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WB to loan $100m for Karachi’s water supply, sanitation projects

WB to loan $100m for Karachi’s water supply, sanitation projects

ISLAMABAD: The World Bank is expected to approve a loan of $100 million that will improve access to safe water and sanitation services in Kara­chi, and increase financial and operational performance of the Karachi Water and Sewerage Board (KWSB).

A World Bank team will start appraising the project submitted by the Sindh government later this month while the executive board of the bank is expected to approve the project by end of June, it’s learnt.

Read: Karachi’s water challenge




The proposed project seeks to increase equitable and sustainable access to safe water and sanitation services in Karachi, and will address the challenges of infrastructure gaps, operational under-performance of the KWSB and the weak enabling environment.

In the past the KWSB has successfully implemented many water supply projects, including those supported by the World Bank. However, the institutional capacity of the the KWSB to satisfactorily manage environmental and social safeguards, in accordance with WB requirements, is still considered insufficient, the World Bank says.

A World Bank team is expected to appraise the project submitted by the Sindh government later this month

The KWSB’s technical challenges are exacerbated by its low operational performance. Lack of metering of domestic customers, an inefficient tariff structure, an outdated database to calculate tariffs, and poor billing and collection efficiency have led to a large gap between receipts and expenditures. In 2015-16, total receipts covered barely 50 per cent of the utility’s operational expenditures.

A conservative estimate of non-revenue water from physical and commercial losses is around 55 to 60 per cent.

Read: Why Karachi is unable to tackle its water and sewerage problems

The utility has outstanding arrears estimated at $460m, outstanding debts to Karachi Electric alone of $320m, and financial losses estimated at over $5m per month.

Given these financial pressures, the KWSB has not been able to carry out preventative maintenance, focusing only on emergency repairs.

Karachi’s water supply services are falling far short of the expanding city’s needs. Nearly three million Karachiites lack access to piped water, but even those formally connected are confronted with inadequate, irregular and inequitable water services.

Brackish groundwater limits the use of alternatives such as household wells. Instead, inefficient and expensive “private water tankers form the major source of domestic water supply”.

The city’s current water demand is estimated at 1,200 million gallons per day (mgd), with the present shortfall of water relative to this demand estimated at 550mgd.

More than six million Karachiites have no access to public sewerage service. Even those with nominal access do not receive acceptable services.

The city’s sewage treatment facilities are dilapidated and not working properly due to “complex challenges of inadequate sewer trunk mains, malfunctioning pumping facilities, and insufficient wastewater treatment capacity”.

A “Commitment of Cooperation” outlining this reform roadmap is expected to be signed by the KWSB, the ministry of local government and the World Bank before the negotiations.

Steps outlined in the “Commitment of Cooperation” include far-reaching changes to improve the KWSB’s operational autonomy and ability to act decisively and professionally in the required turnaround.

This is expected to include an amendment to the the KWSB Act, but will also involve other measures to improve the KWSB’s scope of action, for example, a negotiation with other government entities to settle arrears that amount to as much as five years of the KWSB’s annual revenues.

Published in Dawn, April 15th, 2019

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