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Government of KeralaLocal Self Government Department
Kerala Sustainable Urban
Development Project
(PPTA 4106 IND)
FINAL REPORT
VOLUME 7
URBAN MANAGEMENT & INSTITUTIONAL DEVELOPMENT
MAY 2005
COPYRIGHT: The concepts and information contained in this document are the property of ADB &Government of Kerala. Use or copying of this document in whole or in part without the writtenpermission of either ADB or Government of Kerala constitutes an infringement of copyright.
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FINAL REPORT
VOLUME 7 URBAN MANAGEMENT AND
INSTITUTIONAL DEVELOPMENT
Contents
1. Overview 1
1.1 Policy Context 1
1.2 Legislative and Administrative Framework 3
1.3 Institutional Arrangements and Service Delivery 4
1.3.1 Local Self Government Department 61.3.2 Service Provision in Project Cities 61.3.3 Inter Agency Coordination and Project Implementation 8
2. Urban Management 10
2.1 State Level Initiatives 10
2.1.1 Improving Service Delivery 102.1.2 Streamlining Systems and Procedures 102.1.3 Training 11
2.2 Municipal Initiatives 12
2.3 Community Development and Poverty Alleviation 12
3. Framework for Institutional Development 14
3.1 Infrastructure Planning 14
3.2 Core Service Delivery and Asset Management 15
3.3 Institutional Development 153.4 Financial Management 16
3.5 Community Development and Poverty Alleviation 16
3.6 KSUDP and MGP 17
4. Institutional Development Components 18
4.1 UMID Components 18
4.1.1 Capacity Building LSGD and DUA 184.1.2 Capacity Building Municipal Corporations 194.1.3 Training on Basic Service Delivery 204.1.4 Community Development and Poverty Alleviation 214.1.5 Community Awareness and Participation Program 22
4.2
Project Sustainability KSUDP and GoK Actions 23
5. Institutional Responsibilities 26
5.1 Overview 26
5.2 Road Map for Decentralization 27
5.3 Institutional Responsibilities for KSUDP Sustainability 30
5.4 Decentralization of Water and Sewerage Services 38
5.5 Institutional Strengthening of KWA 39
5.5.1 MIS and System Development 40
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5.5.2 Customer Service 405.5.3 Organization Arrangements and Human Resources 415.5.4 Procurement and Inventory Management 415.5.5 Support to IS Master Plan 42
6. KSUDP Implementation Arrangements 43
6.1 Project Management and Administration 43
6.2 Executing and Implementing Agencies 436.2.1 Executing Agency 436.2.2 Implementing Agencies 44
6.3 Project Implementation Management 44
6.3.1 Project Management Office (PMO) 446.3.2 Project Implementation Units (PIU) 456.3.3 Project Implementation Support Services 46
6.4 Project Performance Monitoring System 49
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Annexes
Annex A Kerala Development Program 1
Annex B Legislative and Administrative Framework 4
Annex C Institutional Arrangements 10
Annex D MC Organization Structure and Inter Department Coordination 13
Annex E MGP Initiatives 23
Annex F E-governance Status in Five Municipal Corporations (IKM) 26
Annex G Prospective Training Curriculum (KILA) 28
Annex H Capacity Building for Poverty Alleviation Initiatives 29
Annex I Policy and Institutional Reform Agenda 30
Annex J Project Performance Management System 36
Annex K Proforma of the Project Progress Report 42
Annex L Framework and Guidelines In Calculating Project Progress 44
Annex MProject Administration & Institutional Development Costing 46
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List of Tables
Table 1-1: Legislations, Regulations and Rules 3
Table 1-2: Utilization of Centrally Sponsored Poverty Alleviation Scheme Funds 8
Table 4-1: Project Sustainability KSUDP and GoK Actions 24
Table 5-1: Road Map for Decentralized Service Provision Water and Sanitation 28
Table 5-2: Sub-Projects - Thiruvananthapuram 31
Table 5-3: Sub-Projects - Kollam 32
Table 5-4: Sub-Projects - Kochi 33
Table 5-5: Sub-Projects - Thrissur 34
Table 5-6: Sub-Projects - Kozhikode 36
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List of Figures
Figure 1-1: Institutional Arrangement at the State Level 5
Figure 6-1: KSUDP Proposed Implementation Arrangement 47
Figure 6-2: KSUDP Proposed Project Management Structure 48
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List of Abbreviations and Acronyms
ADB Asian Development Bank
ADS Area Development Society
BOT Build Operate Transfer
BOO Build Own Operate
BOOT Build Own Operate and Transfer
CBO Community Based Organisation
CDS Community Development Society
DFID Department for International Development
DPC District Planning Committee
DWCUA Development of Women and Children in Urban Areas
EIA Environmental Impact Assessment
EDII Entrepreneurship Development Institute of India
GDP Gross Domestic Product
GIS Geographical Information System
GoI Government of India
HRD Human Resources Development
HUDCO Housing and Urban Development Corporation
IEE Initial Environmental Examination
IKM Information Kerala Mission
IMA Indian Medical Association
IMR Infant Mortality Rate
INRM India Resident Mission
IT Information Technology
JBIC Japan Bank for International Cooperation
KocMC Kochi Municipal Corporation
KolMC Kollam Municipal Corporation
KozMC Kozhikode Municipal Corporation
KSEB Kerala State Electricity Board
KSPCB Kerala State Pollution Control Board
KSRTC Kerala State Road Transport Corporation
KSUDP Kerala Sustainable Urban Development Project
KUDFC Kerala Urban Development Finance Corporation
KUDP Kerala Urban Development Project
KWA Kerala Water Authority
LFS Land Fill Site
Lpcd Litre Per Capita Per Day
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LSGD Local Self Government Department
MFI Micro Finance Institutions
MGP Modernizing Government Program
MIS Management Information System
MLD Million Litre Per day
MSL Mean Sea Level
NABARD National Agricultural Bank for Rural Development
NATPAC National Transportation Planning and Research Centre
NGO Non Government Organization
NH National Highways
NHG Neighborhood Group
NRY Nehru Rojgar Yojna
NSDP National Slum Development Program
O&M Operation and Maintenance
PIU Project Implementation Unit
PMO Project Management Office
PPP Public Private Partnership
PPTA Project Preparation Technical Assistance
PWD Public Works Department
RIS Repayment Information System
SC/ST Schedule Caste and Schedule Tribe
SHG Self Help Groups
SJSRY Swarna Jayanti Shahari Rozgar Yojna
STP Sewage Treatment Plant
SWM Solid Waste Management
TCPO Town and Country Planning Organization
ThMC Thiruvananthapuram Municipal Corporation
TMC Thrissur Municipal Corporation
TRIDA Thiruvananthapuram Development Authority
TUDP Trivandrum Urban Development Project
UFW Unaccounted Water
USEP Urban Self Employment Program
UBSP Urban Services for the Poor
VAMBAY Valmiki Ambedkar Awaz Yojna
WTP Willingness to Pay
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1. Overview
1.1 Policy Context
Subsequent to the 74th Constitution Amendment Act (CAA), 1992 the Government of Kerala (GoK)
embarked on a policy of decentralization of powers to local governments. The Kerala MunicipalitiesAct, 1994, was drafted based on decentralization principles laid down in the 74 th CAA. In September
1995, GoK transferred powers and functions to local governments; along with institutions, offices and
functionaries. GoK chose to operationalize the decentralization process through participatory local-
level planning and initiated it through the Peoples Plan Campaign or the Kerala Development
Program (refer Annex A).
Key features of the decentralization initiative comprised (i) transferring health related institutions
(except medical colleges and regional speciality hospitals) to local governments; (ii) transferring all
schools to Urban Local Bodies (ULBs); (iii) planning and implementing centrally sponsored poverty
alleviation schemes through ULBs; (iv) planning social welfare schemes, implementing Integrated
Child Development Scheme (ICDS), payment of various social security pensions, and creating centres
for disabled care are ULB responsibilities; and (v) planning and providing urban basic services,
including water supply, sanitation, storm water drainage and urban roads (excluding those provided /
maintained by the State Public Works Department).
The 9th Five-Year Plan (FYP) between 1998-2002 witnessed a fiscal crisis, with growing revenue
deficits arising out of (i) debt servicing on high borrowings; (ii) increase in salary and pension
payments following the 5th Pay Commission and University Grant Commission (UGC) revisions; and
(iii) sluggish growth in revenues and Central Government transfers. However, despite the moderate
growth key achievements during the plan period comprised (i) decentralization of development
through local governments; (ii) institutionalization of e-governance and computerization of
departments; (iii) development of the tourism sector and the consequent impact on employment
opportunities; (iv) reduction of poverty through synergies between local governments and
Kudumbashree/SPEM (State Poverty Eradication Mission); (v) development of Scheduled Castes
(SC) and Scheduled Tribes (ST); (vi) launch of a participatory rural water supply project in six
districts of the State; (vii) commissioning 13 power projects and completion of irrigation projects; and
(viii) improvement of the States education system.
10th
FYP Focus and Decentralization. Based on the lessons learnt through the 9th FYP, the 10th FYP
(2002-07) for Kerala is based upon local governments development plan and focuses on (i) reforms
and improving organization efficiencies; (ii) increasing allocation in information technology, tourism
infrastructure, poverty reduction and health; (iii) planning programs to facilitate employmentgeneration; (iv) promoting private sector investment in economic development; (v) preparing sub-
plans for poverty reduction with participation of women groups and focus on vulnerable sections of
the society; (vi) evolving a plan for the disabled and women beneficiaries; (vii) strengthening
decentralization and improving the planning process; (viii) continuing support to increased use of
information technology in all facets of development; (ix) continuing support to tourism infrastructure
development; (x) promoting the development of village and small industries; (xi) promoting the
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participation of private sector in providing education; and (xii) improving service delivery in key
areas like health, revenue, education, etc.
Fiscal Decentralization. Fiscal decentralization in Kerala requires the Municipal Corporation to
generate own sources of revenue income and is assigned own taxes comprising property tax,
profession tax, advertisement tax, entertainment tax and service tax. Based on the recommendations
of the First State Finance Commission, in addition to devolving surcharge on stamp duty and 20% of
the net collection of motor vehicle tax, and basic tax was also devolved to the MCs. For functions and
schemes transferred after the 74th CAA, Plan and Non-plan grants are provided in a tied form; GoK
also devolves untied plan grants equivalent to an amount greater than one-third the approved plan size
of the State. Key features identified for fiscal decentralization include:
Devolution of State funds Plan (untied and not less than 33% annual size of State Plan of the
total allocation to a local self government institution, 30% is allocated for SC/ST development
and 70% is allocated for general purposes and comprises 10% in productive sectors, 10% for
slum infrastructure, not more than 50% on infrastructure, and 30% for service sector); Asset
Maintenance (Non-plan tied/5.5% of annual own-tax revenue of GoK); and General Purpose(Non-plan untied/3.5% of the annual own-tax revenue of GoK);
Entitlements to individual local governments based on a formulae and stipulating that no part of
the devolved funds should be used for staff salaries and establishment expenditure;
Implementation of the plinth area based system of property taxation and increase in tax base
through property mapping; affecting a four-yearly revision to property tax;
Asset survey of ULB own property and transferred properties to be carried out for devolution of
asset maintenance fund;
Service tax to be made compulsory and linked to the cost of performing obligatory functions;
Carrying out two-yearly revision to non-tax license items and advertisement tax;
Releasing funds in fourteen instalments during a fiscal year; any shortfalls in fund usage would
result in allocation lapsing.
Of importance is the feature regarding planning and implementing projects prepared by local self
governments 30-40% of the plan size of the States budget was set apart for local self governments
with 15% of the said amount earmarked for ULBs.
The KM Act, recommendations of the State Finance Commission, the Decentralization of Powers Act
and the Urban Policy and Action Plan govern urban management by the municipal corporations. The
Urban Policy and Action Plan, 2002 was formulated to address the urbanization trends in the State
and key elements comprise:
Preparation of a development vision;
Promotion of private sector participation;
Identification of growth centres for economic development;
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Preparation of a database to assist urban land consolidation;
Conservation of heritage structure and open space;
Urban road planning;
Provision of primary health care services;
Provision of urban drainage services;
Preparation and implementation of solid waste management and sewerage services;
Administration of accounting reforms in LSGIs;
Transition to the plinth area system of property taxation;
Restructuring the Kerala Urban Development Finance Company; and
Introduction of IT enabled services.
1.2 Legislative and Administrative Framework
The legislative and administrative framework governing urban infrastructure development and urban
management is based on Acts, Rules and Regulations formulated by the Central and State
Government. The legislations considered under KSUDP is detailed in Table 1-1 below and described
in Annex B.
Table 1-1: Legislations, Regulations and Rules
Legislations, Rules and Regulations Infrastructure / Management
A. Central Acts and Rules
a. Constitutional Provisions (Article 48 and 51) Infrastructure and Environment
b. Constitutional Provisions (Project Affected Persons) Infrastructure and Social
c. Land Acquisition Act, 1894 and as amended 1984 Infrastructure and Social
d. Wildlife Protection Act, 1972 Infrastructure and Environment
e. Water (Prevention and Control of Pollution) Act, 1974 and asamended in 1978 and 1988
Infrastructure and Environment
f. Water (Prevention and Control of Pollution) Cess Act, 1974 Infrastructure and Environment
g. Environment Protection Act and Rules, 1986 Infrastructure and Environment
h. Forest (Conservation) Act, 1980 and as amended In 1988 Infrastructure and Environment
i. Environmental Guidelines for Rail / Road / Highway Projects,MoEF, 1989
Infrastructure, Environment andSocial
j. Hazardous Waste (Management & Handling) Rules, 1989 Infrastructure and Environment
k. Biomedical Waste (Management and Handling) Rules, 1998 Infrastructure and Environment
l. Coastal Regulation Zone (CRZ) Notification, 1990 Infrastructure and Environment
m. 74th
Constitutional Amendment Act (CAA), 1992 Infrastructure and Management
n. Environmental Impact Assessment Notification, 1994 Infrastructure, Environment andSocial
o. Municipal Solid Waste (Management & Handling) Rules, 2000 Infrastructure and Environment
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Legislations, Rules and Regulations Infrastructure / Management
p. Municipal Solid Waste (Management and Handling) Rules,Notification, Sept 2000
Infrastructure and Environment
q. National Policy on Resettlement and Rehabilitation for Projectaffected Persons, 2003
Infrastructure and Social
r. Labour Welfare Laws Infrastructure and Social
B. State Acts, Rules and Policies
a. Local Authorities Loans Act, 1963 Management
b. Kerala Water and Sewerage Act, 1986 Infrastructure and Environment
c. Kerala Municipalities Act, 1994 Infrastructure and Management
d. First State Finance Commission, 1996 and Second StateFinance Commission, 2001
Management
e. Kerala Decentralization of Powers Act, 2000 Management
f. Kerala State Transport Project (KSTP), R&R Policy, 2000 Infrastructure and Social
g. Kerala Ground Water Control and Regulation Act, 2002 Infrastructure and Environment
h. Urban Policy and Action Plan, 2002 Infrastructure and Management
i. Kerala Infrastructure Development Bill, 2001 Infrastructure and Management
j. Kerala Fiscal Responsibility Act, 2003 Management
1.3 Institutional Arrangements and Service Delivery
In addition to the Municipal Corporations/local self-governments, State-level Departments, Programs
and Missions, and Institutions govern urban development and basic service delivery in the States
ULBs (refer Annex C for details on institutions involved in urban development).
State Level Departments of Local Self Government, Water Resources, Public Works, Revenue
and Housing, General Administration, Power, Health, and Science, Technology and Environment
provide policy and administrative directions to various State and local-level agencies for effective
urban basic service delivery. Departments overseeing transferred functions like education, health,
etc. also play a key role in urban service delivery.
Missions constituted by GoK effectively administer the process of good governance, facilitate
urban environmental management, improve financial management in ULBs and assist in poverty
alleviation; these include the Modernizing Government Program (MGP), Clean Kerala Mission
(CKM), Information Kerala Mission (IKM), and State Poverty Eradication Mission
(Kudumbashree).
Institutions supporting activities in urban management include Kerala Water Authority (KWA),
Kerala Urban Development Finance Corporation (KUDFC), Kerala Institute of Local
Administration (KILA), and Development Authorities.
Institutional arrangements for urban development are indicated in Figure 1-1.
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1.3.1 Local Self Government Department
The State Governments Local Self Government Department (LSGD) is in charge of urban
development in the State. Through the Secretary, Urban, the LSGD oversees the functioning of the
States ULBs. The Secretary Urban, LSG is assisted by a Deputy Secretary and Under Secretary in
overseeing functions of the Department.
The Directorate of Urban Affairs under the Secretary, Urbans office issues policy directives, staff
sanctioning, postings and transfers, and ensures release of plan funds to respective ULBs. Secretaries
of the ULBs report to the Secretary, LSG (U) through the Director, DUA. The Director, DUA is
supported by three Regional Directors having offices at Kollam, Kochi and Kozhikode; at the central
office, the Director is supported by a Joint Director.
Key responsibilities of the Director, DUA include (i) functioning as the appointing authority for staff
in ULBs and undertaking necessary disciplinary actions required; (ii) undertaking transfer of State
funds to ULBs and affecting budgetary control; (iii) administering pension and provident funds of
municipal staff; (iv) providing the LSGD with policy matters and reform agenda support; (v)
according sanction to ULBs for borrowing from the Kerala Urban Development and Finance
Corporation (KUDFC); (vi) undertaking overall supervision and control of activities in the ULBs; and
(vii) playing an important role in the functions and decisions of the three missions the Information
Kerala Mission (IKM), Clean Kerala Mission (CKM) and the State Poverty Eradication Mission
(SPEM)/Kudumbashree.
Key responsibilities of the Regional Directors include (i) conducting inspections of ULBs; (ii)
carrying out performance audits of ULBs every three months, on behalf of the State Performance
Audit; (iii) undertaking grievance redressal; (iv) undertaking performance appraisal of ULBs
regarding resource mobilization activities; (v) reviewing no-confidence motions against municipal
chairpersons; (vi) undertaking preparation of reports on plan fund utilization, for submission to theMinister, LSGD; and (vii) reviewing compliance of ULBs with Local Fund Audit Report and
submitting the same to the Director, DUA.
Missions and Programs constituted by LSGD facilitate ULB functioning, ensure basic service
delivery, prepare policy papers, provide training to municipal staff, and build staff capacity to manage
municipal functions. Urban management, waste management and poverty alleviation are facilitated by
IKM, CKM and Kudumbashree, respectively. All three Missions report to the LSGD and play a key
role in urban development. The Kerala Institute of Local Administration (KILA) undertakes training
programs for both municipal and panchayat organizations; KILA also reports to the LSGD.
1.3.2 Service Provision in Project CitiesService provision type, institutions involved and the legal context for the provision define MC
performance and coordination with other agencies/State Line Departments. The following are key
issues associated with the aforesaid services:
1) Water and Sewerage.Currently, KWA creates water and sewerage infrastructure assets and
maintains the same. While the KM Act, 1994 and amendments therein require the MCs to
maintain and arrange water and sewerage services, KWA continues to provide water services in
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all municipal corporations except Thrissur. Sewerage is limited to ~ 40% area coverage in
Thiruvananthapuram and 5% area coverage in Kochi both systems are maintained by the KWA.
KWA directly collects water charges from the consumers and the Municipal Corporation.
New/additional lines within the MC area are constructed as deposit works, with the MC making a
deposit with KWA for the identified work. KWA carries out major repairs (like pipe bursts /
leakage) on distribution systems but the MC carries out road rectification. Water qualityassurance is by KWA and any contamination of water is reported to KWA (and at certain
instances an intimation is sent to the MCs Health Department). Key concern areas regarding
water supply and wastewater disposal comprise:
Non-remittance of the water tax component in the property tax, apportioned towards capital
contribution, to the KWA affects repayment of funds towards capital creation to improve
water supply.
Reduction in State transfers to the MC from duty on transfer of property. Through a 1994
Government Order, GoK ensures that KWA receives payment towards demand raised on the
MC towards operational cost on headworks and street taps (25% of the duty on transfer of
property, transferred by GoK to the MC, is deducted and apportioned to KWA).
Improvement in coordination with KWA regarding operation and maintenance. GoK through
a Government Order has created a system of coordination on the aforesaid aspect; the same
may be further refined to facilitate large-scale/citywide projects.
2) Solid Waste Management.Municipal solid waste management collection, handling, treatment
and disposal is a mandatory function of the ULB. Conservancy staff appointed by the MC
carries out waste management activities. Regarding waste treatment and disposal, the KSPCBs
mandate includes monitoring the methods of waste collection and transportation, and the
treatment and disposal technology. Bio-medical waste handling and treatment is the responsibility
of the waste generators/hospitals. The MC is expected to ensure that bio-medical/hazardous waste
generators dispose waste generated in an environmentally sound manner. The Clean Kerala
Mission (CKM) conducts training programs for MC staff associated with waste management, in
addition to identifying waste management and disposal strategies for ULBs in the State.
3) Roads and Drainage. Municipal Corporations and the State PWD are responsible for creation and
maintenance of roads and roadside drains in the cities; services offered by an agency is limited to
the assets created by it and there is overlap in jurisdictions. While the PWD caters to main road
links and highways/district roads and drains along these links, the MC undertakes works and
maintenance on other roads and roadside drains. The State PWD creates new roads and roadside
drains based on the Master Plan prepared by the TCPD and processed by the Development
Authority; funding is either sourced directly from the State or identified State Line Departments.
The MC creates new roads and roadside drains based upon the Annual Plan approved by the
District Planning Committee the funds for new works is sourced from the plan allocations of
the State for developmental works. The Project Engineer from the MCs Engineering Department
oversees construction of all new works.
4) Waterways/Canals. The presence of waterways/canals affects connectivity between different
parts of the city and between the city and the hinterland. The Irrigation Department under the
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State Water Resources Department maintains waterways/canals in urban and rural areas of the
State. Storm water flows into the natural drains/canals through a reticulation of roadside and
secondary drains. Dredging activities along main drainage channels are carried out by the
Irrigation Department based on the gravity of the problem.
5) Poverty Alleviation.The MC provides infrastructure in low-income settlements, primarily
housing Below Poverty Line (BPL) households. Funds drawn from the MCs capital budget and
those available from centrally sponsored schemes are utilized for infrastructure creation in BPL
settlements. Kudumbashree channels funds of centrally sponsored schemes to the MC and
monitors fund utilization through its District Mission Coordinator (DMC). Infrastructure
requirement is identified through the neighbourhood groups/area development
societies/community development societies and indicated to both the MC and Kudumbashree.
Based on the funds available through Centrally Sponsored Schemes and projects/schemes
approved by the MC, Kudumbashree transfers the requisite amount to the MC for utilization in
BPL settlements 2% of the Municipal Corporations own revenue is earmarked for poverty
alleviation schemes. The Urban Poverty Alleviation (UPA) Cell within the MC handles urban
poverty related functions. Table 1-2 indicates the fund utilization/project progress in the fiveMCs related to poverty alleviation schemes.
Table 1-2: Utilization of Centrally Sponsored Poverty Alleviation Scheme Funds
MunicipalCorporation
SJSRY (IncomeGeneration Scheme)
NSDP (InfrastructureDevelopment scheme)
VAMBAY (HousingDevelopment Scheme)
Allocation Expenditure Allocation Expenditure Sanctioned Completed
Thiruvananthapuram Rs.26 mn 79.5% Rs.44 mn 54.0% 1,160 nos. 338 nos.
Kochi Rs.22 mn 81.6% Rs.43 mn 66.0% 2,610 nos. 1,140 nos.
Kozhikode Rs.24 mn 124.0% Rs.45 mn 81.4% 1,116 nos. 160 nos.
Thrissur Rs.7 mn 65.7% Rs.19 mn 67.0% 16 nos. 2 nos.
Kollam Rs.15 mn 95.7% Rs.26 mn 58.0% 536 nos. 29 nos.
Source: Kudumbashree, Aug 2004.
6) Town Planning. The Development Authority (DA) is a coordinating agency responsible for
Master Plan implementation, which is prepared by the Town and Country Planning Department.
The DA is expected to coordinate with State Line Agencies and the MC regarding plan
implementation. The MC currently oversees land use zoning originally the responsibility of the
DA. Under Section 30 of the KM Act, 1994, the MC is required to carry out spatial planning; this
function is currently carried out by the TCPD at the MCs request.
1.3.3 Inter Agency Coordination and Project ImplementationImprovement in inter-agency coordination is contingent on the MC staffs capacity to handle large-
scale works, the MCs financial soundness and ability to leverage funds for works and a clear
distinction regarding the operational jurisdiction of the MC and State Line Departments. For sub-
projects proposed under KSUDP, coordination of activities between the MC and State Line
Departments is important with regards approvals and clearances, land acquisition, and resettlement
and rehabilitation of affected persons. Further, post construction, sub-projects will require
incorporating adequate operation and maintenance controls/measures to sustain investments in
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addition to defining responsibilities of each agency. Improvements in inter-agency coordination are
dependent on the project implementation arrangement with a focus on sustainability during the
operation and maintenance period.
Regarding project implementation capabilities, the MC currently undertakes new projects through the
Engineering Department (through the Project Engineer in larger municipal corporations). However,
these projects are limited to construction of shopping complexes, marriage halls, etc. and are largely
limited to buildings. Major urban infrastructure projects are generally outsourced to State Line
Departments on a deposit work basis, wherein the entire cost of the project is deposited with the State
Department for undertaking the project; the State Department is responsible for designs, contract
award and project management. The Municipal Corporation has no control on the progress and quality
of the work carried out. Staff in the Municipal Corporations Departments attend to operation and
maintenance or basic service delivery and are not equipped to handle project design, detailed
engineering or construction supervision of urban infrastructure projects. It is therefore imperative to
build staff capacity to handle the aforesaid functions in order to manage sub-project components
under KSUDP. Refer Annex D for organization structure of the municipal corporations and inter-
department coordination within the MC. Review of the staffing in each municipal corporation is
provided in Volume 2 City Reports.
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2. Urban Management
2.1 State Level Initiatives
State-level initiatives in improving urban management and capacity building are fostered through the
Modernizing Government Program, the Information Kerala Mission and the Kerala Institute of LocalAdministration.
2.1.1 Improving Service Delivery
GoK through the Modernizing Government Program (MGP), initiated in 2002, conceptualised a
development approach for Kerala to (i) ensure an assured level of basic services to the poor and
marginalized through a Minimum Needs Program (28 initiatives); (ii) build an enabling economic
growth environment (15 initiatives); (iii) achieve fiscal sustainability at the State and Local Self
Governments (7 initiatives); (iv) enhance effectiveness and efficiency of core Government functions
(17 initiatives); and (v) build on decentralization for efficient, effective and accessible Local Self
Governments (33 initiatives). The MGP Steering Committee identified 100 initiatives and currently
60 are operational (refer Annex E for MGP initiatives). MGP support is to 2,605 institutions with
funds amounting to Rs.12,000 million sourced from the ADB in two tranches.
With specific reference to local governments, MGP aims to (i) provide a framework for preparing
five-year plans; (ii) design systems to ensure performance focused basic service delivery; (iii) identify
local economic development potentials; (iv) institute systems to strengthen accountability; (v) institute
management, budgeting and accounting, and resource mobilization systems to strengthen local self
governance; (vi) identify training needs for local government personnel; and (vii) facilitate policy
decisions for effective governance.
The Steering Committee has recommended a Service Delivery Project (SDP), which focuses on (i)
direct service delivery areas comprising core civic services, public amenities and social security; and
(ii) support service delivery (physical infrastructure, human resources and administrative support).
Municipal Corporations are currently preparing plans to access MGP support under the support
service delivery component, which comprises (i) infrastructure (construction and procurement); (ii)
human resource development (institution, customer/citizen service and staff/manpower requirement);
and (iii) administrative support (improved systems and procedures and consumables/recurring
expenses).
2.1.2 Streamlining Systems and Procedures
The Government of Kerala through the Local Self Government (LSG) Department and the State
Planning Board conducted a systems and process study1 in the States local self-governments; variousexperts supported the State departments in this exercise. The Information Kerala Mission (IKM),
established in June 1999, has an e-governance mandate/program to implement the recommendations
1 The systems and processes covered: (i) plan formulation, monitoring and implementation; (ii) citizen services comprisingpension disbursement, welfare schemes, etc.; (iii) revenue transactions; (iv) finance and accounts; (v) public works and
purchase management; (vi) administration and establishment; and (viii) local body institutions covering Panchayat
Committee, Standing Committees, Gram Sabhas, etc.
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of the aforesaid study, which primarily aims at prudent financial management, accountability and
transparent government-citizen interface in local self-government institutions (LSGIs). The mandate
covers software development, training, support and handholding, and database management (refer
Annex F for e-governance initiatives in the five municipal corporations).
In order to undertake immediate deployment and testing of its applications, IKM entered into a
memorandum of understanding (MoU) with a few of the States LSGs. The MoU also identified
beneficiary contribution/support to facilitate the initiative. IKM is currently working at two levels:
Creating a database at the local-level; and
Developing the identified software at the State-level (at IKM headquarters).
GoKs LSG Department now proposes to implement its comprehensive computerization program
through public-private partnership on a Build-Transfer-Maintain (BTM) model. The BTM Operator
shall (i) supply, deliver, install, commission and maintain hardware in the 1,249 LSGIs and related
institutions; (ii) maintain the applications developed by IKM; (iii) provide training and support
services; and (iv) carry out relevant data entry. The Kerala State Industrial Development CorporationLtd. (KSIDC) currently manages the bid and an Operator(s) would be appointed by Dec 2004; the bid
would be evaluated on a Quality-Cost Based Selection (QCBS) basis. The BTM Operator fees would
be borne out of State Plan funds over a five-year period. The Operator fees would be paid every half-
year for the first two operating years and every quarter for the remaining three operating years. The
assets would be transferred to the LSGI on completion of hardware installation, which is expected to
occur within the first year of contract award. On completion of the contract, the BTM Operator would
have handheld LSGI staff in managing the e-governance applications and improved the LSGIs
financial management capability.
On appointment of the BTM Operator, IKM will provide technical guidance to the Operator and limit
its role to being an application service provider (ASP). IKM will oversee BTM operations on behalf
of the LSG Department and through the assistance of stakeholders groups at the local-level it will
oversee and certify database creation and analysis. IKMs term would expire along with the
completion of the BTM Operators contract, by when it is envisaged that the LSGI would be self-
sufficient and will effectively manage computerized operations.
2.1.3 Training
The Kerala Institute of Local Administration (KILA) conducts training programs on various activities
comprising decentralized planning, poverty alleviation, financing urban infrastructure, good
governance, resource mobilization, planning for urban infrastructure, and women development. KILA
conducts sessions for elected councillors, municipal staff and non-governmental organizations(NGOs). Training on decentralized planning is conducted at the district level through resource persons
trained by KILA; all other training is conducted at the KILA premises in Thrissur. The Institute of
Management in Government (IMG), Thiruvananthapuram also conducts training sessions in urban
management but is limited to senior-level functionaries.
The courses conducted by KILA provide ample exposure to participants on urban management issues
and innovative initiatives in other parts of the country but are not oriented towards applying urban
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management techniques. KILAs main course is on decentralized planning, which is held at the
District Headquarters and aims at training LSGI staff, elected councillors and NGOs on working
group functions. Guest faculty train 150 resource persons, who in turn impart training to the aforesaid
stakeholders 50,000 stakeholders are trained annually. KILA has limited internal staff to conduct
programs and depends largely on resource persons. KILA is currently identifying a resource group
(25-30 persons) of elected representatives to conduct trainings in Urban Local Bodies (ULBs).
KILA receives funds from GoK, CapDeck2, Housing and Urban Development Corporation
(HUDCO), National Institute of Urban Affairs (NIUA) and the UN HABITAT for implementing
training programs. The aforesaid training finance support organizations have pre-defined areas of
training, for example, NIUA supports training on financing urban infrastructure and resource
mobilization. The training programs are generally scheduled for three days and are conducted at
KILA as residential programs. KILA facilities require upgradation and the organization is currently in
discussion with Central and Donor Agencies for additional funding to build KILAs capacity.
Training through KILA and IMG are oriented towards exposing staff to LSGI management issues;
there is no course related to application wherein handholding through project implementation/physicaland financial monitoring and financial management is dealt with. KILA also lacks a comprehensive
Training Impact Assessment (TIA), which would have helped determine the outcome of the training
programs conducted and the actual demand for training. IKM, however, has a comprehensive training
program built into the missions activity schedule, which focuses on implementation and
management.
2.2 Municipal Initiatives
Municipal Corporations of Thiruvananthapuram, Kochi and Kozhikode have made efforts to improve
service delivery and urban management in their respective jurisdictions. Of specific importance is the
DFID aided Poverty Alleviation Project in Kochi and the Capital Region Development Program in
Thiruvananthapuram, where infrastructure projects were undertaken; the City Development Strategy
(Cities without Slums) for Kozhikode laid down areas of urban management and basic service
delivery for the Municipal Corporation to adopt. The MCs of Kollam and Thrissur are recent
formations; the MCs are gradually undertaking initiatives to improve urban management and service
delivery within their respective regions.
The aforesaid initiatives were supported through some form of external assistance and were not
internally generated initiatives. Municipal Corporations are continuously faced with issues related to
insufficient staff, inadequate staff qualification, lack of streamlined systems and procedures and
overall inability to handle large-scale projects. Currently, MGP and IKM initiatives are the only
mediums of improving urban management in the Municipal Corporations.
2.3 Community Development and Poverty Alleviation
The State Poverty Eradication Mission (SPEM) of Kerala, also known as Kudumbashree (means
prosperity of the family), is a holistic, participatory, women-oriented poverty reduction programme.
2 CapDeck is Capacity Development for Decentralization in Kerala, a program sponsored by the Swiss Agency for
Development and Cooperation.
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GoK implements it with the active support from GoI and NABARD. SPEM was constituted as an
independent society, registered under the Travancore Cochin Literary Scientific and Charitable
Societies Registration Act, of 1995, on November 18, 1998. Unlike in other Indian states, in Kerala
the roles and functions of the State Urban Development Agency (SUDA) to monitor and facilitate
GoIs state-level poverty reduction programme is performed by Kudumbashree. The society has a
time bound mission statement to eradicate absolute poverty in 10 years through convened communityaction and facilitating community organisation of the poor.
The Governing Body of SPEM has 24 members, chaired by the Minister for Local Self Government
and the Secretary to Government, Local Self Government assisting the Chairman in the capacity of
the Vice Chairman. Six GoK Departments represented by their respective secretaries, Directors of
Panchayats and Urban Affairs, other nominated representatives from the District, Collector, one Lady
Mayor, one Lady Panchayat President and other nominees from the State Government constitute the
committee. While SPEM is a unit of GoKs Local Self Government Department, it is autonomous in
its operations as it is registered under the Societies Act.
SPEM/Kudumbashree operates in the States three regions of south, central and north; a Directormanages each region. Each District is managed by a mission co-ordinator functioning as the District
Head supported by an Assistant District Mission Co-ordinator. The roles of these officers are strategic
and facilitative to ensure that time bound activities are carried out. They monitor the programme and
provide technical backup support to the corporations, poverty reduction teams and women groups.
The project officer in the corporations or local bodies carries out the actual implementation of poverty
eradication programs with support from the municipal staff in the Health Department. The project
officers are designated as community officers who oversee field level works.
Kudumbashree programs are designed on a participatory approach, which has enabled women groups
to design self-managed groups, driven by spirit within and not from outside. The women members at
the grass root level are encouraged to take up leadership through functional activities like Community
Health Volunteers, Income Generation Activities Volunteers, Infrastructure Volunteers, Secretary and
President. These groups prepare periodical micro plans, which become the base for the Community
Development Society (CDS) plan or antipoverty sub-plan of the local body. Based on the local bodys
approval, the CDS societies take up the sanctioned work. These groups also act as Thrift and Credit
Societies and play a pivotal role in assisting Development of Women and Children in Urban Areas
(DWCUA) groups under SJSRY.
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3. Framework for Institutional Development
As a service organization, institutional strengthening and capacity building of the MC is dependent on
the following functions: infrastructure/urban planning, service provision, institutional development
and financial management. The following sub-sections detail issues related to the MCs ability to
provide municipal service and provide a framework for enhancing urban management in the State.
The current section lays the background for identifying urban management and institutional
development components and based on the identified issues, a comprehensive urban management and
institutional development component was identified for the Project.
3.1 Infrastructure Planning
According to the States Tenth Five Year Plan and the KM Act, the MC requires:
Undertaking responsibility of urban planning, where the MC requires building staff capacity to
undertake preparation of the Municipal Development Plan including urban planning to reduce
State agency involvement in urban planning and implementation;
Undertaking preparation of Development Vision and Citywide Development Plans, which the
MC is currently undertaking but the planning mechanism does not provide for a holistic
approach; MC staff capacity should be built to ensure integration of plan works and adoption of a
holistic approach to citywide infrastructure provision; and
Establishing a Planning Department within the MC, which should undertake all planning
responsibilities for the preparation of the Municipal Development Plan including spatial planning
and land use management for the identification of land for specific projects such as solid waste
treatment/disposal plants. The MCs Planning Department will ensure works implementation, and
monitoring and asset management by the Engineering and Health Department. Immediate focus
is required to address requirements under the Kerala Development Program, where no specific
post was sanctioned or department created within the Municipal Corporation to carry out
decentralized planning3.
In formulating local-level plans, Ward Committees4 play an active role supported by the MCs
Engineering Department. However, procurement is carried out based on the Stores Purchase
Manual and PWD Manual; the MC lacks access to a comprehensive Works Manual comprising
procedure from planning through implementation. Besides proving to be a pressure on the MCs
resources, works are disjointed and do not adopt a holistic view to planning.
3 Technically qualified staff was absent in panchayats; hence, they were allowed to procure external assistance forplan/estimate preparation.
4 Ward Committees are constituted in LSGIs with population exceeding 100,000 persons. A Ward Sabha is constituted in all
LSGIs with population less than 100,000 persons.
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3.2 Core Service Delivery and Asset Management
GoKs Tenth Five-Year Plan and KM Act focuses on core service delivery with specific emphasis on:
Improving urban drainage, where it is imperative for the MC to develop Storm Water Master
Plans that should be part of integrated planning within the Municipal Development Plan;
Undertaking solid waste management and sewerage provision, where GoI guidelines suggest
waste disposal should be under the direction of a Municipal Environmental Engineering
Department instead of the present Health Department (as a recommendation under KSUDP, it is
suggested that the Project Implementation Unit created for KSUDP implementation will
subsequently form a part of the Municipal Corporations Engineering and Planning Department 5);
Undertaking water and sewerage services, where Section 315 of the KM Act, 1994, provides the
Municipal Corporation with a mandate to construct and maintain water supply and sewerage
assets within its jurisdiction and outside KWAs control, and provide services to the city6;
Preparing annual maintenance plans;
Promoting public-private partnerships is dependent on the a policy of the LSGD, though certain
municipal corporations have taken initiatives to undertake projects on a public-private partnership
mode; e.g. Thiruvananthapuram Municipal Corporation proposes to construct a scientific landfill
on a Build-Operate-Transfer mode; and
Implementing urban poverty alleviation programs, where the MC is undertaking steps to ensure
increase in centrally sponsored scheme fund utilization with assistance from Kudumbashree.
3.3 Institutional Development
Institutional development in the MC is governed primarily by the State Finance Commission
recommendations and the KM Act, which focus on:
Reorganizing decentralized operations based on magnitude of works/revenue
collection/municipal functions to satisfy the requirement for preparing Municipal Development
Plans;
Introducing information technology (IT) enabled services and streamlining municipal systems
and procedures; the Information Kerala Mission oversees property mapping and introducing
computerized accounting and management information systems (MIS); and
Addressing human resource development, through appointment of additional and appropriately
qualified staff for Municipal Development Plan preparation and implementation.
5 It is recommended that the Engineering Department of the city is reconstituted to undertake the following activities (i)
spatial planning, (ii) urban infrastructure design, construction and maintenance; and (iii) solid waste management. A
Superintending Engineer shall head the department and an Executive Engineer in each of the aforementioned wings/groups
shall oversee functions assigned therein.6 While GoK has constituted a committee to review staff transfer from State Line Departments to Local Self-Government
Institutions, staff transfer has not yet been affected. KWA continues to maintain water services in all cities except Thrissur.
Future service provision in water and sewerage is contingent on GoK policy regarding staff and asset transfer to LSGIs.
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3.4 Financial Management
Financial management in the MC is governed primarily by the State Finance Commission
recommendations and the KM Act, which focus on:
Legislations for implementing the plinth area based system of property taxation are pending,
which critically effects the MCs ability to increase its revenues the implementation of the
aforesaid property taxation system is a commitment made to access Government of Indias Urban
Reforms Incentive Fund (URIF); and
While accounting reforms have been accepted by GoK in-principle, new Rules are yet to be
framed to make the transition from cash-based accounting system to double-entry accounting
system.
3.5 Community Development and Poverty Alleviation
Dovetailing Kudumbashree programmes in KSUDP will substantially improve the impact of the
Project. The baseline survey revealed the need for sustainable project support to poor settlements by
way of infrastructure provision. Hence, it is proposed that community development and poverty
alleviation is undertaken through a Community Infrastructure Fund (CIF) and Poverty Social Fund
(PSF). The MCs will utilize the CIF for (i) infrastructure provision in BPL settlements; (ii) assistance
to women and children; and (iii) provision of health and education facilities. The MCs will utilize the
PSF for (i) providing facilities to vulnerable groups; (ii) undertaking income and employment
generation activities; and (iii) capacity building of staff and institutions to undertake poverty
alleviation initiatives. Kudumbashree will play a key role in activity identification for CIF and PSF
utilization.
Infrastructure in BPL Settlements. Provision of basic services comprising water, sanitation, roads,
streetlights, drainage, community hall, day care centres for children, health facilities, and
rainwater harvesting facilities.
Women and Children. Creation of Gender Resource Centre, Child Development Centre, legal aid
support, nutritional support, support to street children/child labourers, and scaling-up Balasabha
programs.
Public Health and Education. Support to Kudumbashree groups to clear garbage from the
communities, mosquito spraying, mini health centre, health kits to volunteers, and health campus.
Income Generation Program. Establishing marketing centres, skill development, micro enterprise
units, Enterprise Development Program training, quality support unit for Kudumbashree
products, and setting-up Livelihood Oriented Business Schools (LOBS).
Vulnerable Groups. Proposals for destitute rehabilitation, street children rehabilitation, centres for
old age people, widows, women in distress, physically and mentally challenged persons, beggars
and migrants, orphans and sex workers rehabilitation.
Capacity Building and Institutional support. Capacity building initiatives for CDS, ADS, NHG
members, CSOs, MC, Kudumbashree team, intervention partners, computer network support to
Kudumbashree DMC, and quality control unit in Kudumbashree.
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The CIF will be available to Corporations on an annual basis for the implementation of programs
within the framework of GoKs Peoples Planning process through city-level Poverty Alleviation
workshops. The workshops will be organised by the Project Implementation Unit (PIU) and the plan
prepared on behalf of the Corporation. In support of GoKs decentralization policy, annual allocations
of the CIF will permit the implementation by the Corporation of a prioritised program of slum
improvement and poverty alleviation based on designs developed by the Corporation in partnershipwith local communities.
Subsequent annual allocations will be performance-based (based on an appraisal of scheme
implementation and operational performance) and may include incentives for additional elements
such as matching funding (e.g., from own-revenue or by fund convergence of GOI schemes such as
SJSRY and NSDP), or other targets such as cost recovery and wider revenue mobilisation. Proposals
will be generated by a participatory planning process led by the women-based Community
Development Society (CDS) structure set up under the existing SJSRY framework. Outline proposals
from the Neighbourhood Associations will be submitted to the City-level Steering Committee for
prioritisation and approval based on defined criteria.
The Poverty Social Fund (PSF) will also be available on an annual basis based on plans discussed by
the Civil Society Organization (CSO) and approved by the City-level Steering Committee. The
proposals, to meet the priority needs of the community, will be identified by Kudumbashree in
coordination with the Municipal Corporation and CSOs with assistance from CDS representatives.
3.6 KSUDP and MGP
From the urban management perspective, KSUDP will complement the activities envisaged under the
ADB aided Modernizing Government Program (MGP). The MGP activities related to urban local
bodies is limited to (i) preparation of holistic waste management systems through incentive
mechanisms (Theme I.7.1); (ii) regulation for management of institutional waste change (Theme
I.7.3); and (iii) Town and Country Planning Legislation (Theme V.1.5). Urban Management and
Poverty Alleviation activities under KSUDP would address select initiatives in MGPs Theme V on
Effective, Efficient and Accessible Local Self Government and shall include:
Five-Year Planning Framework. Asset management plans, community rehabilitation plans for the
physically and mentally challenged, and spatial plan with focus on connectivity.
Local Economic Development. Identification of micro-enterprise opportunities for the poor.
Strengthen Local Self Governments. New office management systems, procurement manuals,
public works manual, IT plan, budgeting, accounting and resource mobilization.
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4. Institutional Development Components
While KSUDP will ensure infrastructure provision in the five municipal corporations, for long-term
sustainability of the assets created and for effective management of urban basic services, it is
imperative to address key urban management issues. Infrastructure creation under KSUDP will be
implemented by the Project Management Office (PMO) at the state-level in association with Project
Implementation Units (PIUs) at each corporation; Kudumbashree will advise and monitor poverty
alleviation components in the city corporations. The urban management component under KSUDP is
related to institutionalizing a system to address the municipal corporations ability to sustain service
provision and the Local-Self Government Departments ability to oversee service delivery by LSGIs.
In summary, the urban management and institutional development under KSUDP will address:
Capacity building of the Local Self Government Department, the Directorate of Urban Affairs
and the Town and Country Planning Department regarding internal systems and procedures and
ULB performance monitoring at the DUA;
Capacity building of Project municipal corporations comprising urban planning, asset
inventorization, accounting and financial management;
Municipal staff training on project development, design and implementation this shall apply to
the five municipal corporations and 53 municipalities; and
Community development and participation for poverty alleviation.
4.1 UMID Components
4.1.1 Capacity Building LSGD and DUA
The current role of the LSGD is primarily related to policy formulation and administrative control of
all agencies within its purview; the DUA shares this responsibility and facilitates in tracking Plan fund
flows/devolution and human resource/personnel management. However, in order to enhance the role
of the LSGD and DUA in urban management, the capacity building assistance activities comprise:
Facilitating creation of a database on municipal services and finances across all corporations
and municipalities which is expected to facilitate performance monitoring of ULBs, facilitating
future State Finance Commission recommendations and providing a basis for Plan fund
devolution;
Facilitating creation of a database on human resources/personnel in each of the States ULBs and
associated attributes including payroll and pension details and to facilitate performance based
promotions, transfers and consideration for training;
Preparing a Budgeting Manual to allow departments to provide accurate and planned financial
requirement to the Accounts Department, which will complement the proposed double-entry
accounting system;
Analysing cost of providing municipal services and identifying the base and basis for taxes and
tariffs establishing guidelines for property taxation and a basis for fixing user charges for at
least water, sewerage and solid waste management; and
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Facilitating creation of a database on municipal assets and asset valuation as a leveraging option
for infrastructure financing in the States ULBs.
Key outputs comprise:
Comparative Performance Assessment/Municipal Database institutionalised at the DUA and
maintained by the DUA for ready reckoning by the State in policy matters;
Database on the ULBs human resources/personnel;
Budgeting Manual for ULBs;
State Policy on environmental sanitation infrastructure cost recovery; and
State Policy/Guideline on financing patterns for infrastructure projects.
4.1.2 Capacity Building Municipal Corporations
The capacity building assistance to the five municipal corporations is aimed at addressing the
planning, core service delivery, institutional development and financial management improvements.
The capacity building assistance activities and outputs comprise:
Preparing Geographical Information System (GIS) based maps through use of satellite (Quick
Bird) imagery (it is envisaged that IKM or the Centre for Earth Sciences will undertake this
conversion) and making base maps available to Design and Supervision Consultants for
topographical surveys and detailed design of infrastructure systems;
Providing GIS based maps for asset management activities that consist of enumerating and
plotting property tax assessments and existing service utility lines the maps will form a key
component of the Project Implementation Unit (PIU) and will be updated through the Project
period and eventually rest with the MCs Planning Department and thereby provide a base for
future spatial planning;
Facilitating financial management reforms through property tax rationalization and accounting
reforms by (i) transiting to a double-entry accounting system7 from the existing cash-based
accounting system (this exercise will also involve valuation of municipal assets and preparing an
inventory of municipal liabilities) this activity shall consist of integration of IKM developed
modules on plan monitoring (Sulekha), accounting and finance functions (Sankhya), and revenue
collection (Sanchaya); and (ii) providing on-job training to municipal staff on accounting
functions and the usage of IKM developed software;
Undertaking other e-governance initiatives including (i) municipal-citizen interface through
citizen charters and provision of information kiosks, etc.; and (ii) networking zonal offices andhead office for information access and work flow; and
7 Under the ADB aided Modernizing Government Program (MGP), GoK has prepared a Detailed Implementation Plan to (i)
finalize the accounting systems in local government; (ii) design a system of accounts and issue new accounts rules and an
Accounts Manual; (iii) develop an accounting software for local governments (developed by IKM); and (iv) conduct acapacity building program for local government staff. The plans focus is limited to rural LSGIs currently. It is therefore
recommended that the activities for the five Municipal Corporations should be undertaken as a part of KSUDP to ensure
effective financial management.
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Developing performance based contracts for procurement, infrastructure creation and service
provision; thereby overcoming the constraints arising from the current format based on the Stores
Purchase Manual.
In order to undertake accounting reforms, its imperative to ascertain the completeness of the
accounting and Management Information Systems (MIS) software proposed for usage by the ULBs,
prepare a methodology for asset valuation, and based on the aforesaid activities, prepare an accounts
and audit manual for usage by ULBs. The indicated activities are proposed as a separate Technical
Assistance (TA) by the ADB, to the five corporations and two municipalities. The TA will provide the
requisite manual for rolling-out the transition activities in the municipalities.
Key components in the process of conversion is:
Ensuring compliance of the accounting system with the guidelines stated in the Accounting and
Auditing Manual currently being prepared by the Government of India;
Verifying assets and liabilities in the records of urban local bodies;
Conducting a valuation of assets and liabilities for entry into the urban local bodies accounting
records; and
Soliciting a chartered accountants certification on the financial records of urban local bodies
upon conversion to accrual/double-entry accounting.
4.1.3 Training on Basic Service Delivery
Under KSUDP, the objective of the training support is to address three key elements comprising
effective planning and infrastructure provision, core service delivery and asset management, and
prudent financial management. The training assistance shall address the following aspects (i)
sensitisation/orientation training; (ii) conceptual training; and (iii) implementation training. It is
envisaged that this training and capacity building program will target the five Municipal Corporations
and 53 Municipalities. In order to clearly define the training curriculum, KSUDP will conduct a
Training Needs Assessment (TNA) in ULBs targeting elected councillors, LSGI staff, NGOs and
members of the Working Groups formed for Decentralized Plan preparation. The TNA will identify
the requirement of stakeholders/participants with respect to the three key elements; it will also
comprise a TIA of past training programs that will provide insights into structuring the curriculum,
based on ULB demand.
Training programs will essentially focus on the three elements and shall include:
Sensitisation/orientation training on planning, financial management, solid waste management
and practices, etc. to expose participants to functions and best practices across the country the
training shall apply to elected councillors, ULB staff, select State Line Department and NGOs;
Conceptual training on project identification, structuring and feasibility assessment for
participants to comprehend project selection for implementation and on goods, works and
services procurement to participate and evaluate bids the conceptual training shall apply to
participants involved during the sensitisation stage and shall comprise select ULB staff from the
Engineering, Health, Accounts and Town Planning Departments, and staff of State Line
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Departments such as Public Works Department, Irrigation Department, and Kerala Water
Authority; and
Implementation training on project (infrastructure investment and institutional strengthening)
physical and financial monitoring, and infrastructure maintenance/asset management the
training will once again apply to staff involved at the conceptual level and field staff involved in
project implementation, with an aim to ensure adequate reporting on project progress and quality
control; specifically for field staff, KSUDP will structure and administer a course on asset
maintenance.
KILA will impart training to guide staff in appreciating project structuring and feasibility analysis;
this activity will run parallel with the works of the Design and Supervision Consultant (DSC) in the
five Corporations to help staff contribute in the works of the DSC. Preliminary sessions of the
implementation training will commence before construction contracts are awarded; main sessions on
physical and financial monitoring will commence once the contractor is appointed for project
implementation. Prospective training sessions are indicated in Annex G.
4.1.4 Community Development and Poverty Alleviation
Under KSUDP, the objective of capacity building for poverty alleviation initiatives is to ensure that
the Project benefits reach the poorest of poor and that all stakeholders involved in the Project are well
informed regarding the activities and process to achieve Project activities. A key component for
successful implementation of poverty alleviation initiatives is the constitution of a Civil Society
Organization (CSO), which is a support system that will assist identify requirement of the poor and
vulnerable, and facilitate Project implementation. The CSO will essentially comprise city-level
stakeholders including but not limited to the Municipal Corporation, business groups, resident welfare
associations, NGOs, CBOs, CDS and Kudumbashree. The CSO will strengthen the activities of the
Urban Poverty Alleviation (UPA) cell in the Municipal Corporation for utilizing the CIF and the PSF
with appropriate facilitation by Kudumbashree. Kudumbashree will play a key role in arriving at a
uniform strategy at the state-level for the Poverty Social Fund component.
Training of CSO members, UPA staff at MC, Kudumbashree and CDS members is therefore
imperative and may be carried out through identified training institutes (refer Annex H for an
indicative list of courses; costs for capacity building is indicated in the Poverty Alleviation Investment
Plan detailed in Volume 3 Social and Poverty Analysis). While a training needs assessment is a
requisite for identifying areas of capacity building, the following is an indicative list:
Community Infrastructure Fund. Activities may include (i) planning and identification of
community infrastructure needs; (ii) operational and maintenance issues relating to infrastructure
provision; and (iii) awareness regarding women empowerment, health and diseases, and
education.
Poverty Social Fund. Activities may include (i) conceptual clarity for scaling-up livelihood
initiatives through livelihood development strategies; (ii) facilitating confederation of Self Help
Groups to graduate into Micro Finance Institutions (MFI); and (iii) focus on business
development initiatives for micro enterprises.
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Strategic Programs. Activities may include (i) project development programs with specific
reference to CIF and PSF utilization; (ii) CSO networking and resource convergence; and (iii)
creating strategy mechanism for CSO to run programs under health, sanitation and income
generation.
4.1.5 Community Awareness and Participation Program
KSUDP success is contingent on appropriate and adequate public awareness generation. A domestic
Community Awareness and Participation Program (CAPP) firm will be recruited to facilitate public
awareness / social mobilization programs on project related issues. Approaches for stakeholder
awareness and participation will involve preparation of information materials and media campaigns.
The Information, Education and Communication (IEC) materials will be developed using mass-media
techniques. Amongst other things, the CAPP will undertake the following specific tasks:
Inventory and review recent and current community-based development initiatives in Kerala;
organizations involved, mechanisms used, successes achieved;
Plan and deliver initial briefing, training and orientation of Design and Supervision Consultants
(DSCs) and Project Implementation Units (PIUs) in community awareness and participation
programs;
Plan and organize regular training events, including workshops and seminars for the duration of
the Project;
Prepare IEC materials, advertisement clippings, project Web pages, etc.;
Promote Project Policy Agenda;
Conduct awareness campaign on scope of project, including the poverty alleviation components,
water optimization and conservation program, environmental and social issues, such as,
resettlement entitlements through various media means;
Transfer information about the Project to the target groups, especially women;
Create awareness among stakeholders regarding long-term benefits and short-term inconvenience
of the Project in order to gain full support of the beneficiaries for the Project;
Create awareness regarding preventive care to avoid any health related hazards;
Create awareness among beneficiaries regarding their responsibilities, including issues such as
user charges and property tax reform etc for achieving the goal of the Project; and
Create awareness among beneficiaries regarding the existing health care facilities and optimal use
of the same.
The CAPP will closely consult PMO, PIU, PMC, DSCs and work with NGOs under the Project, while
preparing materials for public awareness campaign, and provide feedback to PMO with a view to
adjusting work program based on the impact of campaign and concerns raised by the beneficiaries.
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4.2 Project Sustainability KSUDP and GoK Actions
Asset creation through KSUDP requires an institutional mechanism for long-term sustainability. In
addition, the institutional mechanism established for asset creation should undertake asset
management and maintenance in the long-term besides undertaking future urban infrastructure
planning with a holistic perspective. Currently, Municipal Corporations do not plan for large-scale
urban infrastructure projects as the activity is undertaken by State Line Departments like the KWAand PWD. In addition, solid waste management rests with the MCs Health Department, which is ill
equipped to handle the responsibility being oriented towards public health functions. The Peoples
Plan Campaign/Kerala Development Program is currently overseen by the MCs Engineering
Department but should ideally be the responsibility of a Planning Department to ensure holistic
approach to infrastructure creation.
The Project Implementation Units (PIU) proposed for KSUDP implementation will draw staff from
various State Line Departments. Through the Project period and with adequate training/capacity
building initiatives, it is envisaged that the PIU staff would be well equipped to oversee long-term
asset creation and service provision in the sectors of water supply, sewerage, urban drainage, solid
waste management, and urban roads and traffic management. Staff requirement for infrastructure
operation and maintenance is detailed in Volume 6 Technical Analysis; costs for system O&M
takes into consideration staffing.
The KM Act, 1994, provides the legislative framework for ULBs to undertake urban planning and
undertake water supply and sewerage services within its jurisdiction. Hence, from a long-term
perspective and based on the KM Act and State Finance Commissions recommendations, it is
recommended to merge the PIU with the Corporations Engineering Department to form a City
Planning and Engineering Department. The reorganised department will then be well equipped to
carry out future project development, implementation and asset management and will oversee spatial
planning, infrastructure development and construction, and solid waste management. Thisarrangement will ensure long-term sustainability of KSUDP and provide for complete decentralization
of infrastructure provision and urban basic service delivery.
The Project component Part B: Urban Management and Institutional Development (UMID) is
designed for long-term sustainability of infrastructure investments undertaken as a part of KSUDP
and in line with GoKs approach to urban basic service delivery and urban management. Table 4-1
maps GoK and KSUDP actions required to address items identified under the institutional
development framework (refer Section 3). The actions indicated in the table are from a viewpoint of
achieving sustainable urban development to address GoKs principles on urban development; it is not
contingent on KSUDP implementation (refer Annex I for a detailed review of GoKs policy and
institutional reform agenda).
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Table 4-1: Project Sustainability KSUDP and GoK Actions
Objectives GoK Actions KSUDP Actions ResponsibleAgencies / Time
frames
A. Planning
MCs to assume
responsibility for urbanplanning, undertakepreparation ofDevelopment Vision andCitywide DevelopmentPlans, and undertake urbanroad planning.
Establishment of a new Town
and Country Planning Act andRules to meet the objectivesof the Project.
KSUDP capacity
building for PIU/MCstaff will providetechnical principles andactual exposure projectdevelopment, planningand implementationactivities.
LSG Dept., Town and
Country PlanningDept. (TCPD),DevelopmentAuthority (DA) andMCs
FY 2008-2009
B. Core Service Deliveryand Asset Management
Provision of improvedwater supply serviceswithin MC area.
KWA to formulate a NonRevenue Water (NRW)Reduction Plan and aProgram for increasing itscollection efficiency.
KWA to enforce itsdisconnection policy forcustomers who do not pay.
GoK to formulate andimplement a policy onconversion of standposts toindividual metered houseservice connections.
KWA enhancement of watertariffs to ensure cost recoveryof O&M by 2010.
- Water ResourcesDepartment, KWA
FY2006-2007
FY2006-2007
FY2006-2007
FY2006-2007
Provision of improvedsewerage and solid wastemanagement serviceswithin MC area.
Viability gap funding forsewerage services throughlevy of service tax on ProjectBeneficiaries as a service taxfor O&M (determined as asurcharge on property tax) Council Resolution and GovtOrder required.
Introduction of a Solid Waste
Collection charge in MCs.
LSG Department, andMCs
FY2007-2008
FY2006-2007
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Objectives GoK Actions KSUDP Actions ResponsibleAgencies / Time
frames
C. InstitutionalDevelopment
MC accountability inservice provision andgreater citizen participationin infrastructure planning,introduction of IT enabledservices and streamlinemunicipal systems andprocedures, and humanresource development inproject MCs.
Changes and reforms inaccounting, MIS, and taxmapping.
Human Resources Policy forurban local bodies.
Conduct awarenesscampaigns to educatecitizens on MC functions.
KSUDP capacitybuilding for PIU/MCstaff on city wideplanning.
KSUDP will supportbase map preparation,property mapping, andimplementation ofaccounting and auditingreforms.
KSUDP capacitybuilding of DUA throughtrainings and creationand maintenance ofdatabase of LSGD staff.
LSG Dept., MCs,IKM, KILA, DUA
On-going; to becompleted by fiscalyear FY 2009-10
D. Financial Management
Implementation of the plintharea based Property Taxand increase in tax base asrecommended by theSecond FinanceCommission.
Implement law to amend theproperty taxation system andto enhance the MC revenuetax base.
KSUDP will undertakebase map preparationand property taxmapping.
GoK
FY 2006-07
Asset survey of ULB ownedproperty and transferredproperties (e.g., water,sewerage, transferredinstitutions such aseducation and health).Asset register maintained
as suggested by theSecond FinanceCommission in 1999.
Establishment of a mandatoryprocess complying with assetinventory management.
KSUDP will undertakemapping of municipalproperties and creationof database at DUA.
LSG Dept., MCs andIKM.
FY 2006-07
Biannual revision to non-tax license items andAdvertisement Tax;recommended by theSecond FinanceCommission.
Implement law to effectrequired revisions.
- GoK, LSG Dept. andMC
FY 2006-07
Accounting reforms inULBs entered into a MoUwith GoK.
Acceptance of double-entryaccounting and establishmentof rules at State-level.
KSUDP will baseimplementation ofaccounting reforms onthe accounting andauditing manuals, asset
valuation procedures,and softwareverification forcompliance withcommercial accountingprinciples preparedunder ADBs TA forCapacity Building forMunicipal ServiceDelivery in Kerala.
GoK and LSG Dept.
FY 2006-07
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5. Institutional Responsibilities
5.1 Overview
Government of Kerala (GoK) has undertaken a process of decentralization, which is manifest in
various planning processes and service delivery initiatives in the State. From the Kerala DevelopmentProgram (Peoples Planning Process) to works proposed under the Jalanidhi Project (decentralization
of water and sanitation services at the rural-level), the State has adopted a stand of equipping the
grass-root levels with a planning and implementation mandate. This approach emerges predominantly
from Indias 73rd and 74th Constitution Amendment Act.
Various other states in the country have also gradually progressed towards decentralization of
services, with specific emphasis on water and sanitation services being undertaken by local self-
governments. Two of Indias most progressive states Tamil Nadu and Karnataka have facilitated
local self-governments (LSGs
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