SHIMLA: The Government of India, Government of Himachal Pradesh (GoHP) and the World Bank signed a $40 Million Loan Agreement on February 15, 2019 to help bring clean and reliable drinking water to the residents of the Greater Shimla Area. The state capital has been facing severe water shortages and water-borne epidemics over the last few years.
The ‘Shimla Water Supply and Sewerage Service Delivery Reform Programmatic Development Policy Loan 1’ is expected to improve the water supply and sanitation (WSS) services in and around the city.
Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance, said that the growing urbanisation and increased tourist load in summer months places huge demands on the water supply infrastructure and sanitation facilities in Shimla. He said that the GoHP has developed this comprehensive policy and institutional reform program to put in place systems to improve water supply and sewerage services in an efficient and sustainable manner.
Khare signed the Loan agreement on behalf of the Government of India. Junaid Kamal Ahmad, Country Director, World Bank India, signed the agreement on behalf of the World Bank and Prabodh Saxena, Principal Secretary, Urban Development Department, signed the project agreement on behalf of the GoHP.
Shimla’s water supply infrastructure with a capacity of 40 million liters daily (MLD) fails to meet the current demand of 56 MLD. Sanitation has emerged as a public health issue in the city with at least 30-40 per cent of the city’s population of around 200,000 uncovered by the sewerage system.
The GoHP has taken the bold step of making the supply of water and sanitation services directly accountable to citizens by decentralising responsibilities to an autonomous company that answers to the urban local body, said Junaid Ahmad, World Bank Country Director. He further said that this development policy loan (DPL) will help Shimla Jal Prabandhan Nigam Ltd (SJPNL) to orient itself as a customer-focused utility that has the technical capacity, governance framework, and appropriate policies needed to provide potable water and efficient sanitation to the residents of Shimla.
The Project, first in a series of three DPL, will support the GoHP’s program of policy and institutional reform needed to bring continuous, pressurised (24×7) water supply, efficient sewage collection and treatment for all households in the city.
The SJPNL will run the city’s WSS system and the State Government and the City Municipality will draft policy decisions such as setting water tariffs and subsidies. The World Bank DPL will support SJPNL in its policy and institutional reform program as it launches three critical operations to overcome the problem: Bringing bulk water to Shimla from a new source on the Sutlej River; 24×7 Water Supply and Sewage Management for the city and; Sewage services for peri-urban areas.
The State has decided to strengthen the financial sustainability of WSS operations in Shimla. Only 12 per cent of the costs needed to operate and maintain the WSS system are recovered from customers in the city, which requires the Government to provide an average annual subsidy of over US$12 million.
The $40 million loan from the International Bank for Reconstruction and Development (IBRD), has a grace period of 4 years and a maturity of 15.5 years.
(With inputs from pib)