World Bank likely to approve $240m KWSSIP-2 tomorrow

ISLAMABAD: The World Bank’s Board of Executive Directors is likely to approve “Second Karachi Water and Sewerage Services Improvement Project (KWSSIP-2)” worth $240 million on Thursday, aimed at providing safely managed water and sanitation services in Karachi and increase Karachi Water and Sewerage Corporation (KWSC)’s financial and operational performance.

Sources revealed that the board is scheduled to meet on Thursday where KWSSIP-2 would be taken on agenda.The project scope consists of three components that contribute to the project development objective (PDO);

(i) Component 1 – Capacity Building and Reform of KWSC;

(ii) Component 2 – Safely Managed Water Supply and Sanitation Services; and

(iii) Component 3 – Project Management and Studies.

A fourth component – the Contingent Emergency Response Component (CERC), with zero allocation, will provide flexibility to government of Sindh to reallocate funds to support emergency response activities in case of an eligible emergency.

WB terms one component of KWSSIP ‘high risk’

Component 1 – Capacity Building and Reform of KWSC ($14 million, of which IBRD $5.6 million, AIIB $5.6 million, government of Sindh $2.8 million): This component will finance capacity building and reform support activities to enable KWSC’s evolution into a well-functioning utility that is also resilient to climate change. Specifically, the component will finance (i) technical assistance and capacity building related to technical and commercial operations, including asset management, geographic information systems (GIS) and data systems, hydraulic modelling, NRW reduction, billing and revenue management, financial management, communications, and customer service; (ii) implementation of organizational structure reforms to enhance efficiency, accountability and commercial orientation in service delivery; (iii) implementation of a human resource reform plan, including a gender-inclusive recruitment and training strategy; (iv) preparation and implementation of water safety plans, including the establishment of a centralised water quality testing laboratory that will be capable of carrying out biological and key chemical (including lead and other heavy metals); (v) rehabilitation and upgrade of office spaces and establishing an innovation, research, development, and learning centre; (vi) technical assistance on PPPs and outsourcing; (vii) preparation of all required regulations and guidelines to enable full operationalization of the new KWSC Act 2023.

Component 2 –Safely Managed Water Supply and Sanitation Services ($958.56 million, of which IBRD $223.8 million, AIIB $223.8 million, ADB $50 million, government of Sindh (GoS) $191.9 million, private capital $269 million): The component will finance investments to enhance Karachi’s water supply and sanitation infrastructure, based on the priorities identified in the 2008 master plan (to be updated in 2024).

The medium-term investment plan addresses five interlinked structural problems in Karachi’s water and sanitation system: a bulk water supply shortfall, a leaky water distribution network, an intermittent supply that does not meet drinking water quality standards, a lack of wastewater collection and treatment capacity, and persistent poor service levels, especially in Katchi Abadis. This component will finance investments including (i) the expansion of safe drinking water and sanitation services in at least seven Katchi Abadis in Karachi, benefiting over half a million people. Investments will include rehabilitation and expansion of water distribution systems, installation of in-line chlorination units, metered house connections, sewerage network rehabilitation and expansion, and accompanying social marketing and behaviour change communication; (ii) priority sewerage network rehabilitation and expansion to restore network integrity in critical areas and reduce sewer overflows and flooding that currently impact an estimated 3.02 million people in these areas; (iii) rehabilitation and upgrading of the existing water distribution network, including the creation of pressure zone boundaries and district meter areas for physical water loss monitoring, installation of in-line chlorination facilities, and installation of modern, digital-technology-enabled network monitoring systems.

The component will also finance network expansion to areas of the city that are currently not covered. In addition, the component will finance a performance- based NRW reduction programme to reduce both physical and commercial water losses.

Component 3 – Project Management and Studies ($26.44 million– of which IBRD $10.58 million, AIIB $10.58 million, GoS $5.28 million): This component finances

(i) the incremental project management and coordination costs, including design review and construction supervision, project management support, E&S risk management, and project results monitoring and evaluation; and

(ii) preparation of subsequent water and wastewater infrastructure projects as per master plan under development with financing from KWSSIP-1, including feasibility studies, engineering designs, E&S studies, and special studies on applicability of trench-less technology in water and wastewater infrastructure development.

Component 4 – Contingent Emergency Response Component (CERC): Following an eligible management crisis or emergency, the Borrower may request the Bank to reallocate project funds to support emergency response and reconstruction.

Copyright Business Recorder, 2024

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