Nepal Country Impact Study

8/12/2019 Nepal Country Impact Study

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03DOCUMENT

IMPACT STUDY

NEPAL COUNTRY


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Water and Sanitation Trust Fund Impact Study SeriesNepal Country Impact Study

First published in Nairobi in 2011 by UN-HABITAT.Copyright United Nations Human Settlements Programme 2011All rights reserved

United Nations Human Settlements Programme (UN-HABITAT)P. O. Box 30030, 00100 Nairobi GPO KENYATel: 254-020-7623120 (Central Office)www.unhabitat.org

HS/011/11EISBN (Series): 978-92-1-132035-0ISBN (Volume): 978-92-1-132306-1

Disclaimer

The designations employed and the presentation of the material in this publication do not imply theexpression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning thelegal status of any country, territory, city or area or of its authorities, or concerning the delimitation of itsfrontiers of boundaries.

Views expressed in this publication do not necessarily reflect those of the United Nations HumanSettlements Programme, the United Nations, or its Member States.

Excerpts may be reproduced without authorization, on condition that the source is indicated.

Photos UN-HABITAT

Acknowledgements

Authors: Lotta Nycander, Piers Cross,Torbjon Damhaug

Editors: Dominic OReilly and James OhayoDesign and Layout: Andrew Ondoo


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DOCUMENT THREE /iii

Acronyms

ADB Asian Development Bank

CA Co-operation Agreements

CBO Community-based organisation

CIUD Centre for Integrated UrbanDevelopment

CSS Country Support Strategy

DUDBC Department of Urban Developmentand Building Construction

DWSS Department of Water Supply andSewerage

ECOSAN Ecological Sanitation

ENPHO Environment and Public HealthOrganisation

FUWS Forum for Urban Water andSanitation

GoN Government of Nepal

GTZ Deutsche Gesellschaft fr TechnischeZusammenarbeit (German TechnicalCooperation Company)

HH Household

I / NGO International / Non-GovernmentOrganisation

I&K Information and Knowledge

KfW German government-owneddevelopment bank

KUKL Kathmandu Upatyaka KhanepaniLimited

KVWMSP Kathmandu Valley WaterManagement Support Programme

LFA Logical Framework Approach

LUMANTI Lumanti Support Group for Shelter

MDGs Millennium Development Goals

MoF Ministry of Finance

MoHP Ministry of Health and Population

MoU Memorandum of Understanding

MPPW Ministry of Physical Planning andWorks

MuAN Municipal Association of Nepal

MWSP Melamchi Water Supply Project

NWSC Nepal Water Supply Corporation

O&M Operation & Maintenance

PAN Practical Action Nepal

PRSP Poverty Reduction Strategy Paper

RBM Results Based Management

RBTS Reed Bed Wastewater TreatmentSystem

RWH Rainwater Harvesting

STWSSP Small Towns Water Supply andSanitation Project

SWAp Sector-Wide Approach

SWM Solid Waste Management

SWM&RMC Solid Waste Management andResource Mobilisation Centre

TDF Town Development Fund

UCs Users Committees

UDLE Urban Development through LocalEfforts

UEIP Urban and EnvironmentImprovement Project

UEMS Urban Environment ManagementSociety

UEMS Urban Environment ManagementSociety

UN United Nations

UN-HABITAT United Nations Human SettlementsProgramme

UNDP United Nations DevelopmentProgramme

UNICEF United Nations Children Fund

VDC Village Development Committee

WAN WaterAid Nepal

WAsC Water for Asian CitiesWATSAN Water and Sanitation

WDM Water Demand Management

WESH Water, Environmental Sanitationand Hygiene

WHO World Health Organisation

WSH Water Supply, Sanitation andHygiene

WSP Water Service Provider

WSS Water Supply and Sanitation

WSTF Water and Sanitation Trust Fund

WUA Water Users Association


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Table of Contents

Acronyms iii

Executive Summary vi

Main Findings on the Nepal Country Programme vi

Main Project Level Findings vii

Recommendations ix

Background and Methodology 1

1.1 Background 1

1.2 Rationale 2

1.3 Objectives of the Study 3

1.4 Approach and Methodology 3

1.4.1 Impact Verification and Analysis Process 3

1.4.2 Output Categories 5

1.4.3 Selection of Sample Projects 5

Country Context and Challenges 6

2.1 Background 6

2.1.1 General 6

2.1.2 Poverty and Gender Issues 7

2.1.3 Urbanisation 7

2.2 Sector Coverage 8

2.3 Sector Organization 9

2.3.1 Government Level 9

2.3.2 District and Municipal Level 9

2.4 Sector Coordination 9

2.5 Sector Financing 10

2.6 Sector Monitoring and Information Systems 11

2.7 Urban Water Sector Performance 11

2.8 Urban Sanitation Sector Performance 12

2.9 Urban WSS Development Programmes 12

2.9.1 Major Urban WSS Development Programmes 12

2.9.2 Development Partners 13

UN-HABITAT Nepal Programme

and Projects 15

3.1 Country Support Strategy for

Nepal WAsC (2008-2012) 15

3.1.1 Country Programme Design 15

3.1.2 Project Portfolio 17

3.1.3 WAsC in the Context of WSS Sector

Investments 18

3.1.4 Tentative Budget 2010-2013 19

3.2 Emerging Issues and Recommendations 20

3.2.1 Sector Organisation Government Level 20

3.2.2 Sector Organisation Municipal and

Community Level 20

3.2.3 WSS Sector Coordination 21

3.3.4 Sector Financing 21

3.2.5 Sector Monitoring and Information Systems 22

3.2.6 Strategic Adjustments of the WAsC 22

3.2.7 UN-HABITAT Nepal Operational Issues 223.3 Overview of Sample Projects,

Outcome Categories, and Approach 24

3.3.1 Outcome Categories 24

3.3.2 Sample Projects 24

3.3.3 Implementing Partners 24

3.3.4 Identified Issues, Achievements and Impacts 25

3.4 Design, achievements and Issues of each

Sample Project 25

3.5 Cross-cutting Issues, Impact Assessment

and Recommendations 37

Summary of Findings and Recommendations 42

4.1 Findings 42

4.1.1 Main Findings on the Nepal Country Program 42

4.1.2 Main Project Findings 43

4.2 Recommendations 44

4.2.1 Strategic Recommendations 44

4.2.2 Administrative and Operational

Recommendations 45


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ANNEXES 46

ANNEX 1: PEOPLE MET 46

ANNEX 2: OVERVIEW OF SAMPLE PROJECTS NEPAL 49

ANNEX 3: Capital Investment Programmes 51

Small Towns Water Supply and Sanitation

Sector Project (2000-09) 51

Second Small Towns Water Supply & Sanitation

Sector Project (2009-16) 51

Urban and Environmental Improvement Project

(UEIP) (2003-10) 52

2nd Urban and Environmental Improvement

Project (UEIP) 52

Urban Development through Local Efforts

Programme (UDLE) (2008-2010) 53

Capacity Development for Water Services

Operations and Public-Private Partnership

in Kathmandu Valley (ADB) 53

Kathmandu Valley, Melamchi Water Supply Project 54

LIST OF FIGURES

Figure 1.1 Approach of the Country Impact Study 4

Figure 2.1 Water Supply and Sanitation Coverage

in Nepal 8

Figure 3.1 Nepal WAsC Strategy 2008-12 Estimated

Annual Budgets and Funding 19

Figure 3.2 Pour-flush Toilet and HM Rai Tole Community

CEO Meeting 26Figure 3.3 Water Treatment and Bottling system in Chyasal,

Lalitpur Municipality 28

Figure 3.4 Biogas Connection and Improved Traditional

Well Khokhana, Lalitpur 29

Figure 3.5 Narayani Community Bharatpur Municipality 31

Figure 3.6 New Toilets from UN-HABITAT Project and

New Tap Connection 32

Figure 3.7 Shreee Rastriya Primary Vidhyalaya

Sano Yagyapuri 33

Figure 3.8 Field visit Shreekhandapur Reed Bed

Treatment System (RBTS) 35

Figure 3.9 Pavement and storm-water system and

Previous open defecation area 36

Figure 3.10 Hetauda Municipality, Rai Gaun and

Kalyantar Communities 37

Figure 3.11 Rai Gaun Traditional Well and New Road and

River Crossing (UEIP) 38

LIST OF TABLES

Table 3.1 Comparison of the Outcomes of WSTF SP and

CSS WAsC-Nepal 17

Table 3.2 Summary of Financial Allocation to UN-HABITAT

Nepal 2005-09 18

T able 3.3 Key WSS sector investment projects in Nepal

(2000-2016) 19

Table 3.4 Key data for Sample Projects compared to

the Project Portfolio 24

Table 3.5 Project Costs per Beneficiary of Some

Sample Projects*) 40


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Executive Summary

This document is an internal Nepalcountry impact study of initiativessupported by UN-HABITATs

Water and Sanitation Trust Fund (WSTF)undertaken by a team of internationalconsultants. The objective of the WSTFis to bring in new investment and ideas,expand service coverage for poor urbandwellers, and help build momentumfor achieving the MDGs. The objectivesand envisaged outcomes of the Country

Support Strategy (CSS) of the Water forAsian Cities (WAsC) in Nepal (2008-2012)are by and large similar to those of WSTF.

MAIN FINDINGS ONTHE NEPAL COUNTRYPROGRAMMEUN-HABITAT is a newcomer to the

Urban WATSAN sector in Nepal, but hasmanaged to establish itself as a notabledevelopment partner in this field. The

order of magnitude of the impacts of theWAsC interventions on the achievementof the MDGs is limited in terms oftangible increase in WSS coverage,but UN-HABITAT has demonstratedsignificant impacts in terms ofimprovements in quality and relevanceof the projects. Hence, the actual valueadded and impacts made by the firstgeneration pilot projects (2005-09)provide a solid base for more vigorous

at large scale replication efforts providedthe UN-HABITAT has incorporated lessonslearned and recommended strategic andoperational adjustments.

Overall, very good work has beenaccomplished under (sometimes) difficultcircumstances in Nepal, which inlude veryhigh government staff turnover, politicalinstability and lack of NGOs with sufficientexperience to mobilise urban poorcommunities.


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UN-HABITAT has an excellent reputation inNepal amongst national water authorities,municipal authorities, communities andNGOs and local institutions. UN-HABITATscomparative advantage is its focus onthe complex problem of the urbanpoorand the ability to integrate WSSapproaches across the urban sector and

community involvement from the outsetof the project.

These are key points of concern offuture national WSS sector development.The UN-HABITAT WAsC Nepal Countryinterventions are well integrated withrelevant authorities, institutions, anddevelopment partners at national andmunicipality level and contribute to thecreation and achievement of GoNs urbandevelopment strategies. The country

programme issues and findings areelaborated in detail in Chapter 3-2 and4-1.

There is a close coherencebetweenthe project outcomes of the Water forAsian Cities Nepal Programme 2008-2012 and those envisaged by the WSTFStrategic Plan 2008-2012 and UN-HABITATs main Nepal aims - solutionsto serving the informal urban poor andgender mainstreaming in cities and smalltowns - are widely recognised as criticallyimportant issues.

The main achieved impacts from 2005-2008 are developing strategic approaches,policy reforms, training and tools inpartnership with the Government anddemonstration of pro-poor community-based management mechanisms inselected pilot communities helping toachieve the WSS MDGs in cooperation

with NGOs, municipal authorities and thestakeholders. In the past, the latter hasbeen pre-dominant, and one of the main

challenges facing the UN-HABITAT is tomake a strategic shift towards the former.

One important aspect of the UN-HABITATfunded Water Supply, Sanitation &Waste Management projects is the localinstitutional capacity building, whichis crucial for the effectiveness and

sustainability of the large investmentprogrammes.

MAIN PROJECT LEVELFINDINGSThe impact assessments of Nepal countryprojects have taken into account thefollowing four programme outcomecategories of the CSS WAsC-NEPAL

(2008-2012):

Institutionalisation of inclusive andgender responsive pro-poor urbangovernance in the WAsC Nepalsupported local authorities

More active engagement ofcommunities in the management ofwater and environmental sanitationat local level with little or withoutexternal support

Improved WATSAN service deliverymechanism at local level

Improved MDG monitoring andreporting mechanisms

In this impact study, the consultantsstudied the achievements and impacts of16 selected sample projects as presentedin the overview in Annex 2. Collectively,these sample projects are considered

representative of the Nepal projectportfolio of 48 projects. Informationwas gathered from reviewing project


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documents, meetings with implementingpartners, interviews with key stakeholders,including beneficiaries and field visits tothe project areas inside and outside theKathmandu Valley.

The objectives and outcomes of theUN-HABITATs interventions are woven into

several associated projects and activitiesperformed by other development partners.Hence, it is not feasible to undertakeprecise assessments of the impacts thatcan be attributed directly to the UN-HABITAT country support programme, sothe impacts addressed in this report arerather in terms ofincremental impactsand value added.

It is noted with concern that the projectportfolio of 48 projects presented in

the Country Support Strategy is verydiverse and complex and that UN-HABITAT is spreading its limited staffand financial resources too thinly ondemonstration and pilot interventions inthe communities. The situation is aboutto stabilise since the number of newprojects have gone drastically down since2007. Nevertheless, it is essential thatUN-HABITAT is determined to tune downits role as a big entrepreneurial NGOand strengthen its functions as strategicinfluencer.

The main impacts of UN-HABITATsinvolvement are contributions toenhanced quality and pro-poorrelevance of the WSS sector projectsthat provide a sound basis for replicationand up-scaling under capital investmentprogrammes to achieve the WSS MDGs atthe national and local levels.

The Country Support Strategy is involvedin the design and implementation ofcapital investment projects funded byADB and other multi- and bilateral-development funding agencies. It isplaying an important role in buildingcapacity in the WUCs to make largeinvestment projects pro-poor oriented,

operational and sustainable. The WAsCNepal operations have demonstratedtangible impacts and momentumtothese and other urban WSS projects.These impacts have been achievedthrough enhanced communityinvolvement, institutional capacity buildingat municipality and community level anddemonstrating innovative approachesto better serve the informal urban poorin cities and small towns and promotegender responsive governance.

The outcomes of UN-HABITATsinvolvement are enhanced quality andpro-poor relevanceof the WSS sectorprojects, thus providing a sound basis forreplication and up-scaling under capitalinvestment programmes to achieve MDGWSS targets at the national and locallevels contribution Institutionalisation ofinclusive in the WAC Nepal supportedlocal authorities.

UN-HABITAT is delivering good work onpoverty & gender mapping, which isboth appreciated and in use by concernedby UDLE, DWSS and the methods are alsoreplicated in projects in Vietnam, Lao PDRand India. The assessment of projectsreveals impressive community work,concrete results and high effort level.Implementation approach is spread toowidely, so there are needs for sharpeningof the efforts and for understanding of

gender.


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Carry out a synthesis and assessmentof the experiences of the communityand pro-poor interventions of allprojects. The purpose of this shouldbe to limit the scope of projects tothe most critical WSS issues, sharpenthe focus and optimise the use ofhuman and monetary resources for

engaging in future local communityWSS interventions. Synthesise theoutcomes in a new up-scalingstrategy.

Management and OperationalRecommendations:

Make necessary adjustments of UN-HABITATs operations and its CSS forNepal in response to the enhancedrole as strategic influencer. Initiate

actions to strengthen internal capacityincluding upgrading of the staffsituation (number and categories ofstaff required), enhanced expertisein financial and policy matters andin municipal service management,strengthening of project cyclemanagement, performancemonitoring, reporting, revisedbudgetary requirements and financialmobilisation. Some specific tasks inthis respect are summarised in the

below bullet points.

Improve the Project Document byusing a standard format includinga log frame with indicators ofachievement and impact that areSMART (Specific, Measurable,Achievable, Realistic and Timebound). The same requirementsshould also apply for non-project

operations.

Pay more attention to systematicmonitoring and reporting of theperformance and achievements ofthe WAsC projects including theircollective achievements reflecting theoverall significance of UN-HABITATNepal.

Explore possible streamlining optionsfor the project cycle management and

disbursement cooperation betweenUN-HABITAT Nepal and HQ.


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Background and

Methodology

1.1BACKGROUND

The goal of the UN-HABITAT Waterand Sanitation Programme is tocontribute to the achievement

of the internationally agreed goalsrelated to water and sanitation inhuman settlements, with particular

focus on the urban poor in order tofacilitate an equitable social, economicand environmental development. Thedevelopment objective is to supportdeveloping countries in expandingaccess to environmentally sound basicinfrastructure and services with a specialfocus on the un-served and under-servedpopulations.

In 2003, to give a greater focus to thechallenge of improving access for the

urban poor to water supply and sanitation,UN-HABITAT re-organized its water andsanitation activities into a comprehensiveprogramme under the aegis of a Water

and Sanitation Trust Fund (WSTF)supported by a number of donors. Theobjective of the Trust Fund was to bring innew investment and ideas, expand servicecoverage for poor urban dwellers, andhelp build momentum for achieving theMDGs.

Managed by the Water, Sanitation andInfrastructure Branch (WSIB) under theHuman Settlements Financing Divisionof UN-HABITAT, the Trust Fund currentlysupports Water and Sanitation for CitiesProgrammes in Asia, Africa and the LatinAmerica and the Caribbean Regions. Inaddition, the Trust Fund also supportstwo unique regional initiatives, the LakeVictoria Water and Sanitation Programmeand the Mekong Region Water andSanitation Initiative. Activities under these

programmes combine policy dialogue andnormative work with on-the-ground pilotand demonstration initiatives.


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Based on a number of years of experienceworking globally within the watersupply and sanitation (WSS) sector andincorporating lessons learnt through itsnormative and operational work, theTrust Fund developed a Strategic Planfor the period 2008 2012. The planenvisions the following outcomes for the

programme:

Increased institutional capacity inpartner countries for advocating/promoting and implementingpro-poor water and sanitationinitiatives and policies with focus ongender equity, renewable energyand efficiency and environmentalsustainability

Increased flow of investment into

water and sanitation sector catalysedby Water and Sanitation trust fundinterventions

Improved Millennium DevelopmentGoals monitoring mechanisms inplace in partner countries, withimproved benchmarking of water andsanitation service providers

The majority of WSTF-supported activitiesare undertaken through Agreements of

Cooperation (CA) signed between UN-HABITAT and a cooperating partner whichcould be a local government authority,a public utility, a NGO or an academicinstitution. However, normativework such as development of tool-kitsand guidelines, awareness raising andtraining and dialogue on policy issueswith government are also importantcomponents of the WSTF supported work.

1.2RATIONALEUN-HABITAT has identified a need toinitiate a rolling strategic assessmentof impact at the country and thematicprogrammatic levels on a regular basis.Such periodic internal assessment willassist UN-HABITATs management and the

realignment of projects to WSTFs strategicpriorities.

This first review has three foci: case studiesof Kenya, case studies of Nepal and athematic focus on Gender. Kenya andNepal were selected as countries in whichUN-HABITAT has a number of years ofprogramme operations and which containa variety of core activities supportedby the Trust Fund being implementedunder different CAs, enabling the team

to study the collective impact of theseaspects under the water and sanitationprogramme.

The impact study also responds torequests from the donors to the WSTF formore information on program impact andthe findings will be presented at the nextWSTF Board meeting in March 2010.

The need to integrate a structuredprogramme of impact studies into the

activities of the WSTF is supported byrecent changes in the strategic contextfor UN-HABITATs work. These include theadoption of the UN-HABITAT Mid TermStrategy and Institutional Plan (MTSIP)2008-2013, which calls for an EnhancedNormative and Operational Framework(ENOF) approach to programming.


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This approach is driven by a number ofexternal and internal factors namely the

HABITAT Agenda, the need to accelerateprogress in meeting the MillenniumDevelopment Goals (MDGs), the ParisDeclaration, One UN reforms, increasedfocus on alignment and coherence inUN-HABITAT activities and the priority nowbeing given to Results Based Management(RBM). Given the emphasis on results, jointprogramming and efforts to align activitieswith desired outcomes, there is now aneed to undertake an impact study thatinforms the WSTF management on the

level of integration of these factors intothe overall programming at the countrylevel and its resulting impact.

1.3OBJECTIVES OF THESTUDY

This impact study initiated by the Water,Sanitation, and Infrastructure Branch(WSIB) is an assessment of the impactof WSTF activities in selected areas. Thisconsultancy is the first phase of a plan

to assess the impact of the WSTF on aregular basis over the next five years.

Based on the results of this study a long-term impact evaluation mechanism will beestablished. The specific objectives of thisconsultancy are as follows:

Undertake a comprehensive study ofWSTFs impact in Nepal and Kenya

Undertake a comprehensive

impact study of WSTF activitiesglobally on the theme of GenderMainstreaming.

This volume (Document 3) presents theresults of the impact evaluation ofUN-HABITAT WSTF activities in Nepal.

1.4APPROACH AND

METHODOLOGY1.4.1 IMPACT VERIFICATION AND

ANALYSIS PROCESS

The methodology developed for this studywas prepared during an October 2009briefing for the consultants held in Nairobiwith the divisional director HSFD, sectionchiefs of WSIB/CTAs and key program staffand outlined in the consultants InceptionReport. The methodology was presented

in the inception report. The figure belowillustrates the proposed generic approachof the impact study in the two focalcountries, Kenya and Nepal.


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The Results-Based Management andLogical Framework Approach (LFA-RBM) matrices provide key informationon the intended effects and associatedmonitoring indicators for the UN-HABITATWSTF Programme. The impact evaluationmethodology was to undertake visits to

key selected projects to meet with selectedproject staff and stakeholders and to studyreal impacts and achievements against theexpectations of key planning documents.

UN-HABITATs planning framework isevolving and there are several relevantplanning documents, including:

The LFA-RBM for the WSP ProgrammeDocument (2003)

The LFA of the WSTF Strategic Plan(2008-12)

The UN-HABITAT MTSIP OverviewResult Framework (2008-09)

The Task Force on the EnhancedNormative and OperationalFramework (ENOF) towards a policyand roadmap.

It was agreed that the most appropriatelog frame for this study would be theWSTF Strategic Plan (2008-12), since thisprovides a forward-looking orientation. Itwas recognised that the impact on someproject outcomes will be less as thesewere not the intended outcomes in theinitial strategy. Since most projects havealso been designed on the basis of theLFA-RBM for the WSP (2003), the studywill also assess their design and impacts

against the backdrop of this strategicframework.

FIGURE 1.1: Approach of the Country Impact Study

5. Strategic Impact Analysis 4. Assessment of Project impacts

1. Strategic FrameworkReview

LFA - RBMWSFT Strategic Plan(2008-12)

RBM and LFAWSP (2003)

2. Project DesignAssessment

MOU Agreements of

Cooperation (CA) Project Docs Consultancy ToR Steering Docs

3. Verification ofAchievements andimpacts

Analysis of DocumentsReview ReportsProgress ReportsTechnical ReportsPartners ReportsAnnual Reports

Field VerificationMeeting PartnerMeeting Stakeholders

PhoneinterviewsProject area VisitsValidation meetings

GENERIC IMPACT STUDY APPROACH


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2.0COUNTRY CONTEXTAND CHALLENGES1

2.1BACKGROUND

2.1.1 GENERAL

Nepal is a diverse country in South Asia,poor in terms of human development butrich in culture, scenery and history, witha population of 27.6 million and an areaof 147,181 km2. Nepals developmentchallenges are immense as deliveringservices and fostering economic growthin a landlocked country with ruggedtopography is not only difficult but alsocostly.

1 This chapter is mainly abstracted from the followingsources: (i) Water, Environmental Sanitation andHygiene Programme for Urban Poor A jointProgramme Proposal of UN-HABITAT and Water AidNepal, (WAN August 2008); and (ii) UNDP GoAL-WaSHProgramme Governance, Advocacy and Leadership forWater Sanitation and Hygiene. Nepal Sector Assessment- Draft. Piers Cross (January 2009)

About 15% of its population lives inthe urban areas, and the country isexperiencing rapid population growth.Nepal has an annual per capita income ofabout USD250.

The country is emerging from nearlya decade of internal armed conflict

and political instability. In April 2008,Nepal initiated a process to rewriteits constitution. The outcome of thisprocess, which may include creation of afederal state and leading to a significantshift in resources to local authorities,will undoubtedly affect the institutionalstructure and performance of the countryand the WASH sector.

Country Context

and Challenges


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The following sections address key issuesrelevant to the development of the WSSsector. As will be further elaborated in thisCountry Impact Study, many of them arefocal points of UN-HABITATs involvementin Nepal.

2.1.2 POVERTY AND GENDERISSUES

More than 30.8% of the population(about 8 million) is living below thepoverty line, and poverty varies spatiallyand socially and its incidence is high,especially amongst ethnic minorities andhouseholds headed by women, who oftenare socially excluded and face challengesin interacting with state authorities andvoice their demands related to accessing

various services. The Poverty ReductionStrategy Paper (PRSP) addresses socialexclusion and deprivation and seeks toreduce Nepals poverty rate and bringwomen and marginalized groups andregions into the development mainstream.

Special efforts are required to enhanceequitable access to resources, skills,and income generating opportunities,education, health care and other basicneeds. Even where social and economic

infrastructure has improved, it has oftenfailed to reach large marginalised groupsof the population. These efforts have beenhampered by a number of factors, whichinclude ineffective governments over thepast decade and lack of elected officialsat local government levels. In this contextit is interesting to note that gender equitypromotion and enhanced pro-poor WSSservice provision are focal issues of WSTFsStrategic Plan (2008-12) and a focalactivity of UN-HABITAT Nepal.

2.1.3 URBANISATION

Nepal is experiencing the most rapidurbanization trend in the South Asian Sub-continent with approximately 15% of itstotal population living in 58 communities.The urban population is increasing at 6.6% per annum, reflecting an increase inmigration to towns leading to potentialconflicts and reclassification of growingtowns from villages to municipalities.If this trend continues, half of thepopulation of 30 million people will beliving in urban areas by 2035.

Over the past two decades, the industryand services sector, with predominantlyurban activities, has grown by almost thesame rate as the growth of the urbanpopulation so gross domestic product per

capita has been more or less stagnant.The rapid urbanisation coupled with theinability of the GoN to keep pace with thedemand for infrastructure and servicesfor urban populations, has increased thepressure on the urban environment.

Urban areas are characterized by a highgrowth rate, an aging infrastructure andsignificant management and resourceconstraints. These result in an averagewater supply time reduced to a few

hours a day and women spending severalhours daily fetching water during the dryseason. For sanitation, open defecationis widespread in rural and urbancommunities in Nepal.

This has serious health, equity andeconomic implications. The huge repairand rehabilitation challenge facing Nepalneeds a comprehensive approach.


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2.2 SECTOR COVERAGE

Although the figures are disputed, Nepalappears to be on track to meet its MDGtargets in water supply coverage, but is offtrack to meet the targets for sanitation.

The figure below shows the Ministryof Physical Planning and Works (MPPW)tracking of national coverage plus theadditional performance required to reachthe 2017 target of national universal

access. It indicates that in 2006, watersupply coverage was in the order of 77%,whereas the sanitation coverage wasabout 46%.

At current investment levels water andsanitation coverage in 2017 is predictedto be about 83% and 81% respectivelyand will therefore not reach the nationaltargets of full coverage. Substantiallyincreased external and governmentalfinancing is needed to meet the targets forboth water and sanitation coverage.

These access figures do not reflect thechallenging sector realities on the groundas there is a high level of breakdownof WSS schemes which limits actualfunctional coverage. The inadequatewater supply and sanitation systems haveadversely affected the quality of life and

100

90

80

70

60

50

40

30

201990 1995 2000 2005 2010 2015 2020

MDG target

Additionalperformancerequired

Water Coverage

Year

NationalCove

rage(%)

100

90

80

7060

50

40

30

20

10

01990 1995 2000 2005 2010 2015 2020

MDG target

Additionalperformancerequired

Sanitation Coverage

Year

NationalCoverage(%)

FIGURE 2.1 Water Supply and Sanitation Coverage in Nepal


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health conditions of the poor. Access isalso heavily skewed by wealth: the richestquintile is eight times more likely to haveaccess to sanitation, and 13 times morelikely to have a household connection.

2.3SECTOR ORGANIZATION2.3.1 GOVERNMENT LEVEL

The Ministry of Finance allocates publicsector finance to the sectoral ministries.The Ministry of Physical Planning andWorks (MPPW) is the lead sectoral Ministryresponsible for water supply, sanitationand wastewater services in the country.

Working with the National Planning

Commission (NPC) it has the responsibilityfor formulating policies, plans andstrategies. MPPW has two operationalarms: DWSS and NWSC. The functionalresponsibilities of the Ministry are dividedbetween the two agencies: Departmentof Water Supply and Sewerage (DWSS)and Nepal Water Supply and SewerageCorporation (NWSC).

NWSC is responsible for water supply,sewerage and drainage services in all

municipalities outside the KathmanduValley. The Kathmandu Valley waterservices are now under the KathmanduValley Water Supply Management Boardand operated by Kathmandu UpatkyaKhanepani Limited (KUKL) - a companyestablished under the PPP concept. TheDWSS is the department responsible forall water supplies and sanitation in ruralareas and small towns, but it lacks thecapacity to effectively build, operate andmaintain and scale-up rural water supplyand sanitation.

2.3.2 DISTRICT AND MUNICIPALLEVEL

The 2004 RWSS Policy sought toshift implementation responsibilityto local authorities and communitiesand restructure DWSSs role to thatof facilitation and oversight, leaving

construction, operation and maintenanceof systems to local government, NGOsand user groups for the smaller projects,and planner and implementer of largerprojects.

The Local Self Governance Act (1999)provides for local authorities to plan andmanage water and sanitation services.This change, however, has not progressedas planned and the absence of a clearlydefined policy for urban water supply

and wastewater services has hamperedthe progress of the WSS sector reforms inNepal.

Improving sector capacity at districtand municipal level is a key action tostrengthen sector development. Thecapacity of municipality authorities isespecially weak, emerging from theconflict and a history of weak localgovernance, and is recognised by manyagencies as a strategic entry point to

improving national development.

2.4SECTOR COORDINATIONThe WSS sector in Nepal is characterisedby institutional fragmentation and limitedsector coordination. There has been anotable growth in externally supportedprojects supported by diverse fundingsources, in particular projects implemented

by NGOs, seeking to fill the gap ingovernment service delivery. MOPPW hascreated a Sector Stakeholder Group (SSG)to improve coherence and dialogue andincrease co-ordination.


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The sector is still driven by projects andsector leaders are overloaded by projectmanagement and are often unable to givestrategic direction or resource allocations.The SSG has recently initiated a movetowards a SWAp and 11 key partnerssigned a commitment to participate in thisinitiative - though progress in this area is

slow.

2.5SECTOR FINANCINGCentral government transfers are the mainsource of finance to local governmentand are estimated at providing more than75% of their income. Allocations are, ingeneral, low compared to needs. The mainsource of local government sector financecomes from MLD and MPPW.

MPPWs policy is that 20% of the budgetallocated for water supply may be usedfor sanitation but in practice the sum ismuch lower. In the current financial year2010/2011?, there was, for the first time,a stand alone sanitation budget allocationthanks to the Year of Sanitation 2008efforts.

About 67% of the public sector budget is

financed through external aid and a largeproportion of sector finance is off-budget.The aid is highly project-oriented, thesingle largest external financiers being theADB and the WB (rural WSS). An analysisof district budget allocations found that45% of DWSS district budget allocationswent off local budgets to NGOs and afurther 32% was spent directly by DWSS.

Budget allocations to the WSS sectordeclined significantly through the conflict

years and are now slowly increasing butthere remains a large gap in resourcerequirements to meet the MDGs and

rehabilitate the aging and poorly-functioning infrastructure. Poverty, lowtariffs and poor collection systems limitrevenue streams whilst households make

high investments in coping mechanisms.Most sector finance by-passes localauthorities (either off-budget funding fromcentral Ministries or direct NGO finance)further undermining local authoritys lowcapacity.

Nepals Foreign Aid Policy-2002, whichforms an integral part of the overall policyfor mobilizing external resources fordevelopment, calls for external financialand technical partners for enhanced

transparency and harmonisation of theirallocations with the national and localgovernment priorities.


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The emphasis of the policy is to:

Foster a spirit of mutual understandingand partnership that will lead toimproved development impact

Reduce compartmentalization andimprove integration, consistency andcompatibility

Encourage INGOs and NGOs tocontribute to and strengthen thenational development process ratherthan functioning independently andoutside of government priorities. Theexternal resources channelled throughinternational NGOs (INGOs) will thusbe better monitored, and their useshould be made more transparent.

There are various estimates of the funding

gap to meeting Nepals planned targetswith MoPPW suggests it is USD46 million/year, though other estimates are higher.But even these figures do not take intoaccount the massive effort required torehabilitate non-functional systems.

Sector financing is generally fragmentedand poorly tracked and there is noconsolidatedfinancial data at national ordistrict levels. The sector has undertakenlimited financial analysis of flows,efficiencies, expenditures, value-for-money and/or unit costs and there is lackof economic analysis of the impacts ofinvesting.

In response to the current WSS sectorfinancing challenges, a comprehensivesector finance study should beundertaken to better determine gapsand inefficiencies, and provide a soundbasis for developing a sector financial

strategies at national and local levels toensure that the MDGs are met, as well asmeeting capital shortfalls and addressingoperational effectiveness.

2.6 SECTOR MONITORINGAND INFORMATIONSYSTEMS

The WSS sector lacks effectiveperformance monitoring and there is noupdated sector assessment. Information

is fragmented, data is unreliable anddefinitions are not consistent. The sectoris characterised by some strong projectmonitoring systems and weak sector-widemonitoring.

DWSSs publication of a sector inventoryshould provide a useful structure andbaseline on which to build a strongermonitoring system with clear definitions.MPPW has prioritised improving theWSS sector monitoring, starting with

a Monitoring Strategy and creating aMonitoring Unit. Financial monitoringis especially poor and strengthening ofpublic sector financial administration willbe a key factor in leveraging sector financeand making progress towards a SWAp.

2.7 URBAN WATER SECTORPERFORMANCE

Whilst Nepal appears on paper to be ontrack to meet its MDG targets in watersupply coverage with a reported access topotable water of 90% in urban areas,81% in rural areas and 82% overall, thereality is different.

Piped water supply covers only a smallportion of urban residents, and the supplyis usually intermittent and the majority ofhouseholds face serious water shortages

during the dry period. Water quantitydelivered is mostly below 50 litres percapita per day (lpcd) and the quality oftenfalls below WHO standards for drinking


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water, mainly due to bacteriologicalcontamination caused by poor sanitationfacilities.

The figure below shows the MPPWtracking of national coverage plus theadditional performance required to reachthe 2017 target of national universal

access. At current investment levels,water and sanitation coverage in 2017will not reach the national targets andsubstantially-increased external financingis needed to meet the targets for bothwater and sanitation.

2.8 URBAN SANITATIONSECTOR PERFORMANCE

Only about three-quarters of the urbanpopulation have access to propersanitation facilities. Onsite sanitationsystems, such as septic tanks, are nota viable option especially for densely-populated core town areas.

Sewerage systems, often combined withstormwater drainage systems, exist in anumber of urban areas. However, theircoverage is limited and final treatmentof the sewage is often inadequate, if not

totally nonexistent. As a result, rivers inurban areas have often practically becomeopen sewers, especially in upland townsduring the dry season.

In contrast, urban areas located inlowlands often experience health hazardsduring the rainy season when floodingand rising groundwater tables renderthe existing wastewater disposal systemsineffective. Overall, these deficiencies ofurban and environmental infrastructure

and services pose a serious threat tohealth and sanitation of the urbanresidents.

The water sector lacks the infrastructureinvestment, capacity and knowledge tomanage its water resources. Inadequatetreatment of urban effluent hassignificantly increased environmentalpollution. There are significant waterquality concerns in both rural and urbanareas and the degree of compliance with

Nepals own water quality standards isweak.

2.9 URBAN WSSDEVELOPMENTPROGRAMMES

2.9.1 MAJOR URBAN WSSDEVELOPMENTPROGRAMMES

The large scale impacts of UN-HABITATsprogramme in Nepal are inevitablylinked to sizeable capital investmentprogrammes.

The major identified programmes include:

The Small Towns Water Supply andSanitation Sector Project (2000-09)

The Second Small Towns Water Supply& Sanitation Sector Project (2009-16)

The Urban and EnvironmentalImprovement Project (UEIP) (2003-10)

The 2ndUrban and EnvironmentalImprovement Project (UEIP) (Underapproval)

The Urban Development through LocalEfforts Programme (UDLE) (2008-2010)

The Capacity Development for WaterServices Operations and PPP inKathmandu Valley (ongoing)


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The Kathmandu Valley, MelamchiWater Supply Project (delayed take-off)

Annex 3 gives some information abouteach of these programmes.

2.9.2 DEVELOPMENT PARTNERS

Major financial partners in the WSS sectorinclude the World Bank, which has mainlyfocussed on the rural sector, and the ADB,which has invested more than USD 300min urban and rural water projects in Nepalsince 1984.

The ADB has also been a significantpartner to DWSS and MPPW in nationalsector policy development. It presentlysupports DWSS in implementing aCommunity Based Water Supply and

Sanitation Project (CBWSSP) and ADBis supporting DUDBC to implement theSecondary Towns Urban EnvironmentalImprovement Project which is improvingservices in small towns and urbancommunities and assisting DWSSundertake further reforms.

The investment banks also support a majorsource replenishment plan (USD 500m)developed for the Kathmandu Valley, theMelamchi and Kathmandu Urban WaterManagement Projects. Progress is slowand the project had to be unbundleddue to pressure against private sectorinvolvement.

There are several leading UN agenciessupporting the sector.

UNICEF which, alongside a disasterresponse program, promotes awarenessof drinking water quality and household-treated water, improves sanitation inhomes and schools, supports hygienepromotion and hand-washing andsupports national and district capacitybuilding

UN-HABITAT supports activities in theirWater for Asian Cities Programme,including developing pro-poor approachesfor urban water and sanitation, promotingalternative urban water sources forhouseholds and promoting innovativeurban sanitation approaches

UNDP currently has a programme thatincludes a focus on poverty reduction,governance, environment and sustainabledevelopment. It has three projectsassociated with the water sector a PPUEproject which helps establish PPPs,largely between municipalities and urbancommunities, by developing systems,enhancing capacity, and supportingproject implementation (includingbottled water distribution, water servicemanagement, public toilet management);

a DLGSP project supporting localgovernance and demand and supply sidesof basic service delivery, including waterand sanitation services and a EENDM unitseeking to enhance sustainable access tonatural resources, including water.

WHO provides technical assistanceto MoPPW, the Ministry of Healthand Population and the Ministry ofEnvironment, Science and Technology. Itssupport focuses on health risk reductionthrough water quality improvement, basedon WHO water safety plan framework,and sanitation and hygiene promotionprogrammes. It provided core funding tothe International Year of Sanitation 2008Secretariat within MoPPW.

The Water Supply and SanitationCollaborative Council (WSSCC) ispreparing one of the first GlobalSanitation Fund grants to Nepal, working

with NEWAH.

Although there are many NGOs activein social development, human rightsand advocacy activities, few of them


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work exclusively on water, sanitationand hygiene promotion at the nationallevel and very few are active in urbanareas. These NGOs engage local civilsociety groups to deliver water supplyand sanitation projects. Because of theircommunity focus, NGOs are found tohave a comparative advantage in getting

stakeholders on board and strengtheningof local WSS authorities.

The key NGOs in the water sector haveorganised themselves in a NGO Forumfor Urban WATSAN (NGOFUWS) as anumbrella organisation for assisting thecommunities to develop and implementwater and sanitation projects. UN-HABITAThas capitalised on, and further enhanced,the capabilities of the NGOs in severaldemonstration projects. The project has

been launched but has suffered manydelays and bottlenecks.


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3.1 COUNTRY SUPPORTSTRATEGY FOR NEPALWASC (2008-2012)

3.1.1 COUNTRY PROGRAMMEDESIGN

This section addresses some CountryProgramme Design issues that haverelevance for the impact assessment atcountry and thematic level as a basis forstrategic, programmatic, and operationalrecommendations to UN-HABITATsmanagement.

The UN-HABITAT interventions in Nepalare all part of the Water for Asian Cities(WAsC) Programme that was launched

in 2003 as a collaborative initiativebetween the UN-HABITAT, the ADB andthe governments of Asian countries.

UN-HABITAT initiated the WAC-NepalProgramme in response to a letter ofinterest from the MPPW in November2004 and, in the MoU which followed,UNHABITAT agreed to invest USD500,000per year in the urban WATSAN sectoruntil 2010. The WAsC Nepal programmewas initiated in 2005 with a series ofprojects implemented in partnershipwith various government and non-government agencies aimed at supportinglocal initiatives in water and sanitationimprovement and building local capacity inthis sector.

The strategic and operational frameworkfor UN-HABITATs current operationsin Nepal is presented in the CountrySupport Strategy Water for Asian Cities

Nepal (2008-2012). The programmesupports the implementation of WATSANrelated MDGs and targets in Asian

UN-HABITAT Nepal

Programme and Projects


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cities, specifically promoting pro-poorgovernance, water demand management,increased attention to environmentalsanitation and WATSAN-related incomegeneration for the poor.

The programme seeks to achieve this bymobilizing political will, raising awareness

through advocacy, information andeducation; training and capacity building;by promoting new investments in theurban water and sanitation sector andby systematic monitoring of progresstowards the MDGs. The overriding thrustof WAC is to enhance capacity at national,municipal and community level and tocreate an enabling environment for newflows of investments in the urban waterand sanitation sector.

Log frame of the Country SupportStrategy

According to the Country SupportStrategy of the Water for Asian Citiesin Nepal (2008-2012), the overalldevelopment impact of the interventionsof the support strategy will be that theUrban centres have improved WATSANservices and are on track to achieve MDGgoals and targets. The overall indicatorquantifying the achievement of this impact

is a 5% increase in urban WATSANcoverage towards national and internally-accepted targets differentiated by genderand income (Urban community).

The means of verification will be anannual report; impact assessmentreport and mission reports. The mainassumptions that have to be fulfilledto attain the envisaged impacts are thatGoN and external development partnerscontinue to invest in WATSAN andsufficient investment resources can bemobilised and availed to meet the needsof the poor and the political situation

favours the implementation of plannedWATSAN programmes in urban areas.

Goals and Objectives

According to the Country Support Strategy(CSS), the goal is To ensure equitableaccess to basic water and environmentalsanitation facilities for the urban andperi-urban poor. The actual indicator toverify the attainment of this goal will bethe number of urban poor with access toaffordable and environmentally sustainableWATSAN and related infrastructurecompared to baseline.

More precisely, the purpose of the countrysupport is to help Nepal attain targets10 and 11 of MDG 7 by building thecapacity of the GoNand other key

stakeholders and by facilitating thepractice of community-based WATSANdelivery mechanisms. The effectivenessof the community-based managementapproach in urban areas has to beconsidered an element in a comprehensiveand professional approach to serviceprovision and not a separate strategicintervention. This issue has been furtheraddressed in connection with the impactassessment of the sample projects.

The specific objectives are to: achievepro-poor water and sanitation investmentin selected peri-urban centres and/or smalltowns; enhance institutional and humanresources capacities at local levels forthe sustainability of water and sanitationservices and for participation in servicedelivery; enhance economic developmentin peri-urban centres through improvedwater, sanitation as well as related incomegeneration activities and increase accessto safe, reliable, environmental friendlyand affordable services for sustainabledevelopment and poverty reduction.


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The broad indicators are stated in the LFAmatrix as follows: increase of 100,000

households with access to water andsanitation services differentiated by genderand income; x% increase in investmentflows of the GoN and municipalitiesin WATSAN; ten municipalities adoptpro-poor, gender sensitive WATSANgovernance frameworks and waterbornediseases reduced in the areas supported bythe WAC-Nepal Programme as comparedto the baseline figure.

Response of CSS WAsC-Nepal to WSTF

Strategic Plan

As it appears from the table below, thereis by and large a good match betweenthe envisaged outcomes of the WSTFStrategic Plan (2008-12) and the CountrySupport Strategy WAsC-Nepal (2008-2012). The WSTF pays more explicitattention to the contribution to increasedflow of investments, whereas the WAsCNepal is more explicitly concerned aboutsanitation, urban environment, andengagement of local communities andauthorities. The impact assessment willtake into account the combined outputsof both documents.

The Output A of the WAsC-Nepal is notfully responding to the stated purpose of

building the capacity of the GoN as theabove Outcome A only mentions supportto local authorities. It is, however, assumedthat Outcome A also means strategicpartnership with the Government in termsof training and creation of national WSSpolicies and strategies.

3.1.2 PROJECT PORTFOLIO

The WAsC Nepal Programme started in2005 with initial interventions in urbanand semi-urban poor communities inKathmandu Valley that served as a startingpoint of a fast growing project portfolio.As can be seen from Table 3-1, theWAsC-Nepal Programme now comprises46 projects (actually 48 projects as ofDecember 2009) of which 22 has beencompleted. The table below also indicatesthat the number of new projects peakedin 2007 with 31 new project agreements

presumably due to funding limitation andlimited capacity for management andprocessing of projects.

The selection of projects seems to have

WSTF Strategic Plan (2008-2012) Country Support Strategy WAsC-NEPAL(2008-2012)

1. Increased institutional capacity for implementingpro-poorWSS initiatives and policies withfocus on gender equity, renewable energy andenvironmentalsustainability

2. Increased flow of investment into water andsanitation sector catalysed by WSTF interventions

3. Improved MDG monitoringmechanisms withimproved benchmarking of water and sanitationservice providers

A Institutionalisation of inclusive and genderresponsive pro-poorurban governance in theWAsC Nepal supported local authorities

B More active engagement of communities in themanagement of water and environmentalsanitation at local level with little or withoutexternal support

C Improved WATSAN service delivery mechanism atlocal level

D Improved MDG monitoringand reportingmechanisms

TABLE 3.1Comparison of the Outcomes of WSTF SP and CSS WAsC-Nepal


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been following a pragmatic approachdriven by upcoming project requests andopportunities rather than by strategic

choices. The project portfolio is complexand diverse with numerous challengesbeing addressed.

The Table 3-2 also shows that the totalaccumulated turnover of the WAsCprogramme in Nepal, since 2005, isabout USD 8.7 million of which WSTF hasaccounted for USD 3.8 million matched bya partner contribution of about USD 4.9million. The beneficiaries have providedin-kind contribution that is included in the

partner contribution.

3.1.3 WASC IN THE CONTEXT OFWSS SECTOR INVESTMENTS

The consultants have not been able toaccess a complete overview of the urbanWSS sector investment situation in Nepal,but Table 3-3 gives an indication of thestate of affairs by summarising the majordevelopment projects.

These projects amount to about USD146 million (plus UDLE) which is roughlyUSD 9 million per year. ADB is by far themajor funding agency for urban water andsanitation investments in Nepal with an

accumulated contribution in the order ofUSD113 million in the period 2000-2016.

In the period of 2010 to 2016 the onlysizeable project is the Second Small TownsWater Supply and Sanitation Sector Projectwith a budget of USD 72 million (USD 12million/year) in contrast to the estimatedurban WSS sector annual investmentneeds of USD 46 million as suggestedby MoPPW (Chapter 2.4). Hence, theGoN and its partners are facing a majorchallenge in substantially increasing theinvestment flow to the urban water andsanitation sector.

The WAsC project portfolio from 2005-2009 is amounting to about USD 8.7million (UN-HABITAT + partners, Table3-1) averaging USD 1.7 million annually.The total envisaged WAsC and partnerinvolvement in 2010-2012 (Figure 3-1) isabout USD 7.5 million or USD 2.5 millionper year of which UN-HABITAT/WSTF isproposed to contribute some USD 1.6million. The securing of the necessaryfunding from the WSTF and optimizing

the use of these funds to add significantvalue to the WSS sector investments aremajor challenges facing the UN-HABITATNepal.

Year No. of CAs Completed Contribution (USD) Beneficiaries

(Direct)UN-HABITAT Partner Total

2005 4 4 327,500 210,898 538,398 9,000

2006 7 7 566,400 719,478 1,285,878 37,800

2007 21 11 1,743,332 2,302,747 4,046,079 113,710

2008 11 0 949,724 1,332,773 2,282,497 24,000

2009 3 0 207,000 313,835 520,835 25,200

Total 46 22 3,793,956 4,879,731 8,673,687 209,710

TABLE 3.2Summary of Financial Allocation to UN-HABITAT Nepal 2005-09


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3.1.4 TENTATIVE BUDGET 2010-2013The tentative budget for the WSTF Nepal WAsC Strategy (2008-2012) is USD 12,475,000 withfunding contributions from WAsC (WSTF) of about USD 7,500,000 and an envisaged localcounterpart contribution of USD 5,025,000. The Figure 3-1 shows the expected annual budgetdistribution.

Project Approx. No ofBeneficiaries

Approx. Cost(USD million)

Small Towns Water Supply and Sanitation Sector Project, 2000-2009 (ADB:100%) Completed

21 towns

252,000 people

35.0

Second Small Towns Water Supply and Sanitation Sector Project 2010-2016 (ADB: USD 45.1 million)

20 towns

270,000 people

72.0

The Urban and Environmental Improvement Project (UEIP) (ADB: USD 30million) (2003-10)

9 towns

320,000 people

37.5

The Urban Development through Local Efforts Programme 2003-10)(UDLE) (GTZ)

58 towns (need data)

Kathmandu Valley Water Reforms Programme (ADB: USD2.5 million) (need data) 3.0

TABLE 3.3Key WSS sector investment projects in Nepal (2000-2016)

2000

1800

1600

1400

1200

1000

800

600

400

200

0

1000USD

2008 2009 2010 2011 2012

Year

WAsC

Local

FIGURE 3.1Nepal WAsC Strategy 2008-12 Estimated Annual Budgets and Funding


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3.2 EMERGING ISSUES ANDRECOMMENDATIONS

Since the impact assessment mainlyfocuses on selected sample projects,no overall assessment of countryachievements and impact is made here.Chapter 3-4 presents the project designand achievements of the selected sampleprojects followed by the emerging issues,impact assessment and recommendationsin Chapter 3-5. The following sectionssummarises the main country program andstrategic issues and recommendations.

3.2.1 SECTOR ORGANISATIONGOVERNMENT LEVEL

Since its launching in 2005, the WAsCProgramme in Nepal is actively engaged incapacity building and promotion of WSSpolicy reforms at national level through itscooperation with such as MPPW, NWSC,

KUKL, TDF and MuAN. It has become animportant niche for UN-HABITAT Nepalto help DWSS gaining momentum in itsnew role, through policy developmentassistance and capacity building supportDWSS.

A strong element of UN-HABITATs policyinvolvement in Nepal is its cooperationwith the GoN, including capacity buildingof DWSS. Many stakeholders expectUN-HABITAT to play the leading partner

role with GoN in helping guide thedevelopment of ideas that might work atscale.

The frequent change of ministers andfocal points in the ministries is a matterof concern for the effectiveness of thecooperation with the Government. Forthe next phases of the WAsC programmeUN-HABITAT should give more priorityto strategic influencing activities, withless effort spent on implementing pilot

projects.

3.2.2 SECTOR ORGANISATIONMUNICIPAL ANDCOMMUNITY LEVEL

One important impact of the UN-HABITAT-funded water projects is thelocal institutional capacity building andstakeholder involvement that are crucialfor the success of the large investment

programmes. UN-HABITAT contributesnotably to the creation of appropriatemodels for small town and municipalWSS service management, encompassingeffective community involvement,


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capacity building of service providers(WSUCs) to improve accounting, financialmanagement and consumer relations.

The frequent changes of municipal ChiefExecutive Officers and the absence ofelected representatives in municipalities/local authorities pose a challenge for

the timeliness and sustainability of theprojects. Despite the limited size of theannual budgets of the WAsC Programme,it has considerable impacts on somemajor urban water supply and sanitationprogrammes.

UN-HABITAT should consider shiftingits role from direct involvement indemonstration and pilot projects to usingthe acquired methodologies and lessonslearned as a basis for strategic up-scaling

and advocacy with other actors (NGOsand CBOs) and funding agencies focussingon the financing and implementationof projects on the ground. The 2005-09projects have given a sound idea ofthe price tag of community orientedapproaches, and basically these costsshould be incorporated into the budgetof new capital investment projects. Tomake this happen will need a close andconstructive cooperation between UN-HABITAT and the large funding agencies.

3.2.3 WSS SECTOR COORDINATION

UN-HABITATs emerging involvementin donor coordination is an importantstrategic shift. UN-HABITAT is recognisedfor its active and increasing engagementin sector coordination and SWAp andthe important contribution of individualprojects. As a UN organisation, it is wellplaced to interact with authorities, donors,

NGOs and municipalities. It has taken aleading role in facilitating improved WSSSWAp coordination under the auspicesof the new arrangement and should in

this respect enhance its role as a strategicdevelopment partner.

3-3.4 SECTOR FINANCING

Enhanced cooperation with financialand technical WSS sector partners andincreased flow of investments into the

sector are priority areas of the WSTFStrategic Plan (2008-12) and UN-HABITATNepal. UN-HABITAT should now considerplacing more emphasis on acting as astrategic partner to the Government andspend fewer resources directly on projectimplementation on the ground.

The funding mobilisation issue is implicitlyaddressed in many projects. The budgetof the UN-HABITAT WAsC Programmeis relatively low compared to the overallsupport by other donors to urban waterand sanitation development. UN-HABITATand its associated project partners are ineffect bringing USD 1.7 million per yearinto the Urban WSS sector with a financialneed of about USD 50 million annually.The major current contributor to theUrban WSS sector is the 2ndADB SmallTown Project with about USD 10 millionper year yet there is a significant fundinggap.

The UN-HABITAT projects are achievingvery good value for money in thetargeted communities, but the WAsCas such does not have the necessaryeconomic robustness to fund effectiveup-scaling. UN-HABITAT should thereforeengage more directly with the majorurban investment partners to enablethem to include UN-HABITATs ideas andapproaches into large scale investments.This should also include vitalising the

MoU with ADB at country level as wellas seeking cooperation with other sectorpartners, such as KfW, JICA, and others.


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3.2.5 SECTOR MONITORING ANDINFORMATION SYSTEMS

UN-HABITAT Nepal is increasingly involvedin improving relevance and coordination ofWSS sector monitoring in agreement with

the focal objective of WSTF concerningInformation, Knowledge and MDGMonitoring. It is recommended that thisactivity should be further upgraded as partof an adjusted UN-HABITAT strategy inNepal.

3.2.6 STRATEGIC ADJUSTMENTSOF THE WASC

The first four years of WAsC operationhas used a project approach rather than aprogrammatic approach. Such jump-startapproach has been useful for getting

the programme quickly up and running,demonstrating results on the ground,gaining field experience. It is suggestedthat greater weight should now be givento its role as a strategic influencer andsource of expert knowledge, rather thanan implementer of service improvements.UN-HABITATs involvement in joint MDG

monitoring efforts and WSS SectorCoordination are focal entry points in thisrespect.

However, such strategic adjustmentswill also have bearings on the size andexpertise of the UN-HABITAT Nepal(in-house and associated resource base)and the budgetary allocations. It will forinstance require experience in financialmatters, policy and strategy development,I&K, and strategic municipal service

management.

3.2.7 UN-HABITAT NEPALOPERATIONAL ISSUES

With the programme budget ofUN-HABITAT Nepal limited to about EUR 5million it is clearly achieving extraordinarilygood value for money. The agency hasmade considerable achievements withlimited financial and staff resources

and developed a project portfolio of48 projects since 2006 by using itscomparative advantage to move fast.

Project Documents. The consultantsnoted that the project documents in theCAs vary a lot in structure and quality andthere is inadequate reporting on progressand achievements compared to thereporting requirements stated in the CAs.What should be considered is improvingproject documents by using a standard

format and list of contents and includinga log frame with checkable achievementand impact indicators.


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Result Monitoring and Reporting.Effective and strategic reporting ofproject achievements and impacts to theinternational funding agencies that arefinancing the WSTF is crucial. UN-HABITATNepal should be commended for its highquality presentation documents andaudio-visual presentations.

However, more attention should be paidto the monitoring and reporting of theperformance and achievements of theWAsC projects including their collectiveachievements reflecting the overallsignificance of UN-HABITAT Nepal.

The basis for integrated result monitoringhas already been conceptualised in theLFA-RBM of the Country Support Strategyincluding a provisional budget as aframework for Annual Plans. Introductionof periodic result and impact monitoring(in cooperation with HQ) is an importantinstrument to keep the WSTF donorsinformed about the achievements andimpacts of the investments with the viewto ensure a stable funding base. Specialattention needs to be paid to how theachievements shall be effectively replicatedat scale, and how UN-HABITAT willmake this happen, including concertedefforts with key partners and associated

commitments and recourse requirements

Cooperation with ADB. The consultantsobserved that the cooperation with theADB is rather sporadic and should beformalised through a MoU with ADBat country level, as has been done inLao PDR. The ADB funded projects arebenefiting substantially from UN-HABITATsassociated post construction supportprojects as demonstrated in Chapter 3. It isimportant that UN-HABITAT be recognised

for its contributions to the functioning ofthe 1stand design of the 2ndsmall townproject and the UEIP contributions.

Project Cycle Management.The UN-HABITAT has developed a lean projectcycle management arrangement, andproject processing time is low despitethe large number of projects, the limitedstaff (six staff, three out of whom areinvolved in project task management) andthe environment in Nepal. The project

identification and approval approachis based on a logical and well-definedprocedure.

Several projects are, however, experiencingimplementation delays from six monthsto two years compared to the plannedschedules. The delays may be attributedto political and governance issues whenit comes to governmental or municipalpartners, whereas other delays have beencaused by internal project preparation,

approval, and disbursement procedures.UN-HABITAT funds are managed fromthe HQ in Nairobi and disbursement isconsidered slow, especially seconnd andthird payment releases due to requiredreporting and fulfilment of CA conditionsfor UN-HABITAT HQ approval, so possiblestreamlining options should be lookedinto.

This process will normally involve theparticipatory preparation of a Project

Document (PD) and/or Project AppraisalReport (PAR) comprising a LFA matrixthat specifies goals, objectives, activities,outputs, verifiable indicators, means ofverification and assumptions/risks. TheLFA will serve as an important basis forthe assessment of project achievementsand impacts versus the planned ones.It is recommended that UN-HABITATconsiders adjusting its project planning,reviewing and approval procedures,including the format of the CA, to asystem of project design documents thatwill enable systematic reviews and impactassessments.


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WAsC Programme coordination andcommunication.The Joint Secretary ofMPPW, raised the issue of the ministrysrole in the implementation of the WAsCand alignment with governmentspolicies to enhance GoNs ownership andsynergies. The MPPW is a member ofWAsC Steering Committee and is, through

the meetings of the Committee, briefedby the Habitat Programme Manager onthe activities of the Urban DevelopmentProgramme (UNDP). A meeting chaired bythe Secretary of the MPPW is held everythree months. All the programmes andprojects of the WAC-Nepal Programmemust first be endorsed by the SteeringCommittee.

3.3OVERVIEW OF SAMPLEPROJECTS, OUTCOMECATEGORIES, ANDAPPROACH

3.3.1 OUTCOME CATEGORIES

The Nepal impact assessment is based ona large selection of Sample Projects thatare partly overlapping and complementary

in terms of objectives and contents. Theconsultants have considered whetherit would be possible to structure theprojects according to the four Output

Categories (Table 3-2) but came to theconclusion to first present and analyseeach project separately and then do theassessment of the cross-cutting issuesunder the Summary of Findings andRecommendations Chapter.

3.3.2 SAMPLE PROJECTSSome 16 Sample Projects (SPs) wereselected by UN-HABITAT Nepal incooperation with the consultants. Animportant criterion for this selection is thatthe projects should collectively representa cross section of WAsCs interventions inNepal. Annex 2 provides an overview ofthe 16 SPs. As shown in Table 3-4, theseSPs account for about 53% of the totalproject portfolio (2005-2009) and financial

contribution ratio between UN-HABITATand the partners is also in the same orderfor the SPs.

3.3.3 IMPLEMENTING PARTNERS

The UN-HABITATs implementationpartners, such as signatories to theCooperation Agreements (CAs) of thesample projects, include:

Department of Urban Development

and Building Construction (DUBDC)

Ministry of Physical Planning andPublic Works (MPPW)

No UN-H Partner Total % of Total

Sample Projects 16 1,893,890 2,664,817 4,558,707 53

% 42 58 100

Total 46 3,793,956 4,879,731 8,673,687 100

% 44 56 100

TABLE 3.4Key data for Sample Projects compared to the Project Portfolio


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Department of Water Supply andSewerage (DWSS)

Municipal Association of Nepal(MuAN)

Town Development Fund (TDF)

NGOs and INGOs: Water Aid Nepal

(WAN), Environment and Public HealthOrganisation (ENPHO), Urban andEnvironment Management Society(UEMS), Practical Action Nepal (PAN),NGO Forum for Water and Sanitation(NGOFUWS), and Lumanti SupportGroup for Shelter, Fresh ActionNetwork (FAN)-South Asia

Municipalities (Dhulikhel, Siddispur,Chyasal, Khiktana and Hetauda)

Some projects are also informally linkedto the ADB supported investment projectsto incorporate supplementary activitiesadding value to these projects.

3.3.4 IDENTIFIED ISSUES,ACHIEVEMENTS ANDIMPACTS

An individual assessment of each ofthe 16 SPs has been made, through a

combination of report reviews, meetingswith key partners and stakeholders,supplemented by field visits to someselected projects. Key information,observations and impact considerationhave been summarised in Sample ProjectBriefs that are gathered in a separateinternal working document.

The impact considerations area combination of UN-HABITATspublications, evaluation report forcompleted projects and the consultantsown observations. The project briefs are

meant to provide food for thoughts forthe impact assessment and not necessarilyconsistently organised and edited. Thefollowing sections will provide a summaryof the contents and findings of eachsample project.

3.4 DESIGN,ACHIEVEMENTS ANDISSUES OF EACHSAMPLE PROJECT

SP1Pro-poor Urban Governancethrough Poverty Mapping and GenderAssessment in Selected Municipalitiesand Enforcement of UrbanEnvironmental Guidelines

Design. The project is implemented by theDepartment of Urban Development andBuilding Construction (DUDBC), which isexecuting the ADB supported UEIP in eightmunicipalities. The purpose of this UN-HABITAT project is to prepare municipallevel basic information systems of urbanpoor through poverty mapping, genderassessment and identifying the needs ofthe poor of the selected municipalitiesand small towns under UEIP and otherprojects.

Achievements. The project outputsare significant as they add value interms of including the needs of thepoor in WSS development planningand implementation of direct WSSinvestments, contributing to achievementof MDGs for 270,000 people (ultimately320,00 people) under the UEIP at a projectcost equivalent to USD 1.6 per beneficiary.


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Issues and Recommendations. The aGIS-based tool and experience gainedfrom this project will also have wideranging impact on poor and genderassessment by replication in othermunicipalities and the implementationof urban environmental guideline andpromotion of rainwater harvesting

through legal framework policy. Theproject is also interacting with SP2, SP4,SP11and SP16.

UN-HABITAT should consider supportingthe replication efforts and continueassessing the impacts of this urban povertyand gender mapping system on theimprovement of the WSS services for thepoor. This activity should be linked to UN-HABITATs increased involvement in MDGmonitoring at national level.

SP2:Community Based SanitationImprovement in Urban PoorCommunities in Hetauda Municipality

Design: The Project is implemented byENPHO in cooperation with HetaudaMunicipality and local communities. Theproject involved a broad range of activitiescomprising:

Capacity building of the municipalityand local CBOs in WATSAN planning

and interventions

Sanitation improvement

Revolving fund for total sanitation

Local water source improvement andmanagement

Capacitate HM for municipal ownedwater supply management

Achievements: The project has

contributed to the performance of theADB-supported UEIP in addressing issuesrelated to community-based sanitationservices and poverty reduction.

FIGURE 3.2Pour-flush Toilet and HM Rai Tole Community CEO Meeting


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It contributed to the efforts in meetingthe MDG target by extending coverageto previously un-served households andpromoting pro-poor sanitation governancefor 5,550 people at a project cost equalto USD 29 per beneficiary in addition toimproved school sanitation.

The project has in many ways enrichedthe approaches of the UESP and similarprojects by demonstrating the conceptsof Community- and School-Led TotalSanitation (CLTS) and (TSLTS), and bymobilising communities to declare OpenDefecation (OD) free areas. Engagingstudents as agents of hygiene behaviouralchange, it demonstrated the successof using schools as an entry point. Byproviding micro-credit and womenssavings and credit groups the project was

able to increase the extent of householdbased toilet construction and incomegenerating activities mainly benefitingwomen.

The project addressed Solid WasteManagement (SWM), Rain WaterHarvesting (RWH), and road anddrainage improvements. The projecthas also enhanced the awareness of theEnvironmental Sanitation Section (ESS)of the DWSS (Outcome category A). Italso had conceptual links to i.a. SP1, SP7,SP11, SP13, SP14,and SP16.

Issues and Recommendations: Theproject seems to go beyond the sanitationfocus reflected in the project title. Likevarious other sample projects it has a veryhigh complexity and diversity that makesit quite demanding in terms of optimisingthe use of human and capital resources.

For future up-scaling, it is needed toprioritise and focus the interventionsmore candidly having in mind the limitedfinancial resources and the large numbermunicipalities in need of support. It isalso important to assure that the projectoutcomes will be internalised so that thecommunity will be able to continue similar

pro-poor interventions with their ownresources.

SP3:Demonstration of Water BottlingSystem for Urban Poor Communitiesin Kathmandu Valley

Design: The project is implemented by theUrban Environment Management Society(UEMS). It has successfully demonstratedlocal water bottling and distribution asa viable alternative of providing safedrinking water to the urban poor.

Achievements: The pilot suppliesaffordable water (USD 0.05 per 20 litres)to some 4,000 people at a project costequivalent to USD 5 per beneficiary,which is considered quite reasonable. Ithas reportedly improved personal hygieneand helped reduce the incidence ofwaterborne diseases such as diarrhoea,

jaundice, and typhoid but no data is

available to quantify these impacts.

The concept has a noteworthy replicationpotential to benefit other poorcommunities. The Low Income ConsumersUnit (LICU) of KUKL and UNDP/PPPUE haveexpressed their interest to collaborate withUN-HABITAT to spread this concept.

Issues and Recommendations: Thefinancial sustainability of this undertakingthrough cost-recovery needs to be furthermonitored.


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SP4:Capacity Building, Dissemination,Demonstration and Promotion of

Rainwater Harvesting (RWH) inKathmandu and Selected Towns inNepal

Design: The project is managed bythe NGO Forum for Urban Water andSanitation (NGOFUWS) and paves the wayfor systematic use of rainwater to mitigateurban water scarcity. RWH has beenpromoted by establishing demonstrationsites and conducting awareness-raising

and capacity-building activities.

Achievements: As a result of massivestaff training campaigning anddemonstration activities in DUDBC, DWSSand in nine municipalities, GoN hasdecided to make installation of the RWHsystem mandatory in all new governmentbuildings and a RWH policy paper isdrafted (SP1). The RWH efforts havealso received international recognition.The project adds incremental value tothe achievement of water supply MDGsunder the UESP and in other investmentprogrammes (ADB, KfW etc.).

Issues and Recommendations: Oneissue that has to be further elaboratedand clarified is the pro-poor effects ofRWH and the technological options andapproaches that will ensure pro-poorbenefits. The pro-poor rationale is relatedto water management by collection ofrainwater so that all traditional water

sources can be revived in order to providethe urban poor with access to drinkingwater from sources such as dug wells,stone spouts and so on. In this respect,the project has resolved a variety ofwater-related challenges in the targetedcommunity thus benefiting the poor andadding another case to the collectiveknowledge base of good practices.

SP5:Initiative for StrengtheningNetworking and Advocacy Capacities

of Civil Society Organizations (CSOs)in South Asia Working TowardsAchieving the Rights to Water andSanitation

Design: The project is also implementedby NGOFUWS in cooperation withFreshwater Action Network (FAN)-SouthAsia. The project is relevant for the urbanwater and sanitation sector developmentprojects in Nepal by increased attention

to the need for building the capacities ofCSOs in WSS development. The projectcomprises various activities such asworkshops, orientation of FAN champions,national and regional FAN-SA meetingsand so on.

Achievements: It is not straightforwardto identify tangible impacts of such aproject. Nevertheless, it will have someinfluence on the abilities of CSOs toinfluence on decision makers in the viewto add value to the achievement of theWSS MDGs.

FIGURE 3.3Water Treatment andBottling system in Chyasal, LalitpurMunicipality


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SP6:Integrated Approach to ImproveWater and Sanitation System andIncrease Agricultural Productivity inSelected Communities in Khokhana,Lalitpur

Design: The project is implemented byLUMANTI Support Group for Shelter in

cooperation with the Community LearningCenter. The impact of the project liesin the demonstration of decentralizedand integrated peri-urban waste andwastewater management by meeting theneeds for more water by rehabilitatingtraditional water sources and ensuring asupply of irrigation water.

Achievements: The project has addressedKhokanas pressing need for more water

by rehabilitating traditional water sourcesand ensuring a supply of irrigation water.It includes essential structural investmentssewer pipes from latrines connected toa bio gas digester, while grey water istreated through Reed Bed TreatmentSystem (see SP14.).

The actual impacts on achievement ofMDGs of the project is improved WSS forsome 2,000 people at a project cost of

about 35 USD per beneficiary. The projecthas also led to increased agriculturalproductivity and production by therenovation of the traditional irrigationcanal in Khokana that were blocked andbroken some 20 years ago.

Issues and Recommendations: Theproject was targeted for integratedWRM and best utilisation of rainwater sothat all traditional water sources can be

revived so that the poor will have accessto drinking water from sources like dugwells, stone spouts and so on. In this

respect, the project has resolved a varietyof water related challenges in the projectcommunity thus benefiting the poor andadding another case to the collectiveexperience base.

SP7:Demonstration of LocalizingMillennium Development Goal (MDG)

on Water & Sanitation throughCapacity Building of MuAN andKalaiya Municipality (KM)

Design: The project is executed byMunicipal Association of Nepal MuANin association with Kalaiya Municipality.MuAN, an umbrella organization of allmunicipalities of Nepal, is instrumental toadvocacy and lobbying at nation level forpolicy reforms and strategies to up-scalethe provision of WSS services to the poormunicipal dwellers.

FIGURE 3.4Biogas Connection andImproved Traditional Well Khokhana,Lalitpur


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Achievements: It has been launchinga campaign on localizing MDGs inmunicipalities of Nepal involvingpartnership with member municipalities,central government agencies, donors, andother stakeholders. Kalaiya Municipalityhas been selected as a model site forimplementing MuANs Poverty Reduction

Strategy by sharing lessons learned amongthe municipalities and partners.

The demonstration project hasstrengthened the capacity and capabilityof MuAN and the pilot municipality. About5,280 people are directly benefiting fromimproved sanitation and hygiene at a costin the order of USD 31 per beneficiary,which also includes the training of MuANstaff. The project is related to the UN-

HABITAT projects SP2, SP9, SP10, SP13,and SP16, the ADB Small Towns Project.

Issues and Recommendations: The mainimpact of this project should howeverbe found at the strategic level by itsenhancement of the capacity of MuANand the Urban Resource Centre to enableother municipalities in localizing MDGsand Poverty Reduction Strategy. In thisrespect, it is recommended to furtherexamine the up-scaling effects of theoutcomes of the project and if necessaryprovide the necessary support to enableMuAN-URC transferring the knowledgeinto practice.

SP8:Strengthening Water, Sanitationand Hygiene Treasuring Health(SWASHTHA)

Design: The project is implemented byPractical Action Nepal (PAN) in cooperation

with ENPHO, MuAN, and targetedmunicipalities and communities. It aims tosupport the GoNs initiatives on YoS-2008on its commitment to help achieve MDGs,

by developing participatory water andsanitation Master Plans for the clustersof municipalities and small towns. Theproject includes education and awarenessbuilding and pilot demonstration projects.

Achievements: The project has reportedlydrastically reduced occurrence of

waterborne diseases (diarrhoea, typhoid,jaundice, worms) and scabies amongthe targeted poor households, thanks tobetter quality water being supplied to theHHs. The projects actual contribution tothe achievement of MDGs is improvedsanitation and hygiene practices for50,000 people, at a project cost equivalentto USD 9 per beneficiary. It is related toi.a. SP2, SP7, SP9, SP10, SP13, and SP16.It is closely integrated with the ADB UEIP

and the Small Town Water Supply andSanitation Project.

Issues and Recommendations: Theproject has effectively delivered theintended outputs in the pilot communities,thus added more value to the commonurban WSS knowledge and experiencebase. More attention needs to be paidto the strategic and efficient use of theknowledge base in the future.

SP9:Water, Environmental Sanitationand Hygiene Programme for UrbanPoor

Design: The project is managed byWAN in cooperation with LUMANTI,and CIUD. It demonstrated urban water,environmental sanitation and hygienefor the urban poor including an effectivemodel of partnership for fast tracking suchprojects. WSS services to the urban poor

communities were not adequately coveredby the UEIP, so one of the project purposeswas to strengthen its pro-poor orientationand provide a valuable basis for replicationin other towns.


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Achievements: The project has involvedcapacity building of WAN and otherNGOs. The projects actual achievement isimproved water supply for 9,025 people

and improved sanitation for 12,000people. Assuming there are 19,025beneficiaries, the WSS improvement costis ab