Sindh government, WB to launch Rs33.6bn ‘Competitive and Liveable City of Karachi’ project

July 18,2019

The Sindh government, with the assistance of the World Bank, is going to start a Rs33.6 billion ‘Competitive and Liveable City of Karachi’ project next year and complete it within a...

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The Sindh government, with the assistance of the World Bank, is going to start a Rs33.6 billion ‘Competitive and Liveable City of Karachi’ (CLICK) project next year and complete it within a period of five years.

This was disclosed on Wednesday in a meeting that the chief minister held with a two-member delegation of the World Bank, led by Acting Country Director Melinda Goods and Senior WB Operations Officer Amina Raja at the CM House.

The meeting was also attended by Local Government Minister Saeed Ghani, Chief Secretary Mumtaz Shah, Planning & Development (P&D) Chairperson Naheed Shah, Principal Secretary to CM Sajid Jamal Abro, Local Government Secretary Khalid Hyder Shah and others.

The project in question is aimed at supporting the Karachi Metropolitan Corporation (KMC) and all six district municipal corporations (DMCs), the District Council Karachi and the Excise & Taxation Department for detailed property survey in the city.

The provincial investment department would also be supported under the project for taking positive steps towards the ease of doing business.

The CM on the occasion directed the chief secretary to hold a joint meeting with the KMC, the DMCs, the District Council Karachi and the Excise & Taxation Department to devise a plan to formally devolve the collection of property tax.

“I am keen to financially strengthen the local bodies in the city so that they emerge as a self-sufficient organisation,” he said, and added that under the project, capacity-building of the local bodies concerned would also be made for the collection of property tax.

KWSSIP

The CM said that the Karachi Water & Sewerage System Improvement Project (KWSSIP) was being launched with the assistance of the World Bank for $1.6 billion over a period of 12 years under which the Karachi Water & Sewerage Board (KWSB) would be overhauled.

“I am committed to making the KWSB a self-sustainable and efficient service-providing organisation,” he said. The World Bank team and the CM discussed the modalities and the implementation methodology about this project in their meeting.

P&D Chairperson Naheed Shah told the meeting that the first phase of the scheme of overhauling the KWSB has been approved for Rs14.7 billion over a period of five years. It has also been approved by the Central Development Working Party, he added.

The KWSSIP is a three-phase project. The first phase is estimated to be completed at a cost of $400 million, focusing on improving water and wastewater services, and a defined set of institutional reforms to transform the KWSB into a financially viable utility.

Under the project, the World Bank would finance $400 million in three investment plans of the KWSSIP: reform in the KWSB of $30 million, Securing Sustainable Water Supply & Sewerage of $50 million and Project Management & Studies of $20 million.

CLICK

The Karachi Urban Management Project has been renamed as CLICK (Competitive and Liveable City of Karachi). It is a $250 million project and is to be completed within five years.

The project has three components: performance-based block grants to Karachi’s urban local councils of $120 million, strategic infrastructure investment and capacity-building in integrated storm water drainage and solid waste management of $50 million, and support for urban immovable property tax reform and institutional capacity-building of $30 million.

The tax reform component includes support for improvement and devolution of urban immovable property tax (UIPT). The cost of the fourth component is $50 million.

Performance-based grants

The performance-based block grants to Karachi’s urban local councils have been approved at $120 million. This component will finance formula-based block grant to the KMC and the six DMCs upon achievement of results by providing incentive to urban local councils to improve their institutional performance and capacity in areas of investment, planning & execution, financial management, procurement, social and environmental, business environment, and citizen engagement and accountability.

The grants will be used to fund local level infrastructure and municipal services within respective mandates of the KMC and the DMCs to improve Karachi’s liveability and competitiveness. Indicative eligible investments may include small secondary and tertiary drainage works, municipal roads, street lighting, parks and other public spaces, public buildings and markets.

Strategic investment

Strategic infrastructure investment and capacity-building in integrated storm water drainage and solid waste management is a $50 million component. This will finance strategic city-wide (inter-jurisdictional) infrastructure needed to enhance Karachi’s liveability and competitiveness. The component will focus on two inter-linked sectoral interventions of integrated storm water drainage and solid waste management (SWM), and include development of drainage and SWM master plans, financing models, public awareness campaigns, feasibility studies for private financing models, tentative technical assistance activities and selective investments in integrated drainage and SWM.

Urban property

Support for UIPT reform and institutional capacity-building is a $30 million component. It will be a support for improvement and devolution of UIPT. This sub-component will support the devolution of administrative functions of the UIPT to local bodies of Karachi.

A phased roadmap to implement the administrative improvements and devolution of urban property tax and its respective institutional model have been developed with the objective of substantially increasing public revenues through UIPT reform.

Reform activities to be supported during phase-I include comprehensive all-Karachi property survey to update property tax database and fiscal cadastre and digitisation of the property tax base for all six districts in Karachi, IT systems upgrades, training & capacity-building support, and implementation of a revised institutional structure.

Phase-II may focus on deeper reforms of the property tax system. The collection function may be devolved to the DMCs in a phased and gradual manner, whereas a number of options are being considered for provincial level management of an ICT platform that manages the fiscal cadastre or property register.

Institutional capacity-building

The institutional capacity-building and implementation support sub-component will finance the supply-side capacity-building interventions for Karachi’s local governments in the areas of financial management, project implementation, social and environmental management, and technical assistance to enhance metropolitan coordination between the local bodies.

Regulatory environment

Support for enhanced regulatory environment and infrastructure financing for competitive Karachi is a $50 million component. This will support developing a strategy, roadmap and institutional architecture for infrastructure financing model and enhancing regulatory environment for improved competitiveness in Karachi.

The main activities to be financed include technical assistance and feasibility studies for developing and setting up a proposed Karachi Infrastructure Fund, and technical assistance programme targeted at the KMC and the DMCs for piloting PPPs for service and infrastructure provision.

This component will finance improving regulatory and doing business environment by simplifying, streamlining, modernising and automating regulatory governance, and improving commercial dispute resolutions, particularly related to property rights.

Implementation arrangements

The project’s main coordinating agency would be the Local Government Department. A Project Management Unit would be established to provide overall coordinating and necessary technical assistance to Karachi’s local councils.

The project’s executing agencies for specific interventions under this arrangement will be the KMC, the DMCs, the KWSB and the Excise & Taxation Department for their respective components.


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