Sindh is the second most populous province of Pakistan. In 2006, nearly half of its 38 million people lived in the urban areas. Poor quality, inadequate, and unreliable urban services and increasing urban poverty were key challenges, particularly in the secondary cities of Sindh facing rapid population growth. In these secondary cities, urban infrastructure and service delivery had not expanded in tandem with population growth. Inadequate planning and infrastructure services management had kept the costs of urban services high and quality low, impeding the economic competitiveness and livability of the cities. Insufficient and unreliable urban services had also damaged the urban environment.
To help address the situation, the Asian Development Bank (ADB) approved a $300 million multitranche financing facility (MFF) for the Sindh Cities Improvement Investment Program (SCIIP) in December 2008. The MFF was to finance basic urban infrastructure improvements in Sindh’s secondary towns through (i) the establishment of government-owned, professionally managed urban services corporations (USCs); (ii) support for urban sector reforms and capacity development; and (iii) priority investment in water supply, wastewater, and solid waste management (SWM) infrastructure. SCIIP was a 10-year program that aimed to improve the health and quality of life of an estimated 4 million residents in Sindh’s participating secondary towns and strengthen the economic competitiveness of the towns. Its expected outcome was enhanced quality, coverage, and reliability of water supply, wastewater, and SWM services for an estimated 570,000 households in the participating towns.
The MFF was provided in 2 tranches, against the original plan of 5. Tranche 1, approved for a $38 million loan in December 2008, was to build the foundation and jumpstart the implementation of the investment program in the 6 participating towns of North Sindh. Tranche 2, approved in December 2012, for two loans aggregating $99.1 million, was to increase the quality, reliability, and coverage of water supply, wastewater, and solid waste management services in the participating towns.
At completion, the program did not meet most of its targets. Outcome targets related to improvement water supply, wastewater, and solid waste management services could not be achieved as most of the planned outputs were only partially delivered. For instance, the target to connect 80% of the households in the project area by 2018 was not achieved as only 1 of the 4 water treatment plants (WTPs) financed by tranche 1 was completed; the rest were only partially achieved because of delays in procurement, tax issues, and interference of the Board of Directors (BOD) of the implementing agency, the North Sindh Urban Services Corporation Limited (NSUSC) in operational decisions. Tranche 2 picked up and completed the unfinished works, expanding potable water supply to 3,411 households; however, issues such as capacity overload and poor maintenance led to WTP breakdown, obstructing the delivery of the intended benefits.
Against a target of 18,000, the NSUSC procured 12,000 water meters; 2,752 meters of which were installed but not used. Installation of the remaining water meters was subsequently stopped by the NSUSC BOD. In another case, the improvement of water supply intake in Rohri could not be achieved because the works for shifting wastewater disposal upstream of the water intake were not executed.
Most of the program’s SWM targets were similarly unmet. Under tranche 1, 300 SWM ramps were constructed, against a target of 520, but were rarely used due to steep gradients. The NSUSC completed studies for 4 landfill sites but the landfills could not be constructed because of land acquisition issues and cost overrun. NSUSC procured equipment for primary and secondary collection with a capacity to transport more than 800 tons of waste daily or 70% of household waste but it continued to dump the solid waste in the open spaces due to lack of proper landfill sites.
Procurement of specialized equipment for solid waste collection, transportation, and sewer cleaning and the inclusion of the development of 3 landfill sites under tranche 2 likewise did not lead to significant improvements. Only 1 taluka municipal administration (TMA) successfully outsourced solid waste collection services to a private company in May 2019. However, solid waste continued to be disposed in open dumps and leased plots in the absence of landfill sites.
Unsatisfactory program performance was underpinned by unfeasible institutional arrangements and the diminishing commitment of the government of Sindh (GOS) to the urban reforms over time. The dual role of infrastructure development and service delivery in 3 core areas of municipal services, thinly spread in 6 cities, was beyond the capacity of the newly established NSUSC, Pakistan's first regional public sector USC. Restructuring of NSUSC and offloading its SWM responsibility partly back to the TMAs were agreed by ADB and the GOS, but the GOS did not implement this.
The program was anchored at the Planning and Development Board (P&DB) instead of the Local Government, Rural Development & Housing, Town Planning Department (LGRD&HTPD)–the custodian of the municipal services in Sindh. Selection of the P&DB as executing agency, and weak coordination of the PSU, the urban unit, and NSUSC with LGRD&HTPD; and absence of TMA capacity building resources weakened project ownership by the TMAs and the LGRD&HTPD. ADB identified the risks at appraisal, but mitigation measures were inadequate, and the issues simultaneously confronted by the NSUSC became beyond redressal.
Because of diminishing interest by the GOS and inadequate time left for MFF utilization, ADB dropped the remaining tranches originally planned to be part of the MFF. The government of Sindh's Planning & Development Board was the executing agency. The NSUSC was the main implementing agency.