Nepal: Integrated Urban Development Project

Lesson Report:

Nepal: Integrated Urban Development Project

Self Evaluation

The scope of work of the design consultants for urban development projects should include an assessment of existing underground utilities.

The initial design of this project was delayed and required modifications during implementation mainly due to the unavailability of information on existing underground utilities such as by plan profile and as-built drawings. Final designs were likewise not always comprehensive, necessitating variations for most contracts, resulting in both startup delays and contract modifications. In future, ADB should ensure that the scope of work of design consultants for urban development projects include an assessment of all existing utilities, including those underground.  Also, that the consultants make every effort to meet their deliverables, comply with the agreed schedules and contract obligations, and respond to requests from client governments and ADB.

Project Cycle Stage

Continuous community consultation, benefit sharing, and interagency coordination are vital to develop social acceptance of sanitary landfill site (SLS) construction.

Part of the project’s design innovation is the construction of modern SLS. The Nepalgunj SLS construction was successful due to continuous community engagement, cooperation among political leaders, and early implementation of a community development program targeted at communities living near the SLS.  However, the SLSs in Janakpur and Siddharthanagar had to be dropped, as nearby communities did not agree to their construction. Due to haphazard operation of existing SLSs and dumping sites, there is a growing “not in my backyard” syndrome in these communities towards SWM facilities. Discord among local political leaders, inadequate coordination at inter-local level, and political misunderstanding disrupted stakeholder engagement and contributed to the two sites’ cancellation.

Project Cycle Stage

Including financial management staff in review missions will be key to ensuring improved financial performance in future ADB-financed projects.

Neither the ADB project team nor project coordination office could fully comprehend the financial management requirements and financial covenant issues raised during this project’s review missions. As such, they were unable to follow up on audit opinions and recurrent issues, leading to the recurrence of the same issues and delays in submitting the audited project financial statements This improved only with the inclusion of a financial management staff toward the project’s end.

Project Cycle Stage

Continually mainstreaming gender and social inclusion (GESI) in the urban development sector of Nepal requires the revision of the GESI operational guidelines to align with the federal structure.

While the key urban sector and executing agency for this project, the Ministry of Urban Development (MUOD), adopted a structure for GESI mainstreaming with separate budget head, this initiative faced challenges after the country’s administrative restructuring. There were no division offices and GESI units in the districts, and the sociologist’s position that used to support GESI activities was removed from the departments. Nevertheless, using the resource materials developed under this project as guide, the GESI-trained staff in the divisions can push for establishing and institutionalizing GESI in the new structure of the provinces and at the local level.  This would require revising MOUD’s GESI operational guidelines 2013 to define the roles and responsibilities in all tiers of government.

Project Cycle Stage

Nepal’s annual urban population growth rate averaged 3.4% between 2001 and 2011 even as the national population growth rate was 1.4% annually. The rapid urbanization pace was driven primarily by rural–to–urban migration, resulting in a declining rural population. Challenged to meet the growing urban population’s needs, municipalities had taken ad hoc approaches to infrastructure development, creating numerous problems such as deficiencies in basic urban services, growth in poverty clusters, recurrent waterlogging, poor sanitation, intermittent water supply, and limited access to transportation.

The Integrated Urban Development Project was designed to address critical urban environmental issues by providing populations in the municipalities of Dharan, Janakpur, Nepalgunj, and Siddharthanagar with better access to municipal infrastructure and services in a socially inclusive manner. These municipalities were chosen for their economic growth potential demand for urban services, and urban management capacity. The project was funded by a loan of $44.8 million and a grant of $12 million, approved by the Asian Development Bank (ADB) approved in February 2012.  At the outcome level, it envisaged providing the populations inclusively better access to improved municipal infrastructure and services.  Its intended outputs were (i) reliable municipal infrastructure developed; (ii) community development programs (CDPs) undertaken, and gender equality and social inclusion (GESI) capacity strengthened; and (iii)project management and administration supported.

Out of 15 output targets, the project exceeded 6, achieved 8, and partially achieved 1.  Existing drainage lines were rehabilitated, and new ones were constructed. Roads were improved, and new water supply lines were installed. However, while the project aimed to construct sanitary landfill sites (SLSs) with resource recovery facilities for solid waste management (SWM) in 3 project municipalities, it was able to do so only in 1. Exceeding targets, community development plans (CDPs) were implemented in 96 poverty clusters of 84 poor settlements, with over 54% women’s representation in the CDP committees. GESI operational manuals, toolkits, and checklists were developed and the target to use these in the Ministry of Urban Development (MUOD) and its departments was reached.  Capacity development activities helped to improve project management skills and efficiency, resulting in reduced bid evaluation time and efficient contract management, however, falling short in the target to achieve timely submission of quarterly, safeguard, and audit reports, among others

Largely successful attainment of intended outputs enabled the project to exceed 2, achieve 2, and partially achieve 1 of its 5 outcome targets. Stormwater drainage systems constructed under the project dramatically reduced waterlogging and related hygiene and public health projects. Flooding duration likewise dropped in all project areas. Drinking water scarcity in Dharan was addressed by providing services to more than 95% of households and doubling the amount of water generated daily in 2020 from its 2010 level. However, the target of supplying households with water 16 hours a day was not met. Project activities such as community health and hygiene awareness, distribution of waste collection machines and equipment, and establishment of an SLS facility have led to expanded household waste collection in the project municipalities.  In 100% of the poor settlements, basic services delivery and hygiene, sanitation, and waste disposal practices improved with the implementation of the CDPs.  Overall, the project thus achieved its anticipated impact of improving the urban environment in the project municipalities, leading to reduced incidence of diseases and improved living standards.

MOUD was the project executing agency.  Day-to-day implementation was through the project coordination office established at the Department of Urban Development and Building Construction.

Project ID
Report Date
Project Number
Report Type
Project loan
Goal 5: Gender Equality
Goal 11: Sustainable Cities and Communities
Loan Number
Date Approved
14 February 2012
Source of Funding
Report Rating
Report Year
Independent Evaluation, ADB
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