India - Water Supply and Wastewater Services in Bombay : First, Second and Third Bombay Water Supply and Sewerage Projects

Report No. 15849 India Impact Evaluation Report Water Supply and Wastewater Services in Bombay Bombay Water Supply and Sewerage Project (Credit 390-IN) Second Bombay Water Supply and Sewerage Project (Credit 842-IN) Third Bombay Water Supply and Sewerage Project (Loan 2769-IN/Credit 1750-IN) June 28, 1996 Operations Evaluation Department Document of the World Bank Currency Equivalents Currency Unit = Rupee US$1.00 = Rs 35 (June 1996) Rs 1.00 = 0.028 (June 1996) Abbreviations and Acronyms BMRDA Bombay Metropolitan Region Development Authority BSDP Bombay Sewerage Disposal Project BUDP Bombay Urban Development Project BWSSP I Bombay Water Supply and Sewerage Project BWSSP 11 Second Bombay Water Supply and Sewerage Project BWSSP III Third Bombay Water Supply and Sewerage Project ERR Economic Rate of Return IER Impact Evaluation Report GO[ Government of India km kilometer lcd Liters per capita per day M Million MCGB Municipal Corporation of Greater Bombay MIDC Maharashtra Industrial Development Corporation mid Million liters per day (0.220 million imperial gallons per day) MWSSP Maharashtra Water Supply and Sewerage Project OED Operations Evaluation Department PAR Performance Audit Report SAR Staff Appraisal Report WSSD Water Supply and Sewerage Department Fiscal Year (MCGB) April I - March 31 The World Bank Washington, D.C. 20433 U.S.A. Office of the Director-General Operations Evaluation June 28, 1996 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Impact Evaluation Report on India Bombay Water Supply and Sewerage Project (Credit 390-IN) Second Bombay Water Supply and Sewerage Project (Credit 842-IN) Third Bombay Water Supply and Sewerage Project (Loan 2769/Credit 1750) Attached is the Impact Evaluation Report (IER) on the subject projects prepared by the Operations Evaluation Department (OED). The purpose of the impact evaluation was to determine the effectiveness of the Bank's interventions in the provision of urban water supply and wastewater services in Bombay. These interventions took place during more than 20 years and involved nearly US$440 million of Bank lending. In the preparation of the report, OED has focused on six areas: (i) technical results; (ii) economic impacts; (iii) social impacts; (iv) institutional impacts; (v) health impacts; and (vi) environmental impacts. Factors which affect these impacts were also assessed. The impact evaluation has drawn several key conclusions. Significant increases in gross water availability have allowed strong economic growth to continue in Bombay. They did not translate into improved service levels because of rapid population growth and lack of system rehabilitation. Water service continues to be intermittent. Service interruptions affect the low income population the most and increase health risks through water recontamination. Sanitation objectives are largely unmet. New sewage collection systems have reduced street level and shore line pollution in some areas, mostly the downtown and harbor areas on the eastern shore. But, non-completion of wastewater treatment plants and outfalls result in a continued health threat from sewage discharges on the western shore. Also, almost one third of public latrines are out of commission at any given time resulting in strong consumer dissatisfaction. Institutional development was positive in that the Water and Sewage Department is by now a moderately well run organization and its finances are sound. However, construction is often beset with lengthy delays and maintenance and rehabilitation are clearly not priorities. Further, economic efficiency has been compromised by cost overruns, a deficient tariff structure, and an inadequate billing and collection system. 2 The report presents recommendations for future operations in the areas of institutional improvements and quality of water and sanitation services as key to sustaining the benefit of the investments. A two-day workshop was held with consumer groups and officials of Bombay and the Government of Maharasthra State in May 1996. A consensus was reached on the report's findings and main recommendations which focus on the need for rehabilitation, steps to restore a 24-hour service, extension of sanitation facilities with the close participation of users, and economic pricing of water and sewerage services. Attachment Contents Preface ........................................................................................................................................... 3 Evaluation Sum m ary.................................................................................................................... 5 1. Projects' Fram ew ork ............................................................................................................ 11 The Setting .................................................................. ........................................................... 1 About Bom bay ...................................................................................................................... 11 W ater Supply ..................................................... ................................................................. I Sewerage and Sanitation ....................................................................................................... 12 W ater and W astewater Institutions ....................................................................................... 12 The Projects ............................................................................................................................ 13 Objectives of the Program .................................................................................................. 13 Im plem entation ................................................................................................................... 15 Evaluation M ethodology .................................................. ...............to.. .................................. 16 2. Econom ic and Social Im pacts .............................................................................................. 19 Technical Results and Service Levels .................................................................................... 19 Econom ic Im pacts .................................................................................................................. 20 Social Im pacts........................................................................................................................... 24 3. Institutional and Financial Im pacts...................................................................................... 27 Institutional Overview ............................................................................................................ 27 Operational Perform ance ........................................................................................................ 27 Financial Perform ance ........................................................................................................... 29 4. H ealth and Environm ental Im pacts .................................................................................... 33 Health Im pacts ....................................................................................................................... 33 Environm ental Im pacts .......................................................................................................... 34 5. Factors and Recom m endations for Sustainability ............................................................. 37 Factors which Affect Im pacts ................................................................................................ 37 Recom m endations .................................................................................................................. 38 Im prove the Institution ....................................................................................................... 38 Im prove the Quality of W ater Service ................................................................................ 39 Im prove the Quality of Sanitation Services ........................................................................ 40 This report is based upon the work of a team consisting of Mr. Tauno Skytta (Task Manager) and Mr. Arthur Bruestle, Mr. Tejbir S. Phool, Mrs. Claudine Voyadzis, Mr. Charles Chandler and Mr. Gary Wu (HQ consultants) and Mrs. Pratima Panwalkar, Dr. V. G. Panwalkar, and Dr. V. Desai (local consultants). Mrs. Helen Watkins provided administrative assistance. The report was issued by the Energy and Infrastructure Division (Mr. Yves Albouy, Chief) of the Operations Evaluation Department (Mr. Francisco Aguirre-Sacasa, Director). 2 6. Conclusions ............................................................................................................................ 41 Annexes A. Project Details ....................................................................................................................... 43 B. Selected Operational Indicators: Bom bay and Other Urban Areas ...................................... 59 C. Socio-Econom ic Survey: Statistical Tables .......................................................................... 63 Attachment Com m ents from the Borrower ..................................................................................................... 67 Maps 3 Preface The purpose of this evaluation is to determine the impact of the Bank's assistance to Bombay to develop the water supply, sewerage and sanitation sector there. The evaluation covers the First, Second and Third Bombay Water Supply and Sewerage Projects (Credits 390, 842 and Loan2769/Credit 1750). These projects supported the sector development program of the Municipal Corporation of Greater Bombay (MCGB) which began in 1972. Elements of other Bank-financed infrastructure projects in the Bombay area are considered in this evaluation to the extent that they affected the program. This Impact Evaluation Report (IER) was prepared by the Operations Evaluation Department (OED) of the World Bank. The study was launched by the study team's first visit to Bombay in October 1994. A second visit occurred in January 1995. During the same period, a team of local consultants conducted a socio-economic survey of 1600 households in four typical wards (of 23 total wards), the results of which are reported herein. As part of the impact evaluation a two-day workshop was held in Bombay on May 14 - 15, 1996, to review the findings and conclusions of the study with officials of the city of Bombay, the Government of Maharashtra State and representatives of consumer groups. Many useful insights were shared at the workshop with Bank staff, and a near-term plan of action emerged. OED expresses its appreciation to Indian officials for their participation, support and contribution to this endeavor. Water Supply and Sewerage and Related Projects Project Approval Loan/ Project Loan/ Year Credit Cost Credit No. (USS M) Amount (FY) (USS M) Bombay Water Supply and Sewerage Project (BWSSP-I) 1973 C390 158 55 Second Bombay Water Supply and Sewerage Project 1979 C842 412 196 (BWSSP-H1) Third Bombay Water Supply and Sewerage Project 1987 L2769/ 304 40/145 (BWSSP-III) C1750 Maharashtra Water Supply and Sewerage Project (MWSSP) 1979 C899 100 48 Bombay Urban Development Project (BUDP) 1985 C1544 257 138 Bombay Sewage Disposal Project (BSDP) 1996 L3923/ 296 167/25 C2763 Amounts are as appraised. a 5 Evaluation Summary Water Supply and Wastewater Services in Bombay Projects' Framework 1. The purpose of this study is to determine the impact of the Bank's interventions in the provision of urban water supply and wastewater services in Bombay. The study covers the First, Second, and Third Bombay Water Supply and Sewerage Projects (BWSSP-I, Cr. 390; BWSSP- II, Cr. 842; and BWSSP-III, Ln. 2769/Cr. 1750). These projects supported the sector development program of the Municipal Corporation of Greater Bombay (MCGB) which began in 1973. Elements of other Bank-financed infrastructure projects in the Bombay area are considered in this evaluation to the extent that they had an impact on the program. The Setting 2. Water Supply. At the onset of the MCGB program, about 80 percent of Bombay's 6.5 million people received public water service, but many relied upon unsatisfactory public standpipes. Water was chlorinated but only six percent was fully treated. Because of excessive leakage and wasteful practices the gross supply of more than 200 liters per person was only adequate to provide the average resident less than six hours of service a day. 3. Sewerage and Sanitation. In 1972, sewer service was limited to central Bombay and a small portion of the suburbs, with septic tanks and privies used elsewhere. Sewer systems were overloaded and during heavy rains sewage and stormwater flooded streets. Septic tanks overflowed and nightsoil was tipped into local watercourses. Industrial wastes were discharged directly into drains and creeks. 4. Institutions. A Water Supply and Sewerage Department (WSSD) was created in 1971, prior to which responsibilities for Bombay's water and sewerage planning, development and operations were divided among several government entities. Responsibilities for other sanitation services such as garbage collection and storm drainage fell to other governmental units. Water resources management and development in Maharashtra was shared by several government agencies and poorly coordinated. The Projects 5. Objectives. The objectives of MCGB's program were to improve living conditions of Bombay's population by alleviating water shortages, doubling the hours of supply and mitigating dangerous and offensive sanitary conditions. The program was divided into phases, with BWSSP-I (1973) financing the first phase which was primarily for water supply system improvements. Subsequent phases covered sewerage as well as water supply. 6. The physical objectives of BWSSP-I were to fully utilize available water sources, improve the quality of supply and the efficiency of the distribution system and, to a lesser degree, rehabilitate and expand the sewerage system. The institutional objectives were to develop WSSD's capacity to carry out the development program and operate its systems; to 6 ensure WSSD's financial viability; and to consolidate the management of State-wide water resources. 7. BWSSP-II (1978) continued WSSD's institutional development and assumed the same physical objectives because BWSSP-I, due to cost overruns, did not achieve them. BWSSP-III (1986, now nearing completion) provided institutional support for WSSD and sought to expand water supply and wastewater facilities to keep pace with the increasing demands. BWSSP-III also planned to expand earlier efforts to provide sanitation and water services to the poor. 8. The Bank's Performance Audit Reports (PAR) for BWSSP-I (1985) and BWSSP-II (1990)' credited WSSD with a sound financial position but cited areas for improvement, including reducing reliance on the water/sewer benefit tax, reducing accounts receivable, and giving meaningful attention to revenue losses through unaccounted-for water. The outcome of BWSSP-I was rated as satisfactory, and that of BWSSP-II as unsatisfactory. Economic and Social Impacts 9. This study reviews the technical results of the MCGB program and their impacts on economic, social, institutional, health, and environmental conditions. The evaluation covers the 22-year period, 1972 to 1994, when a social survey was carried out as part of the study. 10. Technical Results. MCGB's original water supply objectives have not been fully achieved. While there has been a 65 percent increase in the gross supply of water, the population increased by about the same level, leaving the per capita availability unchanged. Connections increased by 84 percent, standpipes by 800 percent, and 75 percent of the connections are metered but many meters do not work. Water service is still discontinuous at two to eight hours a day in most areas. The quality of water meets international standards when it enters the distribution system but is subjected to recontamination at the consumer level because of low and negative pressures. 11. Wastewater objectives have not been met primarily because of implementation delays, population growth and sewage quantity increases. Achievements include a 20 percent increase in the number of dwellings connected to the sewerage system, a 20 percent expansion of the area served by the sewer system, and the completion of collection, treatment and disposal works for the harbor area. Important shortfalls include the failure to complete the two wastewater treatment plants and the two marine outfalls partially constructed under BWSSP II. At 170 persons per latrine, the slum population is grossly underserved with sanitation. One third of the 35,000 latrines are out of service and consumers complain of poor designs and maintenance. 12. Economic Impacts. The benefits of the program clearly exceeded the costs. Seasonal water shortages, interrupted service and a polluted urban environment, which cause serious economic disruption and personal hardship, would be far worse in the absence of the program. Gross water supply per person would be 60 percent of the present level and uncollected sewage would flow in the streets. 1. Performance Audit Reports on Bombay Water Supply and Sewerage Project 1, Report No. 5875, dated October 1, 1985 and Bombay Water Supply and Sewerage Project II, Report No. 9265, dated December 31, 1990. 7 13. But was this indispensable program the least cost solution? The answer is a qualified yes. The technical solutions and their sequencing generally appear to be least cost. However, true costs were higher than anticipated and benefits were postponed, in part because of severe delays in procurement and construction. Unsatisfactorily designed facilities, such as the underutilized public latrines and the partially completed submarine outfalls, posed substantial and unexpected costs without commensurate benefits. 14. Although the projects included components for system rehabilitation there was a clear bias for major construction and, as a consequence, important benefits which could have accrued from relatively low cost rehabilitation were not achieved. Possibly the least cost initial intervention would better have been a system rehabilitation effort of modest cost. 15. The level and structure of water supply and sewerage tariffs are matters of economic and social importance, for they impact upon economic viability, equity among consumer groups, and the ability to manage demand. For most consumers water and sewerage prices, however, fall far short of meeting either the full financial cost of water or the incremental economic costs. Consequently, consumers are not signaled true costs, waste is encouraged and a false message is given that large capacity expansions are required. 16. The tariff structure favors domestic over commercial and industrial consumers. This policy of subsidizing domestic consumption encourages waste of water which could be put to economic use by others. It also prompts industrial consumers to resort to costly recycling and other measures to avoid the high tariff of WSSD water. 17. Social Impacts. A survey carried out as part of this study compared conditions at the time of the survey with those of 10 years earlier. The results indicate that for water supply, coverage with house connections increased significantly; standpipe use iemained constant; access to 24-hour supply decreased; and more households now rely on partial-day service than in 1984. Respondents complained that water often reaches them in the early morning hours causing familial hardships, and some 8O petcent do not trust the safety of the supply. It is the poor, who cannot afford booster pumps and costly water storage facilities, and women, the principal water haulers, who bear the greater burdens in terms of access and convenience. The survey data indicates that other than an increase in house connections, little progress has been made in key indicators for consumer satisfaction. 18. In non-slum areas almost all the households are served by toilet facilities, in large part because of the program. But many slum dwellers complain of inappropriate designs, numerical inadequacy and poor maintenance of latrines. In the poorer wards, more than half of the children use open field defecation. Institutional and Financial Impacts 19. The audits' views on institutional performance are consistent with the findings of the PARs. Staffing for the water supply function at 96 per thousand connections is grossly excessive. Unaccounted-for water is 40 percent to 60 percent on a 24-hour supply basis against the BWSSP-I target of 25 percent. Metering is only 15 percent effective. Accounts receivable are excessive and more than 30 percent of the customers claim to pay nothing for water. Improvements in these areas are essential if sound economic and financial policies are to be pursued. Contracting is often beset by delays and monitoring indicators called for under 8 BWSSP-III were not prepared. Monitoring indicators are now being prepared for BSDP, however, there is a need to reexamine them as they do not provide a full spectrum of management data. . 20. Daily service interruptions are a key impediment to a rational use of water in several ways. First, much water is wasted through pipe flushing and households discarding "old" stored water when "fresh" water is supplied; second, pressure interruptions make metering unreliable; and third, poor service quality makes tariff adjustments less acceptable to the public. Finally, long interruptions make it indispensable for customers to invest in individual storage tanks; a solution which cost millions of dollars more than the recourse to large scale storage by the MCGB. 21. Since the start of the program the Bank has urged officials of Maharashtra State to develop and manage water resources in a comprehensive, multisectoral way. As an important step in this direction, a State-level water resources authority with membership from water-using sectors was created in 1995. 22. Water and sewerage taxes and tariffs at the onset of the program were inadequate in level and structure. As the program progressed, the revenue targets were generally met. WSSD's contribution to capital expenditures, in part due to rate hikes and in part due to postponed works, exceeded 40 percent. 23. The financial strength of the WSSD is one of the brightest results of the program. However, WSSD's finances are heavily reliant on a narrow and shrinking revenue base provided by industrial and commercial consumers, on taxes and on the fact that the growing foreign exchange losses associated with its borrowing are borne by the Government of India. It appears that the level of the subsidy is not essential to ensure that domestic consumers can afford water. The poorest nine percent of households earning less than Rs 900 a month in 1995 are estimated to spend less than one percent of income on their water and sewerage bill and water which is purchased privately from tanker trucks costs up to 50 times the price charged to them by WSSD. Health and Environmental Impacts 24. The intervention model held that the incidence of water-related diseases would decline if supply hours and standpipes were increased in the slums through distribution of fully treated water. Although full treatment was implemented and the number of standpipes expanded by 800 percent, a health survey in 1992 failed to detect significant reductions in water-related diseases. This may be due in part to the intermittent water service and the poor quality of sanitation services. Changes in health status are also affected by interventions in health care and education, and are often linked to incomes-factors external to the program and beyond the scope of this impact evaluation. 25. The sewerage components were to provide the primary environmental benefits of the program. Some sewerage systems have been expanded and two marine outfalls are in use, thereby relieving street-level and near shore pollution in the areas served. However, about 75 percent of all sewage is untreated and discharged to local waterways and coastal waters, causing extensive environmental hazards. 9 Recommendations for Sustainability 26. The present institution and cost recovery policies are not sufficiently strong to ensure that the present level of service can be sustained, let alone improve in the future. Costs are unnecessarily high, procurement procedures are cumbersome, construction lead-times are long and unaccounted-for water is high. Metering, billing, and collection performance is poor. In the past, capacity expansions and tariff increases were used to cover operating shortcomings but fresh approaches are now required to expand the revenue base, rationalize the use of services and improve service levels. 27. WSSD should next undertake a major rehabilitation effort with the objective of providing consumers with 24-hour, uninterrupted water service. With distribution system improvements, the present gross supply of 240 liters per capita per day (lcd) is adequate to provide an average of 135 lcd over 24 hours, equivalent to WSSD's estimate of consumption by apartment dwellers. This effort would help to (i) ensure that the water remains potable; (ii) improve consumer convenience; (iii) eliminate expenditures for private water storage; and (iv) lower WSSD's management and labor costs. Issues remain on how to go about this (because, for example, there is insufficient storage capacity), therefore a pilot project would be appropriate to uncover the constraints and work out the details. The effort should be holistic, and include reducing leakage, improving metering, billing, and collection, and raising domestic tariffs while providing a life-line tariff block for the poor. 28. There is a parallel need to provide improved sanitation services for the disadvantaged, both in terms of quality and number of facilities. The BSDP contains a slum sanitation component. It has a better chance of success because it actively involves the community in design and maintenance of new facilities. Conclusions 29. Water supply and sewerage planning, construction and operations in Bombay posed daunting challenges to those who planned and implemented the investment program. At the outset, there was a huge backlog of unmet demand because of underinvestment. Population and economic growth accelerated in the following decades and the proportion of the poor increased as did the slums which they occupied. 30. The intended impacts of the program have not been realized. Shortcomings include that water is not safe to drink; water service, especially to the poor, is difficult to access and is provided at inconvenient hours of the day; industrial water needs are not fully met; sanitary facilities are too few in number and often unusable; and urban drains, creeks and coastal waters are polluted with sanitary and industrial wastes. 31. This study confirms the PAR ratings for BWSSP - I and II (para. 8). For BWSSP - III, current findings support assessments shown in the latest supervision reports. In particular, the sustainability of program benefits is rated as uncertain due to weaknesses in WSSD's cost recovery policies and its performance in the operation and rehabilitation of the water system. 10 32. The findings were discussed at the workshop and a near-term action plan was developed. These actions, endorsed by MCGB in a letter to OED, dated May 17, 1996 (See Attachment), are: * water supply activities would be focused on rehabilitation, with emphasis on leak reduction and effective metering; * a pilot program would be undertaken to test the issues which confront the provision of 24- hour supply; * latrines would be built and restored to provide better sanitary service to the poor; and * water and sewerage tariffs would be restructured to reflect the full cost of service, while providing a life-line block for the poor. 11 1. Projects' Framework The Setting The water and sewerage program started with a large backlog of unmet demand, and during its implementation Bombay's population grew by 80 percent. Water supply was intermittent, and sewerage systems were overloaded causing sewage to overflow into the streets. The fledging Water Supply and Sewerage Department was not operating with the autonomy envisaged at the inception. About Bombay 1.1 The Bombay urban region is India's largest with a population of 12.6 million (1991), or nearly six percent of India's urban population. It is the capital of Maharashtra State, contains India's largest seaport, and is the country's pre-eminent center of trade, commerce, and finance. It is also a major manufacturing center and accounts for 30 percent of the value of India's industrial production and 10 percent of India's industrial employment. It has maintained this prominent position in manufacturing despite the out-migrations of water-intensive industries such as textile and chemical industries 1.2 The boundaries of Municipal (or Greater) Bombay contain a 440-square kilometer urban region and a population of 10 million people-about three million on Bombay Island and seven million in the suburbs. The municipality is administered by the Municipal Corporation of Greater Bombay (MCGB). 1.3 Because of relatively good employment opportunities and access to services, the average population growth rate in Bombay's urban region from 1981 to 1991 was 4.3 percent per annum, compared to 3.1 percent for India's urban areas as a whole. The provision of infrastructure and housing has not kept pace with this growth rate. While Bombay's economic strength and its role in India's economy has created abundant employment opportunities and attracted rural migrants, an estimated five million people live in slums. Water Supply 1.4 Bombay's water supply system was initially constructed in the mid-19th century to serve commercial and residential areas in the southern portion of Bombay Island near the harbor and the Fort. Subsequent rapid expansion of commerce and development of industry required the periodic addition of new sources of supplies which, largely from surface sources, were ever more distant from the city. Figure 1.1 shows the progress in the water supply situation prior to Bank involvement in the sector. From 1985 to 1995, the share of commercial and industrial uses in the demand decreased from 14 percent to 8 percent and from 21 percent to 11 percent, respectively. The share of residential uses increased from 65 percent to 81 percent. 12 Figure 1.1: Progress in Water Supply, 1941 - 1971 30 270 led 25 -------------- ------ - ----- 20 --- 128T cd -97 15 - - - - - - - - - - - - - - - - - - - - 984 mil 10 ----- - - -- gea -ae p capaity,- - - 494 mid Vaitarna wef d.tu6c0 million (1971) 0 1941 1946 1951 1956 1961 1966 1971 AMCGB Service Area Population, millions s p h r Aggregate water supply capacity, mid x 100 Water per capita, led x 10 1.5 At the onset of the MCGB program in 1972, some 1,500 million liters per day (mld) of water from distant surface sources were conveyed to Greater Bombay's 6.5 million people. About 80 percent of the population was served through 144,000 connections and 3,000 standpipes, with 57 percent of the connections metered. Water was chlorinated but only six percent was fully treated. The gross supply of more than 200 liters per person per day was deemed to be inadequate to meet the high level of leakage and growing domestic, industrial and commercial demand This resulted in less than six hours of service a day. Physical losses in the distribution system were estimated at 16 percent of the net supply under the partial-day service regimen, but with full day service would have been well over 50 percent, a value which exceeds normally acceptable water utility standards. Sewerage and Sanitation 1.6 Prior to the 1970s, the efforts to develop urban infrastructure and keep pace with rapid urban growth gave higher priority to water supply than to sanitary sewerage. In 1972, sewerage was limited to central Bombay and a small portion of the suburbs, with septic tanks and privies used elsewhere. Some 50 percent of the population were served by sewers, 20 percent were partially served, and the balance had no service. More than 50 percent of the population, even those that lived in sewered areas, relied upon communal facilities. Sewer systems were overloaded and during heavy rains mixed sewage and stormwater flooded streets. Septic tanks overflowed and tank pumpage and nightsoil was tipped into local watercourses. Industrial wastes were discharged directly into drains and creeks. Water and Wastewater Institutions 1.7 A Water Supply and Sewerage Department (WSSD) was formed in 1971, prior to which responsibilities for Bombay's water and sewerage planning, development and operations were divided among several government entities. Responsibilities for other sanitation services such as garbage collection and storm drainage fell to other Bombay governmental units. Responsibilities 13 for water resources development in Maharashtra were fragmented among government agencies and a state-wide consolidation was deemed necessary. In 1973, this fledgling Department was not operating with the autonomy which was envisaged at its inception, and was in need of development assistance. The Projects The goal of the WSSD's expansion program was to improve living conditions and health. The project objectives were to improve the delivery of water supply and sewerage and sanitation services, build a sound institution and ensure its financial viability. Objectives of the Program 1.8 World Bank assistance to the water supply and sewerage sector was initiated in 1973 with the First Bombay Water Supply and Sewerage Project (BWSSP-I). This was subsequently followed by two additional water and sewerage projects. These three projects are the principal subject of this impact evaluation. Data on these projects are shown in Table 1.1; details are in Annex A.2 Bank contributed about 40 percent of the total investment. No major investment outside the Bank supported projects took place in the water supply and sanitation sector in Bombay. 1.9 In 1971, MCGB's international consultants submitted a feasibility report for a 1972- 1981 development program for water supply, sewerage, sewage treatment and disposal in Bombay estimated to cost US$547 million. This formed the basis for the Bank's project preparation activities, and, eventually, the long-term MCGB-Bank program for the sector in Bombay. The goal of the program was to improve the health and living conditions of Bombay's population by alleviating water shortages and mitigating dangerous and offensive sanitary conditions. Recognizing the magnitude of the effort required, the program was divided into two phases, with BWSSP-I financing the first phase followed by one or more additional projects for the second phase. The first phase was to be primarily for water supply system improvements, and the second phase for wastewater. 1.10 While implementing the Bombay water and sewerage projects the Bank also assisted three other projects which contributed to achieving the program's goal. Elements of these projects have been considered in this evaluation to the extent that they had an impact on the program. These three projects are also discussed below. The Maharashtra Water Supply and Sewerage Project (1979-85) provided water supply and sewerage to towns and villages in Bombay's hinterland and helped to build the capacity of the Maharashtra Water Supply and Sewerage Board. Some of the towns formerly serviced by MCGB were transferred to the Board, and some of the facilities built under the project use tht same water sources as WSSD facilities. 2. The facilities included in the BWSSP - I, II, and III are shown on maps IBRD 28089, IBRD 28090, IBRD 28088, and IBRD 18974, respectively. 14 Table 1.1: World Bank-Funded Water Supply and Sewerage Projects in Bombay Project Name, Objectives Components FY, L/C No., Cost, L/C Amount First Bombay Water To improve the quality Water Supply: Supply and of supply and the * Pise weir and headworks on the Bhatsai River; Sewerage; FY73, efficiency of the * pumping scheme from the Bhatsai River to Bombay; C0390, distribution system by * 22 cu.m./sec. Treatment plant at Bhandup for all water entering MCGB's US$ 158.2 million, fully utilizing the distribution system; US$ 55.0 million available sources of * storage reservoirs; supply and * primary distribution system improvements; maximizing the hours * minor works and equipment. of supply to the Sewerage: consumers; to * urgent works for upgrading and improving 9 existing pumping stations, and rehabilitate and construction of 7 new sewage pumping stations; expand the sewerage * upgrading of Ghatkopar and Dadar treatment plants; system to handle the * 10 km pumping mains, 107 km trunk sewers, 12 xm branch sewers; growing effluent flows * feasibility studies and preliminary designs for further treatment and outfalls; (SAR, BWSSP-1, * maintenance equipment. paras. 5.03, 5.05) Institutional Development: Strengthening of BMC's water supply and sewerage organization and improvement of related technical and financial operations through technical assistance and training. Second Bombay To complete MCGB's Water Supply: Water Supply and works program * Supplementary (455 mid) river water pumping capacity at Pise Weir Sewerage: FY79, scheduled for * A 455 mId water filtration plant at Panjrapur, adjacent to existing pre C0842, implementation during treatment facilities; US$ 411.6 million, the period 1977-1981, * Construction of a 120 million liter balancing reservoir and some 35 km of US$ 196.0 million and to complete works 2.2 meter diameter transmission mains, including a 3 meter diameter tunnel originally scheduled 12.75 km long; under BWSSP-1 (SAR, * Additional pumps and associated mains at Bhandup to supply the Malad and BWSSP-lI, para. Borivli areas; 4.02) * Distribution of existing transmission mains to restore capacity of the existing system; * 10,000 public taps and 15,000 new latrines in slum areas; * Leakage detection equipment, meters, vehicles, workshops, storage, misc. equipment, operator's quarters and access roads to facilities. Sewerage: * Sewage collection and conveyance works in 5 zones including new pumping stations, renovation of existing pumping stations, construction of force mains, trunk and branch sewers, as well as 7 km of large dia. sewers in the Maharashtraim zone to convey sewage to Bandra; * Public latrine blocks in slum areas; * Renovation of an existing 42 mid sewage treatment plant at Colaba; * Pre!iminary sewage treatment and disposal via two 800 mid submarine outfalls. One at Worli and one at Bandra; Sewage treatment in aerated effluent at Versova, Malad, Chembur and Bhandup, with capacities 131, 280, 386 and 196 mid, respectively. Third Bombay To improve further Water Supply: Water Supply and BMC's * Addition of trunk mains, distribution mains and transmission tunnels to the Sewerage; FY87, implementation and distribution system; C 1750 and L2769, operational * Construction of a 455 mid water treatment plant, 2,233 mld pumping US$ 304.3 million, performance, to capacity in 17 units, and 144 million liters clear water storage in four service US$ 185.0 million expand the water and reservoirs. sewerage facilities for Sewerage and Sanitation: the city of Bombay, * Construction of 54 km sewers and 150 mid pumping capacity; and to keep pace with * Provision of low-cost on-site waste disposal facilities in areas not covered by increasing demand water-bome sewerage; from population * Provision of suction tanks, local pumping arrangements, tubewells and growth and expansion minor mains to serve the urban poor in slums; and of industrial and * Provision of technical assistance and vehicles for operations. commercial activities (SAR, BWSSP-Ill, I para. 3.01) 1 15 1.11 The Bombay Urban Development Project (BUDP, 1985-94), targeted at the poor, sought to increase the supply of affordable land, infiastructure and shelter. The infrastructure component included water supply and sanitation at the local level in the same areas as the three water supply and sewerage projects The Bombay Sewerage Disposal Project (BSDP) was approved in i995 to undertake the incomplete wastewater collection, treatment, and disposal components of BWSSP-I through III. The timing of the projects is shown in Figure 1.2. Figure 1.2: Timing of Water Supply, Sewerage and Related Projects 191WSSP I BWSSP II - . BWS P III I- I MWSSP BUDP BS P So ial Survey year 1970 1975 1980 1985 1990 1995 2000 2005 Legend: - Planned Period - - - Extended Period Note: Social Survey occurred in 1994 but covered the period 1984-1994. Seepara. 1.22. 1.12 The physical objectives of BWSSP-I were to fully utilize available water sources, improve the quality of water supply and the efficiency of the distribution system, double the hours of supply, and rehabilitate and expand the sewerage system. The institutional objectives were to develop, through technical assistance and training, WSSD's autonomy and capacity to carry out the development program, and to operate its systems. At the Maharashtra State level, the objective was to reform the institutional arrangements for managing state-wide water resources. The financial objectives were to ensure WSSD's viability: operating revenues were to be sufficient to cover operating expenses, depreciation, interest, debt repayments and at least one-third of WSSD'S capital expenditures. The institutional and financial objectives were central to ensuring that the program's benefits would be sustained. 1.13 The objectives of the first project remained substantially unchanged for the subsequent projects, in large part because they were not attained due to delays, physical cut-backs and, most importantly, an ever increasing demand driven by population and economic growth. Implementation 1.14 BWSSP-I (1973-81) encountered severe cost increases during its implementation and underwent substantial redefinition in 1976, at which time proposed investments for water distribution pipelines and water meters were reduced and the sewerage components were dropped. 16 1.15 BWSSP-1I (1978-88) assumed the same physical objectives as BWSSP-I and sought to continue WSSD's institutional development, but it too encountered implementation problems, most notably with the sewerage component. BWSSP-III (1987-96), now nearing credit closing, finances the continued expansion of water supply and wastewater facilities, and, as the earlier projects, has a component of institutional support for WSSD. BWSSP-III also expands on the earlier modest (and largely unsuccessful) efforts to provide sanitation and water supply services to the poor. The incomplete wastewater collection, treatment and disposal components of BWSSP-I through III are now covered, in a somewhat revised form, by the BSDP3 and are being undertaken with an enhanced community-based approach that will potentially improve the likelihood of success. That project also includes a substantial sanitation component. 1.16 Performance Audit Reports (PARs), prepared by OED, have been completed for BWSSP-I and II and MWSSP. The PAR for BWSSP-1, which rated the outcome as satisfactory, lauded the achievements of a 30 percent increase in the gross water supply capacity and the introduction of full water treatment. It noted that the investments were undeniably essential and probably represented the least cost technical solution. The PAR observed, however, that the physical achievements were attained with a three-year delay and a 60 percent cost overrun, and that no sewerage works were undertaken. The PAR credited the project with building a strong water supply and sewerage institution. 1.17 The PAR for BWSSP-II noted that the water supply components met their objectives, and while there were modest achievements with regards to sewerage in essence this component was a failure. The outcome was rated unsatisfactory, sustainability uncertain, and institutional development moderate. 1.18 There is no audit report for BWSSP-III which is expected to close in June 1996, two years later than originally planned. The supervision report of January 1996 notes that there is a disbursement lag of 51 percent but that implementation progress had improved in 1995 compared to earlier years. While many water supply contracts would be completed by December 1996 and sewerage contracts by March 1997, an additional three years will be required to complete major distribution facilities (a water conveyance tunnel, a pumping station and three reservoirs) because of difficulties in awarding contracts and with resettlement. This would indicate that major institutional difficulties remain. Evaluation Methodology Impacts are evaluated through several approaches that include document analysis, site visits, a survey, a workshop and solicitation of stakeholder opinions. The evaluation considers the objectives, components, and outcomes of the three projects. 1.19 Taking into account the goal and objectives of the water supply and sewerage program, this evaluation assesses the impacts on the population and economy of Bombay. It covers institutional, economic, social, health, and environmental areas. Data for the evaluation is from relevant documeats and 1ecords, site observations, interviews with personnel, and a field survey, 3. Facilities ir.iuded in the BSDP are ihown on map IBRD 26628R. 4. Performance Audit Reports on Bombay Water Supply Sewerage Project 1, Report No. 5875, dated October 1, 1985, Bombay Water Supply and Sewerage Project II, Report No. 9265, dated December 31, 1990 and Maharashtra Water Supply and Sewerage Project, Report No. 7202, dated April 1, 1988. 17 including interviews of household, commercial, and industrial beneficiaries. A workshop was held in Bombay in May 1996 to review the draft of this report and to obtain the views of Bombay authorities and beneficiaries. 1.20 The evaluation first considers the physical output i.e., the resultant facilities, and the technical consequences of those facilities. A similar approach is used for the institutional development elements of the program. Thereafter, economic, social, institutional, health and environmental impacts are discussed. 1.21 The evaluation then analyzes the factors which affect, either favorably or unfavorably, those impacts. The ability of the program's benefits to be sustained is dependent in large part on the performance of the service delivery institutions, that is MCGB and WSSD. Other key issues for improving the level of water supply and sanitation services are identified, evaluated and recommended in Chapter 5, which also suggests future actions. 1.22 The social data of this study are derived from a field survey carried out in late 1994. The survey covered four (of a total of 23) representative wards in Bombay and involved questionnaires and interviews of 1,600 households. It sought to obtain information about current (1994) and retrospective (1984) conditions based upon the respondents' perceptions of the present and recollections of the past. It addressed access to and utilization of water and sanitation facilities, how well these facilities function, the costs and affordability of the services, user satisfaction and their beliefs concerning hygiene and disease. 19 2. Economic and Social Impacts Technical Results and Service Levels Targets for capacity expansion have been met for water supply but not yet for sanitation. The service level objectives have been only partially achieved mostly because of implementation delays and strong population growth. Most telling is that the hours of water supply, at two to eight hours per day, are little better than in 1970. Sewage collection has been notably improved, but proper disposal is yet to be attained. Community latrines are still a major source of consumer dissatisfaction. 2.1 Despite substantial investments in the physical plant over the course of the three projects (see Table 1.1 on page 14), MCGB's original water supply objectives have not been fully achieved. While there has been a 65 percent increase in the gross supply of water, the population increased by about the same level, leaving the per capita availability unchanged. Figure 2.1 shows the progress made in the supply situation from 1971 to 1995. Connections increased by 84 percent, standpipes by 800 percent, and 75 percent of the connections are now metered (although effective metering is far lower, see para. 2.12). Water service, however, is still discontinuous at two to eight hours per day in most areas. Because of this poor quality of service, customers are incurring high costs for pumping and storage facilities, a solution that is millions of dollars costlier than system upgrading.5 Following investments in treatment plants, water now meets international standards when it enters the distribution system but it is subjected to recontamination in the distribution system because of intermittent and at times negative pressures. Annex B presents selected operational indicators for Bombay and other urban areas. These indicators suggest that average domestic water consumption in Bombay compares favorably with that in other cities in India and elsewhere, life of water meters are significantly shorter, staff per 1,000 connections are significantly more, and that industrial and commercial uses provide a much heavier subsidy than in other countries examined. 2.2 Wastewater objectives have not been fully met primarily because construction of the key facilities has not been completed, yet population and wastewater volumes continued to grow. Facilities to collect sewage are fairly well developed with some 90 percent of the city and 40 percent of the suburbs sewered and the collection, screening and disposal works for the harbor area at Colaba is completed. But the two wastewater treatment plants and the marine outfalls for Mahim and Worli, components of BWSSP-II, have not been completed (although the Worli outfall is partly completed and is in use); they are now included in BSDP. The study finds that the enforcement of industrial wastewater regulations is weak, further contributing to the poor environmental conditions. 5. This service discontinuity is as reported by WSSD. In reality, almost half of the 230,000 connections serve buildings which are equipped with on-site pumps and reservoirs to provide longer durations of service. The total cost of these pumping and storage facilities can be estimated to exceed US$30 million; this is more than double the cost allocated for system rehabilitation under the three projects (excluding the cost of additional storage capacity in the system). Another 70,000 connections, which serve the five million slum dwellers, have few storage options and these consumers must take water whenever WSSD makes it available. 6. Water quality has improved over time. In 1985, the yearly average of water samples deemed unfit was 22 percent; in 1994 this number declined to 4 percent. 20 Figure 2.1: Bombay Population, Water Supply, and Per Capita Availability (1971-1995) 30 240 led BWSSP-III -_538 mid 2 ...164.lcd ... .. ....... .. . 193md 1.-\ 245 lcd BWSSP-1 6.0 million (1971) 9nilo(~1 1971 1976 1981 1986 1991 1996 MCGB Service Area Population, millions Aggregate water supply capacity, mid x 100 Water per capita, lcd x 10 2.3 Of the 35,000 latrines in Bombay, 13,000 were built by MCGB and 22,000 by other organizations, many with World Bank support. While exact data is lacking, a gross calculation indicates that there are about 170 slum dwellers per latrine. The fact that about 10,000 latrines are out of commission at any time (while Bombay authorities repair some 800 per year) exacerbates the situation. The public complains of poor latrine service-at issue is the lack of a sense of ownership, inappropriate designs and inadequate maintenance. Economic Impacts The program has avoided crippling water shortages and brought important economic benefits particularly to domestic consumers. Achieving the least-cost solution has been compromised by lengthy delays and cost overruns. The tariffstructure and deficient metering, billing and collection systems fail to signal the consumer the economic cost of the service, resulting in water wastage. Rationing supply through service interruptions (as opposed to demand management through pricing) also promotes uneconomic behavior and increases costs. 2.4 A major economic issue is whether the benefits of the program exceeded the costs. That they did is beyond question. Periodic water shortages, interrupted service, and a polluted urban environment, which cause serious economic disruption and personal hardship, would be far worse in the absence of the program than even today's unsatisfactory situation. For example, gross water supply, now about 250 liters per person per day, would be about 150 liters if the Bank- supported projects had not been undertaken. For all its shortcomings, service levels in Bombay are better than in other Indian cities, e.g. Madras where economic growth is hampered by large water shortages. 2.5 The economic rate of return (ERR) was not estimated at appraisal for BWSSP-I; it was about six percent and 12 percent for BWSSP-II and BWSSP-III, respectively, on the assumption that the value of water to the consumer is equal to the price charged. Recalculating the ERR for the program as a whole gives a figure of 6.7 percent, an indication that prices are below the economic cost of the program calculated with a discount rate of about 10 percent. 21 2.6 It is clear, however, that the value of water service to the consumer far exceeds its current price for most of the consumers. When and wherever shortages occur, residential and commercial consumers are willing to purchase water from tanker trucks for as much as Rs 30 per cubic meter; i.e. 50 times the price that households are charged. Large industrial consumers' willingness to pay is not as high since they have the cheaper option of recycling wastewater at a cost of about Rs 15 per cubic meter. The ERR for the program is estimated at 12 percent when households consumption above basic needs is valued at current prices (a conservative assumption). It is about 30 percent when this consumption is valued at Rs 15 per cubic meter (intermediate between the price of WSSD and tanker water). Only a small share of this return goes to WSSD. Indeed, most consumers, especially households, receive an enormous surplus (difference between the value of the services to them and the price charged) whereas this surplus 7 is negative tor many industrial uses. 2.7 Given that the program was indispensable, did it represent the least cost solution? The answer is a qualified yes. The major technical solutions and their sequencing generally appear to be least cost. Costs were higher than anticipated and benefits were postponed, in part because of severe delays in procurement and construction. Unsatisfactorily designed facilities, such as the underutiized public latrines and the partially completed submarine outfalls, posed substantial costs without benefits and represent economic losses. 2.8 Although the projects included components for system rehabilitation there was a clear bias during implementation for major construction, and as a consequence important benefits were foregone which could have accrued from relatively low cost rehabilitation, such as leak reduction and improved metering. The Bank shares culpability for this, through its agreement to curtail rehabilitation when the projects underwent mid-course redefinition. In fact, at some point along the sequence of projects, it would have been desirable, probably in the middle to late 1980s, to have a project exclusively for rehabilitation and institution building. As discussed in the May 1996 Workshop, the next investment should most certainly be in this area as opposed to new construction (para. 5.11). 2.9 The level and structure of water supply and sewerage tariffs are matters of economic and social importance. These impact upon economic viability, equity among consumer groups, and the ability to manage demand. During the course of the program, tariffs have been raised several times and as a consequence the financial position of WSSD has generally been satisfactory. 8 Prices, however, are not in line with economic incremental costs. Consequently, consumers are not signaled economic costs, for most of them-the domestic consumers-prices are only a small fraction of the cost. Thus, wasteful practices are encouraged and the message is given that large (but uneconomic) capacity expansions are required. 7. In 1994, domestic consumers paid Rs 0.6 and commercial consumers Rs 4.5 to Rs 23 per cubic meter. Water purchased privately from tanker trucks costs approximately Rs 30 per cubic meter. Assuming that a household would be willing to pay the tanker price, this difference amounts to a consumer surplus of about Rs 2,000 for a slum household consuming 72 cubic meters/year, equivalent to 40 lcd in a five-person household, and Rs 8,800 for households consuming 300 cubic meters/year. However, it is likely that the latter would consume less if faced with tanker unit costs and this surplus would be lower. 8. The incremental cost of water based on estimates prepared in 1994 is expected to be in the range of Rs2.9 to Rs3.9 per cubic meter. This cost will depend upon the projects selected. The cost estimates include the cost of source development, transmission mains, pumping, and water treatment but does not include the cost of distribution. 22 2.10 The tariff structure discriminates against commercial and industrial (C&I) consumers in favor of domestic consumers. In 1994, C&I tariffs ranged from seven to 38 times those of domestic tariffs, and while C&I consumers took some 10 percent9 of the water sold, they generated 80 percent of the revenues. This deliberate policy of industrial consumers heavily subsidizing domestic consumers encourages wasteful consumption by the latter which could be put to good economic use by others. Moreover, the level of subsidy is not essential to ensure that domestic consumers can afford piped water. The poorest households, those earning Rs 900 a month, are estimated to spend less than one percent of income on their water bill, a figure that is low by developing country standards.'0 2.11 The high cost of water has prompted several industries to treat and recycle water at costs of three to six times the cost of the public supply. The highest marginal cost of water to an industrial consumer was Rs. 23 per cubic meter. This rate compares unfavorably with waste water recycling costs of Rs 8-15 per cubic meters liters and desalination costs of Rs. 20 per cubic meter. Consequently, several industries have opted to recycle waste water for cooling. Further, some industries have resorted to treating their effluents and they refuse to pay sewage charges. These factors have adversely affected WSSD's revenues. The relocation of water- intensive industries of course has its plus side also, for it makes more water available to other users without expanding the capacity of supply. But many commercial users, such as hotels, have no relocation option and are forced to live with the quality of service and the price of whatever the public authorities impose on them. 2.12 The use of price as an economic signal depends upon the system having a well operating metering, billing and collection system. At present 25 percent of the connections are not metered and 80 percent of the meters do not function, so metering is effective for only 15 percent of the customers. Accounts receivable are high and, according to the social survey, more than 30 percent of the customers pay nothing for water. For most consumers there is no price constraint on consumption and consequently the utility must rely upon physical rationing. Improvements in metering and revenue collections are essential if sound economic and financial policies are to be pursued (para. 5.15), however, the low price charged for water provides WSSD with little incentive to act in this area. The Bombay authorities would appreciate having the Bank's assistance in the area of tariffs, metering and collection; Box 2.1 illustrates one successful experiment. 2.13 Service interruptions used to ration water are a key impediment to a rational use of water in several ways. First, water is wasted by households who throw out that which is left from the previous day's storage, and additional water is wasted by localities which daily flush out accumulated pipeline sediments; second, pressure interruptions make metering less acceptable and technically unreliable; and third, poor service quality makes tariff adjustments less acceptable to the consumers. 2.14 In most societies the majority of commodities, even essential ones such as food and water, are allocated on the basis of the cost of production and the consequent price to the consumer. Water service in Bombay (as in many other cities in India), where the primary allocation mechanism is physical rationing, is an exception. Experience has shown that utilities which use the price mechanism are more efficient and more responsive to consumer needs, and 9. Report of The Expert Committee (Water Planning) on Bombay's Future Water Resources and Improvement in Present Water Supply Schemes, December 1994, Pg. 18-14. 10. In international development practice, commonly accepted figures for low income groups range from one percent to five percent. 23 that consumers are willing to pay full costs for water and sanitation services that meet their expectations. Box 2.1: Metering Project in the Town of Pusad In 1980, 2,000 water meters were installed in Pusad, a rural town with a population of 30,000 people in Maharashtra. Of the cost of US$25 per meter, consumers contributed US$18, with the balance furnished by the municipality. Although the qualities of the meters were often inadequate, the effects of the project have been positive. After the project the system provided 24-hour service, compared to an intermittent service of 7 hours daily before. Pressures also rose to satisfactory levels throughout the system. One practical effect was that whereas some consumers previously had had to install their taps in specially prepared below ground pits to be able to obtain water from the system, they subsequently obtained direct delivery to their second floor bathrooms. . Previously, water charges were based only on the size of the connection. The meter installation made a volume-based tariff possible, and thus turned operating losses of US$12,000 into an operating surplus of US$4,300. The effective cost increase to consumers was estimated at 64 percent. At about 3 percent of household income for those just above the poverty line of US$945 per year in 1991, billings were readily collected, indicating consumers' willingness to pay. The internal rate of return for the metering project was nearly 30 percent. Reference: Meterization in Developing Countries - A Case Study, by Mr. S. S. Patwardhen, Mahrashtra Water Supply and Sewerage Board, 1981. 2.15 Price need not be an impediment to the poor having access to service, as a life-line block of water may be made available to all in the design of the tariff structure. The cost of basic supply (40 led) to a household of five persons paying the MCGB full cost of RS 2.3 per cubic meter is only Rs 15 per month. This amount is considered affordable to poor families earning Rs 900 per month; 1.7 percent of the household income. Also, from an economic standpoint, it is preferable to offer subsidies to the poor for the cost of connection and for other price inelastic items as opposed to subsidies for volumetrically measurable supply. Presently, the WSSD's tariff structure subsidizes both elements: the cost of connections as well as the water supply. If water supply needs to be subsidized at all, it should be restricted to (i) a first block for basic needs as is done by many utilities worldwide, (ii) the poorest households and (iii) the price should cover at least the recurrent costs. This would help to ensure the rational use of water while efficiently redistributing income. 24 2.16 The same economic arguments are valid for sanitation. However, experience in other countries shows that willingness to pay for wastewater removal, treatment and disposal is not as evident as for water supply and sanitation because the waste producer does not experience full and direct benefits. Thus, for wastewater management the use of a mix of volumetric pricing and property taxation, as is now the case in Bombay, is appropriate. Social Impacts Consumers complain about the inconvenience of partial day water service, the poorly designed and operated sanitation facilities, and storm drains that are clogged with refuse. The poor and especially women and children mostfrequently bear the burdens of these deficiencies. 2.17 A survey of 1,600 households carried out in four wards of Greater Bombay as part of this study compared conditions at the time of the survey, December 1994, with those of 10 years earlier. The wards and the respondents within the wards were chosen to provide a representative mix of water and sewerage services as well as income levels and housing types. Data was dsaggregated by gender and cultural characteristics. 2.18 The s-;rvey interviewed individuals and focus groups and observed facility use. As there was no sirtilar baseline data, the respondents were asked in 1994 to recall the situation of 10 years earlier. The respondents were queried about access and quality of services; costs, satisfaction and affordability, aid hygienic beliefs and practices. Relying upon recall has its weakness but the approach was deened to be the most suitable way to judge change over the decade which the first and second projects impacted. 2.19 The survey results indicate that, for water supply, coverage with house connections increased from 46 percent in 1984 to 62 percent in 1994 and standpipe use remained constant at 37 percent, but access to 24-hour supply decreased from 36 percent to 22 percent. The use of wells declined from 9 percent to 1 percent, probably because well water became increasingly contaminated and piped water became more available. For those who receive partial day service a major complaint is that water often reaches them in the early morning hours, thereby causing stress and hardship, particularly on women. Twenty percent of the respondents spend more than one hour per day collecting water (compared to 24 percent in 1984) but those in the Mahim fisherman's colony spend an average of 4-5 hours per day. Some 80 percent of the respondents do not trust the potability of the supply. 2.20 The situation is especially bleak for consumers that do not have house connections. Some 36 percent fetch water whenever and however they can; for the others water is allocated by locally organized quotas, time periods or queuing. Almost 80 percent of the respondents who use standpipes report that most of the local quarrels take place around common taps. In a recent and promising development, in lieu of free standpipes WSSD now offers self-organized groups metered connections which, for a fee, serve 5 to 15 households each. 2.21 The survey indicates that almost one third of the respondents believe that they do not pay for water. Among them, half are tenants and they probably pay indirectly through rents or other arrangements with connected households. This payment is loosely or not at all related to consumption. Significantly, some 20 percent of homeowners stated that they do not pay for water revealing an WSSD administrative weakness. Water revenue collections at standpipes have improved over the decade, however-three fourths of the respondents indicate that they did not pay 25 for standpipe water a decade ago; only one fourth do not pay at present. As noted in para. 2.10, most consumers are able to pay the present level of tariffs. Willingness to pay may be another matter, as evidenced by the low level of collections and reports of willful damage to meters, possibly out of frustration with the low quality of service. 2.22 It is not uncommon to find, as in this survey, that when water is scarce and allocated by physical manipulation instead of price it is typically the poor, those who cannot afford house connections, booster pumps and costly water storage facilities, and women and children, the principal water haulers, who bear the greater burdens in terms of access and convenience. The survey data indicates that, other than an increase in house connections, little progress has been made in key indicators for consumer satisfaction. This may help to explain why WSSD is not held in high esteem by its customers. 2.23 With regards to sanitation, access to latrine facilities in slum areas increased from 77 percent to 84 percent but almost all slum dwellers surveyed complain of inappropriate design, numerical inadequacy and poor maintenance. In the poorer wards more than half of the children use open field defecation. In non-slum areas almost all the households are served by toilet facilities, for which the program deserves credit. About one-third of respondents indicated that they were willing to pay more for toilet facilities if they were improved. Consumer preference is for clean facilities which are well lighted, with water supply and connected to sewerage. 2.24 Pay-and-use latrines which are connected to sewers and operated by the private sector in high traffic areas, and alternative community-operated facilities for slum dwellers are successful in Bombay. For example, 40 of the toilets built under BUDP are operated by a community group in the fisherman's colony of Colaba and cleaning and maintenance are considered by the users to be satisfactory. Group members may use the facilities at a monthly contribution of Rs. 15-20 per family. There are other examples of successful latrine programs in India-Gujarat has one that serves households and it may be an appropriate model." 2.25 Overall, it would appear that the impact of the communal latrine program could have been greater had it responded better to consumer needs, with regards to both facility design and operation. Consultation with beneficiaries and a capital cost contribution from them would impart a sense of ownership and respect for the facilities and help to ensure their sustainability. The report finds that Bombay authorities and the Bank have placed great reliance on publicity, demand assessment and consultation in the design of the latrine component of BSDP. 2.26 Consultation with all the stakeholders may also help improve the rules that were followed to mitigate the impact of reservoir construction in the watershed area. Monetary compensation was paid for the change in land use, mostly to government as a forests owner. Local dwellers were offered jobs and new water supply by MCGB but no resettlement compensation. 11. Performance Audit Report on Gujarat Water Supply and Sewerage Project (Credit 1280-IN) dated June 10, 1996, Report number 15715. 27 3. Institutional and Financial Impacts WSSD is a moderately well run organization but construction was beset with lengthy delays, and operational performance is still weak in the areas of staffproductivity, leakage detection and repairs and metering. Financial performance is adequate but is too dependent on a narrow revenue base made up of commercial and industrial users and on taxes and hidden subsidies from the Government of India to cover the foreign exchange losses on borrowings for WSSD. Institutional Overview 3.1 WSSD was established in 1971 as a step in the preparation of the first project. Prior to that, responsibility for water supply and sewerage was divided among various units of the Bombay government. Technical planning and development were weak and poorly coordinated, and operations and maintenance were fair at best. Financial accounts were blended with general municipal accounts. Water charges covered cash expenditures and one-third of the cost of the very low investment level. There was no charge for sewerage. 3.2 Responsibilities for water resources were historically fragmented among several state agencies and uncontrolled development of scarce water was occurring. Therefore it was agreed under BWSSP-I that an appropriate authority for water resources management would be established by 1975. 3.3 A major institutional gain was made under BWSSP-I in 1973 when WSSD's status was upgraded to an autonomous Department with a unified management structure and its own accounting and financial budgets. This contributed to coordinated water and sewerage planning, raised the level of technical operations and gave the utility a firm basis for growth. In 1992, storm water drainage was added to WSSD's portfolio. 3.4 The Performance Audit Reports for BWSSP-I (1985) and BWSSP-II (1990) credited WSSD with a sound financial position but also cited areas for improvement. These include reducing the excessive reliance on the water/sewer benefit tax, which generate some 32 percent of the revenues but is not based on volumetric metering; reducing the accounts receivable, which stood at 68 percent of billings in 1989 against the target of 20 percent; and paying serious attention to revenue losses through unaccounted-for-water. 3.5 The PARs' views on institutional performance are backed by findings of this evaluation. The dependence on non-volumetric charges continues to be high and increased to 41 percent in 1994 because attempts at metering were half hearted and not sustained (see Annex A, Table 7). Further, the number of meters out of order is at 80 percent. Accounts receivables in 1994-95 stood at 60 percent of billing. The problem continues without improvement because 22 percent of current receivables in 1994-95 remained uncollected. Operational Performance 3.6 Staffing for the water supply function, for example, is exceptionally high at about 96 staff per thousand connections compared to sector norms of 5-20. Manually opening and 28 closing some 650 valves throughout the day in order to ration and equitably distribute water may contribute to this high figure. Another factor contributing to the high staffing level is the WSSD's approach of hand-delivering water bills to all customers because several water connections in slums have no postal addresses. 3.7 Trends in staff productivity have varied by function (see Annex A, Table 10). The staff productivity of the pumping function has improved in that the pumping per staff increased. Staff productivity in the water treatment function and the water production function have remained generally steady or improved slightly. The productivity of the valve operation function, however, deteriorated noticeably with a 20 percent decrease in efficiency from 1985 to 1995. The productivity of the meter reading staff appears to have improved by 60 percent, from 341 meters per staff in 1985 to 537 in 1995. However, this apparent improvement is misleading because of the very large number of non-operational meters; 80 percent of these meters are suspected not to work properly or at all. Significant opportunities for improvement are evident in the metering and valve operation functions. 3.8 Unaccounted-for water reportedly would be in the order of 40-60 percent on a 24-hour supply basis whereas 25 percent was a BWSSP-I target for 1981. 2 Actual water losses are less than 40 percent because the pipelines are not pressurized 24 hours a day. 3.9 While there has been considerable effort at staff training, some of the benefits have been lost due to staff rotation and attrition. In addition some staff report that the use of consultants for project supervision is excessive and undermines staff training, morale, and effectiveness. 3.10 WSSD has recently organized to take greater advantage of private sector participation. Large construction contracts have traditionally been awarded on the basis of competitive bidding but now WSSD also engages contractors on an annual basis to renew service lines, lay small water mains, provide fire hydrants and clear storm water drains. 3.11 Throughout the program and even to this day procurement and construction is beset by delays, in part because of inadequately detailed specifications, cumbersome procurement procedures which on occasion require 520 days to achieve an award, poorly qualified contractors and unsatisfactory control and supervision of construction.3 In addition, there were major design issues under BWSSP-II, some not fully controllable by WSSD, which held up both design and construction of sewerage components. 3.12 Monitoring indicators called for under BWSSP-III, which would have provided WSSD with management data on the parameters shown in Table 3.1, have not been generated by WSSD. Bank staff do not seem to have been persistent on this matter during the course of supervision. WSSD's ability to manage its resources and meet the needs of its clients is dependent upon the development and use of key indicators. The lack of data which these indicators would have provided also hindered the work of this impact study. 12. WSSD started a leakage reduction program in 1971 which continued for a few years, but there are no records of its accomplishments. It decided to repeat a similar program in 1981 but no significant actions have in fact been undertaken. 13. This evaluation understands that the procurement process has been streamlined under BSDP. 29 Table 3.1: Monitoring Indicators Called for Under BWSSP-III Physical Criteria Staffing * Water production; water quality; water * Number of employees consumption; number of connections, public standpipes, meters and leaks repaired Financial * Number of sewer connections * Average cost per 10,000 liters of water delivered * Communal sanitation facilities * Average water revenue quick current ratio General Indicators * Average age of customer recoverable * Population, Greater Bombay * Collection efficiency population, city areas * Debt to equity ratio * Population, suburbs * Rate of return on assets * Total population served by private connections Facilities for the Poor * Total population served by public standpipes * Lengths of service mains; number of storage tanks and tubewells 3.13 There may be some improvement in this area, however, as WSSD now produces the monitoring indicators called for under BSDP. How it uses this data is another question; for example, the data show that only 15 percent of the domestic connections have working meters- a situation that has prevailed for years-yet there does not seem to have been a response by management. Some of the present monitoring indicators are of lower importance than others and some critical parameters, such as those concerning water and sanitation services to the poor, are not adequate. The study suggests that the matter of monitoring indicators be revisited by WSSD management with the view of producing data which are key to the performance of WSSD and on which action can be taken. Indicators with targets should also be used to improve the accountability of group managers within WSSD. 3.14 Starting in 1972 the Bank has urged officials of Maharashtra State to develop and manage water resources in a comprehensive, multisectoral way. Through 1994 state-wide water resources management and development was undertaken by a single sector agency, the Maharashtra Irrigation Department. In 1995 a state-level water resources authority, headed by the Chief Minister, was created. The board members include representatives from irrigation, agriculture, industry, and urban and rural development. The authority is responsible for formulating water resources policy and addressing issues such as allocating water between competing interests. This represents a major improvement in water management strategy, but it remains to be seen how well the authority functions. 3.15 This evaluation concludes that while there was noteworthy progress in utility formation and management early in the program, and WSSD's financial health appears to be satisfactory, other areas of institutional performance are weak. The expected institutional impacts have not been fully realized and this puts sustainability at risk. Financial Performance 3.16 A utility's financial position is a key indicator of its overall performance, its ability to sustain itself and to render quality service. By this measure, even though industrial subsidization of domestic consumption is high, WSSD does well. As evidence, WSSD's contribution to the large capital expenditures of the program exceeded 40 percent. Tariffs at the onset of the program were inadequate in level and structure so BWSSP-I set stringent financial requirements on the fledgling utility. Eight rate hikes over the period 1976-1994 (Figure 3.1) helped WSSD to 30 generally meet the revenue targets prescribed in the Loan Agreements. It is noteworthy, however, that the domestic tariffs barely increased. The conscious strategy to shift the revenue burden from the domestic consumers to the industrial and commercial consumers has resulted in the situation that some 10 percent of the water sold generates 80 percent of the revenues. The increasing dependency on a progressively narrower revenue base exposes the WSSD to significant revenue losses if industries decide to relocate or develop cheaper sources for water. Figure 3.1: Commercial and Household Water Tariffs 250 200 upper bound of non-domestic 150 & ' 100 lower bound of n n-domestic 50 estic 0 1970 1975 1980 1985 1990 1995 Year 3.17 The WSSD receives a subsidy from the Government of India (GOI) which assumes the exchange rate risk. The GOI has undertaken IDA credits with a repayment period of 50 years. Since the 1996 value of the Rupee against the US dollar is approximately 25 percent of its value in 1974, this has resulted in a significant exchange loss to the GOI. The cumulative loss through 1995 amounts to approximately Rs 670 million on credits of Rs 2,039 million for BWSSP-I and DWSSP-II. Unless the Rupee revalues, these losses are likely to increase significantly in the future. One estimate suggests that the GOI may incur an unforeseen loss of Rs 46,730 million on orig;nal credits of Rs 3,918 million by the time all three credits, including BWSSP-III, are repaid in th year 2036. In different terms, while the GOI obtained the credits at an expected annualized cost of approximately 0.5 percent, the cost may actually be more than 10 times as high, in the range of six to eight percent per annum. This loss also results in a subsidy from the GOI to the WSSD which is not reflected in the latter's financial statements. The GOI exchange rate loss of Rs. f35 million realized in 1995 translates into a six percent or Rs 0.15 per cubic meter increase in the cost of water (Annex B, Table 11). This loss is equivalent to a GOI subsidy of at least Rs. 100 per annum for each Bombay resident. 3.i8 In the end, the full cost of water, including cash expenses (employee costs, utility services, repairs and maintenance, interest and equity payments, administrative and general expenses), depreciation and exchange rate losses amounts to Rs 2.45 per cubic meter. This cost may also be detailed as follows: water supply Rs 1.41; sewerage Rs 0.59; storm water and other, Rs 0.30 and foreign exchange losses, Rs 0.15. 3.19 Cross subsidization between different WSSD customers is evidently huge. Domestic consumers pay only Rs 0.60 per cubic meter or 24 percent of the full cost. Industrial and 31 commercial users pay according to an increasing block schedule. Since the latest tariff increases in April 1996, the smallest consumers among them pay Rs 6 per cubic meter or about 2.5 times the full cost. The larger consumers pay Rs 35 per cubic meter or more than 14 times the full *:ost. 3.20 Cross subsidizations between different WSSD functions is also evident. Approximately 60 percent of the WSSD revenues derive from water charges, and another 32 percent from wastewater charges. The remaining revenues accrue mainly from general revenues and storm water drainage charges. Approximately 61 percent of direct costs are associated with water supply. Wastewater costs are approximately 26 percent and storm water drainage costs are approximately 13 percent. Thus, sewage charges help subsidize the provision of storm water drainage. This finding is noteworthy because the storm water drains were added to the WSSD portfolio in 1992. The subsidy to the storm water drainage functions needs to be addressed along with the overall tariff structure reform. 33 4. Health and Environmental Impacts Health Impacts Although improved health was a goal of the program, little change in the levels of water- borne diseases has been observed While water quality has improved, other factors which were not targeted by the program, such as hygienic practices, health education and health services, have also affected health impacts. 4.1 A comprehensive study in 198214 found that on average five percent of the population suffered from water-related diseases each year. The average rate of unfit water samples taken frcm patients' households was 54 percent, with no difference noted in slum or non-slum areas. It was estimated at the time that children below 12 years of age were four times more likely to get water-related diseases than adults, and that one third of deaths were due to water-related diseases. The study concluded that the supply of filtered and chlorinated water would reduce the morbidity due to water-related diseases if it reached the tap in a potable state. 4.2 Aware of the link between water and disease, the intervention model foresaw improvements in public health with improvements in water supply service and potability. While supply hours did not expand markedly as a result of the program, the number of standpipes expanded by 800 percent from 1971-1994 and coverage with house connections increased (para. 2.1). Additionally, full treatment to improve water quality came on line in 1981. 4.3 The impact study reviewed data on the incidence of severe diarrhea and vomiting as reported at Kasturba Hospital, which is situated within the boundaries served by MCGB, and found that health conditions improved only slightly after the water supply improvements (see Figure 4.1).15 4.4 While these data may be too limited to draw definitive conclusions, it is clear that an important health indicator did not undergo a significant improvement despite the water and sewerage program. This may be because the levels of water availability and access, despite improvements, are still inadequate. Also, the quality of water, despite treatment, is compromised because the distribution system is intermittently pressurized and the water is thereby subject to recontamination, especially during the monsoon season. Poor garbage collection and latrine facilities further contribute to the problem. 14. The Health Survey was conducted by the Health Department of the MCGB in 1982: Data were provided from the household survey (active surveillance), and from dispensaries (passive surveillance). More recent water sampling data reveals a steady improvement in water quality, however, at monsoon time the numbers of unacceptable samples exceed 10 percent. 15. The Socio-Economic Review of Greater Bombay (1993-94) prepared by the Center for Research and Development, Bombay, suggests that the significance of gastroenteritis in the distribution of deaths is declining. Further, a statistical analysis suggests that the number of diarrhea cases is declining annually at the rate of two cases per million people. These improvements are considered to be minor. 34 Figure 4.1: Incidence of Diarrhea & Vomiting , Kasturba Hospital, Bombay (1972-1993) 3501 300{ Before full treatment 1981 After full treatment 250 of water supply of water Supply 200- 1985 monsoon 1988 150 . monon 10o 50 0 00 00 4.5 Water, sewerage and latrine services are not the sole determinants of health. The general level of sanitation in the household and the community, hygienic practices with regard to food, water and personal care, and nutrition and health care all play important roles. A successful health intervention effort requires more than physical facilities, it also requires raising awareness, improving education, and a cadre of health workers who can provide sustained support to the community-measures which were, perhaps appropriately, not included because of costs and institutional conflicts which would have overburdened an already large program. But having said this, certainly the health situation was not helped by the secondary role assigned to sewerage and sanitation relative to water supply in the early years of the program, and by sanitation taking a larger share of the cutbacks when cost overruns forced the redefinition of BWSSP-I and II. Environmental Impacts Environmental conditions at the street level have improved because of expanded sewerage coverage. Shoreline pollution has also decreased in selected areas because two marine outfalls, one completed and one partially complete, are in service. But much remains to be done as three-fourths of the collected sewage is still discharged to creeks and coastal waters without treatment. 4.6 The sewerage components were intended to provide the primary environmental benefits of the program. The sewerage component of BWSSP-I was dropped during project revisions in 1976, and eventually included in BWSSP-II. But technical, managerial and contractual difficulties have postponed even to this day the completion of several key sewerage components in BWSSP-II and even its follow-on project, BWSSP III. While sewerage systems have been expanded, thereby relieving street-level pollution in the areas served, 75 percent of the collected sewage is discharged 35 without treatment to creeks and coastal waters. Most of the other 25 percent is de-gritted, screened and discharged into coastal waters via a 0.5 km outfall at Worli."' 4.7 The commissioning of outfalls reduces the total coliform concentration at the shore by a factor of one thousand" and improves the aesthetic appearance of the water. However, in the Worli area, the outfall is too short to protect the recreational beaches from exposure to sewage: beaches at risk from sewage redeposition include Dadar during the Monsoon season and Bandra during other times of the year. 4.8 Another outfall was commissioned at Colaba, a service area with about 300,000 residential and commercial consumers; it is 1.1 km long and preliminary investigations suggest that the sewage plume from this outfall may move safely out to sea without posing a threat to the shore line. However, the sewage discharged through this outfall disposes of only one percent of the total sewage collected by the conveyance system. 4.9 The discharge of untreated sewage is detrimental to the environment. The completion of the water supply components of the program exacerbate this condition, for they have increased the volume of wastewater which must be managed. 4.10 A program for addressing the above shortcomings is the essence of the BSDP which started in 1995. The fact that this project was subjected to a comprehensive environmental assessment (EA) in accordance with regulations that did not govern the earlier projects provides a level of confidence that environmental concerns are appropriately addressed. Indeed, the EA process prompted a design change which is worthy of note: public consultation revealed a demand for a more meaningful sanitation component to meet the environmental needs of poorer households, and the project was modified accordingly. But citizens also complain about uncollected garbage and clogged drains," problems which call for institutional improvements as opposed to capital investments. 4.11 Overall, some positive environmental impact was achieved within BWSSP-I , II and III. But the long awaited substantial benefits of the program will be achieved only with the completion of BSDP in the year 2002. Additional projects will also be necessary because of continued urban and economic growth. 16. Although the 3 kilometer Worli outfall is not complete, 0.5 kilometers are now in use and there has been a noticeable improvement in the water quality along the westen shore. Before the project about 500 mid of waste water was discharged on the shore. After the project this outflow, which has increased to 700-900 mid, is channeled off shore by the outfall. 17. From dilution experiments at Colaba, it is estimated that the total coliform concentration in a 100 ml sample taken before commissioning the outfall would be 10' coliforms; the count of a similar sample is now estimated to be 10 coliforms. 18. WSSD staff explained at the May 1996 Workshop that they have a regular program for drain cleaning. This seems to contradict the finding of the Social Survey. w 37 5. Factors and Recommendations for Sustainability 5.1 Sustainability as used here is the ability to maintain the benefits of the program as they are, now without further external inputs. There are several factors which affect the level of positive impacts and their sustainability, and these are briefly described below. Factors which Affect Impacts Impacts are affected by both internal and external factors. WSSD has direct control over internal factors such as the management of construction, maintenance and operations. However, Maharashtra State and MCGB set policies and laws which govern and control WSSD's freedom of action; for example, MCGB sets tariff levels and structures, the design of which is in part politically driven. Other factors extend to worldwide conditions, such as global inflation and the shortage of materials in the 1970s. 5.2 The Bombay region is blessed with the availability of an educated work force and a strong industrial base, and MCGB benefits from this situation in the construction of new facilities and the management of its assets. But the impact of these attributes on the cost and quality of MCGB services appears to be below potential: WSDD has too many performance problems with equipment such as water meters and some pumps; it also notes that civil works may be too small to attract the best local contractors. 5.3 Three factors adversely affected the performance of the program. First are the factors over which program officials had no control-for example, the macroeconomic shocks of the 1970s which caused worldwide inflation and shortages of energy-intensive materials such as plastic pipe and cement. A large part of the cost increases and material shortages experienced in BWSSP-I may be attributable to this cause. 5.4 Second are the factors which fall under the purview of state and local officials. These include urban policies and political expediencies which encouraged the rapid growth of the slums and complicated the delivery of efficient and effective urban services. Inadequate property registration and cumbersome civil service regulations and procedures for the selection of contractors and the settlement of claims also limited WSSD's ability to effectively carry out projects and manage its operations. The streamlining of procurement procedures agreed upon recently for the implementation of BSDP is a welcome development. 5.5 The MCGB, and not the WSSD, sets the tariff level and structure, and the inappropriate domestic tariff appears to be driven by political rather than economic considerations. WSSD's finances are heavily reliant on a narrow shrinking revenue base provided by industrial and commercial consumers, on taxes, and on the fact that the growing foreign exchange losses associated with its borrowing are borne by the Government of India. 5.6 Third are the factors internal to WSSD. These factors include project design issues as occurred with the marine outfalls; a predisposition for construction as opposed to strengthening operational performance through leak reduction, effective metering, billing and collection, and other operation and maintenance activities. An overarching consequence of these practices is the long interruption of service each day which in turn has an adverse impact on health benefits and 38 economic efficiency (uneconomic evasion of services by industries, higher cost of individual storage compared to large scale storage in each service area). 5.7 Inadequate consultation of users by WSSD during the project formulation process increased the risk that full benefits would not be achieved. Consultation stimulates the participation and commitment of the various stakeholders in paying for, using and maintaining the end product. It also fosters a more thorough examination of alternative ways of achieving project objectives and helps to ensure that even people who may not be beneficiaries (for example, people who live on proposed reservoir sites) are not adversely affected without compensation. India and other developing countries, as well as development agencies, have come to recognize the importance of consultation in the late 1980s, but there was little if any consultation during the preparation of BWSSP-I and II. 5.8 One can only speculate on the outcomes had consultation been more extensive. Possibly the latrines would have been designed differently, maintained better and put to fuller use as demonstrated by the experience of the BUDP; possibly there would have been fewer cutbacks in sewerage and sanitation at the time the projects were redefined; possibly a stronger effort would have been made to provide more convenient water service; and possibly willingness to pay and the image of WSSD would be stronger. It is to the credit of the authorities that consultation played an important role in the design of BSDP in 1994-95. Recommendations Unless the facilities meet their objectives over time, the value of the investments in them will be lost. The most important determinants for sustainability are sound institutions which are responsive to consumer needs, and financial viability. Using water resources efficiently and equitably among competing sectors, and not overburdening the environment with wastes, are keys to environmental sustainability. In each of these areas there is room for improvement. Improve the Institution 5.9 The key to sustaining the present level of service is a strong institution, and in this area there is room for improvement in Bombay. Staffing is excessive and procedures are cumbersome; and unaccounted-for water is high. Performance is weak for metering, billing and collection. In view of these weaknesses sustainability is uncertain. In the past, capital expansions and tariff increases were used to cover institutional shortcomings. If this approach were replaced by one which extracts maximum benefits from existing facilities by concentrating on rehabilitation and improving operations, it would lay the foundation for an affordable gain in the reliability and quality of service and help to ensure that the original goals of the program are fulfilled and sustained. 5.10 Accordingly, there is need for an examination of institutional issues pertaining to WSSD and the governance and regulatory framework within which it operates. This examination should focus on the soundness and inconsistencies from a scheme to another of water and wastewater policies, particularly water and sewerage tariffs; expanding the roles for the private sector in both investment and operations areas; and listening to and responding better to consumer concerns. Training and assistance had been provided under the program but there is a continuing need for this because ofjob rotation and attrition. 39 Improve the Quality of Water Service 5.11 Both investment and operational measures need to be taken to improve the quality of water service as perceived by consumers. With respect to water supply this would require a major rehabilitation effort with the goal of providing consumers with 24-hour, uninterrupted water service. This would help to ensure that the water remains potable; improve consumer convenience; reduce expenditures for private water storage facilities; and reduce WSSD's management and labor costs. Equally important, the public's low image of the utility would improve. 5.12 Programs to detect and repair leaks and to improve the metering, billing and collection functions would be essential, integral parts of this rehabilitation effort. Because of difficulties that are likely to be encountered, particularly in areas where the pipe networks are tangled and meters are willfully destroyed, it should be approached incrementally, be carefully monitored for costs, benefits and social implications, and be started in a zone where conditions are most conducive to success. Because the support of the consumers is essential, the effort must be accompanied with a public education campaign. 5.13 Is a 24-hour, uninterrupted service feasible? The PAR for BWSSP-1l estimates that it is feasible both technically and financially. And an analysis by this impact study of data for the year 1991 from the appraisal report for BWSSP-III appears to confirm this. If the average domestic consumption were 135 liters per person per day (instead of the 182 lcd assumed in the report), and industrial demand and losses were equal to the appraisal targets, gross demand would equal gross supply and rationing by interrupting service would not be necessary. 5.14 But is 135 lcd domestic demand realistic? Probably yes, given that almost half of the population live in slums, where consumption would be low because much of the water is carried. Indeed, 135 lcd could provide 60 lcd for slum dwellers and 200 lcd for non-slum dwellers. For comparison, average consumption in the UK and in Brazil is 136 and 151 lcd, respectively; the Maharashtra Water Supply and Sewerage Board uses 120 and 50 lcd for house connections and standpipes, respectively; and WSSD itself estimates that the present consumption by apartment dwellers to be 135 lcd. 5.15 Measures for achieving a 24-hour supply include reducing waste by consumers; reducing physical losses in the system; adding additional system storage and reconfiguring parts of the transmission and distribution systems. Assuming metering and collections have been made effective, unfettered demand could be managed by restructuring tariffs to better reflect costs for any consumption above a life-line block. Physical losses would climb with pipes under pressure the full day, but the appraisal target of 24 percent losses is not unrealistic provided a vigorous rehabilitation program is undertaken.'9 5.16 Another hurdle is to change the mind-set of the officials of Bombay and perhaps even of the consumers. The officials claim that Bombay is unique, that it already provides better water service than other major cities of India, and that the "good" water service attracts migrants. Some consumers may have become resigned to their fate, and others who can afford it have 19. A study by WSSD found that introducing 24-hours supply to an experimental area required 50 to 60 percent more water. But in the study physical leakage was not disaggragated from consumer consumption, nor was there an effort to reduce leakage, improve meturing or charge approoriate tariffs, which is the package this evaluation is advocating. The findings of this study suggest the significant potential for increasing water availability via conservation. 40 installed tanks and pumps with WSSD subsidies. This evaluation adheres to the view commonly held worldwide, that anything less than 24 hours of water supply is unsatisfactory, if better service is technically and economically possible as it is in Bombay. Improve the Quality ofSanitation Services 5.17 The final need is to provide, or cause to be provided, adequate sanitation facilities and services for the disadvantaged. Past government efforts at this were not successful. The ongoing Bombay Sewage Disposal Project contains a slum sanitation component which would serve 20 percent of the five million slum dwellers. It has a better chance of success than earlier efforts because it actively involves the community. The social survey reveals the needs: better technology and improved operations and maintenance. Recent learning reveals that latrines need water supply, must be connected to sewers, be adequately drained, and be equipped with lights. Community-organized maintenance works better than that provided by government. The coiimunity-based approach of the BSDP should be monitored and its successes replicated; other examples of successful community-organized sanitation in Bombay may also serve as useful models. 41 6. Conclusions The planners of the program faced daunting challenges because of the backlog of unmet demand and subsequent economic and population growth. Despite huge investments the original investment goal of improved health and access to water and sanitation services has not materialized for a large portion of the population. But had there not been a program the present situation would be catastrophic. At the May 1996 workshop, a near-term plan to tackle the major current problems emerged: to focus on system rehabilitation; to pilot a program for providing 24-hour water supply; to improve the provision of sanitation; and to restructure water and sewerage tariffs to equitably meet the cost of supply. 6.1 Water supply and sewerage planning, construction and operations in Bombay posed daunting challenges to those who planned and implemented the investment program. At the outset there was a huge backlog of unmet demand because of underinvestment. Population and economic growth accelerated in the following decades and the proportion of the poor increased as did the slums which they occupied. Additionally there was much optimism but limited experience in the design and implementation of the massive program necessary to meet the needs of the population. 6.2 The intended impacts of the program, to improve the health of the population and their access to water supply, sewerage and sanitation services, have not been realized. The program's potential impacts were adversely affected by external factors such as the global inflation of the 1970s, as well as policy and institutional difficulties at the state and local levels. Shortcomings include that the purveyed water is not safe to drink; water service, especially to the poor, is difficult to access and is provided at inconvenient hours of the day; industrial water needs are not fully met; sanitary facilities are too few in number and often unusable because of inappropriate design and poor operation; and urban drains, creeks and coastal waters are polluted with sanitary, household and industrial wastes. 6.3 Nonetheless, the investments delivered substantial economic, social and environmental benefits. Despite population and industrial growth they enabled marginal improvements to the very unsatisfactory conditions which prevailed at the onset of the program. Without the program conditions would be catastrophic. Water supply availability and access to water service and sanitary sewers increased while street-level pollution declined. Importantly, an autonomous utility was formed and its staff exposed to valuable experience in utility planning, design, construction and operations. But institutional improvements will be required at the municipal and department levels to ensure that the benefits of the program are sustained. 6.4 The Bank played a role in helping to define and finance the strategic approach which sought to balance investments in critical infrastructure with institutional capacity building. But the Bank's support could have been better at critical junctures such as when the sewerage components of BWSSP-I1 were undergoing redefinition. It also could have pressed for a more equitable tariff structure and a sustained rehabilitation agenda at WSSD. 6.5 The impact evaluation confirms the ratings stated for BWSSP-I and BWSSP-II in earlier evaluations (paras. 1.16-1.17). For BWSSP-III, current findings support the ratings shown in the latest supervision reports (para. 1.18). Because of weaknesses in WSSD's cost recovery policies 42 and its performance in the operation and rehabilitation of the water system, the sustainability of program benefits is rated as uncertain. 6.6 The findings were discussed at the workshop and a near-term action plan was developed. These actions, endorsed by MCGB in a letter to OED, dated May 17, 1996 (see Attachment), are: * focus water supply operations and investments on rehabilitation (as opposed to new capital facilities), with emphasis on leak reduction, meter installation and maintenance, and the rehabilitation of secondary networks and connections; * undertake and evaluate a pilot program in three wards to access the contribution that loss reduction and changes in consumption patterns can make toward extending the 20 supply of piped water to 20-24 hours per day; * redesign new latrine components and retrofit existing ones to ensure good maintenance with the help of piped water and sewerage and the involvement of the users and the private sector; and * restructure water and sewerage tariffs so they reflect the full cost of supply, with subsidies limited to facilitate access and provide basic needs to the lowest income population. 6.7 While there is a need for further investments in water supply and sewerage in the long run, the immediate needs would be effectively addressed by the actions described above and in Chapter 5. These actions would help to address the concerns of WSSD's consumers, greatly improve the level and quality of service, and enhance the image of WSSD. 20. Although the communication refers to "20 to 24 hour" supply, this study does not consider anything less than 24-hour supply to be satisfactory. 43 Annex A Project Details India: First Bombay Water Supply and Sewerage Project, Cr. 390 Total Project Cost: US$ 158.2 million equivalent Cr. 390: US$ 55.0 million equivalent Approval: 15 May 1973 Agreement: 22 Jan. 1974 Effectiveness: 13 Mar. 1974 Closing: 30 Jun. 1981 Goals and Objectives Water Supply The project aimed to improve the quality of supply and the efficiency of the distribution system by fully utilizing the available sources of supply and maximizing the hours of supply to the consumers (SAR, para. 5.03). Sewerage The project aimed to rehabilitate and expand the sewerage system to handle the growing effluent tkws (SAR, para. 5.05). Annex A 44 Compo ents Planned (SAR) Actual (PCR, PAR) Water Supply (cost: US$111 million) Water Supply (cost: US$208 million) * weir and headworks on the Bhatsai River * weir and headworks constructed * pumping scheme from the Bhatsai River to * pumping facilities completed Bhandup and Panjarapur * 22 cu.m.isec. treatment plant at Bhandup for * Bhandup and Panjarapur treatment plants all water entering MCGB's distribution constructed, all water now treated system * storage reservoirs; 5.3 cu.m./sec. Treatment * storage reservoirs built plant at Panjarapur * primary distribution system improvements * reduction or deferment of certain * minor works and equipment equipment installation Sewerage (cost: US$47 million) Sewerage (cost: US$42 million) * urgent works for uprating and improving 9 * reduction of the length of sewers and existing pumping stations, and construction of sewage pumping mains from 130 km. to 7 new sewage pumping stations 59 km * uprating of Ghatkopar and Dadar treatment * improved one instead of 9 existing plants pumping stations * 10 km pumping mains, 107 km trunk sewers; * improvements to existing sewage 12 km branch sewers (130 km. total) treatment works were omitted * feasibility studies and preliminary designs for further treatment and outfalls * maintenance equipment Institutional Development Institutional Development Strengthening BMC's water supply and sewerage * exceeded expectations organization and improvement of related technical * high operation and maintenance and financial operations through technical standards, excellent training policies and assistance and training programs, billing and collection systems improved * but asset revaluation is long overdue Annex A Intervention Model Water Supply BWSSP-I water supply elements were selected from the Development Program as being the most suitable to bring the maximum immediate benefits (SAR, para. 5.03). Sewerage The sewerage elements were chosen to: (a) rehabilitate the existing system as rapidly as possible; (b) commence sewering unsewered suburbs; and (c) form new Bombay Municipal Corporation (BMC) engineering design and supervision teams to expedite the second phase of the program from 1975. The need to maintain a balanced annual investment program through 1981, with the urgent water project elements to be executed by 1977/78 meant that the sewerage program would commence more slowly and peak in the second phase of the Development Program (SAR, para. 5.05). Outcomes Water Supply The objectives were realized. The increase in bulk water supply of 30%, as planned, and the provision, for the first time, of treatment for all water fbr Bombay were impressive. The delay of about three years in completing the project, and the cost overrun of about 60/6, postponed and reduced the potential benefits. BMC was unable to gain on the expected availability of water on a per capita basis and to increase the hours of service, due to the delay and continued population increase to 37%. (PAR, pg. iv, and PCR, pg. 48). A second project (BWSS II) was planned to inter alia finance items deferred from BWSSP-I. Sewerage The objective was not achieved due to the scope reduction in 1976. The project has added some 50 km of sewers to the existing system and some 50% of the BMC area is now served. Because of the cost overrun, less water borne sewage is collected, and none of the collected wastewater is treated (PCR, p. 48). Institutional Development The Water and Sewerage Department developed into a sound institution with good management and staff. (PAR, para. 24). Annex A 46 India: Second Bombay Water Supply and Sewerage Project, Cr. 842 Total Project Cost: US$ 411.6 million equivalent Cr. 842: US$ 196.0 million equivalent Approval: 25 Jul. 1978 Agreement: 13 Nov. 1978 Effectiveness: 12 Jun. 1979 Closing: 31 Mar. 1988 Objectives and Goals Water Supply and Sewerage To complete MCGB's works program scheduled for implementation during the period 1977- 1981, and to complete works originally scheduled under BWSSP-1 (SAR, para. 4.02). 47 Annex A Components Planned Actual Water Supply (US$114.5 million) * Supplementary (450 mid) river water pumping capacity at Completed Pise Weir * A 450 mid water filtration plant at Panjrapur, adjacent to Completed existing pre-treatment facilities * Construction of a 120 million liter balancing reservoir and Completed in 1990 some 35 km of 2.2 meter diameter trans!aission mains, (34 km of transmission including a 3 meter diameter tunnel 2.75 km long main) * Additional pumps and associated mains at Bhandup to supply Completed the Malad and Borivii areas * Distribution of existing transmission mains to restore capacity Completed in 1990 of the existing system * 10,000 public taps in slum areas Detailed data not available * Leakage detection equipment, meters, vehicles, workshops, Equipment, vehicles, etc. store, miscellaneous equipment, plant operator's quarters and procured; facilities access roads to facilities constructed Sewerage (US$94 million) * Sewage collection and conveyance systems in 5 zones Sewage collector network including new pumping stations, renovation of existing completed as planned, but pumping stations, construction of force mains, trunk and none of the major pumping branch s-Iwers, as well as some 7 km of large diameter sewers stations or the treatment/ in the Mahim drainage zone to convey sewage to Bandra disposal facilities were outfall completed by the time of * Renovation of an existing 42 mId sewage treatment plant at the audit (PAR, p. vi). Colaba * Preliminary sewage treatment and disposal via two 800 mld Two major pumping submarine outfalls, one at Worli and one at Bandra stations not finished * Sewage treatment in aerated effluent at Versova, Malad, Not completed Chembur and Bhandup, with capacities 131, 280, 386 and 196 mid, respectively * 15,000 new latrines in slum areas 12,000 latrines completed Other costs: US$203.1 million for stores, vehicles, engineering services, contingencies, and training. Annex A 48 Intervention Model Water Supply Prior to the project, the average availability of water was about 125 liters per capita per day, which was much less than the average demand under the existing pricing structure, and the supply was consequently limited to between 2-8 hours per day depending on location (SAR, para. 1.15). Without the project, BMC could not have maintained the water supply service even at its existing level; with it, all sections of the community, including the urban poor, may have access to reasonably safe water, and industry can continue to function even though the quantity of water is less than would be considered adequate under most circumstances (SAR, para. 6.01). Sewerage Prior to the project, the effectiveness of the existing system was limited by its inadequate capacity as well as the age and the obsolescence of some of its components (SAR, para. 1.18). The systems for collection, conveyance and disposal of human wastes and industrial wastes would be improved, thereby reducing health hazards to a fraction of their present level; environmental pollution would be limited to acceptable levels (SAR, para. 6.01). Institutional The project would increase the capacity of the WSSD of BMC, provide additional training for technical staff and administrative personnel and foster the practices and concepts of sound engineering, cost recovery and efficiency in pricing in the public sector (SAR, para. 6.01). Outcomes The project proved to be highly complex and difficult, and had mixed results (PAR, p. 10) Water Supply Most of the water supply components were completed successfully albeit with significant delays, largely due to material shortages, strikes and land acquisition problems. The completed components show good quality construction and efficient operations (PAR, p. vi). However, after the credit was closed, there were six substantial works still incomplete (PAR, p. 7). Sewerage Most of the sewerage facilities were incomplete. Poor construction workmanship was the norm, the two main submarine outfalls were partially constructed, which were to discharge 60% of Bombay's sewage into the Bay of Bombay, were laid one year after the original closing date of the credit, and were eventually abandoned by contractors. These had to be redesigned due to serious design flaws. In the absence of the sea outfall disposal system and the delay in the construction of the aerated lagoons, the completed collector system discharges raw sewage at various points into inland waterways and the sea, creating unacceptable environmental pollution and health hazards and essentially negating the projected health benefits of the project (PAR, p vii). 49 Annex A India: Third Bombay Water Supply and Sewerage Project, Ln. 2769 / Cr. 1750 Total Project Cost: US$ 304.3 million equivalent Ln. 2769: US$40.0 million Cr. 1750: US$145.0 million equivalent Approval: 16 Dec. 1986 Agreement: 12 May 1987 Effectiveness: 29 Jan. 1988 Closing: 30 Jun. 1996 Goals and Objectives As part of a continuing program to improve further MCGB's implementation and operational performance, to expand the water and sewerage facilities for the city of Bombay, and to keep pace with increasing demand from population growth and expansion of industrial and commercial activities, the objectives of the project were to: * Continue and expand on the efforts of previous projects in improving sector efficiency through improvements in project management, procurement, billing and collection, and leak detection and repair in the WSSD; * Expand water supply and sanitation facilities for the urban poor by providing: (i) the water delivery capability in support of the Bombay Urban Development Project, which will be benefiting some one million people classified as urban poor; (ii) suction tanks and pumping arrangements for slum colonies on high ground; (iii) tubewells and extensions of mains to other slum areas; and (iv) improved sanitation facilities in fringe areas of the city; * Increase the supply of water to the BMC area by 455 mld to a total of 2,930 mld, compared to an anticipated demand of some 3,568 mld in 1991. After allowing for commercial, industrial and other uses and losses, this would increase the average per capita availability to 137 lcd for the 11 million population projected for 1991; * Expand the sewerage conveyance facilities in isolated developed areas of the city which are not already served; and * Evaluate operating experience and develop appropriate design criteria and technical options for future investment in sewage treatment in Bombay and other parts of India (SAR, para. 3.01). Components (Planned) water Supply a. Distribution System (US$171.2 million): * construction of 52 km of trunk mains, diameter range 600 mm to 3000 mm; * construction of 49 km of distribution mains, diameter range 150 mm to 1800 mm; * construction of 9 km of 3000 mm diameter transmission tunnels; * lining 76 km of pipeline with cement mortar, diameter range 1200 mm to 3000 mm; and * provision of leak detection, system instrumentation and control equipment, valves and about 32,000 water meters. Annex A 50 b. Treatment Capacity, Pumping and Storage (US$75.0 million) * construction of a 455 mid capacity water treatment plant, together with staff quarters for operators; * building and installation of pumping capacity of 2,233 mid in 17 units; and * construction of about 144 million liters of clear water storage in four service reservoirs. Sewerage and Sanitation c. Sewer and Pumping (US$38.5 million) * construction of about 54 km of sewers, diameter range 230 mm to 1000 mm; and * building and installation of equipment pumping capacity of 150 mid in 12 units d. Sanitation (US$6.6 million) * provision of low-cost on-site waste disposal facilities in selected areas of Bombay not covered by water-borne sewerage; and * provision of suction tanks, local pumping arrangements, tubewells and minor mains to service the urban poor in slums. Technical Assistance and Vehicles for Operations e. Training (US$3.5 million) * Training for BMC/WSSD staff in system maintenance and operations at facilities in Bombay and abroad, including development and expansion of course curricula at BMC's existing training center. f. Consultancy (US$8.0 million) Appointment of consultants to: * improve WSSD's project planning and implementation capacity; to enhance the water and sewerage billing and collection; to strengthen financial audit procedures; and to enhance financial analysis operations; * help implement the project and prepare preliminary designs for the next tranche of source development (Vaitarna) to meet future water supply needs; and * review and develop design parameters in wastewater disposal systems, based on stabilization pond technology (Versova), examine the possibilities for recycling washwater at the potable water treatment plants and to reduce distribution system water losses by the application of improved techniques. g. Vehicles for Operations (US$1.5 million) * Supply of 83 trucks, four wheel drive vehicles, buses and other vehicles for project implementation and operations. Intervention Model A high priority of BMC is to increase the water supply production capability to progressively extend the hours of water service availability throughout the system. A major component in this project addresses this issue by the provision of a further 455 mld of fully treated water from the Bhatsai source, so that by the time the project is complete the shortfall will have been reduced to about 18% of the projected demand. Other components are designed 51 Annex A to improve service levels and availability leading ultimately to the provision of a continuously pressurized distribution system delivering safe hygienic water at all times (SAR, para. 6.02). Bombay's wastewater collection and disposal system which is being implemented under the ongoing BWSSP-ll has been designed and built progressively for a planning horizon in the year 2005. The additional water supplies will therefore not adversely contribute to Bombay's wastewater disposal problems to any appreciable extent. Minor extensions to the sewer conveyance system are included in the proposed project to serve in newly developed areas. Wastewater treatment processes will also be further reviewed to decide future investment options and determine the most cost effective technologies for pollution control (SAR, para. 6.03). The rationale for continued Bank support to the BMC/WSSD investment program rests on the contribution that the Bank can make to the achievement of key sector objectives, particularly in the areas of improved operational performance and project implementation capability. Bank involvement during project preparation has helped to give more emphasis to the following specific project objectives: * improved detection and repair of leaks and waste reduction through the introduction of new technologies; * improved water revenue collection efficiency through improved customer records and associated management reporting; * strengthened project planning and control, using network based management systems for more timely and lower cost implementation of project components; * improved procurement performance through prequalification of contractors and suppliers for all major contracts; * follow-up and assessment of the operational performance of alternative sewage disposal systems (lagoons and sea outfalls) with a view to establishing appropriate design parameters for use in future investments in Bombay and elsewhere in the region; and expansion of sector training programs focusing on operations and maintenance and construction management ensuring that all major engineering components were analyzed for cost effectiveness and designed in sufficient detail (SAR, para. 3.02- 3.03). Annex A 52 India: Maharashtra Water Supply and Sewerage Project, Cr. 0899 Total Project Cost: US$ 100 million equivalent Cr. 0899: US$ 48 million equivalent Approval: I May 1979 Agreement: 21 Jun. 1979 Effectiveness: 9 Nov. 1979 Closing: 30 Jun. 1985 Goals and Objectives The objectives of the project were to: * provide satisfactory water and sewerage services to 2.4 million people (estimated 1991 population) in the communities concerned, including essential services for the poor; * improve public health in urban and rural areas by making available adequate quantities of wholesome water, at tariffs within the public's ability to pay, and by the collection and safe disposal of sewage; * improve the ability of authorities to implement, operate and maintain water and sewerage works and to achieve financial and economic viability; and * provide an environment conducive to the development of industry, the creation ofjobs and better conditions for the employed (SAR, para. 3.06). 53 Annex A Components Planned (SAR) (Cost: US$ 100 - 155.8 Actual (PCR, PAR) (Cost US$ 188.4 million) million) Water Supply (Cost: Rs. 314 million) Substantial changes were made in the project Augmentation of the existing water supply components in view of reorientation due to the facilities in the six towns and the provision of increased 1991 population in rural areas from new or expansion of existing water supply 0.77 million to 1 million. systems in 104 villages. The works were to (Water Supply Cost: Rs. 832 million) include a new river intake and treatment plant, (Sewerage Cost: Rs. 361 million) transmission mains, storage reservoirs and (Other Cost: Rs. 427 million) pumping stations, distribution networks and 1. Addition of a bridge across Waldhuni River reservoirs, house connections and public 2. Construction of new conventional water standpipes. This would total available in the treatment plant at Badlapur in lieu of uprating project areas to 390 mld. flows of existing plant Sewerage (Cost: Rs. 186 million) 3. Changes in design of some work Sewerage collection and disposal services were components for optimal use to be expended in three towns and 4. Provision of additional number of reservoirs comprehensive new services were to be in the rural area provided in another three. A total of 26,000 5. Construction of conventional sewage property connections were to be constructed. treatment plant at Bhiwandi in place of Other (Cost: Rs. 360 million) Oxidation Ponds Provision of workshops, meter testing (According to the PCR, the physical facilities, vehicles, tools, and bulk meters. components were still ongoing.) Technical assistance was to provide for engineering design, training, operation, maintenance, financial services and project administration. Annex A 54 Intervention Model The project would relieve hardship caused by the inadequacy of water supplies and sewerage facilities and would improve the health of people in the project area; it would also optimize the use of some of the existing water resources and associated works. Benefits of the project include the development of the newly formed Maharashtra Water and Sewerage Board and fulfillment of one of Bombay's Metropolitan Region Development Authority (BMRDA) functions to coordinate and monitor a regional development program in a major sector (SAR, para. 3.07). Outcomes The rapid urbanization occurred and vertical expansion was observed in place of horizontal in many parts of the project areas, leading to much higher population densities. In the view of rapid urbanization the level of services (water supply and sewerage) as provided the project is difficult to achieve. However, the project is expected to provide broadly an absolute increase of 250 mld (160%) in water supplies. Moreover, filtered water supply would be made available for the first time in Bhiwandi and replace similar unfiltered supply from BMC to Thane. The project is also expected to provide equitable distribution of water at improved pressure. House owners are now required to connect their properties to sewers. The project provided for about 22,500 (3,500 completed by project completion) connections between road- side chambers and manholes on the streets, so that house-owners could connect their latrines to the road-side chambers. MWSSB has further grown into a strong institution possessing capable managers and other staff. The new staff for the finance and accounts wing is expected to gain experience and further improve the performance of the wing. The revenue realization for sale of water has increased but indicates arrears on a large scale. In the Southern area full exploitation of the MWSSB's existing Badlapur Water Works as well as Shahad/Barvi Water Works of Maharashtra Industrial Development Corporation (MIDC) was contemplated. The project provides for bulk sale of water to the local bodies of Thane, Bhiwandi, Dombivli and Kalyan and retail water supply in Ulhasnagar and Ambarnath. In the project area, though a difficult task, MWSSB has adopted a commercial approach for fixing water tariff for Board water works duly taking into account the prescribed rate of return. It also continues to pressure local authorities in the project area to adopt a similar approach while fixing the water tariff. Except Bhiwandi, all towns in the project area have metered water supply. In Bhiwandi only new connections are metered. But 12.5% of the meters were found to be out of order. Water leak-detection work was done in Ulhasnagar, Ambarnath and Bhiwandi. As there is a lack of adequate and effective leakage-measuring devises in Ulhasnagar and other constraints, the success has been limited. However, MWSSB continues to make concentrated efforts to detect and check leakage, in the distribution system. 55 Annex A India: Bombay Urban Development Project, Cr. 1544 Total Project Cost: US$ 256.7 million equivalent Cr. 1534: US$ 138 million equivalent Approval: 29 Jan. 1985 Agreement: I Mar. 1985 Effectiveness: 22 Aug. 1985 Closing: 30 Sept. 1994 Objectives and Goals * To make a large increase in the public supply of affordable land, infrastructure and shelter, particularly for low income families and small businesses; * To substantially improve local government financial and administrative capacity to deliver and maintain services, particularly the infrastructure created under this project; * To strengthen the Government's institutional capacity to plan, coordinate, implement, and evaluate the objectives, programs and policies of Affordable Low Income Shelter Program (ALIS), and replicate the achievements; * Through more efficient and equitable land use planning and pricing policies and more appropriate performance-oriented design standards, development control, and building regulations to aim at improved public sector cost recovery and a major reduction in the public and private costs of shelter investment; and * To direct a larger proportion of private investment in land servicing and shelter construction into low cost units for low-income families. Components (Planned) * Land Infrastructure Servicing Program (Cost: US$ 120.9 million): About 85,000 serviced residential, commercial and small industrial plots, including community facilities, core housing, and house expansion loans, on 13 sites in 5 Bombay Metropolitan Region (BMR) sub-regions, benefiting 500,000 people; * Slum Upgrading Program (Cost: US$ 34.0 million): Upgrading of about 300 ha of slum areas, mostly in the Bombay Municipal Corporation, including provision of tenure, improved infrastructure services, home improvement loans and community facilities, benefiting 500,000 people; * Local Government Finance Administration and Services (Cost: US$ 18.4 million): Equipment and civil works for improving the maintenance of roads, drains and services, and collection and disposal of refuse, in the Bombay Municipal Corporation, Thana Municipal Corporation, Kalyan Municipal Corporation and New Bombay Municipal Corporation, directly benefiting over one million people. * Technical Assistance, Training and Equipment (Cost: US$ 1.5 million): Improving the capacity of project implementing and coordinating agencies. Intervention Model The project-based interventions were intended to generate the following benefits: * support for an unprecedented three-fold increase in the annual supply of affordable, BMR, shelter units, particularly for low-income families, and thereby reduce by 1990 the number Annex A 56 of households in illegal and/or environmentally unsound shelter from 1-1.2 million to 0.7-1.0 million; * substantial improvement of local government financial and administrative capacity to deliver and maintain services, particularly for low-income families and small businesses in the jurisdictions of the new municipal corporations, Thana Municipal Corporation (TMC), Kalyan Municipal Corporation (KMC), and New Bombay Municipal Corporation (NBMC); * strengthened state and local government institutions for planning, coordinating and evaluating projects, programs and policies and for replicating the achievements, particularly in the heretofore neglected and problem-plagued land development and shelter sector; * demonstration that more efficient and equitable land use planning and pricing policies and more appropriate design standards, incorporated in the Development Control and Building Regulations (DCBR), can result in full public sector shelter cost recovery, a major reduction in the public and private costs of shelter investment and significant investment of private capital in low-cost, low-income housing; and * direction of a larger proportion of public and private investment in land servicing and shelter construction into low-cost units for low-income families, while still providing large numbers of plots for higher income housing, community facilities, commercial and small industry use (SAR, para. 6.01). 57 Annex A India: Bombay Sewage Disposal Project, Ln. 3923 / Cr. 2763 Total project cost: US$295.6 million Ln. 3923: US$167.0 million equivalent Cr. 2763: US$ 25.0 million equivalent Approval: 6 Jul. 1995 Agreement: 28 Dec. 1995 Effectiveness: March 22, 1996 Closing: 31 Dec. 2002 Goals and Objectives The physical objectives are ..." to complete the facilities (originally proposed and partially completed under the First, Second, and Third Water Supply and Sewerage Projects) and provide for the improved safety of the disposal of sewage from Greater Bombay, to complete these in substantial accordance with realistic timetables, and with a good construction quality" (SAR, para. 3.06). The institutional objectives are: * strengthening the capacity of MCGB's WSSD in all aspects of the management of the provision of sewerage services including planning, design, construction supervision, including materials and construction quality management, operation and maintenance; * sustaining the financial viability of the provision of water supply and sewerage services in Greater Bombay through direct charges to beneficiaries at appropriate levels; * improving the health and environmental conditions in Greater Bombay through the construction of sewerage works improvements so designed and constructed as to conveniently and economically permit a further level of such improvements in the future; and * improving the health and environmental conditions for a significant portion of the slum dwellers of Bombay through the construction of sustainable sanitation improvement facilities, mainly for safe excreta disposal, of a kind and nature determined in consultation with the prospective beneficiaries (SAR, para. 3.07). Components (planned) Physical Works (US$191.7 million plus contingencies): * Worli and Bandra marine outfalls * Bandra pumping station * Ghatkopar and Bhandup lagoons * Ghatkopar influent tunnel * sanitation program for the slums (164 slum sites, approximately I million people served) * structural features to improve the stability of five existing sewage pumping stations; and * conveyance system improvements Technical Services (US$15.2 million plus contingencies): * Engineering supervision * Studies - upgrade O&M * Conveyance system condition survey Annex A 58 * Slum sanitation - consultant and NGO services Preparation of Future Investments (US$16.9 million plus contingencies): * Feasibility Study, Malad and Versova areas * Feasibility Study, Bhandup and Ghatkopar areas * Feasibility Study, Worli and Bandra areas * Detailed Design, all six areas Intervention Model The CAS of May 19, 1995 emphasized the need to build the institutional and financial framework that will enable cities to provide critically needed services to a rapidly growing population (SAR, para. 1.42). The potential health and environmental benefits of improving the disposal of more than 60% of the sewage from the Greater Bombay area are considered substantial even though they are not readily quantifiable - particularly in economic terms. The provision of sewage treatment and disposal facilities under this project will enable the very extensive collection and conveyance systems, which have been constructed under BWSSP-fl and BWSSP-III to be effectively utilized (SAR, pg. v). 59 Annex B Selected Operational Indicators: Bombay and Other Urban Areas Table 1: Water Consumption Per Capita Quantity City Year (lcd) U.K. (average) 1990 136 Ankara, Turkey 1991 130 Algeria (average) 1990 146 Brazil (average) 1989 151 Bogota, Columbia 1992 167 Santiago, Chile 1990 148 Bombay: 1/ 1986 Average 180 Apartment > 100 sq. m. 306 Apartment < 100 sq. m. 220 Chawl 110-146 Slum 90 1/ Norms when no rationing is in effect. Per 1986 data in BWSSP III SAR para. 2.07. Table 2: Composition of Demand (Percent of Water to Distribution System) Commercial City Year Domestic and Industrial Other Bombay 1986 (For metered connections) 69, u 21 10 Bogota, Columbia 79, 16 5 Algeria (average) 71, 20 9 Macao 43 51 7 1/ Combined house connection and standpipe. Table 3: Tariff Structure - Ratio of User Rate to Average Rate User Domestic Commercial Industrial Bombay 1/ 0.16 1.05-3.15 1.05-3.15 San Jose, Costa Rica 0.76 1.79 1.82 Bogota, Columbia 0.86 1.63 1.51 Bursa, Turkey 0.86 1.32 1.32 1/ Per 1986 data in BWSSP III SAR, para. 5.15. Annex B 60 Table 4: Unaccounted-for Water (UFW) City Year Percent UFW 1/ Bangkok, Thailand 1990 33 Brazil (average) 1989 39 Bogota, Columbia 1991 40 Santiago, Chile 1990 29 Togo 1990 22 Bombay 1986 22 2/ 1/ Percentage of water which is delivered to the distribution system. 2/ Distribution system is pressurized only a small part of a 24-hour day. Table 5: Life of Water Meters City Year Life (years) Macao 1991 15 Singapore 1991 7 U.S.A. (average) 1984 17 Bombay 1986 1.8 -able 6: Personnel (number of staff per 1000) City Year Water Connections People Served Bursa, Turkey 1992 4.6 0.9 Brazil (average) 1989 6.5 0.8 Santiago, Chile 1990 2.1 2.5 Togo 1990 22.4 0.5 Bombay 1991 96.0 n.d. n.d.: No data available. Table 7: Bombay: Water Consumption Pattern Quantity Taken Revenue Generated Revenue Generated (% of Total) (% of Total) (% of Metered Supply) Metered Supply 59 80 100 Industrial 11 71 (including commercial) 56 Commercial 1 4 Domestic 41 24 20 Other 6 5 20 Unmetered Supply 22 20 En-route Supply 4 0 Losses 15 0 Total 100 100 Source: BWSSP III SAR (1986) Table 5.3 and Annex 15, Tables A and C. 61 - Annex B Table 8: Bombay: Water Consumption and Revenues (For connections which are metered) Consumer Category Quantity Taken Revenue Generated (%) (%) Industrial 19 56 Commercial 2 4 Domestic 69 20 Other 10 20 Source: Constructed from data in Table 7. Table 9: Selected Indicators on Coverage 1984 1994 Coverage with house connections 46% 62% Standpipe use 37% 37% Access to 24 hour water supply 36% 22% Use of Wells 9% 1% Table 10: WSSD Staff Productivity Indicators Units 1975 1980 1985 1990 1995 Quantity of water pumped mld pumping staff 2.7 11.9 17.6 15.3 Quantity of water treated mid/treatment staff 7.2 7.6 15.3 Quantity of water produced mld/production staff 0.31 0.25 0.31 0.33 0.32 Valve operations valves/valve operating staff 1.0 0.9 0.9 0.8 Metering operations meters/staff 341 439 537 Major repairs pipe bursts/staff 2.0 2.6 2.3 Annex B 62 Table 11: Tariffs and Cost of Water Lower Bound Upper Bound Of Of Non-Domestic Non-Domestic Households Users Users Tariffs and Costs in 1972 Cost of Production 0.20 0.20 0.20 Tariff 0.25 0.50 0.80 Tariffs and Costs in 1995 Cost of Production 2.45 2.45 2.45 Tariff 0.60 6.00 35.00 Percent of Cost Recovered By Tariff 24% 245% 1429% Notes: 1. Costs are expressed in Rupees per cubic meter. 2. Cost of production includes employee costs, utility services, depreciation, repairs and maintenance, interest and equity payments, administrative expenses, apportioned general expenses, and exchange rate losses incurred by the GOI. 3. The 1995 cost of production (Rs 2.45) is detailed as follows: Water Supply 1.41 Sewage 0.59 Storm Water and Other 0.30 GOI Exchange Rate Losses 0.15 63 Annex C Socio-Economic Survey: Statistical Tables Table 1: Access to Water by Ward, percent Colaba HC SP Well Only Tanker Other a/ Total b/ Before 67.6 22.0 1.0 2.0 11.1 103.7 After 75.6 16.0 0.5 2.0 6.1 100.2 Mahim HC SP Well Only Tanker Other a/ Total b/ Before 42.8 28.0 14.3 2.3 32.1 119.5 After 59.3 44.5 0.5 0.3 6.1 110.7 Kurla HC SP Well Only Tanker Other a/ Total b/ Before 37.6 56.0 0.8 0.0 17.8 112.2 After 46.1 47.5 0.0 0.3 16.6 110.5 Malad HC SP Well Only Tanker Other a/ Total b/ Before 37.3 44.3 18.5 1.5 26.6 128.2 After 66.8 41.8 4.3 0.0 9.9 122.8 a/ Other includes collecting free water from the neighbor, community water tap and well, and no water supply bought from neighborhood. b/ The totals amount to more than 100% because some respondents have multiple water sources. Note: HC - house connection SP - standpipe Table 2: Water Supply Hours per Day, Before and After Project Colaba Kurla Mahim Malad Before-Project 8+ 8+ 2-3 4-6 Project objectives 8+ 8+ 3-4 5-8 Actual hours of water supply 3-4 6.5 3 4 Table 3: Number of Days Water Stored in Household, percent None One Tivo Three Non-slum 8 60 25 7 Slum 8 63 22 7 HC 10 60 23 7 SP 7 62 24 7 Average 8 61 24 7 Annex C 64 Table 4: Storage Facilities, in percent Overhead/Underground Storage tank in Large containers Total b/ tank in building house a/ HC 33 54 62 149 SP 5 51 92 148 Total 19 52 77 148 a/ Containers are usually 42 gl plastic or steel containers. b/ The total exceeds 100 percent because of multiple responses to questions. Table 5: Payment by Domestic Consumers for Water, Before and After Project, percent After Before Don't Pay 30 47 Rs. 1 - 10 14 14 Rs. 10 - 30 30 25 More than Rs. 30 26 14 Table 6: Toilet Facilities by Slum and Non-Slum Categories, Before and After Project, percent Slum Non-Slum Before After Before After Toilet 56 71 93 97 Toilet with Open Drain 21 10 4 1 No Toilet 23 16 3 2 Pay and Use 0 3 0 0 65 Annex C Table 7: Children, Women and Men with No Toilet Facilities in Slum Areas, Before and After Project, percent Children Women Men Before After Before After Before After Colaba 70 67 64 25 71 55 Kuria 27 23 12 2 12 4 Mahim 66 20 54 4 56 7 Malad 63 50 51 26 51 31 느 - \ - - 67 ATTACHMENT COMMENTS FROM THE BORROVTER gg,. COP,':' 0 Ntunicipal Head Office, 4 C. GANDHI Extension Building, Ud floor. DY. MuniciPal Commissioner Mahapalika Marg, Fort. Bombay-« 001. (En~ing) 0 Telephone s 2620970 (Direex i 2620251 Ext. 295. ArER la 0 c. 191o96 Mr. Yves Albuoy Chief, Operations Evaltjai ion DLvision, The World Bank, 1-818 H Street, NW, DC, 20433, 11. S. A. TIornbay Impact Evaluation. Wal.,r Smpply and Sewerage Sector Workshop on. De-ar Mr. Albuoy, Kindly accept nur sinc<-re thariks. for organising the Workshop cm tlie Bombay Impact Evaluation - Wal<,r Supply and Sewerage Sector. Please convey mir t.hanks also to Mr. e.Godavitarne -ind Mr. Tej Phool who joined you i-n organising the Workshop. I attach a summary wfi i e Ii shows a fair summary of tbc (,()ntýlusions drawn at the Workshop. With renards, Yours sincerely. 611ý , P , e. Gandhi 68 ATTACHMENT 1. Focus water supply operations and investments on Leak detection, meters installation and maintenance, and rehabilitation of secondary network and connections. 2. Evaluate a pilot of above programe in 3 or more sample Wards to assess the contribution that loss reduction and changes in consumption patterns can make towards extending the supply of piped water to 20-24 hours per day. 3. Expand the coverage of sewerage and individual sanitation and the capacity for effluent treatment and disposal far into the ocean. 4. Redesign new latrine components and retrofit existing ones to ensure good maintenance with the help of connection to piped water and sewerage and involvement of users and private sector. 5. Restructure Water and Sewerage tariffs so that they reflect the full cost of supply, and that subidies are limited to facilitate access and consumption for basic needs by the lowest income population s iBRD 28090 INDIA FIRST BOMBAY WATER SUPPLY AND SEWERAGE PROJECT SEWAGE COLLECTION AND DISPOSAL SYSTEM on Creek o* -T-N I SEWERS . c .a 0 0 NEW OR UPRATED PUMNG STATIONS o 0 SEWAGE TREATMENT WORKS - -- T SEWAGE TREATmENT WORS EMNDED C HEADWORKS SUBMARINE PPES - ni,,, - iAIN ROADS -*V. o U RAILROADS NEW DRAINAGE ZONE BOUNDARIES -. -IGREATERBOMBAYMUNICIPAL LIMIT NATIONAL PARK zzSANTA smA MAHI 0o CRUZ BOMBAY - - - P S R N MA-BAR - A H I 0 1 2 3 aude JUNE 1 Note (June 1996): Plans shown above are os appraised in 1973. The Credit was ciosed June 1981. The Project Audit Report of October, 1985 states that the project was redefined in 1975 with the following changes: Sewer lengths were reduced from 130 to 50 kilometers, only one of the planned nine pumping stations was rebuilt, and planned improvements to the existing sewage treatment works were dropped. IBRD 28089 INDIA ; - FIRST BOMBAY WATER SUPPLY AND SEWERAGE PROJECT -. WATER DISTRIBUTION 76"Creek INSET - - -. - - -- - - - MAN PIM m?E5 INETS) kl~~--- ......~ 5ICJTB SREATEr~ -A-- SEE Rs -' TROMBAY ----. NEW Dk E ZOE DOUNM Powal -- - --GREATEEBMBYM PAPMUMT PQWAR ... .. .. .. .. . - LE ELW 4 A VERAV HG LEVEL G Q. -BOMBAY VERAV6% s AO - ow BOM- -OIV I --RO - ,~ REQLAMTION - WESTMAHIM EVELa CHL B AC K - -i 2 3 4 Kdl ~ees AR ABIAN SEA 0~-ý W. 4Mie IBRD 28088 G. *~ ' INDI A SECOND BOMBAY WATER SUPPLY AND SEWERAGE PROJECT SEWAGE COLLECTION AND DISPOSAL SYSTEM EXISTING SEWERED AREAS PRE 11IIAY I PROJECT SEWERED AREAS UNDER 501SY I PROJECT SEWERED AREAS UNDER UAY 1 EPROJECT SEWERED AREAS IWROVED UNDER AMBAY [PROJECT ?<«/ASEAWEREDAREASIEEROVED UNOER ESBAY UPRM*C RAILWAYS ---- - - - NEW DRAINAGE ZONE INDNDARIES - GREATER 11EMY MUNICIPAL LIMIT -TERAIONAL O.DARI.E WOR PRAMD OUT TAAROLONPCI AIRAO I MALABAWORI S _ AMLI I KRILOTETERS JUNE 1996 Note (June 1996): Plans shown above are as appraised in 1978. The Credit was closed March 1988. The Project Audit Report of December 1990 states that the construction and equipping of 20 sewage pumping stations were incomplete and that much of the work was at a standstill. The Mahim and Worli submarine pipes were not completed (although Worli is partially in use) and are now financed under the Bombay Sewerage Disposal Project (See Map IBRD 26628R). IBRD 26628R INDIA BHANDUP BOMBAY SEWAGE DISPOSAL PROJECT IAGOONS Brci son o srA s n a carre TREATMENT AN DISFOSAL FACIUTLES BHA U PGHATKOPAR UD C RO p"-~AED WHHIN THE NEXT 50 0YARS SEWAGE CONEYACE SYSTEK TA,UNDER CONSTR0C~O -L -1 A T K O P AR r --- PLAND~ THNTHE NEXT 5-10 yEARS NATONAL PARK _ UlAIEOWR -- - DRA~GE ZONE BOUD ES : .- GREMHBOMBYMUNIOWMd i~ ALA -E - WORLI p 4* ~ 'Ef A BANDRA BAND .- E-~.av - -a - ARB!NAE U 'E LOVNN OUTFALLFM? 14 .4.jTUNNEL 1 2 3 n~Iw, JUNt 1I9J IBRD 18974 50nupp., v. INCD1A THIRD BOMBAY WATER SUPPLY AND SEWERAGE PROJECT REGIONAL WATER RESOURCES AND BMC TREATMENT AND TRANSMISSION FACILTIES BOMSAY li BOMBAY 111 EXISTING PROJECT PROJECT - * Reservoirs \ * * Treatment WorkS and Punping Skations Treaimenr Works and Pumping Stotons \--Expansion - Maun Pipelines ----- - -= Tuinnels --- Weirs Li Zone scrvd by Bana~ PNoiect (MIOC) 1. Zonn served byTrans-Thana Wager Supply Scheme(MIDC) T-~ Zone served by Shohad Woter Svpply Scheme (GOM) Lgra Zone served by Ransa. Woter Supply Schemae (MIOC) C__v_c BMC Supply Area Bholsa, Irrigoton Command Area, Stage I r___MIDC Industriäl Areo CIDCO Are s - Reservours Plannd for Future Deoeloprent -d Existing Reservoirs and Dams Roads 1 3 Roiways - lmit of Greater Bombay ----i-- mit of Bombay MetropolIton Region --- Inrernational Boundones 0 s 0 15 2 25 3O W -- ~ i, Hin J. WI Tw 1.y. T,.ahnvnI . -EEH/MGL _____________________ runaton r -c - R eer . .r ..,- T* AUGUST T985 IMAGING Report No: 15849 IN Type: IER