kerala rural water supply and enviormental senitation project--by prashant priyadarshi

8/9/2019 KERALA RURAL WATER SUPPLY AND ENVIORMENTAL SENITATION PROJECT--BY PRASHANT PRIYADARSHI

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IntroductionThe project will improve water and sanitation services for 1.5 million people, specifically

targeting Kerala's poorer and disadvantaged communities in the Kozhikode, Malappuram,Palakkad and Thrissur districts. The project will assist local and state public agencies in shiftingfocus from direct service delivery to supporting community groups in planning, constructing andoperating piped water supply and environmental sanitation systems. It will also assist theGovernment of Kerala and the Government of India in building their capacity to implementIndia's sector reform policies.

Pre-requisites analysis

1. Government permission for the site work.2. Understand the site of work.3. Collect information regarding the site and its advantages and

disadvantages and its limitations.4. Applying loan from the different banks.5. Contact the contractors for the best tenders for the execution of project6. Choose the best tender with fewer less prices.


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Economic and Financial Analysis1. Comparing Estimates and Assumptions. Making use of household data collectedfor 23 water supply schemes, the economic appraisal estimatedthat (a) about 1.37 hours,on average, are spent on water collection to meet household needs (this figure can befurther broken down by type of scheme and district); (b) the burden of water collectionfalls disproportionately on women, i.e. about two-thirds of all cases; and (c) the averagedaily consumption of water is 64 liter per capita at the start of the project.

2. The appraisal analysisassumedthat (a) 70 percent of the households would optfor private connection, while the remainder would choose a stand post; (b) 90 percent ofthe time spent collecting water could be saved when choosing a private connection versus75 percent of time to be saved when collecting water from a nearer stand post; (c) thevalue of the opportunity cost for time saved from avoided water collection was 57 Rupeesdaily or 7.13 Rupees per hour, derived from discounting the daily wage for unskilledlabor (Rs.122.5 for men and Rs.71.4 for women in 1999) by availability of work,irrespective of whether increased time is converted to productive uses, leisure or other;(d) consumption of water would be increased from 64 to 70 liter per capita, as per theprojects design parameters; (e) cost for O&M would be, on average, 31 Rupees permonth (being, incidentally very close to the average observed O&M cost of 33 Rupees

per household per month, but lower than households actual contribution to O&M, whichis 46 Rupees per month); (f) average incremental water consumption is an average ofactual costs of supply (derived from the present values of time savings and incrementalconsumption benefits per liter) and the future cost of supply (derived from the total costof provision, including O&M, per liter); and finally (g) the salvage value after 20 years ofoperation of the systems amounts to 5 percent of the capital cost.3. The ICR economic analysis followed closely this methodology, using the baselineestimates on time savings and consumption as benchmark, replacing estimated orassumed parameters with observed ones, and deviating slightly from some of theassumptions, where there was either a potential for improvement or where datalimitations did not allow for another approach. The respective indicators for both

appraisal and completion analysis are outline in the table 3.1 below, followed by a briefexplanation when different parameters were computed.

Assumptions and Estimates underlying the Appraisal andImplementation Completion Analyses

Indicator Appraisal Completion


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Water Consumption at

Baselin

eWater Consumptionafter the Project

Time Spent atBaselineTime Savings after theProjectOpportunity Cost of

TimeIncrementalConsumption BenefitsO&M costSalvage Value ofSchemesTime Horizon

64.2 lpcd

70 lpcd

1.37 hours

1.17 hours

Rp.57 per day

Rp 0.013/liter

Rp. 31/hh/month

5percent of capital cost

20 years after project

64.2 lpcd

70 lpcd

1.37 hours

1.0 hour

Rp. 44.48 per day1

Rp 0.004/liter

Rp. 46/hh/month2

5percent of capital cost

20 years after project

Population Growth

Standard Conversion FactorIncluded Cost

Included Benefits

Completion

1.5 percent up to design0.9Capital Cost of WSWatershed ProtectionInstitution BuildingO&MSoftware ComponentTime SavingsIncremental Consumption

SalvageAvoided O&M Cost ofExisting Systems

Completion

1.5 percent up to design0.9Capital Cost of WSWatershed Protection +Environmental ManagementPlansInstitution BuildingO&MTraining + Social

MobilizationTime SavingsIncremental ConsumptionSalvage

5. Two key constraints of the ICR analysis were that the monitoring system of theProject does not deliver actual water consumption or the time avoided for collectingWater. In fairness, integrating such monitoring indicators into any M&E system requires acomplex and costly household survey to be repeated at completion, in which neitherindicator is easily observable, especially in the absence of metering in the case of theconsumption parameter. However, implementation results of the project indicate thatalmost all households chose a private connection suggesting an elimination of the time

spent collecting water from a distanced source. Although one may argue that this couldmean all time spent for water collection is now eliminated, the ICR analysis remains onthe conservative side, assuming that householders will still need to spend some time forwater handling, if only for storing water due to intermittent supply. While there is nosystematic data collection on the hours of water supply available to households, anecdotalevidence suggest it may be as low as only 4 hours in some communities.


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6. Two minor constraints in the analysis were how to treat existing systems that havebeen rehabilitated and how to differentiate the benefits between different water supplysystem options, i.e. piped, well or other. In order to reduce the complexity of the analysisand for lack of detail on the latter (and, at times, no information on either), systems weretreated the same with simple average computations.

7. In addition, the reason why incremental water consumption is computeddifferently to the appraisal analysis is that, even if erring on the conservative side,households are currently paying approximately 0.004 Rupees per liter, based on theaverage tariff of 46 Rupees per household per month and the average household size of5.5 people. Since this ICRR analysis assumes households to fully reap the benefits of thenow 70 liters per capita per day of water available to them as per t he projects design, it isonly consistent to assume the incremental value to be equal to what households pay forthat consumption (though the welfare benefits may be significantly higher,notwithstanding the decreasing returns from the incremental consumption of anadditional liter of water).

8. Lastly, it required some finesse to model population growth increase while notoverstating the benefits, when systems are assumed to become non-operational after 20years. Other than in the computations at appraisal that assumed a 1.5 percent growth rateuntil 20 years after the first system has become operational and then assumed zero growth,the ICRR analysis deducted the number of beneficiary households from the total(included their assumed growth in number over the years) 20 years after water systemshave become operational, leaving only the salvage value of 5 percent. One may alsoargue that including population growth, in the first place, in such analysis may overstatethe benefits since connecting additional households, even if there is sufficient capacity inthe water production system, will come at additional connection cost not assessed here.Among other parameters, the sensitivity analysis estimates a scenario of zero populationgrowth to verify the robustness of this and other assumptions.

9. All cost and benefit streams were converted in 2000 Indian Rupees, to replicatethe perspective at the start of the economic appraisal of the project.

10.Findings. Before assessing the robustness of the results mentioned above, it isworthwhile investigating whether the project did observe significant deviations per waterscheme with respect to investments spent per household. This is generally a usefulmonitoring tool to identify excess expenditure or economies of scale, both may beexplicable after further investigation. As one can see from graph 3.1 only very fewoutliers, in terms of the total cost spent on a village scheme per household, can beobserved from the existing data. There are some economies of scale that suggest thatabout 5 Rupees per household can be saved if adding an additional household in thewater scheme, but these are small compared to the average, more than 4 thousand RupeesOf cost per each household for providing this level of service.

11. Though limited data is available on time saved and time spent, a sample


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household survey that was not used for the computation of the ERR because of its small

sample size of only 27 households, yields that the time saved per household wasapproximately 1.65 hours per day (thus exceeding the appraisal estimate of time spent)and it suggests that almost 80 percent of poorer households (poverty status judged by

appearance) have benefited from reduced time spent on collecting water. The samesurvey also reveals that about 26 percent of poorer households spent part of their savedtime for work, compared to only 5 percent of better-of households. Because of only 20percent of the observed households taking on work after saving time collecting water, theopportunity cost of time savings were revisited adopting the lowest unskilled womenlabor wage applicable to Kerala (as shown in the table above). However, the value ofactivities women increase their time on in lieu of water collection should not bediscounted, and it is difficult to assume a value any lesser than the lowest unskilled laborcost for activities that may result in better health, feeding, improved schooling or overlyimproved well-being. The distribution of spent time is displayed in graph 3.2 below,distinguishing perceived poor and non-poor households.

12. Sensitivity Analysis. A robustness check on the estimates of key parameters wascarried out, suggesting that the economic rate of return changes mostly, and significantly,with changes in the projected benefits from saved time for water collection. This is notsurprising since this indicator is the major benefit assessed for the implementation of theproject. All things equal, only if saved time is assessed at half of the value projected nowi.e. even below the baseline estimatethe ERR would equal the assumed discount rateof 12 percent and the net present value of the investment would become zero.13. If one iterates time savings estimates with other parameters, like consumption, thevalue of incremental consumption, population growth assumptions or opportunity cost,the following values for the ERR emerge, as displayed in table 3.2 below.

Baseline ERR Estimate

Consumption at

Completion

70.0 lpcd

64.2 lpcd

60.0 lpcd

Value of Incremental

Consumption0.004 Rupees/liter

0.002 Rupees/liter

0 Rupees/liter

Population Growth

1.2 percent0.5 percent

0 percent

Opportunity Cost of Time5 Rupees per hour4 Rupees per hour

3 Rupees per hour

2 Rupees per hour

Time Savings

1.0hours/hh/day

18.7percent18.2percent17.9percent



18.7percent14.7percent10.4percent5.5percent

0.8 hours/hh/day





0.66

hours/hh/day






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14. The shaded areas outline the benchmark estimate of the ERR of this ICR analysisagainst variations of different assumptions. As one can see from the table above, there isonly little sensitivity to changes in parameters other than time saved for water collection

and the opportunity cost of time. If both time savings and opportunity cost of time arelowered significantly, the ERR would become lower than 12 percent and the net presentvalue of the project would become negative. However, the question is whether thesedecreases in values are likely, given the already conservative assumptions adopted for theanalysis.15. As with all economic analyses, the benefits assessed always remain incomplete.Benefits from water investments are at times difficult to quantify as they do require solidhousehold data for understanding the time savings, consumption and household storagepatterns in the presence of intermittent supply, or they require epidemiological data totrace health improvements back to project investments. The case of the water investmentsreviewed above is no different. While further increases in assessed benefits on timesavings may be feasible by reducing intermittency in supply, this would come at a highermaintenance cost, thus reducing other consumption by households. Reducingintermittency of supply may also increase health benefits, as additional handling of waterfor storage may increase contamination, but again at the trade-off of higher maintenancecost. Whether these benefits outweigh the cost and whether households are willing to payfor better service is ultimately an empirical question that is not being examined further inthis ICRR.

(b) Staff Time and CostStage of Project Cycle

LendingFY98*

FY99*FY00FY01

Total

No. of staff weeks

0

0105.8429.74

135.52

US$ Thousands (includingtravel and consultant costs)5.03

44.62246.1090.73

386.48

Supervision/ICRFY 1FY2FY3FY4

FY5FY6FY7FY8FY9

Total :- 606.43

12.4925.4729.4233.16

35.8527.9124.7411.5019.69

385.49

20.9137.7152.7274.82

92.8175.6070.5671.46109.84

606.43


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Project Evaluation ReportKerala Rural Water Supply & Sanitation Agency

Name of the Project : Kerala Rural Water Supply & Sanitation Project (Jalanidhi)Area of Operation : State wideProject Implementation Period: 20002006, extended to September 2008

Project Finance DataProject Outlay: US$ 65.5 Million Rs.451 Cr. revised at MTR to Rs. 381.5 Cr.Terms: Standard Credit, Grace Period: 10 Years, Years to Maturity: 35 years

Fund Flow Details (Rs. in Cr) Actual Received up to Sept08 (Rs. CroresGOK Pre- Finance Sanctioned 310.00GP 27.12Communities 53.20TOTAL

390.32Total Amount expended in the Project till the end ofSept08

Rs. 368.62 Cr.

Reimbursement claimed from World Bank Rs. 267.82 Cr.Reimbursement received from GOI as ACA Rs. 240.92 CrOutstanding Claims pending reimbursement Rs. 26.90 CrDemographyGram Panchayats (GPs) targeted 80GPs covered 112Tribal GPs covered 10Households participating for water supply schemes 1.93Benefitting population (water supply schemes) 11.28 lakh

Percentage of participating BPL Households 52 percentPercentage of participating SC/ST households 16percentTotal number of households covered by the completedschemes

1.67 lakhs

Total Beneficiaries covered (Completed schemes) 9.95 lakhsParticipating NGOs 51

Water Supply

No of Beneficiary Groups (BGs) implementing WaterSupply Schemes

Total Water Supply Schemes startedTotal Water Supply Schemes commissionedKWA schemes handed over for rehabilitationKWA schemes rehabilitatedTsunami rehabilitation Water Supply schemeGP schemes rehabilitatedSchemes provided to Schools/Anganwadies

409931723698174951253175


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Cost Analysis

Annual O&M collection by BGs at the end of project(Approx)

Rs.7 crores

Cost per KL (operating cost) Rs. 3/-Average O&M cost per month/HHs Rs. 31.45/-Average scheme cost Rs.5.75 lakhsAverage household cost per water supply scheme Rs.13783Average household contribution per water supplyscheme

Rs.2067

5. Assessment of Bank and Borrower Performance5.1 Bank Performance(a) Bank Performance in Ensuring Quality at Entry

The Banks performance during preparation is rated satisfactory. The process ofselection of Kerala state for Bank support itself was innovative. The Bank prepared aGeneric Project Concept Note which was disseminated by GOI amongst all states forassessing interest and reform-readiness of the States and then recommended Kerala as thefirst State for Bank support. Though the Bank generally adopted focus-state approach atthat time the Bank agreed to support Kerala because of its unusual sector merit. In view16of the willing partner and enabling socio-political environment the Bank pursuedimplementation of major sector reforms under the project.The project was speedily prepared within 11 months. By appraisal, significant progresswas achieved in launching the first batch of RWSS schemes and first lessons learnedwere included into the project design. The Team made conscious efforts to rope in thePRI department in designing the project along with the nodal water resources departmentwhich was exemplary and beneficial to the project.The project design ensured consistency with the Banks fiduciary and safeguard policies. The national and international experiences and lessons learned (refer Section 2.1) werewell integrated into the project design. The institutional design and implementationarrangements were well thought through. The project risks were well identified andmeasures to address them were built in. As subsequent experience proved, the projectdesign did not require any major modifications during implementation.(b) Quality of SupervisionThe Banks performance during supervision is rated satisfactory. Project implementationbenefited from the smooth preparation phase. The Bank attained team continuity, with thesame team leader and social expert in charge throughout the entire supervision period.Supervision teams were consistently substantial, covering all project aspects. Seventeensupervision missions were carried out, two every year, all of them well documented. Inaddition to the interaction with GOKs high level relevant officials and the ProjectManagement Unit and desk reviews of reports, continuous efforts were made to carryout


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field visits to participating GPs and beneficiary communities, to gain feedback and onsitedirect understanding of project effectiveness and impact. Splitting the Banksupervision teams into several groups enabled reaching significant visit coverage (eachGP visited at least twice and about 500 schemes visited during project life). The Bankparticularly made substantial efforts to monitor and support measures towards enhancingproject sustainability.The Bank team worked hard to respond to the emergency situation that arose after theTsunami in December 2004 by allocating project funds and quickly designing the newcomponent with related changes in the legal documents.Supervision aide memoirs and Implementation Status Reports (ISR) indicate that dueattention was consistently provided to PDOs, project implementation progress and

monitoring of legal covenants and agreed actions and issues, particularly includingfiduciary and safeguards issues. Ratings provided at ISR, consistently satisfactorythroughout the implementation period, are considered realistic.

(c) Justification of Rating for Overall Bank PerformanceBecause of the above mentioned factors, the overall rating for Banks performance hasbeen rated Satisfactory.

5.2 Borrower Performance(a) Government Performance

Borrower performance is rated as satisfactory. GOK promptly set up the new KRWSAand fully staffed and equipped it within the first four months of identification mission.GOK largely maintained autonomy of KRWSA and most decisions of scheme andprocurement approvals were taken by KRWSA. As and when required, GOK issuedguidelines to reiterate the necessary policy support and environment. Advance projectfunds were provided consistently and the key project covenants were always incompliance.


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Borrower performance, however, slipped from highly satisfactory to satisfactory duringthe last 3 years (of which 20 months were in the project extension period) due to failurein maintaining KRWSA directors and some of the other key staff for a reasonable period.Though these failures resulted in some implementation delays, GOK still ensured that thebasic project principles were never compromised. Equally important for the future of the

sector reform, GOK has committed itself to maintaining project staff and in providingadequate budget for KRWSA to implement any further rural water supply program.(b) Implementing Agency or Agencies PerformanceImplementing Agencies performance is rated as Satisfactory. The performance ofKRWSA was highly satisfactory in preparation and during the first three years ofimplementation and then declined to satisfactory. The main factors contributing to thisperformance were: strong ownership of the project principles, commitment of its diverseand multi disciplinary staff, emphasis on forging collaboration with the GPs, SOs andUser groups, developing and signing MoUs between them, adopting scheme cycleapproach for activity sequencing, developing and managing an excellent M& E system,computerized financial management system, field based capacity building programs,

constant endeavor to stakeholder consultations and regular learning and correctingimplementation strategies where needed. The leadership especially by the first twoProject directors was inspiring and supportive of its staff and the project approach. TheKWA who was in charge of implementing the Tsunami scheme also had a satisfactoryperformance.The performance of GPs in partnership with the BGs was satisfactory all along projectlife. GPs provided strong leadership and support to BGs while still allowing them toindependently handle implementation and procurement responsibilities. BeneficiaryGroups too demonstrated high level of interest, ownership and capacity in planning,implementing and managing WSS servicesExtensive capacity support provided by theprojectmainly through SOs- was extremely useful to GPs and BGs in managing thisresponsibility.

(c) Justification of Rating for Overall Borrower PerformanceTherefore, overall borrower performance is rated as satisfactory.Decentralized service deliveryapproach for RWSS has the potential for scaling-upaccess. The project's ability to exceed most of the targets in the Development Objectivecoupled with the strengthening of the sector institutions and local governments to ensuresustained delivery capacity demonstrates the potential of this approach to go statewide.However, as demonstrated with this project, the step by step approach taken to scaling upis a sound way to build capacity and prepares the ground for moving toward a sector wideapproach and scaling up. Capacity building for implementation at local level and theexistence of clear and enforceable "rules-of-the-game" contributes greatly to the successof decentralized implementation. "Learning-by-doing" approach to capacity-building istime-consuming but has proven to be effective. Developing implementation capacity isinitially slow but when fully achieved results in accelerated delivery of services.Need for Enabling Environment: Ownership of the project design and continuoussupport during its implementation at the political, bureaucratic and operational levels is a


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prerequisite for project success. Conducive policy environment and willingness to learnby doing are equally vital for success.Community Demand Driven is certainly the most appropriate approach forproviding sustainable and high quality WSS services in rural areas, specially in thecontext of India. Responsibility drives capacity. Informed choice by the communities

leads to innovative, appropriate, cost-efficient and sustainable solutions, as shown in theproject through the various technology options implemented, the spontaneousimplementation of meters and the unexpected and impressive number of latrinesconversion, ground water point recharges, environmental management facilities and rainwater harvesting structures constructed. All these communities participated in theplanning, design, procurement, implementation and management of their facilities,including the most vulnerable groups, therefore ownership is strong. If demand forreliable, equitable and sustainable water service remains high, experience and freedom toact as autonomous body would definitely help the communities to address the nextchallenges, including expansion of the schemes, major breakdowns or sourcessustainability issues. Nowhere in India, has such achievement been reached using a

different approach.Active participation of local governments is also critical to ensure greateraccountability and long term sustainability. If most of the responsibility would be inthe hands of the BGs, the Panchayat Raj Institutions should be well integrated into theprojects institutional design. In addition, organic and sustained links between state,districts, GPs and BGs are essential to guarantee the institutional sustainability and toensure the appropriate operation and maintenance and long term management of thefacilities. It is quite unrealistic to assume that the water and sanitation committees wouldbecome sustainable at the end of the project. Continued support and regular monitoringwill be immensely useful in consolidating the institutions. This is particularly relevant inthe case of the larger water supply schemes, for which sustainability challenges areobviously bigger.19Bank needs to have effective remedies during supervision: While piloting newapproaches and implementing paradigm shiftsthe borrowers must consistently providesound and continuous leadership and staff in the project management units - throughoutthe project period. The Bank too should have adequate remedies (such as suspension ofdisbursements) to address the issue of frequent and arbitrary turnover of key project staff whichcan affect pace and quality of implementation.

Improved assessment of cost estimates. Projects implemented directly by communitiescan earn cost savings than when done through contractors. In this project, for example,actual costs were approximately 15% less than those estimated at appraisal. Greateraccuracy can be introduced in cost estimation at appraisal by factoring-in theprocurement selection method and implementation procedures.

Avoid inclusion of a national component in State projects: The small national TAcomponent of the project which aimed at supporting nationwide advocacy of the sectorreform policy did not take off due mainly to diminishing of GOI's interest during


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implementation. It may be best for the Bank to continue concentrating its support onstate- level projects only.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners(a) Borrower/implementing agenciesThe Borrowers own evaluation report is comprehensive (attached unedited in Annex 7).GOK has in a separate letter of February 13, 2009, endorsed Bank assessments andratings contained in the Draft ICR that was sent to it by the Bank for review andcomments.(b) Co financiers(c) Other partners and stakeholders

Project Costs and FinancingComponents Appraisal Estimate

(US$ millions)

Actual/Latest

Estimate(US$ millions) *

Percentage of

Appraisal

(A). INSTITUTIONALSTRENGTHENING

10.10 10.23 101%

(B). COMMUNITYDEVELOPMENT ANDINFRASTRUCTUREBUILDING

62.70 62.70 116.4%

(C). STATEWIDESECTORDEVELOPMENT

1.20 73.00 3.3%

(D). NATIONAL

SECTORDEVELOPMENT

2.00 0.04 2.5%

Total Baseline Cost 76.00 83.32 109.6%Physical Contingencies 5.40 0.00 0.00Price Contingencies 8.40 0.00 0.00Total Project Costs 89.90 83.32 92.7%Project PreparationFund

0.29 0.29 0.00

Front-end fee IBRD 0.00 0.00 0.00Total Financing

Required

0.00 0.00


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Source ofFunds

Type of Cofinancing

Appraisal

Estimate

(US$ millions)

Actual/Latest

Estimate

(US$ millions)

Percentage of

Appraisal

BorrowingAgency

6.80 3.52 51.7%

Borrower 0.00 0.00 0.00%

LocalCommunities

10.70 11.80 110%

InternationalDevelopment

Association (IDA)

6.50 62.00 94.6%

Local Govts.(Prov., District,City) of

BorrowingCountry

6.80 6.00 88 %


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Technical analysisThere are no major technical issues to be addressed during preparation of schemes orimplementation since India and Kerala have rich experience in both simple and complextechnologies used in RWSS. The project will mainly involve construction of small-scale pipedwater systems, household latrines, a few simple road side surface drains, and GWR schemes

around open wells. Most water supply schemes will be designed bythe SO engineers withcapacity building support and monitoring by KRWSA. KRWSA has developed adetailed technical manual covering design criteria, guidelines on sound engineering practices,standard drawings and cost estimates, specifications for construction materials, goods,equipment, and civil works. A rate list for items to be procured has been developed foreachproject district based on market prices. These together withguidelines on communitycontracting will ensure cost effectiveness, quality of materials procured and theiraccounting, andinternal checks and balances. Use of scientific methods such as geophysical surveys,remotesensing data, resource mapping and test wells, coupled with local knowledge, areexpected to ensure appropriateselection of sites for proposed drinking water sources. A largenumber of experienced engineers are available inKerala including those retired from KWA

(earlyretirement is at 55-years of age). GPs and BGs commonly usethese engineers on paymentof consultancy fees to prepare and approve their plans prepared under decentralizedplanning.Transfer of existing KWA schemes to GPs: The project involves the transfer of existing singlepanchayat piped water schemes (currently owned and managed by KWA) to GPs and BGs, perthe new GOK policy, as well as the project requirement. This will be a challenge because ofKWA's possible lack of cooperation, and the degree of complexity involved in developing soundengineering proposals for their rehabilitation, reorganization, and integration with other water


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developing, testing and implementing the new decentralized service delivery model on apilot basis; and (b) build the states capacity in improved sector management in order to scale up the new model state wide.

2.1 Achievements on Development Objectives

2.1.1. Jalanidhi project was able to achieve its development objectives by successfullytesting and implementing (a) the cost recovery reforms and new decentralized servicedelivery model in the 112 GPs; (b) 348 existing single panchayat water supply schemesin the project GPs owned by Kerala Water Authority (KWA) and/or GPs were takenover, rehabilitated and managed by beneficiary groups (BGs); (c) operation andmaintenance (O&M) of 3712 water supply schemes are fully managed by BGs with theirown funds in the project GPs; and (d) sanitation and hygiene behavior of the 112 projectGPs have significantly improved. (85 Jalanidhi GPs have received Nirmal Gram Puraskarfor achieving 100percent household latrine coverage). All the 5 rounds of sustainabilityevaluation studies conducted so far indicated the fact that more than 90percent of thecommissioned Jalanidhi schemes were technically, financially and institutionally

sustainable and the people of rural Kerala were capable of successfully operating andmaintaining the schemes owned by them.2.1.2. Jalanidhi project was first experimented in 5 GPs of Malappuram, Palakkad,Thrissur and Calicut districts. After the successful implementation of 135 schemes inthose panchayats, the project was scaled up to another 87 GPs (2785 schemes) of the

same districts against the PAD target of 80 GPs (2500 schemes). During the Mid TermReview of the project, it was found that the project was achieving its targets, with nocompromise on quality, at a lower cost than estimated earlier. Based on the reworkedbudget, it was decided to scale- up this approach in other districts of Kerala onexperimental basis. Accordingly 2 GPs each were selected in all the 9 districts of Keralaand successfully implemented 926 schemes, thus enhanced the project coverage to 110GPs.

3. Project achievements3.1. Coverage: Experimenting in 4 districts initially was scaled up to all districts ofKerala except one to achieve a coverage of 110 GPs through 3712 schemes in differentbatches .Besides 2 GPs of Kollam districts were also included to implement Tsunamirehabilitation water supply project under a joint venture program of KWA and KRWSAon community based participatory model. Thus Jalanidhi Project has covered 112 GPsthrough 122 projects of which 10 were tribal projects.3.2. Decentralization: Kerala has been one of the most successful states inimplementing the 73rd and 74th amendment and devolving responsibilities to the lowest

tier of the Local Self Government Institutions- the gram panchayats. This project hassuccessfully carried out decentralization a step further by forming cluster groups ofcommunities needing water and willing to be a part of the project through legallyregistered bodies called the Beneficiary Groups (BGs) in partnership with GPs. Therewere 4099 active registered BGs in Jalanidhi with an average membership of 42 familiesper group.3.3. Community Ownership: Proof of willingness to participate, accept and own the


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scheme was validated by the willingness of the community to share the financial costs.Out of the total project funding of Rs.390.32 crores mobilized as on end of Sept08, Rs.53.2 crores (14 percent) have come as Community Contribution and Rs. 27.12 crores(7 percent) from the GPs. Even the tribal, who hitherto have only received free service,have accepted the change in thinking and contributed Rs.83.6 lakhs in cash and labor

towards capital cost contribution. This has been considered as an effective means ofownership and a commitment for the maintenance of the assets created under theproject for the Beneficiaries.

3.4. O&M Management: 100 percent of the O & M expenses are being met by thecommunity with no subsidies either from the local self govt. institutions or the state Govt.At an average of Rs.31.45 per family per month, the total O M expenses to be met by thecommunity annually would be approximately Rs.7 crores. BGs bearing full O&M costmeans revenue gain for the State Govt. & GP thus, enabling GPs to venture newdevelopmental activities with the savings so achieved to the exchequer and has beengoing on for years now. Thus Jalanidhi schemes unlike other water supply schemes are

no more a burden on the Public Exchequer.3.5. Equity: The myth that the poor will be marginalized from such a project was proved wrong by extending the project benefit to about 52percent of BPL families against

the state BPL population of 36percent. Besides 16percent of the Jalanidhi beneficiarieswere from SC / ST families which are another good indication of the inclusion of poor inthe project. Apart from this, there are 10 tribal panchayats in Jalanidhi project. This isprobably the only project where tribes had paid their beneficiary contribution well in timefor the implementation of the scheme. There are 162 functional schemes in the tribalareas covering a population of about 35,000.3.6. Community Contracting: The community contracting and transparency in theproject execution had resulted in 10- 15 percent cost savings. It has also been provedwrong that the involvement of neither educated nor technically qualified local peoplehave affected the quality of scheme, but, on the contrary, majority of the schemes havebeen completed well in time with superior quality standards.3.7 Strengthening of GPs: The Jalanidhi Project has also earmarked an amount ofRs.10 lakhs per panchayats for the overall strengthening of the Local self Governmentthrough capacity building, Provision of computers, Exposure visits to GP members,modernizing the panchayat building and overall development of their resource centre etc.GPs representatives (President/Secretary) have appreciated the inclusion of thesecomponents in the project during a State wide workshop attended by GP representatives.3.8 Pre & Post Coverage: Pre & Post project water supply and sanitation coveragein Jalanidhi Gram Panchayats are shown below

Time saved per day due to availability of water at door step through Jalanidhischemes has been arrived at 48190 man days (average time saved perhousehold per day has been 2 hours) which is as good as generating 178 Cryearly by considering Rs.100/- as man-day cost. Jalanidhi water supply schemes produce potable quality of water approximatelyat Rs.3/kilo liter, which is one third of the rate at which other supply driven


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programs produce water in the state. Capacity Building was the corner stone of Jalanidhi Project. KRWSA hasfollowed the cascade effect- found to create local knowledge centers,economic viability and maximum reach.

4. Project Benefits4.1. The project is directly benefitting 1.8 million people in the rural areas of thethirteen districts of Kerala. Communities in project villages, especially womenparticularly the poor and the vulnerable, has been benefitted from an improved andsustainable water supply and environmental sanitation services through time savings incollecting water, better health benefits from more and cleaner water and improvedsanitation and hygiene practices etc.

4.2. GPs participating in the project benefitted from the GP strengthening component,increased generation of internal resources from the beneficiaries and full O & M burdenshouldering by the beneficiaries. The GPs were also benefitted from the local social assetcreation made possible through the strong capacity building component of the project.The increased demand /opportunities to provide efficient support services and setting upsupply chains to the local communities; demands for materials for the scheme etc. havebenefitted NGOs and private sector business group.

4.3. 12 lakhs people who were trained at the community level, in various aspects,apart from the 6 Community Facilitators engaged per GP who were all from the localcommunity. The social assets created by this project will be the intangible benefits whichwill act as catalysts and tools for community and social development in the coming years.All the pump operators were members of the BGs thus with 2 operators trained per BG,jobs for at least 3700 operators at one per BG have been created. Apart from this there

were women trained as masons, plumbers etc. who become income generators of thePanchayat population.4.4. The most valuable benefit for the elected representatives of the Panchayat wasthe good will created and the improvement in their individual credibility. All the electedrepresentatives of BG groups who were in the initial batch had been reelected with clearmajority in the next election.

6. Banks performance6.1. Lending: The reasonable terms of lending by the bank helped the GOK toimprove the quality of rural water supply and sanitation delivery system in selectedpanchayats of Kerala through the Jalanidhi project. The preparation team from the Bank

with experts from various related sectors having vast experience could successfully blendthat with the decentralized planning program in Kerala for the formation of a balancedproject. The sustainability of investments which was aimed from the beginning of theproject was also materialized. This experiment in WATSAN sector with partial capitalcost sharing and hundred percentage O&M cost met by the community was foundsuccessful. Project identification process initially brought out crucial sector issues as wellas protests from various stake holders but, could contain all such issues and made the


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project principles to be accepted by the community and others. The project which startedon a pilot basis in 5 panchayats of 4 districts initially was scaled up to the whole of stateon experimental basis at the behest of Bank on the request of GOK by extending to 110panchayats for utilizing the balance funds estimated at the time of Mid term review.

Further during the lending period, Bank agreed to take up Tsunami rehabilitation watersupply projects in 2 coastal panchayats of Kollam district with the joint participation ofKWA and Jalanidhi, a unique venture in Kerala, thus throwing opportunity to develop anew model in the sector. The World Bank mission team also was agreeable to extend theproject period from December `06 to September `08 for implementing the Tsunamirehabilitation project along with other progressing schemes.

6.3 In each mission the bank team closely monitored the progress by conducting fieldvisits and interacting with all stake holders. The resultant aide memoires, detailing theagreed actions with GOK helped the agency to complete the project on a time boundbasis. Thus the team was very much committed to see that the time bound projectachieved its targets and goals as set out in the project appraisal document. On all vitalissues, concurrence of the bank on solutions received expeditiously. Further thecontinuity of the core bank team through out the span of project implementation actuallyhelped the project a lot in its stability and smooth Going. The enthusiasm shown by theteam to discuss any and all matters in detail with the BGs and other stake holders werecommendable.6.4 The deliberations, discussions, seminars and workshops conducted during thesupervision mission with different stake holders were really productive. Bank hadstipulated clean guidelines through their project appraisal document for the selection ofJalanidhi GPs as well as NGOs. Further they had given clear targets for all othercomponents to be achieved and thus helped the agency.6.5 Throughout the planning and implementation phase, Bank helped to sort outexecution problems, in a bilateral basis after discussing the issues with senior officials ofKRWSA as well as at Government level so that there were mutual trust and coordination.6.6 Bank has taken keen interest in the independent sustainability evaluation exerciseof the project and helped the agency to frame the terms of references. The proactive roleplayed by the team leader and each member of the team in supervising the variousactivities can be described as excellent. For example large number of Government Ordersand circulars were issued by GOK based on their comments and discussions with otherstake holders for the effective implementation of the project. The banks timelyreimbursement of claims helped GOK for the smooth fund flow of the project.6.7 The courtesy and co-operation extended by the Bank to the GOK was really worthmentioning.

7. Overall performance of BankThe overall performance of the bank is rated as excellent.

8. Borrower Performance

a. During Preparation


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Jalanidhi project was a unique project in Kerala since it aimed at a bold and courageousturn from the conventional approaches. Though challenges and difficulties wereenvisaged in acceptance and implementation of the project philosophy by social/politicalsections the borrower had managed the situations with its long term vision of thesector .The project was prepared with active cooperation and participation of key stake

holders including LSG department along with the bank team. Again the confidence onproject acceptance by the community in terms of partial capital cost sharing and fullO&M was another bold decision that was conceived in the project. The ownership by thecommunity was a remarkable shift in the WATSAN history of Kerala for making theproject a sustainable one. During strategy preparation care was taken to integrate watersupply activities along with other related components like GWR, Sanitation, Capacitybuilding, WDI etc, indeed a welcome attempt!At the preparation stage itself, provisions were made to include the economically weakersection in the project by lowering the beneficiary contribution rate and also by crosssubsidization. The project clearly developed agreements that has to be signed between thedifferent stake holders and clear guidelines were issued on the roles and responsibilities

of each stake holder, scheme cycle, funding pattern for the project, procurement rules,purchase of land, estimate preparation and registration of BGs etcb. During Implementation(i) Performance of Government of KeralaThe Government of Kerala has initiated reforms as part of a well designed and coherentdevelopment strategy much before the advent of the Jalanidhi project. In line with thedevelopment objectives of the World Bank funded Rural Water Supply project and thereform process at the national level, the Govt. of Kerala was also initiating policies andprograms to improve service level, ensure sustainability of investment and effectivemanagement of water resource as an economic good. The much acclaimed Olavannamodel which was a trendsetter in community based, participatory service delivery modelstarted in one of the project districts of Kozhikode in the mid eighties.GOK has largely followed the Govt. of Indias policies and priorities for its RWSschemes. Until recently in Kerala the, drinking water services have been the soleresponsibility of the KWA, a statutory agency set up in 1986. Since 1997,decentralization received a major boost in Kerala through devolution of over a third ofthe state plan funds to local authorities as "untied Grams". The main features ofdecentralization comprise transfer of functions and staff to local authorities, financialallocation through statutory and formula based transfers a participatory and rational local45level planning process to ensure appropriate and equitable utilization of funds. It aims tobe flexible while ensuring accountability and transparency in the process.The Water and Sanitation sector in the state was substantially strengthened from thelessons learned including those of community participatory schemes throughdevelopment and announcement of a comprehensive and holistic water policy in 2008 forthe state.The following events summarize the key sector development in the Water and Sanitationsegment undertaken by GOK.a. (i) Olavanna Model with the community base, participatory, service delivery with


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partial capital cost sharing and full O&M cost recovery was repeated in the Jalanidhiproject. (ii) About 1050 single Panchayat water supply schemes of the KWA was to behanded over to the GPs concerned .In all Jalanidhi panchayats this transfer was made amandatory condition for executing agreement. (iii) State and District level Water &Sanitation Mission was constituted by Government (iv) In 2004 Government of Kerala

had appointed KRWSA as the nodal agency for State-level coordination of the statewidecampaign for promotion of Rain Water Harvesting (RWH). (e) KRWSA was designatedas the nodal agency / secretariat for sector development in the State to kick-start thereform initiative and to provide conceptual inputs, chart, guide, and monitor the reformprocess. (f) Comprehensive water policy for the state of Kerala was enacted by the statelegislature in 2008.b. The GOK has undertaken the responsibility to release funds in time through budgetprovision for timely implementation of the project. In consideration of the BGs demand, for the sustainability of the schemes, GOK issued an order reducing the electricity tarifffrom commercial rate to domestic rate for Jalanidhi and other community owned schemes.c. For the effective co-ordination of KRWSA, at the apex level GOK constituted a

General Body with Minister for Water Resources as President and a Governing Councilwith Principle Secretary Water Resources as Chairman. These bodies effectively madepolicy decisions in terms of anchoring the ongoing project and provided suitable supportlike staffing, financing, linkages with other project etc. The GOK has thus accorded highpriority to the institutional strengthening.d. The GOK has been positive towards the results shown by this pilot project as isevidenced by the reforms model being accepted in the planning process for the water andsanitation sector not only in the 10 th and 11th five year planning exercise but also in themodernization of GOK programs. Inspiring from the success of this model GOK hasdecided for a follow on project for Jalanidhi and accordingly submitted a proposal ofRs.1200 crores to GOI for approval which has been duly recommended and forwarded toWorld Bank for their consideration.In the light of the above, the performance of GOK is rated as Excellent.

(ii) Performance of KRWSAThe Government has created an autonomous institution Kerala Rural Water Supply andSanitation Agency (KRWSA) which was registered on 17-11-1999 under TravancoreCochin Literary, Scientific and Charitable Societies Registration Act 1955 (Act XII of1955) with Registration No.T.1812 with enormous vested powers to GoverningExecutive Council .The Governing General Body with Honble Minister for Water Resources as thePresident along with representatives of Government Secretaries, NGOs, PanchayatPresidents, Kerala Water Authority & Social Organizations in the water & sanitation

sector acts as the policy making forum.The Governing council of KRWSA, a regular decision making body has been functioningas an effective board overseeing the project implementation. During the period of 8 yearsof existence the board met 29 times to take necessary policy decisions for effectivefunctioning and the meetings were all well attended.The project had developed a unique institutional implementation arrangement where bythe requirements of carrying out a project dedicated vertical system, (PMU-DPMU),


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ensuring the operational autonomy and functional decision making while maintainingacceptable accountability standards for Government of Kerala, Government of India andthe World Bank.KRWSA was mainly implementing the project by coordinating the activities of all thestake holders namely SOs, GPs and BGs. KRWSA has developed an excellent MIS

system for monitoring the field level activities which has been well appraised by all stakeholders and World Bank has termed the MIS system as one of the best in the country inthe RWS sector. The Project finance Management team with a practicing CharteredAccountant from Private Sector as the Finance Manager along with commerce graduateassistants have been the strength for the smooth functioning of FMIS .Further the FMISsystem operationalized by KRWSA has been successfully monitoring the progress of thefinancial management system of the project.As the nodal agency for Rain water harvesting and sector development management forthe whole of the state Rain Cell was formed in KRWSA for effective implementationof the scheme. Kollam and Kasargode sector reform projects were supported by KRWSAby way of coordination, capacity building, and monitoring. An exclusive sector

development cell at PMU was set up to manage various State wide Sector developmentactivities effectively.For taking the challenge of completing the project in time, output based payment systemfor SOs performance was introduced. For ensuring Capacity building through varioustrainings and other tools to all stake holders a separate cell namely Capcell was formedunder KRWSA. KRWSA has arranged independent Construction quality monitoring ofall schemes and independent Sustainability evaluation studies. KRWSA has taken activerole for the formation of BG federation in all panchayats for looking after the post47operation monitoring. KRWSA had shown specific interest to prepare and issue largenumber of booklets on various aspects like water quality, sanitation, KWA rehabilitation ,accounting procedure, GP strengthening, GWR, Operation and maintenance for thebenefit of the communities. For large comprehensive schemes also KRWSA haddeveloped an independent accounting and managerial software for the benefit of thecommunity on O&M and technical cum operational manuals. As an alternate technologyoption, KRWSA has successfully developed the model of the Rain water harvesting insuch areas where it was difficult to locate a source. 12percent of the total water supplyschemes of KRWSA are of Rain water harvesting schemes.The sincere and committed attitude of KRWSA was very much appreciated andcomplemented by all stake holders even to the extent that World Bank Jalanidhi teamcould win the 1st Runner-up prize for Jalanidhi project from among all World Bankprojects globally.In the above context, the implementation performance of KRWSA is rated as Exemplary.(iii) Impact of implementationThe project had a meaningful impact in varying degrees on the rural water supply &sanitation sector and related institutions in the state at different levels. The project had aconsiderable impact on the change in life style of the rural people and their increasedcapacity to tackle local issues. Jalanidhi has a purposive gender sensitivity built into it.Women held at least one of the three major office bearer positions in BGs. This


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responsibility has given a rare opportunity to understand about the dynamics of watersupply scheme and women were able to play meaningful roles in BG. There were severalexamples across the Jalanidhi schemes where ordinary home maker women, who wereconfined to their homes, have taken a responsibility in the Jalanidhi scheme andsubsequently got elected to the local GP. Jalanidhi has tremendously contributed to the

social capital enhancement and increased local awareness on water and sanitation. Therewere a lot of behavioral changes in hygiene conduct of community as a whole. Jalanidhihas given a push to the collective confidence of the community that it can plan andimplement programs that can solve problems, be it in water or sanitation. Also thecapacity of the Government and PRIs has improved and are even trying to replicate thismodel in other developmental sectors like health, education etc.

Institutional/Operational/Technical lessons

(a) People can implement and manage community driven project and meet the O&M

needs if properly trained and authorized to do so. The success here in water sectorpromotes entrusting such activities in other sectors of health, electricity, socialwelfare, tourism, irrigation, law and order (community policing) etc.(b) Capacitating women in shouldering responsibilities can develop leadershipqualities among rural folks.(c) The empowered BGs at panchayat level were slowly emerging as units of localbody to tackle local issues. This in turn has triggered the panchayats to act 48immediately on social issues since they were accountable to voting public. Thelesson was that joint ownership of BGs and umbrella support by panchayat arekey indicators for success.

(d) Transparency and accountability can be ensured if stake holders are balancedthrough well defined powers.(e) Non Government Organizations-SOs is helpful/useful for project implementationbut to overcome their limitations, Gram panchayat Action Team (GPAT) havebeen introduced.(f) For equitable distribution and prevention of water misuse, metering was helpful tothe BGs and that was made part of the system based on the demand ofbeneficiaries.(g) Instead of small environmental units like soak pits, compost pits and vermincompost units a solid/liquid waste management system for the panchayat shall bea better proposition for future projects.

(h) The method of Cascading effect experimented by KRWSA at GP/BG level incapacity building and information dissemination in the project was verysuccessful.(i) To tackle water quality problems and to overcome the resistance on chlorine tastein water, silver ionization plants, iron removal plants, etc were provided asremedy.(j) Though O&M is owned by BGs it was felt necessary to extend GP level


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intervention to certain eventualities where BGs become helpless. An apex bodyBG Federation at GP level with GP President as the Chairman has beenintroduced in order to have support both institutional/financial in tacklingintra/inter BG issues also so that the project is fully sustainable.(k) This project was aimed to cover small schemes on a pilot basis. But the

communities have proved that they can take up very large projects exceeding1000 families and also run the O&M successfully in LWSS/CWSS.(l) Joint venture schemes have also been undertaken as in the Chawara-PanmanaTsunami rehabilitation project where KWA and KRWSA joined together. Thismodel successfully progressing can also be replicated in other areas ofdevelopmental spectrum where large population was to be addressed together.(m)To combat the falling level of water table in Kerala massive GP level GWRactivities are to be given utmost importance in future.

CHALLENGES AND OPPORTUNITY

10. Hurdles / difficulties/Risks faced:Frequent change of the Executive Director and other key staffs affected the smoothfunctioning of the organization considerably. Majority of the staff members working inKRWSA were recruited to the project on contract basis and due to uncertainty on thecontinuity of the project, the project experienced high staff turnover resulted tosubstantial delay in the completion of the project in time. Mild resistance from authorizedpersons to exercise the delegated authority in handling and settling issues at times, haveunnecessarily delayed the execution process. Various Elections (Lok Sabha, StateAssembly, PRIs etc) held during the project implementation period has also affected the

project execution progress. Energisation by KSEB, pending arrears of KSEB forsettlement by KWA as well as GPs due to dearth of funds were the few difficulties faced.

11. Looking forwardSince the project has achieved its goals in the pilot phase, Government of Kerala hasdecided to extend this project to other panchayats of the state by formulating a follow onproject proposal which targets to cover 400 GPs with an estimated cost of Rs.1200 crores.The project is expected to be implemented with World Bank assistance.Post Operational Phase:- All the stake holders mainly GPs and BGs have establishedtheir involvement and efficiency in managing schemes with adequate supply chain

support and are Going to be fully sustainable.Government was very much impressed in the new paradigm shift demonstrated by theJalanidhi Project. The following actions initiated by the Government subsequent to theclosing of the first phase of Jalanidhi Project underline the above fact.1. Government has made sufficient budgetary provision for completing theremaining works and to continue the institutional set up even after the WorldBank credit closing period.


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2. The Government has also committed to continue the new institutional set updeveloped by the Jalanidhi model and Jalanidhi approaches as it is evident fromthe recent GO issued by the Government appointing KRWSA as theimplementing agency for the Swajaldhara model ARWSP sub components.Government has allocated 20percent of the ARWSP fund for implementing the

same through KRWSA in the current financial year.Thus looking forward Jalanidhi project has prompted GOK to scale up the project in asignificant manner to the whole of the state proving its effective impact in the water andsanitation sector of Kerala.

ReferencesInternet links

http://jalanidhi.com/index.htm

http://web.worldbank.org
http://jalanidhi.com/index.htmhttp://jalanidhi.com/index.htmhttp://web.worldbank.org/http://web.worldbank.org/http://web.worldbank.org/http://jalanidhi.com/index.htm

kerala rural water supply and enviormental senitation project--by prashant priyadarshi

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