PROCEEDINGS OF THE SOUTH ASIA URBAN FORUM SOUTH ASIA INFRASTRUCTURE SECTOR L N T INCOLLABORATIONWITHFPSI WRBANAND WATER SECTOR BOARD THE WORLD BANK, WASHINGTON, D.C. JUNE 24, 1999 Report Outline FOREWORD ACKNOWLEDEMENT PART I: SUMMARY OF PROCEEDINGS 1. Welcome and Introduction: The Urban Sector in South Asia: Issues and Options Frannie Leautier, Sector Director, SASIN, The World Bank 2. Key Note Address: The Linkages of Comprehensive Development Framework and the South Asia Urban Operations MiekoNishimizu, Vice President, South.Asia Region, The World Bank 3. The Bank's Urban Strategy and Its Challenges Angela C. Griffin, Sector Manager, TWURD, The World Bank 4. FLOOR DISCUSSION: Global Urban Challenges and Strategies 5. Strategic and Comprehensive Approach to Urban Development Hiroaki Suzuki, Pr. Operations Officer, SASIN, The World Bank 6. India: The Reform Agenda Mr. P. V. Rajaraman, Finance Secretary, Governmentof TamilNadu, India 7. Urban Tamil Nadu: Yesterday, Today and Tomorrow Ms. S. Malathi, Secretary, Tamil Nadu Municipal Affairs and Water Supply Tamil Nadu, India 8. The Tamil Nadu Urban Development Fund Dr. KrishnaswamyRajivan, Chief Executive Officer, TNUDFS Tamil Nadu, India 9. PANEL DISCUSSION: Chris Kessides, Pr. Economist, TWURD, The World Bank Prof. Subbiah Kannappan, Professor of Economics, Michigan State University Eloterio Codato, Sr. Urban Management Specialist, LCSFP, The World Bank Hiroichi Kawashima, City Development Strategy (CDS), Urban Anchor The World Bank 10. FLOOR DISCUSSION: Approaches to Urban SectorReform - The Case of Tamil Nadu (India) 11. BangladeshMunicipal ServicesProject Jonathan S. Karnkwalala, Pr. Financial Analyst, SASTN, The World Bank 12. Pakistan Municipal DevelopmentProject Michael Schaeffer, Senior FinancialAnalyst, TWURD, The World Bank 13. PANELIFLOOR DISCUSSION: Municipal Development: Cases from Bangladesh and Pakistan Chair: SoniaHamman, SectorDirector, MENA, The World Bank Braz Menezes, Pr. OperationsOfficer, LCSFP, The World Bank Arun Benarjee, Pr. OperationsOfficer, SACBF, World Bank Country Office, Bangladesh 14. Providing Servicesfor the Urban Poor - The ChallengesAhead George Gattoni, Pr. Urban Operations Specialist, TWLTRD, The World Bank 15. Sri Lanka: Colombo's Clean SettlementsProject An Effort in Progress - Jelena Pantelic, Sr. Urban Specialist, SASTN, The World Bank and Ms. Allyson Thirkell, Consultant, London, U.K. 16. PANEL DISCUSSION: SocialDimensionsof Urban Infrastructure Operations Warren Waters, Social Scientist, SASSD, The World Bank MOVING FROM SAFEGUARDSTO OUTCOMES 9 The SARUrban Portfolio P. Illangovan,EnvironmentalSpecialist, SASES and Kumi Kitarnori, Consultant, SASEN, The World Bank 9 AddressingUrban AirPollutionin SouthAsia Alastair McKechnie, Sector Director, SASEG and KseniyaLvovsky, EnvironmentalEconomist, SASEN, The World Bank PART 11: LIST OF PARTICIPANTS PART 111: PROGRAM SCHEDULE Foreword South Asia Infrastructure Unit (SASIN), welfare of urban populations, particularly urban in collaboration with the Urban and Water poor, will be adversely affected, which could Sector Board in the PSI Network of the World eventually lead to social unrest. Cities would Bank, organized a "South Asia Urban Forum" also need to be well managed and governed in on Thursday June 24, 1999. We are pleased to order to meet the challenges of urbanization. share with you the Proceedings of the Forum. Paying attention to city finances will be critical The purpose of this one-day forum was to take to allow sustainable provision of basic services stock of the progress of urban operations in the to its residents. South Asia Region of the World Bank, share information and exchange views with Bank The timing of this Forum was opportune. colleagues and some of our clients. About 114 The region is now beginning to record results of participants attended the forum, including a the first generation of the renewed urban delegation from the State of TamilNadu, India. operations in the South Asia Region after a decade of non-investment in the urban sector in The World Bank's South Asia Region is the Region. In collaboration with the Urban and experiencing rapid urbanization. By 2025, the Water Sector Board, SASIN has taken the region will have a majority of its people living in following systematic and cascading approach to urban areas; a phenomenon that is urban development in South Asia: unprecedented. At present 31 percent of people living in cities of South Asia live in poverty. By 8 Formulation of Urban Strategies at the 2025, it is expected that this number will grow National andlor State Level in India, to nearly 40 percent . The pace of urbanization Bangladesh and Pakistan (Punjab State). is expected to continue as the region becomes more linked to the global economy. To provide Assisting cities with City Development services to the 38 percent poor residents in Strategies(CDS) in India, Bangladesh, Sri these cities, would require concerted efforts to Lanka and Nepal. seek solutions that work and replicate them. Cities, which are already producing nearly 50 Financing Specific Investment Projects that percent of the region's GDP, will need to derive from these strategies in India, become more competitive in order to sustain the including the Tamil Nadu Urban demand for services from the burgeoning urban Development Project 11, Karnataka populations. Sustained economic growth and Municipal Strengthening project, Gujarat development in the region is increasingly going Municipal Institutional Strengthening and to depend on the quantity and quality of urban Urban Infrastructure Development Project; services which cities will be able to provide the Municipal Services Project in citizens and industry. Massive concentration of Bangladesh and the Punjab Municipal population and economic activities create DevelopmentFund Project in Pakistan. pollution and aggravate the situation of already widespread urban slums. If these externalities These projects address a number of and social issues are not properly addressed, the fundamental issues of urban sector reforms, including but not limited to: capacity building of the forum by making it a stimulating and municipalities; municipal financing through interactive event, allowing participants to update municipal development funds, municipal bond their knowledge, share insights, meet colleagues and performance grants for less creditworthy working on similar issues, and work together in municipalities; participatory community-based exploring new ideas. We also were able to infrastructure services delivery for.urban poor; show-case successes achieved by our clients in and sustainable environmental projects. the Tamil Nadu Urban Development Project which provided an opportunity for learning and Key strategic issues were presented and a knowledge sharing between clients and Bank wide variety of innovations in project design, staff. Sharing of best practices will allow the supervision of project implementation, and Bank and its clients to push the frontier on what financial leveraging techniques being used in works in poverty reduction in urban areas, SASIN operations were discussed. We are very thereby contributing to scaling-up the impact of pleased that we could achieve the objective of successful projects and approaches. Frannie A. Leautier Sector Director South Asia Infrastructure Sector Unit The World Bank Acknowledgement Several people contributed to the success Ackerman, Warren Waters, P. Illangovan, of the Forum by hard work, commitment and Alastair McKechnie, Kseniya Lvovsky, selflessness. Margaret Thalwitz, Zmarak Shalizi. Our special thanks to Mr. P. V. Rajaraman (Finance We would like to express our appreciation Secretary of Government of Tamil Nadu), Ms. to all the participants of the forum. Ms. Frannie S. Malathi (Secretary, Municipal Affairs and Leautier (Sector Director, SASIN) who Water Supply, Government of Tamil Nadu) and encouraged us to organize this forum and Ms. Dr. Krishnaswamy Rajivan, Chief Executive Mieko Nishimizu (Vice President, South Asia Officer, TNUIFS, Tamil Nadu), who shared Region, The World Bank), who joined us in their valuable experience in Tamil Nadu Urban spite of her extremely busy schedule and DevelopmentProject and the Tamil Nadu Urban provided us a great insight into the linkages Development Fund. We thank Mr. Anthony between the Comprehensive Development Pelligrini, Ms. Amy Osborne and Ms. Laura Framework and infrastructure investments in the Lewis for their great support from the Urban Bank, deserve specialthanks. Sector Board. We wish to thank the task team charged with delivery of the Forum who worked We would like to thank all the speakers, hard to accomplish the task - Mmes, Julie moderators and panelists who made this forum a Viloria, La1 Gardner, Gladys Stevens and valuable event. They are Mmes and Messrs. particularly Mr. Kwabena Amankwah-Ayeh, Angela C. Griffin, Manuel Panalver-Quesada, who made impeccable arrangements for the Christine Kessides, Hiroichi Kawashima, forum and compiledthe proceedings. Subbiah Kannappan, Keshav Varma, Jonathan Kamkwalala, Michael Schaeffer, Braz Menezes, We look forward to seeing you again at Arun Banerjee, Sonia Hamman, George Gattoni, the next south Asia Urban Forum. Jelena Pantelic, Allyson Thirkell, Richard Hiroaki Suzuki(TeamLeader) Principal OperationsOfficer SouthAsia InfrastructureUnit The World Bank SUMMARY PROCEEDINGS 1.THE URBAN SECTOR IN SOUTH ASIA Frannie Leautier, Sector Director SASIN, WorldBank Old problem.... Globaltransformationwith importantshifts Why renewed urgency? for urbancenters 4 Increasing number of poor, most of whom are or will 4 Demographics and income disparities be in urbanareas 4 DecentralizationandGovernance 4 Size and urgencyof problemrequiresdifferentways of 4 Roleof the city in regionaleconomies working 4 Pressurefor servicesand infrastructure 4 Few sustainable successes, with a key challengein 4 Environmentaland socialfactors scaling up 4 Macro and financialcrises have cast doubt onwell- held concepts and approaches DEMOGRAPHICSAND INCOME VARYING REGIONALDEMOGRAPHICS DISPARI'TIES 4 Urbangrowth rates inAsia about the same as global average, but absolute numbers in urbanareas are orders of magnitudelarger 4 Highconcentrations of population(density) inAsian cities, with densities higherthan any other region inthe world 4 While income disparities inAsian cities are low compared to other regions,there are highintercountry disparitiesat a very low level of city product compared to the world average 4 Specialcharacteristicsof cities in small land-locked Source: LMCHSUrbanIndicatorsProgram countries, and port cities URBANIZATION DISPARITIESEXIST WITHINAND BETWEENREGIONS 4 Increasingconcentrationinlargecities across all countriesinthe region Incomedisparity is 4 Urbanpoverty growing faster than rateof urban ratiooftop20% growth in SouthAsia householdsto bottom 4 Populationpressure,country size, and regional 20%households inequalitiesshaping patternof developmentand averageratioinregion role of transport 4 Cities beginningto function as 'systems of cities" with quality of city managementinteractingwith transport policy and performancein shaping further urbanization Source: UNCHSGlobalUrban Observatory 1-1 < . Numberof cities by city size Wdhin Region Demographics Y Fast but varied growthof urbancenters in South Asia + Highrural-urbanmigrationhasfueled fast and uncontrolledurbangrowth + Populationconcentrationin increasinglylarger metropolitanareas Growing importanceof secondary cities and towns Source: UNCHSUrbanIndicatorsRogram Petaland FugalForcesin SAS Urbanization Patterns DECENTRALIZATIONAND GOVERNANCE City Population Density Growth Roduct + Constrainedfiscal environment at central levela big (000) rate Upas.(1993) force driving decentralization Bombay 10,265 603 2.04% 275 Growingreliance on localbodiesin service delivery, but Chittagong 2,400 61 5.34% 218 these bodies haveweak management capacity and do not have sustainablefinances Bhiwandi 553 934 22.88% 341 Capacity of localgovernmentsto manage their cities Lahore 4,509 37 3.59% 428 impactsthe comparativeadvantageof cities Colombo 4,390 86 0.49% 1,036 Size and importanceof localbodies shapes the competitive positionof cities as well as the quality of their management Illustrationof the implicationsof good City Performance governance on cities comparative advantages The Kathmandu-Biratnagar-DhakaChittagong Corridor andthe functioning of key cities: current traffic420,000 tons per year, potential to double Road link only if using Chittagongport, but rail and road if usingCalcutta Chittagongand Calcuttain competition,and Source: UNCHSUrbanIndicatorsRogram performanceof ports and cities critical 1-2 CENTRAL GOVERNMENTCAN ..... FinancialManagement and Transparency F @ - T E e LG 12E'El Kathmandu 1 X EGTFiTpX-'p Revenuesand - CAPEX in 1993 $ per capita a n g ~ + ~ - 1 I 1 _: Source: UNCHSUrban IndicatorsProgram Source UNCHSUrbanInd~catorsProgram LOCAL GOVERNMENTCAN...... Potentialchallenges Tiffty Settaxes Borrow Contratfj &charges + Kathmandu Some Some All Dhaka may not be able to react in an agile and flexible manner due to size constraints Bratnagar Some + Governance as shown by transparency and Dhaka ... ... some autonomy may give advantage to Tangail and 1; ,Tangail /W Alr Biratnagar over Dhaka and Kathmandu + ChMagong ,411 m Chittagong city may be performing well but issues I need to be resolved in Chittagong port to protect position relative to Calcutta Source: UNCHSUrbanIndicatorsProgram Past expe5ences: Project Types Past Approaches, (1) Multi-sectoralintegratedprojectsaddressing Lending Trends & +delivery andlor improvementof services Lessons Learned in and shelter to the urban poor SA Urban Projects +improvementof municipal services I +development of strategiesto deal with rapid urbangrowth +strengthening of localinstitutionsto prepare and implement integratedurban developments (2) CityandStatewideWaterSupplyand Main constraints faced during past SewerageSanitationPmjecfs efforts 4 Dealingwith urbanW&S sector,andexpansion of water supply and sanitationfacilitiesto the Non-responsiveurbanor sector policy urbanpoor. frameworks (3)Uhan housingfinanceprojects *Land acquisitionproblems 4 Designedto developmarket-orientedhousing finance, and reducedeficit inurbanshelter and Weak financialand institutionalcapaclty of services. municipalities and concernedagencies (4)Uhan transportpmjects Work overloadof implementingagencies 4 Designedto improvephysical andfinancial performanceof the publicbusand rail Lackof funds for 08M of infrastructureand companies. Improvements What is SouthAsia doing to deal with these MainConstraints..(contd.) issues? Rapidurbangrowthoutpacing thewrvlce supply Increasesprovldedthroughsome 4 Draw up holisticframeworks that sharpen strategic of the projects vision, recognizingthe schizophrenic aspects of urban Emphaslson physicalworks, soft on development lnstitutlonalstrengthening& financial 4 Introducelong-term system-wideapproachesrather than project approachto investment in urbanareas and Reform transport-focus on development impact Unwleidynatureof IntegratedproJects 4 Learnfrom others and focus on long-terminstitutional building, understandingthat change requires a process Inadequateassessmentof demand, often of transforming urban societies obliged governmentsto rescuewlth heavy 4 Move towards regionalratherthan nationalprograms, subsidles understandingspatial aspects and 'systems of cities" Recognizethe schizophrenicaspects of urbandevelopment: Lessonsfrom impact based budgeting inthe 4 Orchestrate a maniagebetween soaal policy, economic region.......The Case of India growth, infrastructureservices 4 Forge coherencebetweencommunitydesirefo; results. privatesector interestinprofitsand NGOinterestsin process 4 Toleratethe coexistenceof city-wide andsitespecific solutions 4 Accept that there is beauty inthe ugliness, and frogscan turn into princes India: From CAS to Urban Sector Strategy From Objectives to Outcomesto Deliverables . 1 iL ( CAS Objective I I UrbanSector 1 Sector Outcomes Deliverables + Focuson Governance W r PradeshUrbanProjed reforming State-wide institutionalreform . ULBmanagementpractices Gujarat MunicipalStrengthening states 8developmentstrategyfor improvedin3 states & UrbanInfrastructure ULBs in UP redefined rolesof state DevelopmentProject + Support policy Urban management entities under West BengalUrbanSector decantrelization Reform Projed reforms in selected strengthened and access to . 1 . + Competitivenessrevisedlegal~ e w o r for k Community InfnrsbucturePilot sectors ULBfunding improved inTN, Kamataka, Gujarat landmanagement KmatakaWS Management& Poverty alleviation Betterunderstandingof urban efficiencyof municipal Municipal StrengtheningPrqect poverty and mlcro-credit for entitles(stafiing) TNUDP urban community Livability-urban environment r SolidWaste Management infrastructure andculturalheritage UItIanPo Get the processright..... Lessonsfrom clients in regionsof the world Startwith the socialaspects The South East EastAsia - ......thengetthe economics Regional Dialogueon Providing right..... S e ~ c efor the Urban Poor s andonly then go for the physical andtechnicalsolutions Socialand politicalaspects - Social and politicalaspects (continued) mobilizecommunities and get stakeholders involved - understandvarying perceptionsof urban 4 Understandand incorporate poor, privatesector, NGOs,local heterogeneity of community needs governments,politicians (gender,age, religious, ethnic, new search for partnershipsand buildalliances, comers, and informalsettlers). coalitions 4 involvepoliticiansand capitalizeon politicalcycles,get mayorsand local bodies involved 1-5 Multiplemodels exist, no one size fits all Understandingsocial aspects is critical to deliver good financialperformance +Collection rates can improveifcommunities 'Bundles and packagesof options are moreeffective are involved than singleservice solutions' +Substantialcommunity participationin financing limitspoliticalinterferenceand patronage,and lowersfinancialrisks - Menuof options to beneficiariesand partners New concepts.... + Developmentalternatives +Tenuresolutions +It's a complex processof social + Landactqui'sition transformation.... alternatives +Financingmodels +Housingas a verb and as an ongoing for corporate partners process + Inter-jurisdictionaltransfers +There are multiplesolutionsand path dependency +in-situupgrading, redevelopmen:, relocation + regularizationof tenure or not Necessaryshifts in long-heldconcepts New concepts (continued) +Poor are creativeand innovative, needto work - with and notfor the people +There ispathdependency +Cost is notthe problem,poor canand are willing and outcomesare to Pay unpredictable + NGOsas managersof social concerns rather +startwithpilot andscale- than advocates of social change UP + Businessas goodcorporatecitizens,with an imageto protectlenhance,and not as philanthropicone-time contributors + Poor (women) are bankable. 1-6 2. KEY NOTE ADDRESS: THE LINKAGES OF COMPREHENSIVE DEVELOPMENT FRAMEWORK AND THE SOUTHASIA URBAN OPERATIONS by Mieko Nishimizu, Vice President, South Asia Region, The World Bank "To fight poverty with passion and subconscious that kept calling me a liar, professionalism for lasting results." This, is the questioninghow I could possibly commit myself first sentence and the very essence of our Bank's to an outcome that would never be realized in Mission Statement. It has a special place in my lifetime. South Asia, because it is here that harbors a lion's share of the world's poor. It is also in Thanks to you and other teachers inside South Asia where most children of the world are and outside the Bank, including those among the growing up in poverty, and nucleus of the poor people of South Asia, I now think very continues shifting from villages to towns to differently. I think of development as cities to mega-cities. There is no poverty transfonnation of a society. Yes, this is the alleviation without urban development, and no paradigm at the heart of Comprehensive urban developmentwithout poverty alleviation. Development Framework. This morning, I want to help frame all the I think of development ~rocessas an ever- good thinking to come in this Forum by sharing lasting process of change, wherein people of a two thoughts with you. First, I want to place society choose to gain more control over their your urban work on a different paradigm for own destiny, enrich lives by widening their development. Second, I want to put your urban horizons, reduce afflictions and shackles of work into a different global context. poverty, and improve the very vitality of life. A Different Paradigmfor Poverty Alleviation I think of as first and foremost that of a society--a living and Our central challenge must be to deliver dynamic strategic "framework" that is based on on poverty reduction, period. So, I think about a long-term vision of the society's own; that our commitmentto fight poverty, all the time. identifies structural barriers for its transformation; that selects those who can serve I used to think of development as poverty as catalysts for change; and that is founded on a alleviation measured in terms of concrete stuff participatory process amongst the people to like per capita income or literacy rate. This kind reach down deeply into the society in creating, of thinking shaped my personal commitment to revising, adapting and realizing that vision. poverty alleviation. I never doubted the strength of that commitment. But, looking back, I think I think of country. sector, or city there was this little voice somewhere deep in my assistance strategy as our banking business strategy that maps into such a living and NGO leaders, slum community presidents or dynamic "framework". agitators. Engage with such people and form lasting alliances. Help them help themselves, And I think of our role as afacilitator for and their people. the process of a society's own transformation, invited by the society to serve as a catalyst for A Different Contextfor Poverty Alleviation change as honest neutral brokers, which after all is at the heart of our corporate strength. So, we are the facilitators who enable these change leaders and agents to see their So, success of our assistance cannot be dream come true. There are many reasons why judged by high rates of return alone, but by each of us wants to fight poverty that way, in whether development outcomes begins the urban as well as rural South Asia, with passion sustained social learning, spreading to a broader and professionalism for lasting results. I now society over time--whether the very acorn of want to share with you one of several that I such sustainable institution building has been hold--one that you may not have had an firmly planted and is beginning to grow as a occasion to dwell on, but one I want you to have strong oak. As such, it is an open-ended process as a "different context" to your work in fighting that cannot and should not be designed 100 urban poverty. percent up front. This is a "poverty alleviation" outcome to which I can hold myself I have a strategic view about our Bank: accountable. It is not an outcome beyond my that, in the long term, IBRD will see a lifetime's reach. There is no longer that "little significant geog-ra~hicalshift of its "customer" voice" anywhere in my subconscious,calling me base. IBRD's financial importance will diminish a liar. except for a few regions of the world. The last year and a half will be shown as an anomaly, Call it the CDF way, if you would like. It and IBRD lending to emerging and intermediate is a way of thinking about poverty alleviation economies will decline. In fact, the last decade that I want to see reflected in everything we do-- altogether will be seen as an anomaly--asthe last in each country on its own merits, at the national gasp of the post-World War I1 decolonization-- or sub-nationallevels all the way down to cities, as Eastern Europe, most of Latin America and towns, and village communities, and all the way East Asia will link up with the rest of the world up again. Exactly how, in urban work, is better through financial and other mechanisms that left up to your talent and teamwork. You know exclude us. To be sure, this is not a widely- that you, too, are empowered to think creatively, shared view. But, it is one that the South Asia act, and transform yourself and those who work Management Team shares, as a team. with you. For me to tell you how, cames the risk of micro-management, stifling your This view implies that the main innovation and throwing away many good geographical focus for IBRD, and IDA, will be acorns. where the world's poor remains concentrated. That is, South Asia, Africa, and certain parts of But, if you really want to know, or if you the rest--notably, parts of the Former Soviet would happen to ask me (here I go!), there is one Union, Cuba, remote regions of China, North advice I can give: Work smart! Don't waste Korea, Myanmar, Viet Narn, Laos, Cambodia. your time designing a perfect Titanic of social Note, that these are places that happen to contain transformation, and don't even think about an seeds of political instability, tracing the world's imperfect one unless it comes with a captain and "fault lines" of political uncertainty. This his crew. Be on the lookout for promising happenstance may not be a mere coincidence. It change leaders and change agents in any urban gives our Mission to fight poverty an entirely society--bethey elected officials, civil servants, differentglobal context. Such a geographical focus for IBRD and imposing substantial social and economic costs. IDA means a long-term relevance of our In Nepal, low-level Maoist insurgency is doing Mission, of course. But, it also means we must the same. In Pakistan and India, the Kashmir focus on poverty alleviation with a sense of conflict remains unresolved. In the former, civil urgency, equating it to global political stability-- strife in Sindh, particularly Karachi, continues. the world peace. At this time, it is only in Bhutan and the Maldives where the political environment seems We cannot let short-term needs of other calm (but, there may be clouds in the horizon parts of the world drive our "tooling up" for the even there). There is probably little we can do longer-term. Our stratepic "drivers" will have to to influence these factors. But, we must at least remain investments in social and human capital, become better informed by (and of) them in institutional development, good governance, and designing our strategy, as proactively as good old-fashioned policy, as before. But, this possible. political context adds critical dimensions to our strategic "drivers": a rapid scaling-up of rural Poor-to-mediocre governments and poverty (where we have a pretty good idea on governance--poor-to-mediocre political leader- solutions) and a serious attack on urban poverty ship, that is--are the other major constraints. (which we do not yet comprehend as well as we Bhutan and the Maldives demonstrate what the should). In both, I hope we can set our eyes on combination of political stability and jump-starting a dynamic process of social enlightened and/or strong leadership can do for transformation, rooted firmly in empowerment development. Afghanistan defines the other and social mobilization at the grass-roots in rural extreme. In between lie the rest of South Asia, and urban communities. Stable societies are burdened with political plurality driven by ones that have discovered positive powers of ethnic, religious, or ideological divide, violent individual and collective empowerment--therein party-rivalry politics, and/or involvement of lies a link between political stability and poverty criminal elements in political process. alleviation, in rural and increasingly in urban Investments in people, institutions, good societies. governance and good policy suffer enormously as a result. What are events and trends that constrain us in moving in this direction? Not surprisingly, Yet, there are hopes at sub-national levels, they are political ones. After all, the ultimate as seen for example in some Indian states, even risk our Bank takes on its balance sheet is the in Pakistan's Punjab Province perhaps, and in political risk of member sovereigns. cities, towns and countless village communities throughout South Asia, where strong leadership Regional and domestic political conflicts is turning governments and governance around are the major negatives. Here again, the end of to work for development. We are indeed the Cold War has changed the political privileged to have such leaders as our partners-- landscape, "downgrading" the world-wide some of them are among us today. I hope that attention to localized conflicts, until serious partnerships with such islands of success problems erupt (e.g., the nuclear testing in India wherever they exist, and with civil society in and Pakistan). Political constraints to general for participatory development process, development are present in all countries, not just will be at the heart of South Asia's urban India and Pakistan. Afghanistan is our extreme assistance strategy. example--a nation of people who have never seen an enduring peace in its history. In Sri So, once again, work smart. Do not waste Lanka, the civil war continues to take a heavy your good time on a Titanic without an toll in people's lives and financial resources, outstanding captain and a first-rate crew. Be on mortgaging the country's future. In Bangladesh, the lookout for promising change leaders and "hartals" and politically motivated violence are change agents among elected officials, civil servants, NGO leaders, slum community operational sights so, I dare say the magic of presidents or agitators. Engage with them. poverty alleviationthrough social transformation Form lasting alliances. Help them help will happen--in your own lifetime. themselvesand theirpeople. If you set your 3.THE BANK'S URBAN STRATEGY AND ITS CHALLENGES Angela Grifln, Sector Manager TWURD. WorldBank Aim of Strategy The Challenge meeting increased -- (Urban "Mission"): needs and demands arising from: To help national and local governments build their + Urbanization capacity to: + Globalization improvethe lives of the urban poor + Decentralization manage urban growth + Government reform and adjustmentof improvecity efficiency and productivity publidprivate sector roles thereby contributing to nationalgoals of poverty aThese trends increasethe importanceof reductionand sustainabledevelopment. cities and local governmentsfor poverty reduction and economicdevelopment B]B URBAN @ URBAN Small cities predominate, but largerones Within a generation,the developing are gaining in share of urban population world's populationwill be mainly urban Percent loo T 90 80 70 so 50 . a 50 10 i 10 0 u * . L . l ( E s A U C Y W h h T M Ad. Ad. L J @ URBAN @ URBAN The DevelopmentStakes are High: realizedevelopmentbenefitsof urbangrowth 1 + through Sustainable Cities --which are: Cities account for the lion's share of GNP and wealth creation (1) "Livable" - + Poverty is becomingincreasinglyurban- and +with equitable opportunity for all residentsto 1 ~ cities face worsening public health, safety and participatein economic and political life of the city security concerns (crime, violence, natural (e.g. access to essential services, secure tenure) +in disasters) I + healthfuland safe environment * 'Brown" environmentalproblemsand urban * congestion have direct impactson household implies addressingboth incomeand non- 1 welfare (especially for the poor) and on incomedimensions of urban poverty, inequality and productivity. exclusion I ---- @ URBAN e URBAN 3- 1 to be "Livable" cities must also be: (3) Well-governedandmanaged that is - (2) "Competitive" where the challenge is for - + accountableand transparent local cities to strengthentheir comparative advantage: government, responsiveto poor,with broad +productive firms and households community participation +clear +spatially-efficient marketsfor infrastructure and rationalsharing of responsibilities (especially transport), landlrealestate, labor, and with higher levelsof governmentand with the capital private sector + localgovernmentstaff +broad-based growth of employment, including trained, motivated,and informalsector well-informed @ URBAN @' URBAN The Bank has a Strong Position in Urban: 81 Recordof performancein UrbanDevelopment (4) "Bankable" - financiallysound- that operationsgenerally strongover three decades is: + El Extemalclient survey shows appreciationfor Bank local governments have resources (user assistance, especially sectorwork and policyadvice charges, tax and transfers)appropriate to their El Globally,the Bank remainsthe leading international expenditure responsibilitiesand greater financial assistance agency for urbanwork autonomy + R Butwe have beendepleting our stock of sector good financial management practicesto build knowledgeand staff experience creditworthiness R And the Bank does notyet fully value the potentlal of cities ineconomic growth and poverty reduction @ URBAN @ URBAN Our challenge in this strategy is to Our Four actions for strategic achieve greater impactby: emphasis: + Taking holistic approach - the city as 1. National urban strategies integral unit of analysis and assistance 2. City developmentstrategies (within national framework) 3. Scaled up (national and city-wide) + Committing to scaling-up programs to help the poor + Reinvestingin internal urban knowledge 4. Enhancedcapacity-building and capacity + Working through partnerships @ URBAN 8 URBAN 3-2 (1) National Urban Strategies address: ...While continuingand strengthening core J Urban dimensionsof national poverty urbandevelopment products and services assessments --in municipalmanagement 4 Synergies betweenurbanand rural development municipaldevelopmentfunds housingand real estate /Equitable policy frameworksfor service delivery and financing urban environment post-conflicUdisasterreconstruction J Intergovernmentalfinance frameworksthat support the system of cities @ URBAN @ URBAN (2) City DevelopmentStrategies: (3) "Scaling-up" projects into programs J Facilitateprocessto identify the shared to provide basic services to the urban "vision"for a city; existing bottlenecks;and poor (e.g., neighborhood upgrading) requirementsfor action Buildingon existing successful initiativeswith the JDiagnose and relate povertytrends to city communities themselves through: functioning, linkingthe four themes /Sustainable financial policies J Support long-teh, cross-sectoralassistance programfor some cities that want such help /Security of tenure /Arrangements for partnership @ URBAN @ URBAN 1 7 Example "We have seen a dramatic Example Bank Slum Improvement Project 1 decreasein violence in Favelas that have (1997) been upgraded." 1 - Favela Jardirn Soma PubkLn-trmtSl,Dmprhdb lnr- h h p 3 V . * r : SlOPaeprbmIb @ I Y m u Y n y . b &mbmWotG-ppd URBAN @ URBAN 3-3 (4) Expandand acceleratecapacity- buildingof localgovernments: To Complementthe NewStrategic /Support professional nehvorksand associ&.ons of Emphases: local governmentsfor sharingof experience,technical assistanceand training +Lending and policy adviceon housing, land and real estate markets,and uhan JDevelop non-project based Advisory Services for environmentalmanagement timely provisionof direct adviceand technical assistance. Continue MunicipalManagementprojects and support +Integrate disastermanagementand cuttual to market-orientedMunicipalDevelopmentFunds, herftage into urban development assistance especiallyfor secondary cities +Resume programsof researchand tool JWo~ldBank Institutem i ) expandingmunicipal development training @ URBAN 48 URBAN To Complement the NewStrategic lmplementatlonof strategywill requlre: Emphases: +External partnerships and fundraising +Coordinate lending and policy advicefor +'Urban Partnership' set up in 1997to - infrastnrctuminvestmentand reformwith incubatespecial initiativesand mobilize support forprivate sector externalfunding participationMnanclng,in specHicsecton -- urbantransport, solid waste disposal,water 8 +'Cities Alliance' - allianceof donors to fund sanitation, powerlheating,telecoms-- with IFC City DevelopmentStrategiesand scaled-up programsfor urban poor +Help bring cities to capital marketsthrough mitigatingmunicipal nisk to enhance +Local Authorities/Associations- for networks creditworthiness -with MIGA/IFC. and capacity building @ URBAN @ URBAN Implementationof strategy will requlre: +Internal alliances across networks and - Challengesof Respondingto Urban thematic groups of the Bank, andwith IFC and LocalGovernmentDemands: +Capitalising on the CDF +Ensuringthat we havethe right assistance +Building Knowledgeand Capacity products +Selectivityvs. +Core electronidpublications knowledge comprehensiveness-taking holisticperspedivewhile retaining necessary depth base in each main area of urbanwork, with a intechnicalcomponents network of external knowledgepartners +Financing non lendingactivities (e.g. country +Skill buildingand recruitment urbanstrategies,CDS, advisoryservices) +Regional Urban Action Plans @ I @ URBAN URBAN LendingComparison: UrbanDevelopmentLending: FWO-99 UrbanDevelopment, UrbanTransport, Urban Water 8 Sanitation as a share of Total Lending n 1: tau f 32% b" I B fl" i . 0 i 1 " 0 , DI lDDl 1- 1 1 1 n @ h.oeC+S-dD42(11 URBAN @ URBAN ?,:Oju Urban Development PorffolioDistributionby Regions Pipeline of Urban Development Projects: WOO-'02 (Numberof Projects) mu. Yd..W.lbrh n- euau. -0 L.AC.nk.. hYLO.PI1.N& E~IU.a?mdh I,* EMp.-u. mM..kdlb mu L.lk*.ldr.& o* CulYa Elqa-Ah-0.: om.A,. O W C I . h P 6 k OkoF.hcI..Iy. 11- t4- 2,. qsn - 0L.h-h- O L 1 6 L M b - W 0-Y. %zzd.u! @ @ 0s-dky31990 *dd- ,.-a."d .udq URBAN URBAN 4. FLOOR DISCUSSION: GLOBAL URBAN CHALLENGESAND STRATEGIES Chair: Manuel Panalver-Quesada, Director, Operations, South Asia Region Panel participants: Manuel Panalver- experience, shows that we've gone about trying Quesada, Director, Operations, South Asia, to solve the technical problems independent of panel chair; Frannie Leautier, Sector Director, the other dimensions. And that has been a Infrastructure Sector Unit, South Asia; Mieko miserable failure. The origin of the problem Nishimizu, Vice President, South Asia Region; does not necessarily dictate the direction of the Angela Griffin, Sector Manager, TWURD; solution. That is one thing worth noting. The participants from the floor: Warren Waters, other fact is that by working in various Social Scientist (SASSD); Jelena Pantelic, disciplines as a team of knowledgeable people SASIN; Mansour DeLarney, World Bank trying to solve the problem, there is a better Institute; others. chance of arriving at a solution than looking at one independent discipline. So that's the other Warren Waters, from poor aspect of it. Also, when you try to solve only the technical side, you don't end up with a Ms. Leautier mentioned that work starts sustainable solution, because you're missing out with the social before the economic and on the dynamics that will sustain the solution. physical. But the ideas usually come from people with technical capacity and technical One example is lack of operation and experience-those with particular civil works or maintenance. Anywhere people go, they can engineering or environmental experience. So find structures that have been built, but are not generally the problem is not identified by social maintained. Buildings are not painted, roads specialists, but by problem area specialists. That have potholes, and so on. And the question is means that the challenge has always been to link "why?" Fundamentally, it's because the social. the two sides early in the process. How can that economic and financial aspects are forgotten in linking be better made when the concept is still a that solution of building the structures first. twinkle in someone's eye or a voice in That's a clear, physical manifestation of not someone' s head? remembering the importance of looking at the process that will sustain the solution. The only Frannie Leautier way this can be solved, both within the Bank That's a very good question. The finding and with the client partners, is by working with that shows this order (i.e., that works starts with disciplines in a team; social experts, technical the social before the economic and the physical), experts, financial experts and economists, that seems to make the most sense when thinking together. When all of these elements considering the past fifty years of development work together, there is a better chance of solving the problem in a sustainable way. MiekoNishimizu working in municipalities that don't have the capacity to respond to their community needs. The question from the floor is a very important one. My suggestionfor improving this A participantfrom the floor problem would be for engineers, economists and social scientists on the team to each have one In my opinion, there is a lack in the experience that would put them "in the shoes of Bank's approach between two dimensions: the the people." This would help them look at the macro-economic level and the physical level. project from the point of view of people in a The people at the Bank do a lot of macro- society and community who are affected by it. economic planning using different tools and then This means spending days and nights living in a they do project work. And in between the two, society to understand it through the eyes of the there doesn't seem to be a tool that can translate people. That would increase the chance of a macro-economic planning into territorial team having a shared experiential base that planning, and that would incorporate in an transcends their distinct areas of expertise. integrated fashion all of the elements this discussion has addressed. A participantfrom thefloor Sometimes, in the Bank's work in It's important to start the salvation process different countries, there is an assumption that at the city level. This means inviting local maybe the country will be able to use the tools NGOs and other participants and placing more it has at its disposal to adjust its master planning emphasis on the process of setting up and exercise or rural planning exercise, and the Bank establishing an urban strategy; when this is can sort of integrate this at the project level. done, practical issues have worked. There have And most of the time there is no suchtool. And been successes where participating processes therefore, sometimes the Bank ends up in a sort have identified very practical, fundamental of piecemeal achievement on the ground. This is problems and solutions. And these are good a very strategic and important issue. More of a solutions with lasting effects, because they're building or a central planning exercise is needed. sustainable. Right now, this is not generally the case. But we do have to do that link, because it's going to take Angela Griffin place anyway. Yes, the city development strategy pilots Frannie Leautier that we've pursued have actively involved community representation, whether it be NGOs This is an important question that the or private sector community groups. And the urban strategy is trying to address by giving us evidence is that it makes a significant two tools: the City Development Strategy and contribution to the awareness. People see their the National Urban Strategy. Those allow us to community through a different lens, whether it bridge the gap at the city level--and then maybe be from a private-sector,business point of view, look at regional economies through systems of or the point of view of a person living in cities, when looking at national urban strategies. conditions that are not acceptable. So The Bangladesh case is one of a National Urban undertaking a city development strategy can Strategy looking at urbanlrural linkages and help. In addition to the village immersion regional patterns of growth and the implications program that South Asia region pursues, there is of that for cities. And then there are case studies a suggestion in our strategy of what's called a at the city level. The strategy is providing two city immersion program. This is the suggestion new tools that were never really used that way in that Bank staff spend some time in the past. municipalities and actually see what it's like Manuel Panalver-Quesada for a ten- or twenty-year period, because this is long-term planning and it has to fit with a long- In talking about this, it's important to term national strategy. identify the actors who are being talked about- whether it's the Bank or the countries that are Angela Griffin being talked about. Yes, taking that holistic view on a City Angela Griffin Development Strategy approach should, over time, mitigate some of those risks. It won't Is the question that, even if what has been solve all of them though. done is to undertake the National Urban Strategy or the City Development Strategy, in your Jelena Pantelic, fromfloor opinion, the tools don't exist to enable us to capitalize on that work? Is that your question? One approach in planning is to try to Does it pertain to master plans at a regional or marry the strategic approach with the local level? operational organization on the ground. So, in terms of urban "specialization of the problem," A participantfrom thefloor there are situations in some countries where a lot of work has been done on the physical level, that Many of the instruments we've been is, on the long-term planning level, but without talking about have already been integrated in paying very much attention to the financial, their program in the process of creation, that is, economic, and long-term strategic planning. So the economic and the social and the this is really where the synergy between the environmental aspects. But they do in fact strategic approach,National Urban Development translate into physical intervention. These are of the strategies, a City Development Strategies maps at different level, and at different scale. on the one hand, work parallel with the Having such tools (i.e., relating to territorial, investment operations. This is a strength of physical planning) is what matters at the end. working together. On the one side, Because whatever economic decision is taken, it theoreticaYstrategic and the experimenting and is going to take place in a physical intervention, trying these postulants, the findings of the whether it is through an industry or having previous experiences, how do they apply on the development, or a sewage waste treatment plant operational side and vice versa. This is the or whatever. And whatever physical develop- situation that we have in Sri Lanka at this point ment comes along has impacts on the plans. At in time. the Bank, we do tend to try and figure out what we're dealing in with impacts of those from the A participantfrom thefloor project level. This is a new environment. This (the Angela Griffin (interjects): Yes, but not Bank) is a place that is run by macroeconomists. holistically. Some of you will remember Vilna Lonzo and his famous phrase that "for macroeconomics the A participant from thefloor world dances on end of a pin." For a long time, urban work was considered a sort of appendage But not from the top down, at the of planning. So it is significant that you are nationdregional level and the implications of mainstreaming the urban agenda in your region that. We do it from the project level. And into a macro view. maybe now it will be possible to do it with these new tools. But so far, in my experience, this has We do have also another point that is a not happened. And this is a dimension that is very fundamental one. We have obsolete missing, but whose impacts may not been seen statutes, which do not pennit us to lend to local governments. Take the OECD, for example. able to satisfy the increased political demand The OECD is a club for central governments. In with the voice. And the question is, to what most countries, local governments are in extent has the South Asian region really opposition to central governments. So my point considered lending to the city govemments as is, in making the connections, one thing that was they've being doing with the state governments, consistently missing in the urban agenda, was an particularly, in India, given some of the attention to law, to regulations, to corporate credibility issues, financial credibility and risk structure. A lot of the urban agenda vanished issues, that will generally raise their voice. into PSD. So why we said it failed was simply because people were looking at bricks, when it Frannie Leautier was looking at urban sector. Every morning an architect would visit me, saying: "I've solved This is a very important question, which the urban housing problem of the world. I've within the region, I can tell you what we are designed a better brick!" I would say: "Look, doing given the constraints we have in not being this is not the problem." able to lend directly to cities. First of all, we have criteria for which cities we work with. Essentially what was happening was that And that mimics, in a sense, our state focus the urban group didn't have the professional strategy, for example in India. So that's one skills to deal with laws, with regulations, with way in which we are able to work with cities governance, with decision-making structures on within countries that have a large number of one side. And on the other side, the macro- cities that can participate in this way. And to economists felt that Housing and Urban was give an example-even within a state, such as mostly policy issues that were not so significant. Tamil Nadu--you can introduce elements by You have all the NGOs in this case. So now it's which cities and local bodies can compete for very urgent that the prevention be re-established resources following a particular selection between the macroeconomists who have their criteria. Within countries where there are fewer view on everything, especially what they don't cities, it's much more difficult. For example, in know. And the other thing is really my plea- Bangladesh. But there, the strategic approach there have been three revolutions in urban work. we're taking is to have an agreement up front on It's the introduction of poverty economics which what the National Urban Strategy looks like. include the urban issues. The second was the And once that is agreed, then you can get all the introduction of finance and the third revolution cities and towns to move in the right direction. is in the urban governance. If we don't include So we have limitations, but it doesn't tie our that in our agendas, we'll have public relations, hands. Because we are able, even within those but we will not have results on the ground. So structures, to do that. Also, in the case of Sri we cannot disassociate the poverty agenda fiom Lanka, we can work with the PC, and since P C the tools. I don't think that there is a gap can take an equity stake, they can work with between central and local planning. another part of the city that we cannot. So if we think broadly in terms of the tools we have Mansour DeLamey,fromfloor available, and the instruments, we are quite powerful, actually, in terms of being able to My comment is one that basically refers to work at different levels of a city in different the political economy of the urban issues. The ways. key question is that as we see the process of political decentralization taking momentum in Mieko Nishirnizu South Asia and other regions of the world we increase political voice in the parliament and at Just one comment. The only thing is, the city level. In fact with India, as we see in please be careful as Bank staff when you talk China, it's at the village level. Let's get the about who we canlcannot lend to, as articulating economic resources and economic means to be articles. Because remember, we are trustees of other people's money. We do not print money; decentralization and the fact that it actually we borrow money. We are just entrusted by the increases people's autonomy at a local level. taxpayers' contributions through donors. Just They become legitimate and powerful in their like your bank, my bank, in whom we entrust own right. Some mayors in Latin America have our money. We're in the business of trust and been elected as presidents in their countries. when we decide to lend, we have to make very They are going to place more and more organized judgments in the case of IBRD and increasing demands on the Bank. And quite other long-term political risk judgments in the legitimately, because of the responsibilities they case of IDA. Either way, the reason why the have for large populations, and for expenditure, Articles we adopt are not outdated--they've for resources, and for being advocates for their always been ahead of us, govern us to lend to community. So we have to think about how we members' body, or lend to sovereigns--period. handle that in the future as decentralization Which, in economists' language, is a collection increases and as their expectations and of people, through an agent that is regarded aspirations rise. No one is recommending there legitimate by all members of a cooperative, should be a change in the Articles, because we which is the World Bank, as those representing know what that would imply; however, there are the people. And that's the body that can implications of decentralization and how we'll represent the sovereign credibly, the sovereign's respond to these increasinglypowerful mayors. commitment to take on the debt, and the national debt. So there is a whole financial aspect to that Manuel Panalver-Quesada consensus. So let's respect that, and use that as a powerful positive force to help actors at As we close the session,let me at least ask different levels of governancecome together on one question without suggesting that the answer the same focus, rather than to make it a divisive is given now. One of the challenges that instrument. intrigued me was the issue of scaling up. And if it's true that we know how some things work, Angela Griffin then if it's also true that we do not seem to be able to get to the scaling up, the question is Just a comment on this point. We do have "why?'This is a very important question that tools that enable us to lend through agencies-- certainly has worried me, not only in the urban municipal developmentfunds, etc. But we have sector, but in many others, for many years in the to be aware of the implications of Bank. 5.INDIA TAMIL NADU URBAN DEVELOPMENT PROJECT (TNUDP) STRATEGICAND COMPREHENSIVEAPPROACH TO URBAN DEVELOPMENT Hiroaki Suzuki, Pr. Operations Oficer SASIN, World Bank ---.- Financing Basic Infrastructure Supportingthe Implementationof Urban Reforms by strengtheningthe capacity of ULBs Secure Sustainable funding sources for urban infrastructureinvestment. ~ ~ e s s oLearned n s -- Long-term commitment(20 years) Scaling Up (Madrasto State Wide Operation) Demand driven participatoryapproach (linkage with CCPICDS) Phased Approach toward the Market-Oriented Urban Financial Intermediary (GOTNowned hnd --Public-PrivatePartnership--BondIssuance) UrbanInvarmcnt Chant Fund (Poverty Focus, R&R.Costs,TA) hfUh'ICPALITIFS (PRIVATE INVESTORS) Mr. P. V.Rajaraman, Finance Secretary Governmentof TamilNadu, India ,Y\I ;\ India:TheReformAgenda , India:TheReformAgenda - --- hILI#rlll~8hcrl~rcrrw@Llncr@l *iirmr nu~llcsavinmsbydlawrsmrmIn WLhllrudwtnl 18ssmammrmmtimsandW ~ Y )IwrrnmIwh-ra bdgot81~ wmmnhrtla sacklu m r . r l m m m ~ ~ ~ rsnrclrll~,nubllcLraItbandrdacItlru R ~ . n n n ~ 8 ~ i l b n u p l # l D L @ r r l t r - o m . r . m U r . k n ~ m ~ m ~ l l ~ D u m r r r n1A t n m c m nmrrhnmc l l t r l I m R l w ~ m l l w ~ n m r l Y r m rsrrclrlhrhu c m n w l t mm m sm b r l l l l c l ~ k m m h - k Q . d mu- atmcthrr. -- - - - - - -- -- - -Raductlan afSIIWIW~SL n m bbeltor castncavm -RaBuctlan ofamandlluraangnwlb of -PSB d l t l n ~ a n t l ~ ~ 1 1 9 -Eaablln# ~ r ~~ n~v at sa~ Ina l t ~ IPlmm!cmre -Tax rafarms Y Tamllnadu:RefonnAgenda *-Tamllnadu: , TheUrbanC e ~ t a t - - - g,--- Q 1019YLTrmllaaduLadaSDDnlMDn8155.. dy * YtbWnlelm@lrnS m1111rnWIC~ mlrrsmarm m~rnramt, ~ r r M I ~ m s m m m w u r r l ~ IntlrcrnotnandummLmmallrrIns k ~ m -Ylttmrrr#s C D M M D S S U C asTurkry,~rllaodDrhnC8. ~ * stm(lllmlrublWU~wb .- TamllnrdubasanlathrrhrIrmrnnan YllllkdYrrcmctrrrLlcbcrmmtt(lrlunr r r r ~ l a t l r nThr nrrermmr rlstaasurban kv#llrrlIrLrrwm~rrlrnrnar nrrnlMrnIn19¶l was%I% slmutflcartlllLlmLrr ~WllVIIMlElhm@lYleSICElrYllJlte thanmaallladlarvnnmad 26% andna~anhrt8 mat r fMabrashln 6-1 csI n nIsulUclnollltlmmtLattLmmrlmrarcn nhmsrdllLamanImIMrtrm k nIwal rlllll cHY mmnmalernmrlLmtMnmmntrrLlcL n c a m a smowc8olmllkwt e l#DC@ ImBBHPhntltlll#mmdU mrmnmmmfmmmImdHhnmmtuio n m a r a rIreatrrdmanrrrrrrhnd m l a r rmfm r k r 8 UmanTamllnadu:ThePollcy Baclgrrrn a r t k t d r n ~ r ~ ~ ~ l n . ~ u * ~ ~ ~ m h ~ to8mulnrkrMmaruhadba8rllmtcbmna Imm# marrlmtmrl8rbarn~ m l l 8 a Uuhtb r ~ n d m l l l l l n m b , k r c r u b ~ u ~ 8 l l t ~ r m nn ddmunnlkl. r m ~ r n u nad~rada~ tsllll*rmr C n t m c r r w r O r r l l r w c b m r r m r ~ d n U I hdIdWrm* -El Ik 8 l m e LladllamWnkm8mhnd88lbal r r b b rdlba8 t h pat, U8 m l M # d nnrlnbbmrballh11111lldn nultlr8U-08 8aad1n ad m d-8 bark UrbanTanrilnadn:Backgronnd UrbanTamllnadrr:Background --- s NUB?tl#8&8@1wasr m o mmr ~ m 8 l l c # ~ ~ ~ U ~ I c m k l w m ~cmrkgmmm8Jmr o miinado:Backgron UrbanTamllnadn:Background S r c u l # l u b m W l u g r nroumuwmt u c e k l l l l l l m u l m : W m l m l l l a U t U ~ I I w m . m r m ~ d m ~ ) n * Z I m w m m n m ~ a r r r u ~ ~ I r ~ ~ ~ u l MIW B U h0- 71111LOmLOYlh481$In& e T Y I m ~ ~ m U u ~ I Y l t m h ~ m ( l c l l l m n ~ m ~ I w @ mcmdl l 5Limsmd ~ l r ~ a h r s M c ~ m R W b u I I I C U U ~ ~ C c t r ~ b u l ~ c M c m W l u ~t~~Iutmd of nrkl nrcrr~os 1,@UmanTamll~adu:Prospects 7. URBAN TAMIL NADU: YESTERDAY, TODAY AND TOMORROW Ms. S. Malathi, Secretary Tamil Nadu Municipal Aflairs and Water Supply Tamil Nadu, lndia Urban Scenario in lndia Demography URBANTAMILNADU 1991census indicstcs 217.18 million i.e. 25.72% constitute the urban population. tr3rds of urbanlndia Live in Class I towns (with more than 1,00,000population) 113rdlive in 23 metropolitancities YESTERDAY, TODAY AND Projectedurban populationby 2021wiU be 618 million and TOMORROW constitute40% of the total and by 2025 will become 50% of the population. Urban Scenarioin lndia Urban Scenario in Tamilnadu Qualityof Life Demowaphy As per 1991 cmsus More than 50% of urbans do not have access to adequate, Tamilnaduis the 3rdmost urbanired state in the country . clean drinkingwater afterM a h m h m Gujarat. 50%not coveredby sanitation Facilities 34.20%of population arc urban ll3rd live below povaty line. Over 600 Town Panchayats, described as oansicoryareas in the 74th ConstitutiondAmendment w m broughtunder thc MunicipalitiesAct in 1994.With this the urban populationhas reached nearly 40% of the total 60%of the urban populationlive in Class I towns About 15%in the singlemetropolitan cityof Chmnai. - Some Characteristicsof Quality of Life urbanisationin Tamilnadu Hasbeen growing consistentlywhereatevenMsbarasblra Urban poor constitute25% of the population. has cxpcricncod dcc~cssein cmainyam. Water suppliesvary h r n 34 lpcdin Town Panchayatsto While theurban population between 1901to 1991 74 lpcd in Corporations,significantlybelow the norm of i a c n d 60foldthe &an dements increasedonly 15 70 lpcdfor Town Panchayatsand 1I0lpcd for fold. Corporations. This has resultedin a largenumber of small towns leading Only 57% of population in Corporation areas. 32% in to low thresholdsforemploymat generation,sustainable Municipalities and 16% in Town Panchayats have access economicbase and viablecapitali n ~ c n uinvntmcot. c to safe sanitation Although70% of Solid Watte generated is collected, most local bodies do not have organired disposal facilities. Less than 50% of the roads arc provided with StormWater Drains Some majorcausesfor sub optimal Some majorcausesfor low levels urban Infrastructure urban infrastructure Urban arcuhavenot had politicallobbyingpowcr dueto strucW i m b b tctwccnnumber of pllrcly &an codtucncia d urban poplktioo Cmm o d Stateinvcrbncnceh v c Gcndsdtomfled d hfmtructurc priorities, refleclingthe mindsetthc "India Jivesin hcr villages': e.g.. while investment i n d water supplyis in h e form of Stateequitychat inurban is wholly debt. Some majorcausesfor low levelsof Some majorcausesfor low levelsof urban infrastructure urban infrastructure HRD and capacity building in the sator hu been Traditiohal wisdom is that all capitalinvemmt in urbrn neglected. Urban m~agcmentasa disciplinehu not inhmsture even watcr; ad tat ion, ctc, m u be financed received the attentionit d m e s eithcr6mnacademic entirely by debt, and that the debt md O&M must be institutionsor fiumthe praaitimers. As a mult thereis serviced by the urbanlocal bodies,eithcrfium user ncitbcrr database, countrywiderecord of best p d c a , chargcsor generaltax mcnues. Suchan presumption nor m instituteof exwllenceeither at the nuioad or state igom: lcvel which can impart quatity blining topcnormel in dl r M i t i armutimemdrpco1-8 mdiv-a bmtwm aspects of urhn management. pivmand d d hdia b . ~ o f & e d b U D J l m c y i n I W J b O d y P x ~ ~ ~ ~ I I Some majorcauses for low levels of The 74th ConstitutionAmendment - urbaninfrastructure A Turning Point l'he 74th ConstitutionAmcndmmtAct was p a s d in I I Laws p v . n b 8 U bcdyadminiswationh v c become 1992. The dicnt hturrs of this amendment,cxpcmdto outof date. have an impact on ULB adminirmtionarc: I I All k c , have led toUrhn LoulBodies,waining - M n d O a y E J e c d a u d t h r s p v . t i a n t n w m a a d w ~ subristcncelevel instihltiolwbarely abk to keep dolt,and seaiau 1ool;ingup to StateGovernment8for dolescvm for - Anln&$admt EIeaialcumninion - A S~IimcoCoMnirdonmlosDmmcndbaisforhlrufcrof ~ h s m e t D b u l b o d i a - Divirianoffudmd RIpondbilitisbdwmrtU.d I d &a The 74th ConstitutionAmendment - State's reformagendafor the ULBs A Turning Point Althoughsome provisionsof this Constitutional Includespolitical, fioaocY and adminismrtiverefonns. AmendmentAct lack clarity and arc impractical, the basic The chanps put in place so far include: spirit and h m o r k of the 74th Constitutional Electioar toall ULBs in October 1996. Chetmli Amendment, has been able to set in motion measuresto Municipal Corporationwent to polls 23yean. improvechc Lancial status and thereby performance Statewideelectionsplaced in office levels of ULBs. - 14.000 Cancillm AlthoughTetpilmdu passed the thcfirmity legislationto - 7U)chuipnar~ the 74th Amendment in 1994,the reform process really - 3500wommd startedin 19%. - 1MO mnnbsnofwderuccionr * State's reformagenda for the ULBs State's reform agendafor the ULBs The State FinanceCommission's rocommendations IDraidTrmkmW MumdN.lH*I implrmnrtcd h m Financial Year 1997-98. Major ones arc: - 3.6% of Sme's tu m w s p don to u r h lo& bodies - Inter-= dlocmian baedonpopllltimpsupim expednmand pr upim mmue. - 15% set.put~m~iraima~inc~ltivcfundtomrud psFDmmnce and 'lundhold' muchlnlly unviable ULBs - 90% ofEntntainmentPIparedonaloul bodia - R e s l ~ ~ c t uofgthe MUDF componentof TNUDP to h - To&vdopnlaulb.advawntingmnueJTorULB% The matethe h t Public-Rivate pu-lnenhipfor financing lynnnof.onul-6ngirbdngiaplsmsled12ULBahom urban infrasmcturc. f i d d you 1999-2000. It isexpatdm boBwdsd toomQlin FY2000dl.'IhcnmhrqpouhsdbuN.lidInrdb1oc4 The Grant Fund, set up under the resmcturcd TNLJDP I - ChussdAaumtmm dmu& USAIDFIREDpmjecttcdaalop was wedto: S b d d for LoalBody Acsanting ~ - - ~cc motim in he mmputsidm pmgnmmefordl ULBS in DRRConcessionA m t for be61s ULBrponraredBOT Smtc. Hvdwvc suwly hmban ~ t h m besl hrr projectin the camuy. dtvdopedfor dl nnmidpd fundims andindled intkULBI It - h d o plbeSySemof D&mS u p e ~ bMdhqmbmt l isaxpecDsdtobe fullyddidby end 1999.2000. dimciaforULBs. Thish acnhncodp.crofpmjm - Thisinhefinimajorampmr;utim .tTonin mem a y for implpncnmion. ULBfuKtions I Value of capital works executed by the Municipalities Others The Statehas issued several administrative ordm. delegatingpowers tocouncilsfor approval and implementationof projects; prescribingn o m for staff for variousbasic functionsof ULBs, put in place a policy for unbundling of basic civic saviccs and for their piivatisation. Impactof the 3 year reform - With the increased resource flowsto ULBs, with simultaneouseffort at cohancing their capacityto implement projects the quantumof capital invesmcnt by ULBshas seen an impressive spurt in the last 3 yean. With ..*in- f mt)u '(jnntFlmd' of W F . tbr ULBs b e h.m.bk nail of Y) "-lad hti lolkcrmlofR~140CmmfkmW F ,inbjlkLlt3 . -. LongT e n I.Th Common Urban Local Bodies Bill SOM ofthe imponantprwisionrinthirAct a: - The wmmn U h Loul Bodies Bill is aarmrehnrive I - - !A)~dmWtofchcri*~ d kl6dprliuPbn I I frmwcdfwULB, in theS o n rrpl&g .bA.8 n;i*g - nri- the mmluay .add i r i - h x q f-tiaudhbul Iceisluionuand ukemm.cuwntthe ~ m mdav daman& on t bodicr. - U b s , theirneed to bcmmc mxpar& inqrn& A ~ u u b u e d ~ m ~ r t c m v i t h p % i s i m f o r w K effcaivcnesin dK needmdopt .I- modesof d o c .adpe0.kfor&I.>d p,mcaux delivay. - Ri-dIrb.mrrvisn. - - Thelegisluionwnd y s dmhtailbyawmmitteeof -upitJ-fa- Iqiduiq forwcr a ycar, duringwhich viewsof mtsholdcr - Tnnrprrm&dsotinloinchdcumoma coadlsnioo, gmrpswr,elkhad~prrsafativqCmproyees, g a ~ apublic ac l -pmup,lhi&d.ad-d.r*. wereheardand ~III - ~ o f l ~ ~ L r ~ . r u o ~ l . modifiuciom,prcrsdby IIK S W lqjdrmrc in Wkr 1998.The Icgirldonhas snse bsn susled(9 bythe - kbdhg oncwhmcaompublicW cEatiwk. h i k tofIndia I I HRD FORULBs For the first time the State would undertake a major training program for both officials and non-officials of ULBs. TNUDP I1 has a major ID component which would concentrate on comprehensive training,system improvements like computerisation, lateral enby of professionals, for specitied periods of time eb. The Tumilnadu Institute of Urban Studies to be restructured to became a state level Training Institute, capable of sustaining the training efforts to be started under TNlJDP Il. HRD FOR ULBs HRD FOR ULBs Citiowill go in for prepadon of city corporateplans - a b m n t prrpvsd (D d s s t rho cily's p l w for a paiodof 5 yean mdwhicb Financial will includennjainv-o, o o u of hvlding ns. ~ With the on-lendingcomponent of TNLJDP11, while the Theaty mrparteplm will ka cbaunent which will kh d i d &Idiscusionwirhdldeholks,visWnasgroupr;residms large ULBs will be enabledto access the capital markets uaddionq pmr naghbmoodS ns..andwill kadoptedby b e directly,the small oneswill do so through the TNLJDF. council. With the groundingof a transparentaccountingsystem, Two dtia, Coimbatorrn d T~mppuare right now in rhe pnresr of meaningful budgeting,and inhousecapacity for luulidngmcircity PI=. Tarnilnabwwld soon be iasitutiorulising thism. effecientmanagement of investments, urban local The cily carpontep l q will kidentifyingmajor mrrof inv-5 bodies are expectedto become vibrant, and self will bccomM impottmt doamrnt for my Finanod Inrdmtion,&st sufficient bodiesresponsive to citizen needs. rhe UEm am r c a r tun& fmm. Tamiinadu Urban Reform initiatives - - The The RoadAhead -The Challenges Firsts BOT projectto be undertaken by an Urban Local Body Evenwhilethe Statehas endeavouredto implanta ULB sponsoredlarge project financedby usercharges comprehensivereform package, areas which are expectedto pose seriouschallengesare: (Madmi IRR) - Thccapacity both technical and financial of the private sector to take up computerisationof major urban local body w come in with large invsbnmb in the sector. functions. - Thccapacityofthesmdl non-viabletownstoputtogether To developan accrual system of of accountingfor ULBs financidly viable invabnmu, this pmblm will get further aggravated with the 'understandable' reluctance of F b w Pahaps the only state to put in place a comprehensive mnsida it "worth their while" to appraise such investmenu. legislationfor urban loeal bodies. - Sustained and relevant capacity building of the pnronnd in the A Rs.900crore investmentin the water supply project at sector Tiruppur,public-privatepartnershipmode. - Apolitid alcoruausonktyerarearrelatingtouserchargei cost mrovery, ac - Avulabilityofruiubledebt imlrumens. 8. THE TAMIL NADU URBAN DEVELOPMENT FUND (TNUDF) Dr. Krishnaswamy Rajivan ChiefExecutive Oficer, TNUDF Tamil Nadu, India Schemeof Presentation Prnrsmrfmrhll( ElhblrkrrmwmrsIrcmrs ltrrrrrnclrsrmaBncrd~ms -- ahMsmcmnarmmamanh1m11mn1m I?? SecuriuMeasures --- a ~ l r l ~ r c ~ r r l t . m c l n ~ r c # m r n (I~tuwt8rcLrW8m~mIlLICllhl(I m a dby C8lwlrlllIrllmubg8blwlkrr: m . n * * n Y g m t . m c a om#rumrarIr~mlrwlrmmIcrr ~ m m ~ m d a ~ m r r l c t a ~ m ~ a ~ 5 IIcaw rtu r m m i r lc w ~ ~ a m r l r l w l a ~rfU a camran. mmu a.[mia-mdlmg mmm c a ~ d w # C l l r c s a m a U B m I * ~ 4 Y l l ~ l d n O l w l ~ I k mrr18bduuimhla maaumacmdI-aIII- m1I m w w o a r r m w t l r k m r W ~ m 4p GrantFund[asou31.03.991 B8.bmm Strg8lktr98W I u m 11 &m6lmrd 801 0.a U58 6 s lltllnrl 5.51~ am un 155 c a ~ - c ~ a r ~ / ~ m r u ~ ~ s Call-lrcrlkmulnlIaWl~rr(W8hrIlrvI~C CmIII-Llr1M.h cum-InmllltlrhrmanrIflm,mna~Mlm~ nIut1#lUS ~ m Q . Q y 1 W ( L I r a - ~ l ~ w v m Ira j~tm-mma rn~mema I MaduralTollRoad - - -- a Wk~m1murnblrknlb~8-numrm ~ ~ J r c t C m l r l b L n C nmaRa n r krlntlrm~mhctUmrr,mYr~mwwtk t r l c l l k d l w m m 8 w l d m D 2 ~ t w ~ ww InstituUoralFramework - cbl b r m ~ r U u v l m l e r l l r L ~ b n ml~awYkrtl~lll#nlrrdrHarlerrm~ kur~ u n t r l m r u r m u d p m ~ mWllllldMbkmlartrUh#thtrtr c r # t n ~ w d ~ u a m ~ m ~ r m r h a adnnnullrk,lrrrlrrwrlrkrIrlnmctur 9. PANEL DISCUSSION Participants: Christine Kessides, Principal project has been built upon a strong policy base, Economist, TWURD, World Bank; Subbiah going into each of the areas that were Kannappan, Professor of Economics, Michigan State mentioned. Also, often, people at the Bank University;Eloterio Codato, Sr. UrbanManagement haven't scaled up because they've walked out on Specialist, LCSFP, World Bank, Hiroichi a good experience or an experience that had Kawashima, City Development Strategy (CDS), some flaws and they left. They had the baby in UrbanAnchor, WorldBank the bath water and saw there was a lot of grime behind the ears. So rather than clean it, they Christine Kessides threw the baby out with the bath water. Or walked out and let the baby drown! That's a Anyone would have to admit that this morbid example, but it seems that that was what project is a complex, multi-faceted project. It was happening. incorporatesdirect living standards,investments; it incorporates financial objectives and Another thing worth remarking is that governance objectives. And it is probably the what's key about this project is that it's been best designed and is already well in operation. built on 20 years of experience. Twenty years of This is an ongoing and continuing project. And experience, in which not only the government it very well represents what the Urban Strategy itself has gradually expanded its efforts across is trying to foster. this wide range of policy and institutional reforms, but also 20 years in which the That Urban Strategy, first of all, is emphasizing lendability. And this project governmenthas, at great pains, trained the Bank. Indeed, at great pains. addresses that directly through investments that are focused (for example, the low income sanitation component), but also through building The project is also based upon its very up the competitiveness of the local government strong commitment to broad-based policy entities, by improving their performance reform. And this successful, indeed, already successful experience should be celebrated. situation, by increasing their governance and management capacity, and by strengthening Although it should be celebrated soberly, this their bankability. It embodies what we're becomes the basis for the Bank's strategy in talking about in the Urban Strategy. South Asia and for other regions, that's a really long-term commitment. This example should be This project has also obviously been discussed in other regions, because it does so emphasizing the concept of scaling up, which, well embody this wide scope of reforms and again, is a strategy the Bank is trying to foster. objectivesthat are encompassed in this strategy. The question was raised, why has the Bank not successfully scaled up its successful experiences Another point that was discussed this in the past? Often, one reason it has not is that morning--the problem of the Bank's statutes, the multiple conditions are not there. This that there is this requirement of a sovereign guarantee. Therefore, the Bank can't lend World Bank, has made a point of it. There's independently, directly to local governments also a lot more emphasis on the issues of without a sovereignguarantee. This project is an governance. example of how the Bank still has tremendous scope to do good and to reach a wide variety of Today, there is so little in the field of scale of local governments, even within the economics in the way of prior theoretical statutory requirements that it has. What's useful principalsrelating to what is possible on the part about this project is that it's really focused on of a government. A good deal of what the process, the graduation process of getting governments can do has to come from actual financial intermediaries in place with private experience,and the economics of governance is sector partners, and having this be a part of not somethingthat can be derived from abstract developing a truly indigenous local capital costhenefit analysis, independent of what one market for municipal finance. That's the long- actually does. term objective. But this project is already well on the way. This should be the model of what However, one useful theoretical example we're doing. It would be nice for us to be is felicitous costhenefit calculus--because the lending directly, independently to credit-worthy budget constraints are all given in traditional local governments, but in fact if they're credit- analysis. These are a function of the kind of worthy to stand without a sovereign guarantee governance mechanisms that exist. for the Bank, they're probably also able and should be going to the capital market. And An important comment that was made there's no way the Bank could reach very many earlier in the panel is that the Bank's objective is of them. The important thing about this kind of not merely to provide some kind of capital and arrangement is that it gives the Bank a way of their systems for people, but to phase itself out reaching indirectly--through these financial of existence,sothat eventually the Bank will not intermediaries--a large number of local be addressing the entire problems of urban governments and at small scale of the development, but only pockets that are left governments. That's important because smaller behind, that are left untouched by the success of local governments will not be able to access these projects. And this success is extremely capital otherwise. So it's actually very promising because it's not really a marriage of consistentwith the Bank's objectives here. different governance possibilities--multi- participation at different levels of effectiveness-- In this case, there is a traditional Bank but, rather, generating a kind of "people's instrument that has been used creatively and participation." Normally, people's participation consistently over a long time with new partners. is perceived to be like some "new-age And that's what makes it different. And that's economics," not quite solid. But in this case, what makes it an interesting case. Both the Bank there is a certain elementof solidity. and the government should be congratulated; that this experience should be disseminated Earlier in the discussion, it was mentioned outsidethe region as well. how very important it is to many diverse decision-making contexts into certain Prof. Subbiah Kannappan convergent goals. And an important component of public choice theory is how very important it Over the past 30-35 years, the field of is to secure some kind of effective convergence Development Economics has undergone a of goals. To conduct a project, you can't just go tremendous amount of change. Early on, the somewhere, endow the money, and get people to criteria that were emphasized were investment act some similar sense of purpose. criteria. And now the focus is more and more on the issues of institutions, and how institutions So much of governance is particular. It's and organizationsand appropriate incentives are not universal. It's specific to particular important. Stiglitz,the Senior Economist for the situations and kinds of trade-offs that are very and less developed rural areas, but, rather, a important. And one of the important roles that great deal of blurring in the middle. the Bank can play, quite apart from phasing itself out, as projects are completed, should be as Hiroichi Kawashima a catalyst for providing a framework for From the viewpoint of City continued experience and growth. Development Strategy, two short comments can be made on this project. The first comment is: Another really important thing is the as of May 1999, there were 33 City or Urban political framework. There is a great deal of Development Strategies either active or misunderstanding and misrepresentation of the proposed in the Bank. And yet, something political framework of India in the popular different is happening in Tamil Nadu State. This press. Currently, there are political is called City Corporate Plan (CCP), and it has developments in India and the emergence of already been incorporated into lending projects, states as centers of decision-making importance, the mainstream of the Bank. comparable to--no longer the monopoly of--New Delhi. There is a framework of evolution of The second comment is that earlier in the machinery--of machinery of participation in panel it was mentioned that there is a institutions. Democracy has provided some government goal to institutionalize the process room on, or least political civility has provided of City Corporate Planning at the local some room, for experimentation, learning and municipal level. And because this City moving forward. One of the major reasons for Corporate Plan is a statewide scaling-up optimism in India, and in terms of Tamil Nadu, approach, it is somewhat difficult to see how an is that some experimentation and learning have actual public consultation process is going on-- taken place side by side with the more dramatic and how widely and how deeply the political changes that have been noted, and there stakeholders could be involved in the process of is some machinery for broader cooperation and CCP. So the sustainability of this approach, continuing interaction. A final point concerns scaling-up approach, by using CCP as a the traditional distinction between urban and technical assistance is really dependant on the rural that has always been maintained. Rural coverage of stakeholders fiom the depths of the development should never really be completely consultation and could be well designed in a divorced from urban development. One of the way that would be managed by the local objectives of urban development in Tamil Nadu government. This would hopefully increase the also should be to bridge the gap between the capacity of the local government. It is urban and the rural areas, so there aren't just two necessary to assess the existing capacity of the polarized dichotomies of urban development, local government. 10. FLOOR DISCUSSION: APPROACHES TO URBAN SECTOR REFORM Cases From Bangladesh and Pakistan Chair: Sonia Hamman, Sector Manager, EMENA, World Bank Panel participants: Keshav Varma, Sector Director, and the fact that "city" is being looked at as an lnjhtnrcture Sector Unit, East Asia, (panel chair); economic engine for growth is very important. Dr. Krishnaswamy Rajivan, Chief Executive Oficer, One thing that one does notice after a South NUDF, Tamil Nadu; Hiroaki Suzuki, Pr. Operations Asian experience is that the leaders in East Asia W c e r , SASZN, World Bank; P.V. Rajaraman, at the city level have a very sound economic Finance Secretary, Government of Tamil Nadu; Ms. grounding. They talk a different kind of S. Malathi, Secretary, Tamil Nadu Municipal Afiirs and Water Supply; participants jiom the poor: language. They look at infrastructure, but first Jonathan Kamkwalala, Pr. FinancialAnalyst, SASW, they look at the economic role the city is World Bank; Brad Thompson, Attorney; Braz playing, the kind of investment profile the city Menezes; Paul Stanjield. has, the kind of exports and importsthat the city is able to generate--complete resource in terms KeshavVanna of human resources--and how that can be Congratulationsto the team from Tamil enhanced. And then the infrastructure is taken Nadu--Mr. Rajaraman, Dr. Rajivan and Ms. into view. So it is interesting to note what is Malathi--for a most comprehensive presenta- happening in Tamil Nadu. tions on urban development. Generally in India, this kind of synergy doesn't easily take place. The second point made is the one It's remarkable how this kind of synergy has regarding the contribution of local bodies to taken place between the Finance Department, building the State of Tamil Nadu. In the the Urban Development Department, the state, developing world, one thing that we have to and the city on a consistent basis and the policies understand is that we're still running cities with so generated may be replicated in other parts of rural laws. To give an example: the city of the country. Ahmadabad had 385,000 traffic offenses in 1985 waiting to be taken care of by the courts, and In terms of urban policy, the fact that these were twenty years old. The court system "city" is being consideredas an economicunit, that existed in the city was in no condition to handle 385,000 pending cases for twenty years. A participantfrom thejloor The city was spending 500 rupees to 1000 rupees per case, when the fine from the court One of the comments that was made is (when found guilty) was 5-10 Rupees. At a go very interesting. The Bank is so Washington- the city completely compromised, squashed all tolerant and therefore obsessed with markets, these cases, and then came out with mobile calls that it has a tendency to forget about market to enable offenders seek redress and other types failures and externalities. The question about of concepts. It is therefore fundamentally the grants reminds us that we have to review important that an upper local body is built in what we say about subsidiespolicy. But there is Tamil Nadu. We would hope to see this concept a dimension of scale of economies and so on, replicated and that urban management be done which is also part of the story. So my question through new kinds of legislation which takes is really one of information. In discussing the holistic view and all issues into consideration trust, in particular, Dr. Rajivan mentioned the before a decision is made. How you have question of guarantees and the role of the private established the political and the social sector, in a sense adding one layer of governance consensus, and generated enthusiasm on a and one layer of transparency in the process. consistent basis is another very interesting issue What is the current status of the project that has in India, where the Bank has had a very varied been discussed for some time with the experience in urban management. infrastructure Sector Unit of The Bank and how would it contributeto the Fund? One or two other issues: the State Finance Commission which has put 3.6 percent of the Dr. Krishnaswamy Rajivan State revenue into cities that generate 65 percent of this State's GDP is not enough, and today There is a national level institution called there is a total investment profile of $40 millions IDFC--the Infrastructure Development Finance to $50 million in six ministerial corporations, Company--which has been set up. Its purpose 102 municipalities, and 630 towns is not basically is not to lend, but to provide take-out sufficient. There is need to think strongly about financing and to become a "World Bank" within upscaling in a State where there is so much of India, to provide guarantee mechanisms and so reform-mindedness and there is so much forth. So far it's done nothing at all in the urban consistency. This is more important also sector. Their priorities were restricted to direct because in the coming years, at least in the lending in the power sector and water supply-- municipal corporation area, most of the they are looking at, but it's not yet decided. But infrastructure shall have to be provided urban--real urban, no, not yet. underground. You can't keep destroying roads and other things, and underground costs more Jonathan Kamkwalala, fromjloor money. This is something that really needs to be looked at. Dr. Rajivan, in your presentation you indicated that from your funds, you make the resources In terms of small cities, there is a concept available to the private sector. Can you explain in the Philippines about 'cluster' management of the rationale for this? smallcities that makes investmentmore viable. Dr. Krishnaswamy Rajivan interest rates. And when you go to the market, you'll need a rating. You will discover the Our eligible borrowers include the private rating agencies will rate a pool of projects for a sector because this trust is an entity, which is in fund against the weakest project in the pool. So the business of making infrastructure loans. if they've got 20 projects financed together-- And if a private sector entity develops a project nineteen are AA, but one's BBB--the entire pool like the Kamrbuti bridge, for example, and is is rated BBB, unless you credit against them acceptable to our terms, and it's a profitable with group accounts for excess coverage from investment, why not? No one is willing to lend other loan B payments. My question to Mr. in India today to a private sector entity to Rajivan is: do you have resources that can be develop a bridge of this sort. Because the first used to put in a venture pool to increase the thing a commercial bank asks is "where's the rating when you go to market? collateral?" Obviously there's no collateral; there's only the concession agreement. A Braz Menezes, fromjloor concession agreement is based on future cash flows, for which the banks will say, provision This is a good opportunity to provide for it in your balance sheet. Therefore, there is a some feedback into the strategic approach for real shortageof funds even for the private sector, urban operations in South Asia. From what was for these kinds of financing if you view it in the said, it takes about 20 years to start seeing the framework of Indian accounting costs. results. So for ABCYs,you've got to cover the rest of the region we're going to be looking at Hiroaki Suzuki some 10, 20 years from now. One part of the strategy should be how to scale-up this In addition, let me add that lending that experience, using what you already have, and comes as a condition for private sector is in line disseminating the same. The other side of it is with private prevailing interest rates. So there is we should probably take less of the constraints no crowding-outeffect. in terms of lending through sovereignty, sovereign governments etc.; but look at what is Brad Thompson, fromjloor successful municipal hnds as a matter of wholesale. You can get wholesale to a number As an attorney and partner in a Wall Street of municipalities, through similar programs. law firm that specializes in public finance, I You can debit the level of municipalities or local have one comment and one question. The governments, scale-up individual types of comment is basically to congratulate Mr. Suzuki programs where it's available etc. And then, in and to tell him that it really is an investor's that process, make a dent in the scale of the dream come true. Your presentation has done a problems nationwide. very good job of identifying the impediments to market access and devising solutionsto get over Paul Stanfield, fromjloor those impediments. You are well positioned to accessthose capital markets. The one challenge This idea of twenty years, that's a little bit ahead of you in accessing the capital markets misleading. It started out as a very will be raising capital at the lowest possible comprehensive project with a lot of different components. The municipal development fund should go wrong, the capital markets lend to the was just one of the components. We can World Bank. Even though the quality of the probably short cut this, so it really doesn't have municipal assets and gold repayments are high, to be 20 years. We can start focusing on this gold is an existing form. And you don't go to type of approach. And also the idea of money the market on the basis of a green-feed project pouring in and making it a public-private resource funding loan. We also have an partnership really didn't come up until about intercept mechanism in the form of available five years ago. Another interesting point was cash balances, which should provide some kind these City Development Plans. This was an of security to the investor. I hope the question is aspect put in early on, when the Plan was answered somewhat. started. It was a condition. If you wanted to get money from the Fund, you had to do a city P. V. Rajaraman development plan. What was interesting about it There were, at least, two major issues, was that it developed a whole local industry of which cropped up during the development of consultants who gained capacity, who were able this project. One issue was whether we should to do these things. So it created, it spawned off have such an intermediarv at a national level. in a whole industry. the context of the state level and this was debated. There are over 700 other bodies in the Dr. KrishnaswamyRajivan State of Tamil Nadu. And in countries where such large numbers exist, if you scaled up at the Your question was, what kind of national level, you run into thousands, and intercepts do we have, if we want to go to the lending to a local body involves a lot of effort market place? Let's look at it through the and time on the part of the intermediaries on the capital markets point of view. Look at our executing side. We felt very strongly that, and balance sheet. We only expect over the next we believe we were able to carry the Bank with five year, with our calculations, that somewhere us, what was needed is a state-level roughly 50, 150 crole would be standing cash intermediarywhich can interact, because it is not balance--all of them short-term deposits, which merely lending, it is institutional development, it could be relinquished at any point in time. So, is project development, a lending operation. It is to an investor into the fund, if he believes that really highly manpower intensive and having a most of the assets are municipal assets he's smaller number to be covered by the going to have a heart attack. But if you're going intermediaries would be a factor for success. to see this stream of liquid resources, then one could really work with private investors. My The second important point, which we feel understanding is that the capital markets in the contributed to the success of TNUDP, was the US probably won't lend to the World Bank, not willingness of the political leadership to let go. on the basis of sovereign guarantees of a host of Let go of the decision-making relating to alloca- governments, whose ratings are probably not so tion of funds for the projects in different munici- good, and rating of the lowest common palities. There's a very strong political angle. denominator may be pretty bad. But on the And our political leadership was willing to let go strength of the US government's pledge in the his power. And not only that: they agreed to Congress to put in x amount of dollars if things formula-based devolution of state resources urban sector was diverted. However, after the rather than an ad hoc allocation to the urban arrival of a new management team two years bodies. The devolution provided equity for the ago, a new emphasis and a priority has been local bodies and TNUDP provided the debt placed on the urban sector. That's why we are funds, and this combination has contributed to here. And not only Tamil Nadu. This the success. afternoon, our colleagues will present a project in Bangladesh, and also, we are replicating this The third important point, which approach in Pakistan--which is a more difficult contributedto the success,was to find the person country and certainly it is coming, but maybe in with the commitment and the capability and speed we should accelerate. support him. And we found the person in the Keshav Varma CEO of this organization, and supported him. That's what contributedto the success. Two points in concluding this session: one is that in the urban perspective, new Ms. S. Malathi leadership and more decentralization and Just a minor point on the City Corporate devolution are taking place. There is an Plans. Someone mentioned that there is a new imminent need for institutions to develop at the species of consultants who drew up this for the country level. We cannot keep bringing people State in the earlier project. We are hoping we to Toronto and to Australia and all these places. can do away with them, because you want to There's a need for us to create institutions of institutionalize this corporate planning, the city international caliber for training local municipal corporate planning. We want to ensure our managers, middle-level managers, and political specialists who work in the municipalities leaders. This is an issue that we are going to involve themselves in the preparation of the have to really go into on a long-term basis. plan. Because if we get it done through consultants, there's a tendency not to have the The second issue is about optimizing the ownership. And we were hoping to make it a performance of the present assets. In the Bank very simple and understandable process. Some we tend to emphasize privatization and public- consultants do make plans nice and glossy- private partnership. And this should be done. looking, but the ownership becomes a major It's a great thing. But in the coming 10 to 15 issue. We're hoping to do away with them in years, and considering the vast nature of all the current project. these--and the performance of the utilities-- Hiroaki Suzuki privatization may come up to 15 percent, 20 percent, 25 percent. But still you have the 75 There was a question on the upgrading percent of utilitiesthat will need to get to a level and replicating of our experience to other parts of comfort for private people to invest in them. of the region. In fact, in the last ten years it's And therefore, it is very necessary that attention true that the region has not featured in the urban be given to present assets in optimizing their sector within the World Bank. For various performanceof these present assets. Actually, in reasons, we failed to deliver good projects. And Australia andNew Zealand, there's a lot of work also the region faced more urgent going on this concept, and we really need to macroeconomics programs, like India in the look at this. 1991 crisis. So, somehow, our effort on the 11.BANGLADESH MUNICIPAL SERVICES PROJECT Jonathan Karnkwalala Sr. Financial Analyst, SASIN, WorldBank bonpladesh Municipal Services ptojeci Contributingto the improvement in quality of life assive shortfallexpectedwith current growth rate, Economy rban Centerswilldrive nationaleconomic gro Environmentand Health: Services and Infrastructure: Qualitywill further deteriorate Tackling "backlog" andaddmusingfuture demand Project Design MunicipalServices / Time Fnme .ti~ I c ~ imsaoo6 ProjectCoet M ~ IpJZ' -2m 154mllllonUS$ 9- 1:I yun .Pkul:lyun Oowmmnt 1M IDA 1SRl 1- .- -- - - - , -- -- - - -- - - MunicipalServices Project MunicipalServices Project 2 FloodRehabllitatlon - -3 Technical Asslstance 4 PmJectStafflng and Incremental ObM Costs [-5 ChHtagongHIN Tracts S p c W Assistance MunicipalServices Project - 5 3( Preparation and Implementation and Operational Action Plan (FOA 3( Creation of MDF ns an independent and autonomous financing mechanism JMunicipal Performance ReviewCommitteeto assess performance of municipalities 4Present PSU upgraded and strengthened as the Municipal Support Unit 3( Paficipatory and Partnership approach will enable a direct role for the communities 11-2 -- -- .- @ - a s Create fiscal disciplineand Mobilizeresourcesfor inhtructure through revolvingfunds Enhance transparency in decision making for investmentsin municipalities DevelopmentFund Usedebt/grantsas incentiveto improve commitmentto municipal reforms Lending Eligibility Criteria: EllglbkSub-proj Munldpalitlesshall haw: m a n a m * maritem, busterminals -undergone a munidpl Sub-project: assessment -indudad inuplblImprovementprogram -adopted a Financialand -hurtipulotad contributionbythe OperationalAction Plan(FOAP) munklpoll~ - h uana g d cost rccovmymechanismfor -undertaken propertyvaluation revenuegenadng pmject Ir In place and updatedrecords LendingEligibility Criteria: Sub-project is con9 -environmentalandsoda1hameworit -munklpallty'slandu# and development plan -PPA frameworktfapplicable -technical normsand standards -mlnlmumsco~nnlc Partnership mtaof returnof 12% -satisfactory Approach Implementation anangoments 11-3 Participatoryand Partnership MunicipalAuthorities Communitiesto providebasic Dreams; infrastructureandsewices Promoting"ownership" through People and Processes communityinvolvementin design, constructionand 08M -- increases Make Results the sustainabilityof investments Improvedusageand maintenance Increasedlevelsofcost recovery, transparencyand accountability 1 PPA -Who I Partnershipof C Partnershipof Corn COMMUNITIES MunidpaiAuthorities empower communitiesto oqanise and partidpate organisewith NGOIPO support ensurecoordinatedsenrice deliveryat participatein expansionand delivery of macrolevel basicenvironmental infrastructure betterableto useparticipatory become involved inoperationand approaches maintenance deliver better-targeted, betbr- functioning, better-maintainedsenrice 12. PAKISTAN MUNICIPAL DEVELOPMENT FUND PROJECT Michael Schaeffer Sr. Financial Analyst, TWURD, World Bank The Issues Punjab Urban SectorReforms PunjabPmvinmOmofPakmn'sMost InchstrialiedI - GownrnentdPutjab inPakitan Implementing UrbmizedState CompmheM'i Ulbsnm a Reforms - Rapid Urbariret'm Funticnala-d FinancialDevoh&imFrom Stateto ULB6 La& d F'hrchlend lnstihddCwacity FincndngUrbmInhaskam Invastmentz PunjabMunicipal - SIlbstantii Baddosf a UrbanInvestments DevelopmentFund Canpany. (PMDFC). LimitedAccauto CleanWater.Open Sewers. LackofStreet O b j e d i of PMDFCto lmpoveUlbanlnfr&3budmS & i L.r Drainage.UncollededGarbap, a-d CongestedRoads - the P r w hdPurjab.ObjediveAchievedTtm@~: (I) Mobilmng ACWli0n.lRe.oumsFor Urban lntnrrmchln ~MIOPMM; @) hvobphg Etkient MechenimtbrAllouUngPublicResources. and, (c) Slnnglhening Financial.Administnlivemd Mansgri.l Capadlies ofULB Councils. Punjab - WASA/ULB Overview Creditworthinessof ULBs Limited ULB Debt Service Capacity Limited "Apparent" Debt Absorption Capacity WASA's Currently Not Creditworthy Existing Liabilities Cannot Be Confmed Weak Municipal Management Capacity Size of Budget Surplus Can Change Dramatically No Municipal Lending Regulatory Framework Year-Over-Year Significant Errors in ULB Accounting Practices PMDFFlow of Funds P i w d l w Go Punjab OU) D" Proposed PMDF Structure Gm- Intensive Technical Assistance In£iastructure Loans 1 Capital Grants - Effective Interest Rate Estimated at 8% M* 1 M A -0- L - A - . Y X Performance Grants U*I Development of a Municipal Lending Regulatory Framework Non-Creditworthy ULBs Creditworthy ULB, 12- 1 Conditions of PerformanceBased Grants The LendingFramework Performance Grants Not to Exceed U.S. S1.OOper Capita Not to Exceed 25% of Total Municipal Revenues Performance Grants Weighted Toward Projects Targeted at Low-Income Population I Environmental Projects Grants Allocated to ULBs That HaveUndertaken Municipal Assessment1SignedMunicipal Improvement Agreement A Number of Uncertainties Municipal Regulatory Framework installation I EffectivenessI Devolutionof Need for Clear Creditor Remedies Propert) Tax Need For Clarificationof Legal Status and Elimination of Octroi Remedies of GO Debt Concerns Include Need for PredictableAdequateRevenues +Impact on Local Municipal Revenues for Municipalities +Stability ProvincialRJationalGovernment Need for IncreasingBorrower Capacity Transfers (Financial/lnstitutional) Need For Restrictions on Debt 13. PANEL/FLOOR DISCUSSION: MUNICIPAL DEVELOPMENT: CASE FROM BANGLADESH AND PAKISTAN Panel participants: Sonia Hamman, Sector objective of the lending is. The objective is not Manager, MENA, panel chair; Braz Menezes, to create credit-worthy municipalities. Basically, Pr. Operations Oficer, LCSFP; Arun Benarjee, they would access capital markets in the short or Pr. Operations Oficer, SACBF, Bangladesh. even medium term. But in fact the objectiveis to create some of the disciplinein municipalities Participants from the jloor: P.V. Rajaraman, to have them to actually repay their debts. And Finance Secretary, Government of Tamil Nadu; have tojustify borrowing for particular projects Dr. Krishnuswamy Rajivan, Chief Executive and there are criteria for which projects would Oficer, Tamil Nadu Urban Development Fund; get lending. Jonathan Kamkwalala, Principal Financial Analyst, SASlN; Michael Shaeffer, Senior In the case of Pakistan, it was alarming to Financial Analyst, TWURD; Ms. S. Malathi, learn that the octroi had been eliminated. Secretary, Tamil Nadu Municipal Affairs and Because about a year ago, the conventional Watersupply wisdom was, "yes this is an inefficient tax"; the concern was, in fact, that it had not been even 9 SoniaHamman keeping pace in real terms. And 60 percent of municipal revenues is a very large percentage of It is very interesting to go back to two municipal revenues, considering what other projects that we learned about a year ago, and sources there are, and the fact that there is this see how they've evolved. One thing that is quite very unpredictable fluctuation in terms of interesting, in terms of both projects is that, Mr. revenues. The fund idea is an interesting one; it Kamkwalala has taken a project in Bangladesh, would be interesting to look at, if you have where he started with some very simple, modest, transfers and performance grants and grants that gradual objectives,and picked up some solutions are matching grants to bring down the effective to try and reach as many municipalities as rate. It's all one pool of resources. Is this the possible. And the thing that was proposed was most efficient way? This is a project that is the Municipal Development Fund. He's tried to basically being designed in a very evolving and still keep the gradual, modest objectives that he transitional situation. So, what are the steps that had set forward and, at the same time, bringing one would have to take to make sure that if you some of the financial discipline that may come do create a development fund, and you create all from borrowing and repayment. He's worked it these other grant mechanisms at the same time, to a point where, even in the context of will your fund take off? And in the end, having municipalities that still have weak capacity and created a system of grants that are around a weak financial resources, it's very clear what the specific project and a specific institution,rather than taking into account what the needs are institutions or things being created, etc. So that across the board and what are the most efficient develops a whole line of thinking on ways of providing transfers from the central performance indicators, and so forth. governments to the local governments and how do you sustain the fund? On people. We found in some of the projects that you need to do an assessment of Braz Menezes training needs at different levels, because just the numbers of bodies that you're dealing with My comments will focus more on the in some cases, can become astronomical. So Bangladesh project because of the institutional you have to say: where do we put our money issues involved. The whole area of institutional and on whom, this first stage, and how do we get development has not really been given the same the biggest bang for the buck? What are the attention in the Bank as have the areas of training areas that we're not going to handle financial and fund development, and so forth. right now? And what is the type of technical And so I would like to share with you some of assistance we can best get from the outside, do a my thoughts and experienceson this. quick shot and then get out? There is the danger always that one wants to set up training In the caseof Bangladesh,the phasing was institutions for the reasons mentioned earlier--at very good--the way the project is starting--very some point phasing out consultants. But gradually and phasing into a second phase that publicly-funded training institutions sometimes obviously provides a transition. It's important become part of the problem. We have situations also to keep that sequencing in terms of a block where we've appraised very fine training of institutional development linked to the institutions, but in a different macro-economic money. Because that has a tremendous situation training institutions also have their influence in terms of changing people's attitudes budgets cut and people have to put bread on the and minds. On institutional development, what table. So they lose key people. And before you we've learned over time is the real richness of know what's happened, your whole project's at this. The Tamil Nadu case will confm that as risk. In others, we've relied completely on the the projects start to get going, there's a lot of use of consultants and, in the process, built a advantage in being very proactive on fine-tuning consultant market that starts to compete amongst and adjusting the institutional development itself, and so the quality of your technical subcomponents. Let me explain. You're assistancegoes up and the price goes down. dealing with policy, a number of policy issues that will really need fine-tuning, and others that On the tools that you put in as part of your will need development from scratch. There are technical assistance, take cognizance of your the regulatory issues. There are the new institutionaldevelopment. As a bank, we tend to regulations in the case of private sector say the municipality must increase its revenues. involvement, BOT, etc. Then there's process. Quite often these municipalities don't have a In lots of the countries we work in, they have basic map, they don't have a cadaster of their either inherited or evolved or developed rather economic contributors. They don't have complex bureaucratic processes. Today, the anything and that takes time to put in place. combination of technology plus other tools And technically sometimes it is more complex allow us to change processes very dramatically-- than it sounds. So you have to allow for that processes that are also measurable. And phase of putting those tools in place before you therefore, it's worth putting in a few can actually start to see results. And so you performance indicators to measure how your need to factor that into priorities for training. institutional development is actually being implemented. You measure the time taken Finally, procurement. We found there's between one action and somebody receiving quite a lot of benefit in terms of training for something, as against just the number of procurement, not because of the Bank project, but as a sort of sideline. Because where you can much. But, that was one principle that we were show that procurement works and where it's able to establish through this agreement. transparent, simple and clear, you actually get governments adopting this as a process for The other thing was that while we were several of their other transactions outside the creating this Municipal Development Fund, the Bank. And so, you can't invest too little on government made an agreement with us, that institutional development. But keep it flexible they would try to establish a set of principles for and don't feel shy to keep changing it from day regulating the fiscal transfer from the center to one. Don't worry about what's in your appraisal the municipalities. This was another sort of report. That's just a sort of guide. philosophical argument that we were involved in. Because right now in Bangladesh it's just Arun Benarjee completely ad hoc. If you go to this very reputable institution called Local Government Along with Mr. Kamkwalala, I helped Engineering Department, and look outside the develop this project in Bangladesh. This project Office of the Chief Engineer, you'll always find took a longtimeto prepare--more than six years. two MPs and several municipal chairmen sitting The reason was that this was initially started as a outside. And they come in while the Bank fairly standard sort of government municipality mission is there. So this man has a lot of IOUs. transfer-type project. But over the years, we learned from what was happening elsewhere and So these were two very important things Tamil Nadu, although it was in the background, that we were able to establish under this project. played a role in changing our minds. And in the And after listening to the various presentations, Bangladesh project, we were trying to do a few in my opinion, there are also a couple of things specialthings. that I believe it is possible to do. One is create relationships between successful projects within One example: Bangladesh is very much a the region. Given that we are a "knowledge donordependent country. And what happens is bank," we are not adequately doing this. We that different donors come in and they lend have much to learn from each other, and we can money for improvement of municipal do it very easily, at least in South Asia. It does infrastructure under different rules. And in our not take much to travel across the border with negotiations with the government we said, look, three or four people to spend a few days. not only are we going to go through this phased approach of the fust two years trying to build up The other idea that came to me is that we the capacity, getting the municipalities to a need to go beyond this stand alone municipality situation where they are better able to at least concept. The idea of clusters of municipalities borrow some funds, if not all that are needed, that are geographically contiguous deserves and once you meet those targets, then we will consideration. Take, for example, the provision lend you money from the Municipal of some services which for certain DevelopmentFund. But in order for us to put up municipalities standing alone will not be this very large amount of funds, you have to economical. But they could expand those agree that from now on all funds going to services in an area going beyond the municipal municipalities will go through meeting this boundary. Solid waste comes to mind very criteria. And this was a real stickingpoint in our quickly here--something like that could be negotiations. Government was extremely done. And there must be other possibilities. reluctant, but in the end they did agree that all donor funds would go under the same criteria as Our project is going to be a very, very this. And considering the fact that probably 80- long-termprocess. There is a real risk, which we 85 percent of those funds that go to the have noted in our documents, that this very large municipalities are donor funds, we sort of amount of money that we have allocated for this capitulated. In my opinion, we didn't lose very project may not actually move. That is very seriousand we have to find some mechanisms to the project requirements. Funding is a separate ensure that we remain flexible. We have a issue. It's a very large project. And unless you certain structure, which we described in the have full support from the government at all reports. But we still need a lot of support from levels, it could be very, very difficult to senior management, in looking at this very complete. Full government support is a flexibly. Because what will work in Bangladesh necessity for a successfulcompletion. may not work in Pakistan. And, in my opinion, what will work in Tamil Nadu may not work in Dr. Krishnaswamy Rajivan, fromfloor Bihar or Uttar Pradesh. Could local institutions have been used in Sonia Hamman these efforts? One of the things that is very interestingis Arun Benarjee that Tamil Nadu has inspired more than just the two cases here. And what's interesting is the Actually, the institution we chose to start different approaches. In the Pakistan case implementation of this project is the local there's been a lot of emphasis on the institution Government Engineering Department, which is that you are creating, and the sizing of that probably the best performing government institution. And in other cases, that you start department in Bangladesh. But the idea is to with an idea of a project and a size, and then try change the role of the LGED over a period of and make the fund fit that size--which may be time. Instead of becoming the provider of the absolutely wrong way to approach it. Both municipal infrastructure services, we want it to approachesare necessary for success. The work change its role over a period from provider to may focus on the institutional aspects on the facilitator, to use a common term. That's why local level and the revenues and capacity, but if the MDF was created with a completely the fund has not been designed correctly, money different set of rules. Because LGED was won't flow and that fund will also fail. Many of getting too much into actually going there and the failures that have occurred in municipal designing things, constructing things and development funds have been because these handing them over without really training or funds were not created to perform and to operate creating any local capacity. It has done what it correctly. has done extremely well. But it has basically failed to create any local capacity. So we needed P.V. Rajarama, fromfloor to make a shift and, from that standpoint--at least in the Bangladeshi context--we have Regarding the Bangladesh project, I'd like hopefully taken care of the problems. to share with you some of our experiences in similar projects in Tamil Nadu. We have done JonathanKamkwalala, fromfloor three projects, Madras I, Madras II and Tamil Nadu. In a multi-sector project like this, we Among the options we considered, one found that the need for a very strong and was using commercial accounts. But that was effective coordinating mechanism is most not a workable option in view of the banking important. Despite our experience with two systemin Bangladesh. earlier projects, with Tamil Nadu I, we could not complete many of the contracts in eight years. Michael Schaeffer,fromfloor Many of these projects involve land acquisition, dealing with other agencies not connected with One of the things we did in Bosnia was to this project, etc. And in the kind of evaluate the banks in the public sector. But administrative culture that exists--I'm sure there's no balance sheet capacity, or a limited Bangladesh must be similar to India--a strong balance sheet capacity. And the financial coordinating leader is essential for completing institutions were weak. We felt that the best option was to go through the banking sector Sonia Hamman because we couldn't figure out a good access strategy to get these funds. One thing that This is an interesting discussion. The perplexes me about South Asia from an Bosnia case was to be able to get the money out intellectual point of view: is why we don't build of the municipalities, and over the long term up the financial infrastructure side? It seems what will happen in that situation is what that we have all that exact same problems in happens whenever there's a long-term market. "greenback," weak financial structure, poor It should not be dependent solely on our balance sheet capacity, but we're still going to resources. The only place that I know of that drive home the municipal lending through the does not depend on international agency lending banking infrastructure. This is a long-term for its resources is Morocco. solution. So I'm curious as to why that banking solution was eliminated. Was itjust because of Ms. S. Malathi, fromfloor the balance sheet or infrastructure or what? In Bosnia, we lent to the banks and capped at a Both in Pakistan and Bangladesh similar certain rate. We expected the spread to be about actions need to be taken. Probably there is a lot five percent, and the long-term rate would be of jumping and pushing by the owners of the about five to ten years. municipalities to get into agreements. But before that, there is a step that is needed. The (A participant from the floor objects that state has to put a set of things in place and abide this does not seem sustainable.) by them. That's where the reform process really starts. In Bangladesh, this is the revenue. Unless Michael Schaeffer, from floor the state agrees to the conditions, it's really not fair to put the municipality into various kinds of It's true that the dimension that is missing regulations and discipline enforcement, saying is a municipal bond market. But still, the banks you must pay this back. I think that this is a very really do want to take the risk in the long term. important link. What that does is that it smoothes out the cash flow of the long term. 14.PROVIDING SERVICESFOR THE URBAN POOR THE CHALLENGES AHEAD George Gattoni,Pr. Urban Operations Specialist TWURD, WorldBank The Problem of Scale: SouthAsia Urban Forum A strategicApproach to UhanOperations 95% of growth incities. B I Slumsgrowingat twice the rateof cities J 4 inIndia. i i 3 In 25yean, them will be as many h ProvidingServicesto the Urban new slum clwelle~~,as &em am Poor: b * ~ Scallng-up Is key for the urban f The ChallengesAhead (I) URBAN 9 URBAN What is neededto scale up? In SouthAsia Challenges: Politicalwill f 0 Convincegovernmentsto investin 0 Povertyalleviation leadingCDSs ! upgrading startingpoint - 5 Unlockingimpediments d City plansfor povertyalleviation d Localframework of action andupgrading Consensusand unifiedaction Devisefinancial supportplans i Alliances and leveraging Networkof practiceexchanges Projectsto Programs f *Toolsandeasy information f and ... URBAN URBAN ...Slum prevention ... Help ingettingthere: TOOIS - f B -Upgrading CD, 0 a f Actions to eliminate the i -Upgradingtoolkit i 8 -Rapid City PovertyAssessment h need for new slums. f toolkit TO on Servicesto the UrbanPoor f f CitiesAlliance Knowledgeand learning @ URBAN URBAN 15. SRI LANKA: COLOMBO'S CLEAN SETTLEMENTSPROJECT AN EFFORT IN PROGRESS By Jelena Pantelic, Sr. UrbanSpecialist. SASIN, WorldBank and Ms. Allyson Thirkell, Consultant, London. U. K. SUMMARY PROJECT DISCRIPTION Sector Issues Introduction The main sector issues are: (i) urban poverty that has forced migrant families to live The capital city of Sri Lanka, Colombo, in slums or on marginal lands; (ii) the has a population of about 700,000. The outskirts deteriorating environmental conditions in the and suburban districts of the Western Province under-served settlements (slums and shanties are about three times as large. The Colombo and tenements or 'slum gardens?, and the Metropolitan Region (CMR) includes three impact on health and productivity; (iii) districts: Gampaha, Colombo and Kalutara, Government's shelter policies and programs that forming the Western Province. The CMR have failed to address shelter issues for a large extends 30 to 40 kilometers to the north, south proportion of urban families, primarily due to and east of the city. poor targeting; (iv) the planning, regulatory rules and developmentcontrol regulations that make it Colombo is the administrative, financial impossible for the low- and middle-income and trade center with a modem container Trans- families to access land andlor shelter finance; (v) shipment port which handles a large tonnage of the high cost and scarcity of land, and containers. The economy has grown at about affordability issues pertaining to the middle and five percent per annum, despite the crippling low-income families; (vi) fiscal incentives, effects of the ethnic conflict that has raged since legislation and protection offeredto tenants (rent 1983. In recent years, diversion of funds to the control, etc.) do not promote private sector war effort has impacted the development in all investments for housing either rental or sales; sectors. The policies of the Government are (vii) the lack of long-term housing finance, the relatively progressive, and have resulted in the reluctance of lenders to deal with lower income relaxation of many controls. The attractive tax groups, and difficulties of enforcing fore- and other incentives to investors have closures; (viii) sector allocations for housing and encouraged foreign investors to buy public urban development are inadequate to deal with assets divested by the Government, and set up the housing and urban development; (ix) private industriesin the freetrade zones. sector investment is a growingindustry for high income condominium housing which is not 10 to 15 perch in the CNM and other urban subject to rent control; while the existence of centers. With salaries of about Rs. 15,000 rent control for older housing discourages average per month, land prices in Colombo are private sector investments and redevelopment. not affordable by middle-income families. These issuesare elaborated below. Many families however, live on one to two perch plots that do not meet development control Half of Colombo residents live in overcrowded requirements. andpoor housing GovernmentPrograms are Unsustainable Due to the relatively high cost of housing, in and near Colombo, a large number of people During the past 20 years, successive commute to Colombo daily. The proportion of Governments have addressed housing issues as families living, in under-served settlements in priority social programs. These programs have the Colombo Municipal Council Area has made little impact on housing conditions or to reached about 45 percent of the city's meet the demands for housing in Colombo and population. Under-served settlements include: other urban centers. Urban housing programs shanties (illegal slums), slums (legal but included high rise and walkup apartments built crowded), slum gardens (rows of rooms in for outright sale or lease purchaseor rent. These compounds), and on environmentally sensitive programs were not sustainable because capital land (canal banks, road reserves). funds had to be appropriated from the budget. Environmental conditions in the under-served Interest on loans and rents were not priced settlements are extremely poor, have skeletal realistically, house allocations were not services, and poor and crowded housing. transparent, cost recovery is poor, and evictions Conditions have deteriorated to the point that and foreclosures are not enforceable. Recent last year there was an outbreak of cholera in budget allocations are adequate for NHDA to Colombo. Middle income families mostly live construct about 500 to 1,000 housing units per in rent-controlled houses in Colombo or live at year. varying, distances in the CMR. Private Sector Investments are onlyfor high cost Buildable land is scarce and expensive housing Urban land is in short supply and Private housing development is expensive. Land prices vary betweer) Rs. traditionally done by persons constructing single 200,000 per perch (273 square feet) in low- family homes through small contractors. income neighborhoods to Rs. 3,000,000 per Foreign private developers injoint ventures with perch in the low density choice living areas. local developers construct high-cost, high-rise The Urban DevelopmentAuthority O A ) owns apartments costing about Rs. 7-9 million (unit large tracts of land Generally used for higher cost of about $125 per square foot), which are income housing and commercial purposes. available for sale to nationals and foreigners. LIDA enters into joint ventures with developers Local developers (Keels, Ceylinco) sell plots or for high income housing and commercial plots with housing, units in the outer districts of development, and for use in the government's the CNM in cost ranges affordable by middle- own housing schemes. income families. The Board of Investments (BOI) tax exempt schemes have not attracted Planning regulations work against low and much foreign or domestic finance for housing middle incomefamilies development. Fiscal incentives available in the past, such as tax exempt development of low UDA's planning, regulations mandate cost housing, constructed for sale, are no longer minimum plot sizesof six perch in Colomboand available. Long-term Housing Finance is Not Available IFC is currently in the process of approving project that would help establish a private Limited housing finance, usually between housing finance company in Sri Lanka. five and ten years, is available from commercial banks to established and higher income The proposed Clean Settlements Project customers. Limited housing finance is available intends to address the issue of housing finance from the government-owned National Savings for middle- and low-income families through a Bank and the State Mortgage and Investment line of credit for use by commercialbanks to on- Bank at subsidized interest rates. However, lend to individuals and or cooperatives for obtaining loans from these agencies are complex purchase of land or shelter. As access to and time consuming. Loans are not easily serviced land by these families is not achievable accessible to low and middle income families. at land prices prevailing in Colombo, discussions have been initiated with the GOSL UrbanLocal Authorities Have Limited Capacity to release serviced land. to Deliver Basic Services. (ii) Access to aflordable land Urban local authorities have had little Discussions going on with the GOSL to release involvement in housing provision. The LTDA-owned land to the private sector for low- resources of urban local authorities, except and middle-income housing, and to housing Colombo Municipal Council (CMC), are cooperatives to organize their own construction. severely limited due to poor resource The project will provide funds to provide mobilization. They have also been constrained services for these lands that will be primarily in the provision of basic services due to legal targeted to low and middle income families. restrictionsregarding provision of basic services Through the use of cooperatives, where the on private lands, and the desire not to provide absolute ownershipremains with the association, official recognition to slum dwellers for fear of the restriction on the minimum plot size could giving a sense of permanency. Where be circumventedthrough construction of three to interventions have been made in urban slums four story walk-ups, and lenders could have they have been done by the GOSL with greater confidence to deal with a cooperative extremely minimal services, or through the society,than individuals. decentralized budget of the Colombo Municipal Council, which allocates funds to Councilors to (iii) Upgrading of under-served undertake improvements in under-served settlements in situ: The proposed Bank financed settlementsin their wards. project will support upgrading the living conditions of up to 25,000 families living in TentativeProject Description under-served settlements who are unlikely to benefit from the re-housing program in the next (i) Long-term housing finance for low- five to ten years. The process of settlement and middle- incomefamilies: There is no long- upgrading (slum upgrading) will unfold through term housing finance available for low-income a methodology that had been developed in the households in Sri Lanka except on a small scale past preparatory stagesof the project through the under the NHDA's house ownership programs. works in sic pilot projects. Use of Community Apart from being inadequate to meet the Environmental Management Planning process, demand, this program is not sustainable because active collaboration between the CBOs and of political overtones of the program, and hence NGOs and the decentralization to Urban Local the large scale defaults. There are recent Authorities (ULAs) will form the principal programs and initiatives in this direction. approach. However, the latest ADB Urban Development Project provides for loans of up to Rs. 100,000 (iv) Strengthening of urban local for repair and improvements of housing, and authorities: Thus far, urban local authorities have served in a passive role with regard to strategy, improve planning operation and shelter provision or providing basic maintenance, resource mobilization, and infrastructure services to improve conditions in financial management. The project will support under-served settlements. Most initiatives have a twidpartnership program with another local been taken by GOSL through the UDA and authority in the UK, USA or Canada where NHDA. Low capacity and strength of urban specific experts (in strategic planning, financial local authorities have been the primary cause of management, valuation, resource mobilization, this malaise. Through the project, assistance including property taxation, town planning, and will be provided to strengthen urban local development control, and operation and authorities to enable them better to serve the maintenance) will work side by side with needs of their citizens, particularly those enjoy officials of the Colombo Municipal Council for low and middle income. Technical assistance periodsof up to six months at a time. would be provided to: developcity development >SOCIAL DIMENSIONS OF URBAN INFRASTRUCTURE OPERATIONS Warren Waters,Social Scientist SASSD, WorldBank WHY considersocialaspects? Benefitsto borrowersof a good socialassessment D DoNoHarm Q Reduced reputationalrisk minimizeconflicts - and disputesover impacts and mitigation O Foster Participation 0 Reducedfinancialcostsandfastcrbenefits - minimize delays in implementation Q Share Benefits 0 Donoham ensurecostofprojectsnotunfairly - borne by third parties 0ReducingandManageRisk 0 Improvedprojectdesign Reduceparticipant's - unmtahty and increaseconsensus on project s-gY Payingattentionto social issueswill SocialAssessmentProcess prevent 0 Unforeseen 0 Negative Q Identifykey Q Evaluate issues/problcms publicity social& institutional and Q Sowedrelations Q Damaged public participation social issues withlocal image issues communities Q Establish Q Added Q Define mechanismsfor 0 Delaysand financialcosts Participation monitoring and stoppage Q Low staff framework evaluation Q Legal disputes morale SocialAssessment The goal of the resettlement policy O Involuntary Resettlement O IndigenousPeoples T o inprove,or atleast restore, 0CulturalProperty incomesandstandwdF of living O Forced Labor and Harmful Child Labor for project affectedpersons O Public ConsultationandDisclosure Q SharingBenefits I Resettlement policytriggered Resettlement policy principles By involuntaryphysical impacts 0 Avoidorminimizeeconomicandphysical 0 takingoflandorother=sets resultingin displacement 0 phyiul relocation 0 Compensateathll replacement value 0 10soflivelihoodarrcceutoanrcts 0 Atleastrestoreincomes,abilitytogenerate 0 louofliveliboodr income, living standards 0 restriaion ofaccesstoparksandprotected 0 Lackoftitlenobarriertoeligibility areas resulting in R Provideopportunitiesforparticipationby PAPS 0 10soflivelihoodr O Design resettlementas adevelopmentprogram E) Avoid or Minimize Compensateat Full Economicand Physical Displacement Replacement Value 0 Selectalternativesites,routes 0 RealMarket Valueforland, 0 Alterproject design buildings, etc. 0 MinimizeR-0-W oranyotherland O Include moving, relocation and transaction costs taking At least restoreincomes, Lack of title no barrier to abilityto generateincome, eligibility livingstandards OTreat all people affected equally OProjects should not createvictims O Resettlementis not "finished" OEligible for rehabilitation assistance, when people move not legal compensation OCensus cut-off date to prevent fraud Provide opportunitiesfor Design resettlementas a participationby PAPS developmentprogram D Participationbuilds ownership 0Createdevelopmentopportunities, and reduces conflict notjust m i t i e impacts & MOVING FROM SAFEGUARDS TO OUTCOMES The SAR Urban Portfolio P. Illangovan, Environmental Specialist EASES, WorldBank and Kumi Kitamori, Consultant, SASEN, WorldBank a" Envi nment in Ur an Sector Operations 1 / SAFEGUARDS / /' / -- - - 7 '~y.~rrrn,",B.,"klDes \ New OP/BP/GP 4.01: ~ntro&ion Salient Features(1) / , Retains basic principlesof OD 4.01 /' + human ~\perationalPolicy4.01 EA: natural environment health and safety +socialaspects+ \\~nvironrnentalAssessment transboundary and global aspects All categoryA and cateaorvB ~romsed / Operatioql Policy 17.05 for IDA fundlnq must comdete a seearate EA remrt ~ r i oto a~~raisal r , Public Di\sclosure Adds new CategoryFIfor Financid intermediary loans -- 6,- , \'\ N ~ ~ ~ P / B P / G P ~ . O\I : OP/BP/GP 4.01: Salient Features(3) / Salient Features(2) - For Category-A Projects: referenceto PollutionPrevention -,fieldvisit by environmental an Abahment Handbook Bpecialistduring preparationof PCD ~learebescri~tionof requirementsfor -forinalenvironmentalclearancefor Sector Inyestment Loansand SECALs PCD package , Improved clhty on Environmental -IndependentexpertsprepareEA / Management~hyns;Implementation report / and pylic -appraisalmissiyntoincludean / environmentalsecialist ,/ -contentiousandrisky -- indpendent 4- panel / ure: Categories 1 2 1.I/ / / 2 / -- 23 i/r 12 I / the project's impactsand mechanismforfin asure on the commitmentand of borrowersand the Bank to p'estions ???for Us a ~ o u n t r ySector Dialogue-- To what extwt is"environment" on the table? 2 B ~ r e merely"retrofittingff environment in the objectives? Mainstreaming HOW can CDS &sed both as an instrumentandhide promote better enviro ~ental - ~. & -- managementatthe city %el? / / \ / Qup'istions??? for Us(2) By can we scale-up p~lotcomponents ini 'qted under MSP and TNUDP II? DHOWdhwe tackle sol~dwaste managemqt and sanitatron for the poor? OHOWmove to from outputs to 0ut~OmeS shoul~projedoutcome ... indicators includemesurable environm-l improvements? -- 9ADDRESSING URBANAIRPOLUTION IN SOUTH ASIA Alistair McKechnie Sector Director, SASEG, WorldBank and Kseniya Lvovsky Environmental Specialist,SASEN WorldBank Urban air pollution in South Asia is among the highest in the world, and so are the adverse health impacts.. . Annual healthburden: -------I ADDRESSING + IM),OOO - 300,000premature I LIWIbmC(UVIDIYI0U URBAN AIR POLLUTION deaths ID- + 4 billionwork dayslostor IN SOUTHASIA rcducedproductivity /I- + Economiccosts in largest citiesreach 10*hofcity Joint presentation of product(compareto 4 % for all developingcountries) SASEGand SASEN + Plus indoorpollution in slums and peri-urbanareas 1 Urban air pollution is a multi-sectoral 1 Controllingsmallpollution sources in I problem involving a variety of sources ( differentsectors is a major challenge Main pollution sources: + Energy a typical sectoral contribution - smallstovesandboilenusingwood,dung,heavyoilor coal; large indusbyand power for a largeAsian city + Transport - poorfuelspecifications (e.g.lead,highs - poorvehicleandroadmaintenance - poortrafficmanagement + Municipal A clear "North-South" pattern in air quality 1 showsthat small energy sourcesare at least as South Asia EnvironmentalStrategy significant as transport in Northern citieswith the for the Energy sector:key priorities highest pollution (TSP)levels +Combating indoor air pollution + Managing urban air quality +Mitigating environmental problems I ma) associated with coal-power chain development in India +.trenmening and enforcement I +Addressing global climate chang Key features of our strategy +Holistic approach to urbanlregional/national + Significant improvements in air quality in at least problems in the energy-environment nexus two major cities in the region by the year 2010; +Focus on outcomes, i.e. significant most of the othermajor cities adopt air quality improvement programs reduction in health and environme + The use of leaded gasolinephased +Facilitatingcross-sectoralcoll in at least 3 countriesby 2005; ph of motor diesel redu two countriesby 20 Actions needed + Short-term(FYO2): - Rsrbmnrclraawith napwivepvunmao arameyfor iddqlair polluricninu l d w d y p o l W dried(Nth.I Delhi. Kuhmudq IAIIOW W w ) ; ud - advancedi+ Wing ocanminuemb phueou( lad in all + Medium-term CFyOS): LIST OF PARTICIPANTS SouthAsia Urban Forum A StrategicApproach to Urban Operations June 24,1999 Washington, DC List of Participants South Asia Region Tel: (202)458-0600 The World Bank Fax: (202) 522-3707 Ms. Frannie Leautier, Sector Director SouthAsia Infrastructure Sector Unit Tel: (202) 473-5307 The World Bank Fax: (202) 522-2418 Mr. Hiroaki Suzuki, Pr OperationsOficer South Asia Infrastructure Sector Unit Tel: (202)458-0329 The World Bank Fax: (202) 522-3708 Mr. George Gattoni, Pr. Urban Planner TWURD Tel: (202)47306267 The World Bank Fax: (202)522-3232 Ms. Angela Griffin, Sector Manager TWURD Tel: (202) 473-7407 The World Bank Fax: (202)522-3232 Mr. Manuel Penalver, OperationsDirector SouthAsia Region Tel: (202)458-4400 The World Bank Fax: (202) 522-2249 Ms. Christine Fallert Kessides Principal Economist Tel: (202)473-3945 TWURD,The World Bank Fax: (202) 522-3232 Mr. Eleoterio Codato Sr. Urban Mgt. Specialist Finance, Private Sector and Infrastructure Tel: (202)473-8646 The World Bank Fax: (202) 522-3552 Mr. Hiroichi Kawashima Consultant, TWURD Tel: (202)473-1744 The World Bank Fax: (202) 533-3232 Mr. Keshav Varma, Sector Director EASUR Tel: (202)458-5972 The World Bank Fax: (202) 522-1787 Mr. P. V. Rajaraman, Finance Secretary Government of Tamil Nadu, India Ms. S. Malathi, Secretary Tamil Nadu Municipal Affairs and Water Supply Tamil Nadu, India Dr. KrishnaswamyRajivan Chief Executive Officer Tamil Nadu Urban Development Fund Tamil Nadu, India PRESENTERS Ms. Amy Osborn (CONTD.) Consultant,TWURD Tel: (202) 473-0453 The World Bank Fax: (202) 522-3232 Mr. J. Kamkwalala Pr. Financial Anaylst Tel: (202) 458-2556 SASIN, The World Bank Fax: (202) 522-2418 Mr. M. Schaeffer Sr. Financial Analyst Tel: (202) 473-4313 TWURD, The World Bank Fax: (202) 522-3232 Mr. Alastair McKechnie, Sector Director SASEG Tel: (202) 473-3047 The World Bank Fax: (202) 522-2427 Ms. Kseniya Lvovsky, EnvironmentalEcon. SASEN Tel: (202) 473-6120 The World Bank Fax: (202) 522-1664 Ms. Sonia Hammam, Sector Manager Tel: (202) 458-5335 MNSID, The World Bank Fax: (202) 477-1993 Mr. Braz Menezes Consultant Tel: (202) 473-8589 LCSFU, The World Bank Ms. Allyson Thirkell, Consultant London, UK Ms. Jelena Pantelic Sr. Urban Specialist Tel: (202) 473-9377 SASM, The World Bank Fax: (202) 522-2418 Mr. P. Illangovan, Environmental Specialist SASES Tel: (202) 458-2747 The World Bank Fax: (202) 522-1666 Ms. Kurni Kitarnori, Consultant SASEN Tel: (202) 458-2580 The World Bank Fax: (202) 522-1664 Ms. Margret C. Thalwitz Sector Leader Tel: (202) 473-2646 ECSM, The World Bank Fax: (202) 477-0686 WORLDBANK Ms.Yeddanapudi Radhika PARTICIPANTS TWUGL Tel: (202) 473 5590 The World Bank Fax: (202) 522 3232 Mr. Tanzib Chowdhury TWUGL Tel: (202) 473 1046 The World Bank Fax: (202) 522 2125 Mr. Finn Nielsen EASUR Tel: (202) 458 7628 The World Bank Fax: (202) 522 1787 Mr. Dick Sommer PSDPP Tel: (202) 458 8293 The World Bank Fax: (202) 522 3481 Mr. Omar Hayat SASIN Tel: (202) 458 0130 The World Bank Fax: (202) 522 2418 WORLDBANK Mr. T.V. Somanathan PARTICIPANTS EAPCA Tel: (202) 458 0294 (CONTD.) The World Bank Fax: (202) 477 2595 Mr. Robert Maurer ECSIN Tel: (9111)461 7241 The World Bank (New Delhi) Fax:(9111) 4619393 Mr. Kwabena Amakwah-Ayeh SASIN Tel: (202) 458 2782 The World Bank Fax: (202) 522 2418 Mrs. Pinki Chaudhuri SASIN The World Bank Mrs. Paula Reed SASIN Tel: (202) 458 0392 The World Bank Fax: (202) 522 2418 Mr. Arun Banerjee SASIN Tel: (880-2) 884 294 World Bank Country Ofice Fax: (880-2) 863 220 Dhaka, Bangladesh - - - - Mr. John W. Flora TWUTD Tel: (202) 473-8866 The World Bank Fax: (202) 522-3223 Ms. Severine Dinghem SASIN The World Bank Ms. Rumana Huque AFTU2 Tel: (202) 473-4769 The World Bank Fax: (202) 473-8249 Ms. Elizabetta Capannelli EASUR Tel: (202) 473-9813 The World Bank Fax: (202) 522-1787 Mrs. ShakuntalaGunaratne SASIN Tel: (202) 458-4421 The World Bank Fax: (202) 522-2418 Ms. SamanthaForusz SASEG Tel: (202) 473-3304 The World Bank Fax: (202) 5222-427 Mr. Robert Panfil SASIN Tel: (202) 473-7758 The World Bank Fax: (202) 522-2418 Mr. Zmarak Shalizi DECRG Tel: (202) 473 2921 The World Bank Fax: (202) 522 1154 Mr. Dick de Bruin EASES Tel: (202) 473 7918 The World Bank Fax: (202) 522 1666 Mr. Mansoor Dailami WBIGF Tel: (202) 473 2130 The World Bank Fax: (202) 676-9874 WORLD BANK Bharat Dahiya PARTICIPANTS TWURD (CONTD.) The World Bank Ms. MajaNaur AFTE1 The World Bank Ms. Rita Ruggiero FRM Tel: (202) 473 3691 The World Bank Fax: (202) 522 2515 Ms. Priscilla Izar LCSFP The World Bank Ms. Daila Tadjerouni MNSRE Tel: (202) 473 3366 The World Bank Fax: (202) 477 1981 Mr. David Hanraharn The World Bank Ms. Zita Lichtenberg SAREX Tel: (202) 458 7953 The World Bank Mr. Daniel Hoornweg EASUR Tel: (202) 458 4732 The World Bank Mr. Geofiey Read EASUR Tel: (202) 458 4078 The World Bank Mr. Rajagopal Iyer EASUR Tel: (202) 473 0840 The World Bank Mr. Keshav Varma Sector Director, EASUR Tel: (202) 458-5972 The World Bank Mr. Robert Maurer SASIN Tel: (91-11)461 7241 The World Bank Fax: (91-1 1)461 9393 Mr. Roy Gilbert OEDST Tel: (202) 473 3476 The World Bank Fax: (202) 522 3123 Mr. Rusdin Lubis EhV Tel: (202) 458 5725 The World Bank Fax: (202) 477-0565 Ms. Priya Mathur SASEN Tel: (202) 458 8178 The World Bank Fax: (202) 522-1664 Ms. Banu Setlur SASEN Tel: (202) 473-7111 The World Bank Fax: (202) 522-1664 WORLD BANK Ms. Rebecca Hife PARTICIPANTS WBIGF Tel: (202)473-6382 (CONTD.) The World Bank Fax: (202)676-9874 Mr. Mark Hildebrand T W R D Tel: (202)473-0575 The World Bank Fax: (202)522-3232 Mr. Jack van Holst Pellekaan OEDCR Tel: (202)473-9182 The World Bank Fax: (202)522-3124 Ms. Kim Cuenco SASIN Tel: (202)458-9107 The World Bank Fax: (202)522-2418 Ms. Deepali Tewari TWURD Tel: (202)473-0866 The World Bank Fax: (202)522-3232 Ms. Paula Dias Pini LCSEO Tel: (202)458-7842 The World Bank Fax: (202)676-9373 Mr. Zmarak Zhalizi DECRG Tel: (202)473-2921 The World Bank Fax: (202)522-3230 PARTICIPANTS Mr. SubbiahKannappan,Prof. of Economics OUTSIDE BANK Michigan State University Michigan Prasad Gopalan IFC Washington,DC Masayuki Karasawa Washington, DC K. Arichandran,(Consultant) Washington, DC Kiyoshi Goto, JDB Washington, DC W. Busch, Worley, Consultant NZ T.Urguhart, Worley, Consultant NZ Bertrand M. Renaud CMD Miki Morimitsu JICA Washington, DC Hans Mersmann The Netherlands (JP) Gulrez Hoda IFC Washington, DC Nicholas Vickery IFC Washington,DC PARTICIPANTS Hiroto Arakawa OUTSIDEBANK OECF (CONTD.) Washington, DC Toru Taguchi JICA Washington, DC David Painter USAID Washington,DC Lindsay Elmendorf, USAID Washington, DC Andra Tambrro USAID Washington, DC RichardA. Tilghaman, Jr. Wells Group New Canaan Connecticut Brad Johnson Hawkins, Delafield & Wood Washington, DC Barjor Mehta Washington, DC AGENDA SouthAsia- Urban Forum Thursday,June 24,1999, RoomFSP-100, IFC Builaing, 2121Pennsylvania Avenue, Washinen D.C. Agenda 8:30 850 a.m. - Registration, Tea and Coffee 850 9:00a.m. - Presentation of Objectives& Expected Outcomes by Hiroaki Suzuki,Pr. Operations Officer,InfrastructureSector Unit, SASIN. Welcomeand Introduction. "The Urban Sectorin SouthAsia: Issues and Options" by FrannieHumplick, SectorDirector, Infrastructure Sector Unit, South Asia. Key Note Address "The Linkages of ComprehensiveDevelopment Framework And the South Asia Urban Operations" by Mieko Nishimizu, Vice President, South Asia Region "The Bank's Urban Strategy and ItsChallenges" by Angela C. Griffin,Sector Manager, TWURD. Floor Discussion - Global Urban Challengesand Strategies. Chair: Manuel Penalver, Director,Operations, South Asia TEAICOFFEEBREAK "Strategic and ComprehensiveApproach to Urban Development" by Hiroaki, Suzuki,PrincipalOperations Officer. SASIN. ''India: The ReformAgenda" by Mr.P. V. Rajaraman FinanceSecretary. Government of Tamil Nadu "Urban Tamilnadu; Yesterday, Today and Tomorrow" by Ms. S. Malathi. Secretary, Tamil Nadu Municipal Affairs and Water Supply "The T a d Nadu Urban Development Fund" by Dr. KrishnaswamyRajivan,Chief ExecutiveOfficer, TNUDFS PANEL DISCUSSION: ChristineKessides. Principal Economist, TWURD Prof. Subbiah Kannappan, Professor of Economics. MichiganState Univ. EloterioCodato, Sr.Urban Management Specialist,LCSFP. Hiroichi Kawashima, City Development Strategy (CDS), Urban Anchor. FLOOR DISCUSSION:Approaches to Urban SectorReform - The Case of Tamil Nadu (India). Chair: Keshav Varma. Sector Director,InfrastructureSector Unit. East Asia. LUNCH PRESENTATION KnowledgeManagement-WebsiteHome Page of Coimbatore Corporation - Forthcoming SA Events and Partnerships By Dr. K. Rajivan, CEO, TNUIFS. Kwabena Amankwah-Ayeh,Urban Specialist,SASIN. Amy Osborne, Urban Anchor, TWURD. 'BangladeshMunicipalServicesProject" by Jonathan S. Kamkwalala,SeniorFinancial Analyst, SASIN "PakistanMunicipalDevelopmentFund Project" by Michael Schaeffer, SeniorFinancial Analyst, TWTURD PANELnOOR DISCUSSION: Municipal Development - Casesfrom Bangladeshand Pakistan. Braz Menezes,Principal OperationsOfficer, LCSFP Arun Benarjee, Principal OperationsOfficer, SACBF,Bangladesh. Chair: Sonia Hamman, SectorManager, MENA "Providing ServicesFor The UrbanPoor The ChallengesAhead" - by George Gattoni, Principal Urban Operations Specialist,TWURD 'Sri Lanka: Colombo's Clean SettlementsProject -- An Effortin Progres" by Jelena Pantelic,Senior Urban Specialist,SASIN,and Ms. AllysonThirkell, Consultant, London, UK. COFFEEiTEABREAK PANEL DISCUSSION Introduction & Overview - Richard Ackermann, SectorDirector,SASEN "Social Dimensionsof Urban InfrastructureOperations" WarrenWaters, ResettlementSpecialist,SASSD "MovingfromSafeguardsto Outcomes" The SARurban portfolio - P. IIlangovan,Environmental Specialist, EASES Urban air quality - Alastair McKechnie, SectorDirector, SASEG, and Kseniya Lvovsky, EnvironmentalEconomist, SASEN FLOOR DISCUSSION: Urban Poverty, Socialand Environmental Issues in Urban South Asia. Chau Margaret Thalwitz, Sector Director, Urban Infrastructure, ECA Co-chau Zmarak Shalizi - Research Manager, DECRG OpportunitiesFor Joint Collaborationand Conclusion by Frannie Humplick, SectorDirector,SASIN COCKTAILS !!!!! For furtherinformationon thc ProcectIings ofthe South Asid Urbcin Forum, dddress your comments, inquiries, questions, ~cquestsdnd suggestions to: Mr Hirodk~Suzuk~(PI-IIICI~~~Opcrcrt~onsOficcr, Tcdln Lcc~dcr) ElndlI Address Hsuzuk~@u~orldhdnkorg or Mr. Kwcibend Arndnkbrdh A\~ch(Ulhan SPccldI~st,Tdsk Mdncigcr), Ihc World Bdnk, Roo111 MC11 109. 1818H Street, NW. Wash~n~ton DC 20433 Telephone (202) 4q8 oyq, qq8 2782 Fclx. (202) ~ L - L ~ I K Ernall Addrrss. Kclmdnkwahdyeh@w~orIdbdnko ~ g