Announcement of Decentralization is Key to Turkey's Water Supply, Sewerage and Urban Development Projects on May 22, 1987

' .I FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 87/71 Contact: Fawzi H. Rihane (202) 477-5325 DECENTRALIZATION IS KEY TO TURKEY'S WATER SUPPLY, SEWERAGE AND URBAN DEVELOPMENT PROJECTS WASHINGTON, May 22 -- The World Bank has approved loans totaling $304 million to assist Turkey in providing adequate water supply and sewerage facilities to Izmir, the country's third largest city and an important industrial center, and for urban development in five other cities. The government's policy of decentralization will be applied to both projects, enhancing the role of local authorities and institutions in the delivery of urban services, and improving their capacity to finance future infrastructure investments. In the first project, technical assistance and training will be provided to the newly established Izmir Water Supply and Sewerage General Directorate (IZSU) to improve its operational, maintenance and administrative capabilities. Control and monitoring of industrial waste discharges into Izmir bay and waterways will be improved. The construction of the Tahtali dam and reservoir will be completed, and associated water treatment and transmission infrastructure will be built. Water distribution will be expanded and the network rehabilitated. Facilities for sewage collection and treatment will be built. The $521 million project will help build a strong sector organization which will provide new water supply facilities for some 840,000 people, and sewerage for 1.17 million people by 1994. Improved operation and maintenance and the rehabilitation of the water and sewerage networks will ensure an adequate supply of water for the 800,000 people presently served. Other benefits include an increase in the productivity of industrial and commercial enterprises, and a yearly savings of about $4.5 million from reduced water losses. In addition to the $184 million Bank loan, other financing will be provided by the Izmir municipal budget ($107.8 million), IZSU ($103 million), Iller Bank ($77.3 million), and State Hydraulic Works ($49.7 million). The project will be implemented over nine years. The cities of Adana, Mersin, Tarsus, Ceyhan and Iskenderun in the Cukurova region in southern Turkey will benefit from a project which aims to refine and implement the government's decentralization strategy while addressing the problems of rapid urban growth and service deficiencies. (more) Note: Money figures are in U.S. dollar equivalents.  I ,,/ ...... -2- The project will help finance investments in infrastructure in each of the cities. City governments will be strengthened to enable them to better plan, implement, operate and maintain urban services. At the same time, their capacity for resource mobilization and financial management will be improved. The Iller Bank, which is the only bank in the country that deals with municipal expenditures and investments, will be supported in building a capacity to appraise and supervise municipal investment programs. A unit to carry out this task will be organized. The total cost of the project is $467.3 million, of which $120 million is being loaned by the World Bank. Additional financing will be provided by Iller Bank ($104.6 million), municipalities ($74.7 million), Electricity and Telecommunications Authorities ($50.5 million), beneficiaries ($47.8 million), the government ($47 million), Development Support Fund ($11.5 million), and the Water and Sanitation Department/Housing and Urban Development Company ($11.2 million). The World Bank loans are for 17 years, including four years of grace, at the standard variable interest rate, currently at 7.92 percent, linked to the cost of the Bank's borrowings. They also carry an annual commitment charge of 0.75 percent on the undisbursed balances. I (