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					                                                      TA 4106 –IND: Kerala Sustainable Urban Development Project
                                                                                              Project Preparation

b) Women and Children Issues. Investments identified under this component cover Gender
   Resource Center, Day Care Center or Early Child Development Center or Early Child
   Development Center, Legal Aid Support, Nutritional Support, support to Street Children/Child
   laborers, and scaling-up Balasabha programs.

c)    Health and Sanitation. Investments identified under this component relate to support for clearing
      garbage from communities, mosquito spraying, mini health centre, health kits to volunteers, and
      creation of a health campus.

The Poverty Social Fund (PSF) addresses the social and economic needs of the poor and comprises:

a)    Income Generation Program. Investments identified under this component relate to establishing
      Marketing Centers, Skill Development, Micro Enterprise Units, EDP Training, Quality support
      unit for Kudumbashree products, and setting-up Livelihood Oriented Business Schools (LOBS).

b) Vulnerable Groups. Investments identified under this component cater to vulnerable groups
   including destitute rehabilitation, street children, old age people, widows, women in distress,
   physically and mentally challenged persons, beggars and migrants, orphans and sex workers

c)    Capacity Building and Institutional support. The proposal under this theme includes capacity
      building programs for CDS, ADS, NHG members, CSOs, MC, Kudumbashree team, intervention
      partners training, institutionalizing insurance, computer network support to District
      Kudumbashree, and quality control units in Kudumbashree.

A key component for successful implementation of poverty alleviation initiatives is the constitution of
a Civil Society Organization (CSO) in each city, which is expected to coordinate the identification and
prioritization of the requirements of the poor and vulnerable, and facilitate Project implementation.
The CSO will essentially comprise city-level stakeholders including but not limited to the Municipal
Corporation, business groups, resident welfare associations, NGOs, CBOs, CDS and Kudumbashree.
The CSO will strengthen the activities of the Urban Poverty Alleviation (UPA) cell in the Municipal
Corporation for utilizing the CIF and the PSF with appropriate facilitation by Kudumbashree.

Training of CSO members, UPA staff at MC, Kudumbashree and CDS members is therefore
imperative and may be carried out through identified training institutes (refer Volume 7 for an
indicative list of courses). While a training needs assessment is a requisite for identifying areas of
capacity building, the following is an indicative list.

      Community Infrastructure Fund. These may include (i) planning and identification of community
      infrastructure needs; (ii) operational and maintenance issues relating to infrastructure provision;
      and (iii) awareness regarding women empowerment, health and diseases, and education.
      Poverty Social Fund. These may include (i) conceptual clarity for scaling-up livelihood initiatives
      through livelihood development strategies; (ii) facilitating confederation of Self Help Groups to
      graduate into Micro Finance Institutions (MFI); and (iii) focus on business development
      initiatives for micro enterprises.

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                                                     TA 4106 –IND: Kerala Sustainable Urban Development Project
                                                                                             Project Preparation

      Strategic Programs. These may include (i) project development programs with specific reference
      to CIF and PSF utilization; (ii) CSO networking and resource convergence; and (iii) creating
      strategy mechanism for CSO to run programs under health, sanitation and income generation.

10.4       Part C: Implementation Assistance
10.4.1          Project Management and Design Consulting Services
The Project Management Office (PMO) based in the state Local Self Government Department
(LSGD) and the Project Implementation Units (PIU) based in the 5 Project cities will be provided
with necessary consulting services under the loan to strengthen their project management and
implementation capability including engineering design and construction supervision.

A Project Management Consultant (PMC) group comprising international and domestic firms will be
located in Thiruvananthapuram to assist the PMO in project management activities including
reviewing engineering designs, procurement, and implementation. The PMC will also assist the PMO
and the PIUs in project formulations, management, monitoring and evaluation, financial and
environmental management aspects, public relations and awareness and the Poverty Alleviation
Programs. A total 276 person months (78 international and 198 domestic) of consulting services will
be required for the PMC.

Two domestic Design and Supervision Consultant (DSC) firms will be provided to assist each PIU in
the project cities; one for the southern region covering Thiruvananthapuram and Kollam and the other
for the northern region covering Kochi, Thrissur and Kozhikode to undertake detailed engineering
design, preparation of construction drawings, procurement activities, construction supervision, quality
control, community awareness and poverty alleviation programs associated with the Project. A total
of 2,724 person months of consulting services will be required for the two DSCs (1,170 person
months for southern region and 1,554 person months for northern region).

10.4.2          Public Awareness and Benefit Monitoring
A domestic Community Awareness and Participation Consultant (CAPC) firm will be employed by
the PMO to make the public aware of the short-term inconveniences and long-term benefits of the
project in order to gain full support of the beneficiaries for the project. Beneficiaries will also be
made aware of preventive care to avoid environmental health-related hazards and of their
responsibilities to avoid the wastage of water, including issues such as water rates, user charges and
property tax reform, etc. for achieving the project goal. The CAPC will require a total 60 person
months of services.

In addition, a domestic Benefit Monitoring and Evaluation Consultant (BMEC) firm will be required
to help the PMO in generating baseline data which will be monitored to assess impact of the Project
and providing guidance for mid course correction, if required, and assess benefits on commissioning
of the Project. A total 51 persons month of services will be required by the BMEC.

The consultant firms for the five packages will be selected in accordance with the latest procedure and
guidelines set by the Asian Development Bank. Outline Scope of Work for the consulting services are
provided in Appendix 10.

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                                                      TA 4106 –IND: Kerala Sustainable Urban Development Project
                                                                                              Project Preparation

10.4.3          Community Awareness and Participation
The PMO will identify and recruit NGOs in each Project city primarily for assisting in the poverty
alleviation planning process through community participation, the public awareness campaigns and
project benefit monitoring and evaluation. In addition, NGOs may be required to assist with any
rehabilitation and resettlement to ensure that affected persons are aware of their entitlements and to
ensure conformity with the project Resettlement Framework and Resettlement Plan.

The NGOs will be required to have experience in community mobilization, training, information
dissemination, communication and media development covering the fields of municipal service
provision, socio-economic surveys, environmental health, income generation, education, gender and

10.5       Special Features
The design of the Project and its sub-project components includes a number of special features and
conditions, reflecting the specific situation prevailing in the Project cities, in terms of the physical
infrastructure, socio-economic circumstances as well as the institutional framework. These features
typically center around an interaction between the investment under Part A in physical works,
integrally supported and complemented by the activities financed under Part B: Urban Management
and Institutional Development. This section serves to highlight these interactions, to enable
recognition of such special features.

Water Supply – System Optimization and 24 Hour Supply
The current provision of piped water in the Project Cities is a critical issue, with limited hours of
service in some areas, low delivery pressures and unacceptably high figures for losses or unaccounted
for water (UFW). The present situation denies basic human needs to the most vulnerable in the cities,
and thwarts any attempts at economic growth. Project component formulation is based on the
principle that an integral program of system optimization should precede any capital investment for
distribution network expansions or source augmentation. The optimization program is to include (i)
Distribution network mapping & analysis; (ii) Leak detection, waste control and metering program;
(iii) Water and power audit of production, treatment and distribution; supported by (iv) a program of
Water management training and capacity building.

A strategic principle and target for the program is the long-term aim of eventually providing a 24-hour
supply to all households with the strategic move of providing water to customers only through
metered connections instead of free from public standposts. This target puts high demands on the
integrity of the entire distribution system, on the organizational strength of the agencies responsible
for operating the system, and the financial efficiency of the billing process. However, the target of 24
hour metered supply – and its underlying essential requirements – is considered to be the only
acceptable for major cities in India, in terms of meeting essential minimum services, enabling the
effective monitoring and thereby control of all UFW, and enable forms of demand management.

Rationalization and Decentralization of Planning Functions
Planning for urban areas still follows prescriptive centralized delivery of a “development plan”.
Effective planning determining local priorities based on an accepted city development strategy in

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                                                      TA 4106 –IND: Kerala Sustainable Urban Development Project
                                                                                              Project Preparation

compliance with the GoK legislative reform for de-centralized planning functions, requires the
establishment of local planning units, and a broad program of capacity building to introduce new
approaches and procedures. The Project allocates resources dedicated to encourage and develop such
a change in planning functions.

Decentralization of Effective Environmental Monitoring and Management
All Project interventions are aimed at improving the urban environment, directly or indirectly. A
current weakness in urban management is the absence of effective environmental management and
control at the urban level. The Project intends (a) to strengthen the environmental management role
through the establishment of a dedicated department for solid waste management, and (b) encourage
the de-centralization of the monitoring role of the State Pollution Control Board (SPCB).

Kerala Local Government Development Fund
In order to provide Kerala’s local self-government institutions’ (LSGIs) additional resources for
financing infrastructure projects, GoK with assistance from ADB is reviewing the possibility of
establishing a financial intermediary that will provide LSGIs with avenues for raising resources
through non-budgetary sources (capital markets, infrastructure bonds, etc.); this option is more
pronounced given the fact that Plan funds are inadequate to meet the growing demand for basic
service delivery.

A separate ADB Line of Credit will flow into the Kerala Local Government Development Fund
(KLGDF). It is proposed that the State Legislature will set-up KLGDF as a “Statutory Entity” of GoK
and the Chief Minister of Kerala may chair the Fund. The KLGDF Board shall comprise members
representing GoK, LSGIs and Financial Institutions. The KLGDF Governing Board will establish a
Fund Management Company (known as the Asset Management Company) that will enter into a
management contract with the Fund to operate the proceeds. GoK and LSGIs will have initial equity
holdings in the Asset Management Company (AMC), which is to be called the Kerala Local
Government Infrastructure and Financial Services Limited (KLGIFSL). It is suggested that the
shareholding should be increased to involve Financial Institutions (FIs), Academic Institutions, etc.;
GoK’s maximum holding in KLGIFSL will be limited to 26% of the equity.

KLGIFSL shall oversee project management and will undertake the following activities (i)
infrastructure investment; (ii) project development and implementation; and (iii) institutional
development assistance. The AMC will operate proceeds from KLGDF on commercial principles to
be decided by the Management Board of KLGDF. Sources of fund will comprise GoK budgetary
transfers, GoI fund transfers, loans/grants from bilateral/multilateral agencies, capital markets, etc. It
is proposed that the ADB will provide the Fund a maximum line of credit of US$ 50 million.

The potential clientele of KLGDF shall comprise all LSGIs including the five municipal corporations
and 53 municipalities. Sub-projects eligible for lending shall include water supply, sanitation, street
lighting, solid waste management, roads, transportation, sites and services, area development, and
other remunerative and non-remunerative urban infrastructure project; KLGDF will not finance power
and telecommunication projects. Eligible items for financing include civil works, services, goods and
materials; KLGDF will not finance land acquisition and working capital costs.

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