This is a project for reforms in the water sector at the state and ULB levels. The primary objectives of the project are reforms and service improvements through private-sector participation in the water sector in Karnataka. For this purpose, three cities viz., Belgaum, Gulbarga and Hubli-Dharwad, have been selected for investments for improvement of water-supply services. The total project cost is Rs. 237 crore. Karnataka Urban Infrastructure Development and Finance Corporation (KUIDFC) is implementing the project with World Bank assistance.
The water sector in Karnataka suffers from chronic inefficiencies, unreliable service quality and limited coverage, sub-optimal resource allocation, mismatched capacity investments, lack of requisite technical manpower, poor operation and maintenance (O&M) practices, uneconomic tariff structure/levels, poor collection efficiency, high levels of unaccounted and non-revenue water, deficient information systems and poor service coverage. On the other hand, service coverage in all three participating ULBs was estimated to be less than 50%. An attempt is being made to address these issues through the Karnataka Urban Water Sector Improvement Project. The partners involved in the project are KUIDFC; Karnataka Urban Water Supply & Drainage Board (KUWS&DB); City Municipal Corporation of Belgaum, Gulbarga and Hubli-Dharwad; and CGE and Seureca, Paris, France.
The project mainly comprises sector development and technical assistance, and physical investments. The first component of the programme includes the establishment of an institutional, legal and regulatory framework, an investment and tariff framework, a water and sanitation information system, and the benchmarking of service provision. The second component comprises priority investment works, implemented by Karnataka Urban Water Supply and Drainage Board (KUWS&DB), to increase bulk supply to the project cities, and refurbishment of the distribution system to transform the existing system into a 24 x 7 water supply system to be piloted in five selected demonstration zones in the three municipal corporations.
The core of the project is a performance-based contract. The private-sector firm is responsible for rehabilitation, operations and management of water service in the demonstration zones in three ULBs, with performance targets. The role of the private sector is limited to the demonstration of improved service. Assets remain with ULBs. Staff continues on ULB rolls, though working under PSP. The PSP is not responsible for tariff fixation and bill collection, and also does not carry any investment risk. The contract is fee-based.
Continuous pressured (24/7) water-supply has been operationalized in all five demonstration zones in three ULBs during 2007-08, and the O&M period commenced on 3.4.2008. Currently, a population of around 1.79 lakhs is being served with 24,000 individual house service connections (HSCs) in the demonstration zones, with the agreed performance standards.

For further details, contact:

Mr. C. S. Pratinidhi
Advisor (UWS)
Telephone: 080–22107270
Fax: 080–22232157
Email: pratinidhi@kuidfc.com