Sustainable Urban Infrastructure

The world is urbanizing fast and about 56 percent of the world’s population (4.2 billion people) is living in cities and towns. By 2030, more than 60 percent of the world's population will be living in cities. In the next three decades, about 2.5 billion people will settle in urban areas, so the urban population is expected to reach 70 percent in total. The rapid growth of urban population will not be in Europe and America, but it will happen in developing countries like mainly India, China and Nigeria. Out of the current urban population of the world, more than one billion people are living in slums, squatters, and substandard living conditions.

In the case of Nepal, unprecedented urbanization is taking place, particularly in Terai regions and hilly areas. Kathmandu and Pokhara valleys have the largest concentration of urban population of the country. Although recent census data shows 66 percent of the total population is living in municipal areas, it cannot be considered as urban population. In many municipalities, people are living in villages and undertaking agricultural and livestock activities. Although exact data is not available, the real urban population of Nepal stands between 25- 30 percent of the total. Out of the 293 urban municipalities, majority of them are located in Terai- Madhesh regions. Madhesh Pradesh, which is the smallest province in the country, has the highest number (77) of municipalities followed by Province 1. Karnali province has the least number of municipalities. The municipalities of Nepal are divided into Metropolitan City, Sub-metropolitan city and municipality. The urbanization in Nepal is triggered by mass migration to urban areas of Kathmandu Valley, towns, and cities in the bordering areas of Terai and along the East -West Highway. Except for a few cities in the Terai region, the service sector is the main driving force for urbanization in Nepal. Nepal's urban sector contributes to more than 64 percent (2020) in national GDP.

Status and issues of urban infrastructure in Nepal 

Most of the cities and towns in Nepal suffer from inadequate urban infrastructure. In Kathmandu Valley which has the largest urban agglomeration with two metropolitan cities and 16 municipalities, roads and public transport is insufficient to cater to the ever-growing number of vehicles. With the estimated population of 4 million, towns and cities of Kathmandu Valley have become congested and polluted. Standard quality of the water supply and sanitation system is not available to the majority of the population. For example, the demand for water supply in Kathmandu Valley is 400 million litres per day whereas the government's water utility agency is able to supply only 150 million litres per day. The water deficit is met by private supply, household wells, tube wells, rivers and springs. In the towns and cities outside Kathmandu Valley, the water supply is provided by Nepal Water Supply Corporation, Water Supply Boards, Water User Committees and household wells.

Similarly, city-wide faecal sludge management system is almost non-existent in most of the cities. Urban dwellers are dependent on household septic tanks or local level sewerage systems which discharge untreated sewage directly to rivers and streams. Even Public transportation in urban areas of Nepal is critically inadequate and the citizens have to depend on private transport operators for short and long-distance travel. Traffic lights are available only at major road intersections of Kathmandu, Lalitpur and Bhaktapur. In other cities of Nepal, the traffic light system does not exist. So far, modern transportation infrastructure such as flyovers, monorail, metro rail, and rapid bus transit systems do not exist in Nepal. Streetlights are available only in some parts of major cities. In the case of electricity, telecommunication, and information technology, the scenario is somewhat encouraging. About 95 percent of urban dwellers have access to electricity and telephone. The latest mobile network is available in most of the towns and cities with 3G and 4G internet. In most of the towns and cities, urban dwellers get access to internet and television channels through government as well as private service providers. 

There is a huge disparity in the level of infrastructure between the larger cities and smaller towns. Urban areas of Terai suffer from the perennial problems of flooding, choking drainage, uncollected garbage, and polluted water sources. The electricity supply has improved since the last five years but the quality and reliability are yet to be achieved .Local municipalities have not been able to provide sufficient streetlights within their territories.

Integrated urban infrastructure for sustainable development

The main issue in the provision of urban infrastructure in Nepal is that there is no integrated approach, with many sectoral agencies responsible for providing different types of infrastructure. For instance, the Department of Roads of the Federal Government is responsible for strategic and major arterial roads, municipalities are responsible for roads less than 8 M wide. However, the federal and provincial governments are also undertaking road projects at the local level. Sometimes all the three agencies are involved in a single stretch of the roads without knowing who is doing what and where. Under the road section, there are water supply pipes, drainage and sewerage pipes, and electrical and telecommunication cables. Each agency operates under its own policy, regulation, and project document without acknowledging the existence of other agencies. The roads in urban areas are dug several times in a year for system improvement, repair, and maintenance. As a result of continuous digging and filling, the quality of pavement gets deteriorated leading to potholes. While digging roads, sometimes one agency destroys the assets of another agency incurring huge loss of property. There is a need for a proper database on the underground infrastructure which each line agency should know and inform other agencies while digging the roads.

All the forms of urban infrastructure are interrelated and interdependent. If the road network is not proper, it will be difficult to lay the water supply and drainage network. If the roads and intersections are narrow, garbage trucks cannot move around the city for collection and transportation of the garbage. Similarly, if garbage collection does not take place on a timely basis, it will go to the nearby drain and choke it. If proper street lighting is not provided, street cleaning and garbage collection cannot be done at night when the streets are empty. Similarly, faulty water supply and drainage systems lead to water leakage which damages the road pavement.

Disasters and urban infrastructure

Urban infrastructure projects demand a huge number of financial resources as well as technical and 44 INFRASTRUCTURE FOR GROWTH managerial capabilities. In a country like Nepal, which is prone to multiple hazards such as floods, landslides, and earthquake, infrastructure development is very costly and time consuming. The country suffers from fragile topography, uncertain geology, and natural and man -made disasters . In many instances, infrastructure such as roads and bridges are swept away by rivers during construction. Electricity towers fall down due to landslides, water supply intakes are filled up with debris, and hydro-electricity headworks are swept away by Glacier Lake Outburst Flood (GLOF). In recent years, the effect of climate change is visible in urban infrastructure development. The excessive rain has led to flooding due to inadequate cross section of drainage. Similarly, debris flow in Himalayan rivers have blocked hydro-electricity tunnels, water supply intakes, and damaged power houses. Flooding in Himalayan settlements, which was unknown few decades ago, has become a regular phenomenon . The city of Pokhara which had never experienced flooding is now adversely affected by it. Water induced disasters have become a regular phenomenon in Kathmandu Valley. 

Disaster mitigation should be considered as a major factor in the provision of infrastructure in the country. In order to ensure that the infrastructure can withstand natural disasters, proper research, planning, and implementation shall be carried out in each and every project. The existing rhetoric of Environmental Impact Assessment (EIA) is not sufficient for urban infrastructure projects.

Inclusive urban infrastructure 

The sustainable development goal (Goal 11) emphasizes the need for inclusive cities and human settlements. To realise the goal by 2030, the national and sub national governments of member countries of the UN need to work towards provision of inclusive infrastructure. This means, roads and transportation systems shall be accessible to pedestrians, cyclists, motorists, people with disabilities, women, and children. Similarly, water supply, drainage, public toilets, public parks, and buildings shall be accessible to all kinds of people including people with disabilities. Adequate streetlights and closed-circuit TVs are necessary for the safety and security of women and children. In Nepal, the aspect of inclusiveness has been largely ignored leading to many infrastructure and public utilities inaccessible to children, women, elderly, and people with disability. Many cities and towns of Nepal lack public open spaces, gardens, and entertainment spots which are necessary for the younger population.

Government's role in the provision of infrastructure

Government agencies are primarily responsible for the provision, operation, and maintenance of infrastructure. In Nepal, they are responsible for water supply and sanitation, electricity, solid waste management, roads, and transportation. As per the federal structure, there are now three tiers of government in Nepal, e.g., federal, provincial, and local. Although the Constitution of Nepal has clearly allocated the roles and responsibilities of each level of government, there has been overlap and duplication of their roles in the provision of urban infrastructure. Although it should have been under the sole responsibility of local government, the provincial and federal government allocate huge sums of money in municipalities and undertake the projects themselves. Considering the low investment in the urban sector, local governments alone cannot fulfil the needs of an ever-growing population in cities and towns. Hence, financial and technical support from provincial and federal government agencies is necessary. However, there must be proper financial planning and coordination among the government agencies to avoid duplication, overlaps, and wastage of scarce resources. The more the local governments are strengthened, the better shall be the quality-ofservice delivery.

Private sector's role, different modalities (BOT, BOOT) 

In recent years, the private sector has shown tremendous interest in the provision of urban infrastructure. Since urban development is an economic activity, any investment done in the sector generates income in the form of taxes, fees, and profit. Due to limited resources as well as its basic responsibility in the social sector, the government alone cannot bear the cost of infrastructure development. In many cases, government agencies lack technical and managerial capabilities. Specialised private parties can support the government programmes by investing in infrastructure projects. There are several models of private investment such as Build, Own, Operate and Transfer (BOOT), Build Operate and Transfer (BOT), Operate and Manage (OM). Depending upon the nature of the project and government policies, private parties can choose the appropriate model. In the first two models, private parties are responsible for project development, financial closure, construction, and operation. They are required to handover the infrastructure after a certain period of time. In the third model, government agencies develop the infrastructure and give it to a private party to operate and manage it for a certain period of time. It is also known as a 'management contract'.

In Nepal, the private sector is not very much attracted to the BOOT and BOT model due to several reasons. The first reason is the inconsistent and unstable policies which get changed frequently mainly after the change of government. The second is the lack of trust among both the parties due to social and political bias towards private entrepreneurs. Third reason is the non- transparent procedures and dealings of the private parties which creates doubts among the people and draws unnecessary media attention. Fourth reason is the lack of competitive risk-taking attitude of the private sector of Nepal. Despite all the reasons, private developers have made tremendous progress in the hydropower sector, housing development, and transportation. Hydropower projects come under Electricity Act, 2049 and develop the project as Build, Own, Operate and Transfer. We are yet to see similar ventures in expressways, bus and airport terminals, metro rail, water supply and solid waste management systems.

Public Private Partnership (PPP)

Public Private Partnership is an innovative concept to create synergy between the government and private sector in a development project. The regulatory authority of the government sector and the financial and technological capability of the private sector can be brought together in project development, implementation, operation, and management. In this concept, the government does not invest money in a normal situation but if there is a financial loss incurred by the partner company, the government provides financial assistance through Viability Gap Funding (VGF). 

Normally, the government does not get any direct profit from the PPP ventures but there are indirect incomes through VAT and indirect taxes. The properties and assets created by the private party are taken over by the government after a certain period. Then, it is up to the government whether it operates and manages by itself or looks for another private party. In Nepal, despite strong legislative and policy tools, the PPP model has not succeeded so far. The Kathmandu View Tower Project of Kathmandu Metropolitan City (KMC) is the largest PPP project undertaken so far. Earlier, KMC had engaged with private parties to build and operate overhead pedestrian bridges. One of the main reasons for the failure of the PPP model in Nepal is the lack of viability gap funding system. In the present context, the government is eager to share the profit but not ready to bear the loss. This undermines the basic principle of partnership and discourages national and international investors. 

Way forward 

All the towns and cities in Nepal suffer from inadequate physical infrastructure. Due to its limited resources, the government alone cannot fulfil the demand of the growing urban population. Due to bureaucratic procedures, government projects generally suffer from delays, cost overrun, and financial losses. Private sector has implementation efficiency, financial and management capability. Private sector needs to come forward to grasp the opportunities provided by rapid urbanisation in the country. They can get involved in urban infrastructure development projects as contractors, consultants, developers, builders, and investors. They can develop the projects entirely on their own or can have partnership with the government. Some of the PPP projects which are attractive to the private sector are - toll roads, flyovers, airport terminals, bus terminals, multiplexes, and amusement parks. To attract the private sector and build trust, the government has the main responsibility to create a conducive policy environment. In addition to our own experience, examples of neighbouring countries like India and Bangladesh will be very relevant to us.

Note: This article is from Nepal Infrastructure Summit 2022 Souvenir by Er. Kishore Thapa.