24 Jan 2008
Press Release - Asia Development Bank
The Asian Development Bank (ADB) will provide a $350 million loan to improve urban infrastructure and services in 31 towns and cities in India’s mountainous northern state of Uttarakhand, one of the country’s top tourist destinations.
Despite its attractiveness to visitors with its dramatic landscapes and rich cultural and religious heritage, Uttarakhand is one of India’s less developed states. Health indicators are below the national average and about a third of the state’s 8 million residents are impoverished.
ADB has identified Uttarakhand as one of its priority states in India because its development is lagging behind other states. Improved urban services are needed to support tourism and industry - two economic sectors with substantial development potential in the state.
“The prospects for the growth of industry and tourism in Uttarakhand are contingent upon the availability of infrastructure and services in urban centers that will support this economic growth and cater to the needs of a rapidly growing urban population,” said Ms. Gulfer Cezayirli, Principal Urban Development Specialist with ADB. “However, the potential role that urban areas can play in Uttarakhand’s development is constrained by limited urban infrastructure and services.”
Water supply is poor in Uttarakhand towns with most houses only getting water for a couple of hours a day. Only two towns have sewage treatment facilities, with the majority of wastewater being dumped into water courses - a major environmental and health risk in the state, which is the source of the Ganga and Yamuna rivers.
Less than half the solid waste generated is collected. Much of it is dumped in drains or hill slopes. Urban roads are inadequate. Traffic volumes have doubled in the past decade and are expected to double again in the next 10 years.
The ADB-financed Investment Program will improve the quality of life of about 3.8 million urban residents projected to be living in Uttarakhand by 2016. The Program’s 31 towns and cities were chosen because they are expected to lead industrial and tourism growth. In addition to ADB’s $350 million, which will be provided in a multi-tranche loan, the Government of India will invest $150 million.
Under the Investment Program, the quality and quantity of water supply will be improved to meet national standards. About 60% of wastewater from the towns and cities will be properly collected and treated. Nearly three-quarters of all solid waste will be collected and disposed of adequately. The road network will be improved to shorten travel times and increase road safety. Investments will also focus on improving the conditions of slums that are home to about 300,000 people.
In addition, part of the funds will be used to improve the capacity of relevant state departments, urban local bodies, and other urban service providers to ensure that they have the ability to manage and deliver urban services efficiently and on a sustainable basis.
While this is the first urban sector assistance of ADB in Uttarakhand, ADB, to date has provided India with nearly $3 billion for urban development in other states, with its assistance focused on poverty reduction through shared growth, social development, and good governance.
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