building at least 1.1 million affordable housing units in the next decade for current and future generations of slum dwellers and migrants.

UN-HABITAT Water for Asian Cities Programme EP-16/17, Chandragupta Marg, Chanakyapuri New Delhi - 110021 (India), Tel: +91-11-42225019 / 22 Fax: +91-11-24104961, Web: www.unwac.org WAC Programme Project Office E-1/191, Arera Colony, Bhopal - 462016 Madhya Pradesh, India, Tel: +91-755-2460835-36 Fax: +91-755-2460837, Email: Wac.India@unhabitat.org

Editorial Board Malay Shrivastava, Secretary, UADD, State Govt. of M.P Hazari Lal, Director, Govt. of India Gulshan Bamra, Project Director, UWSEIP, Bhopal Debashish Bhattacharjee, ADB, India Resident Mission Aniruddhe Mukerjee, CTA, UN-HABITAT, Bhopal Editor Kulwant Singh, CTA, UN-HABITAT, New Delhi

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