Urban Infrastructure and Service Improvement

Water Supply:

Investments in this regard will be aimed at improving the quality of water and extending the service duration all year round to at least 12 hours a day throughout the system and 24 hours a day in most parts of the cities, and completely meeting demand by the end of the NERCCDIP. The investments will involve expanding water production capacity through source and treatment works; expanding and rehabilitating distribution systems, reservoirs, and machinery; replacing “bunched” service connections and old and leaking connections; installing bulk and consumer meters; and reducing non-revenue water (NRW). The infrastructure improvements will be supported by awareness campaigns to promote water conservation, demand for water supply improvements, and sustainability and cost recovery objectives.

Sewerage and Sanitation:

The sewerage and sanitation improvement program will take a two-pronged approach comprising (i) the construction of central piped sewerage and sewage treatment systems and the provision of service connections; and (ii) the improvement of sanitation systems that rely on individual systems, particularly septic tanks and soak pits, until sewerage systems can be built. Community latrines will also be provided in low-income areas and low-income households will be assisted in improving sanitation.

Solid Waste Management:

The improvements in solid waste management will increase service coverage to more than 80%. To this end, (i) awareness campaigns will be launched to promote understanding of the importance of good sanitation and in-house waste collection, segregation, and recycling; (ii) solid waste collection, transportation, treatment, and disposal will be improved through the provision of solid waste equipment, the construction of transfer stations as needed, and the development of sanitary landfill sites and composting plants; and (iii) solid waste operations will be made more efficient through the introduction of improved management systems for the routing and scheduling of vehicles, other machinery, and staff and training programs to maximize the benefits from investments in infrastructure and equipment.

Capacity Building and Investment Program Management

Urban Governance and Financing:

NERCCDIP will support the state governments and ULBs in meeting their commitments to the institutional and financial reform agenda in line with the policies of the central and state governments. In particular, it will help (i) further reforms associated with the creation and strengthening of ULBs, (ii) incorporate efficiencies and commercial principles into service delivery through the gradual introduction of sustainable service delivery agencies especially in water supply and sewerage, and (iii) implement financial management reforms to promote sustainable sources of financing and the transparent use of financial resources for service delivery.


NERCCDIP will assist the states in implementing the 74th CAA by supporting them in (i) conducting civic awareness campaigns and public hearings toward the creation and strengthening of ULBs, (ii) preparing or strengthening municipal legislation with a view to transferring functions from the state to the ULB, and (iii) conceptualizing and implementing organizational development measures and introducing operational systems improvements. Efforts will be made to integrate traditional structures into emerging urban governance frameworks. Such improvements will be complemented by comprehensive human resource development programs and training for officials.

Municipal Financial Reform:

Improvements will be made in accounting and budgeting systems and practices through the adoption of accrual-base accounting, the use of geographic information systems in revenue administration, and the computerization of financial systems. Assistance will also be extended in the design, introduction, and implementation of consumption-based and progressive user charges and improved property taxation to enable the recovery of full O&M costs by the end of the NERCCDIP implementation period.

Improved Service Delivery:

NERCCDIP will also support the states in (i) improving operational and financial efficiency and asset management, and (ii) restructuring over the short term the states’ departments into a single ring fenced area with dedicated responsibility for city water supply and sewerage, and for accounting and financial management. The capacity-building component will also include an umbrella program of civic awareness and community participation (in waste segregation, among other activities) to support the implementation and positive impact of all the physical improvements under NERCCDIP. The participation of the city residents, including the women, the poor, the slum communities, and other vulnerable groups, in program implementation and their equal sharing in its benefits will be ensured.

Improved Capacity to Manage NERCCDIP:

This component will provide funding support for costs associated with NERCCDIP management and implementation, including the incremental administrative and operating costs of program management units in MOUD and the states, equipment, logistics, and the services of consultants who will assist these units in managing NERCCDIP and carrying out detailed design and construction supervision. Such support is considered essential to the implementation of NERCCDIP in view of the proposed executing agencies’ lack of experience with undertakings of this size, and implementation through separate design and construction contracts.


Project Components