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World Bank to support Shimla water supply and sewerage services with another $160 million

  • World Bank to support Shimla water supply and sewerage services with another $160 million

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The World Bank
The World Bank Group has two goals, to end extreme poverty and promote shared prosperity in a sustainable way
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The World Bank Board of Executive Directors approved a $160 million program to intensify support for the Government of Himachal Pradesh’s efforts to further improve water supply and sewerage (WSS) services in the iconic hill city of Shimla.

The Shimla-Himachal Pradesh Water Supply and Sewerage Services Improvement Program will help bring round-the-clock 24x7 water supply to Shimla and ensure that all wastewater generated in the city is collected and treated efficiently, bringing significant health benefits to the city’s residents and the 3.2 million tourists who visit each year.

The new program builds upon the Bank’s partnership with Himachal Pradesh that has, since 2018, helped improve WSS services in the state capital, which had long faced severe water shortages and water-borne epidemics. Shimla today receives an assured two-three hours of daily water supply compared to once in three days earlier, and all water connections in the city are now metered, ensuring transparency and accountability.

These service improvements were achieved primarily through the creation of an empowered city water utility, the Shimla Jal Prabandhan Nigam Limited (SJPNL) set up under the Bank-financed Shimla Water Supply and Sewerage Service Delivery Reform Programmatic Development Policy Loan. SJPNL today is a corporatized WSS company with full operational and financial autonomy and is directly accountable to its customers. The new program will focus on consolidating SJPNL as a well-governed professional WSS utility with increased systematic business planning, corporate governance, and performance focus.

“Setting up modern utilities that are able to deliver water services on a 24x7 basis – no more intermittent supply – and ensure universal access – water for everyone – is the standard India intends to achieve. Shimla has made a bold step in this direction by establishing an autonomous water utility that can deliver efficient, accountable, and sustainable water supply and sanitation services to its citizens,” said World Bank Country Director Junaid Ahmad. “The Government of Himachal Pradesh and the Shimla municipal government converted a water crisis to create a reformed water company. Shimla did not just ‘fix the pipes,’ Shimla ‘fixed the institutions that fix the pipes.’ SJPNL is far better prepared today to mitigate and manage disruptions from any future shocks, whether from pandemics or climate change or other sources. It is a lighthouse for many other states.”

The Bank-supported program will also focus on improving the resource efficiency and financial sustainability of WSS services in Shimla. The cost of supplying water in Shimla is one of the highest in India since water needs to be pumped up some 1400-2000 meters elevation. Leakages in the transmission system not only lead to water wastage but also require increased bulk water pumping to offset the losses, which in turn results in high energy consumption.

“The program will incentivize SJPNL to reduce leakages, and, along with demand-side measures, can help significantly reduce water and energy use,” said Smita Misra, Lead Water Specialist and the World Bank task team leader for the project. “Shimla has already installed meters for all water supply connections and is implementing volumetric billing; reducing non-revenue water and increasing energy efficiency will further reduce production costs and revenue loss. These savings will, in the long term, reduce the dependence on government subsidies."

The citywide improvements in WSS services envisaged under the program also include expansion of the city’s sewerage collection network with about 100 kms of sewers in uncovered areas. A water quality lab will ensure more frequent and accurate quality monitoring, while a digitised WSS management system will improve service quality and asset management.

Participation of Women

The Bank-supported engagement has so far prioritized improving women’s effective participation in WSS management and service-delivery in the city. Of the 60 contractual employees in SJPNL, 16 are women, including seven employees in executive roles. The creation of a cadre of women volunteers or Jal Sakhis (friends of water) is also helping SJPNL deliver WSS services more efficiently. These women form a vital link between SJPNL and its customers as they report on issues relating to poor services, low pressure, quality issues, as well as educate women and children about water usage and conservation. SJPNL also plans to convert its billing centres and the grievance redressal mechanism to be managed only by women.

The $160 million loan from the International Bank for Reconstruction and Development (IBRD) has a maturity of 14.5 years, including a grace period of five years. The program will use a Program-for-Results financing instrument that links disbursement of funds directly to the achievement of specific program results.

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