How JNNURM altered the Governance Ecosystem of Bhubaneshwar

By Amita Bhide

As a state with low proportion of urbanization, Odisha was not a major beneficiary of the Jawaharlal Nehru Urban Renewal Mission (JNNURM) funding. Only Rs. 759.20 crore  (1.14 per cent of the total central government allocation) was assigned to it, of which only Rs. 479.36 crore (63 per cent of the allocation) was actually released (CAG, 2013). Furthermore, though the JNNURM project was launched in 2005, it was not till 2007-08 that it impinged visibly on the urban governance and development trajectory of Odisha. This blog post is an excerpt from a larger city-level research titled ‘Governance and Infrastructure Transformations in Bhubaneswar via the JNNURM ’ that  focuses on comprehending the change that JNNURM has brought about in the governance ecosystem of Bhubaneswar by taking into account the perspectives of multiple actors who are affected by these shifts. It questions whether JNNURM has been able to impact the integrated sewerage system of the city in a manner that it is beneficial to all sectors. The research was a part of a larger ICSSR-funded project called ‘Impact of Infrastructure and Governance Transformations of JNNURM in Small, Medium & Large Cities’. All studies related to the project can be downloaded from our open source website.

Bhubaneswar has no centralized underground sewerage system as the state had limited financial capacities in relation to the requirements of this largest and fast-growing city.  Only the central part of the city, ‘Koeningsber’s Bhubaneswar’ built in a curved grid before the 1980s (called Units 1 to 9), and the first mass-housing projects developed by the Housing Board and the BDA in Chandrasekharpur in the north (in 1984-86) are covered with a sewage collection network. Most of these lines have been executed in a piece meal manner, and the sewage is discharged into ten open (natural) storm water drains. This leads to backing up, overflow and stagnation of sewage in the road side ditches and pits and contaminates the ground water. The open ditches and drains are also excellent breeding spots for flies, mosquito and weeds. With growth in population, these systems have become public health hazards.

The rapidly transforming skyline of Bhubaneshwar. Source: Wikipedia Commons, By Sailesh Patnaik

The current governance and development set-up for sewerage service in the state has evolved over time. Till 1958, the Public Works Organization under the administrative control of the Works Department, Odisha and headed by a Chief Engineer, was responsible for the construction and maintenance of water supply, drainage and sewerage facilities in the state, as also roads, buildings, irrigation and flood control structures. With increased need for Public Health Engineering (PHE) works in the state, the state government appointed a Chief Engineer, Public Health in July 1958. Two years later it created a permanent PHE wing in the Public Works Department (PWD) Public Health Engineer Organisation (PHEO) for planning, design, execution, implementation and maintenance of water supply and sewerage schemes, after the National Water Supply and Sanitation Committee recommended independent Public Health Engineering Departments in every state. Ten years later (June 1970), the PHEO was transferred from the Public Works Department to the Urban Development Department; subsequently, the Odisha Water Supply and Sewerage Board (OWSSB) was constituted under the same department to plan, design and execute water supply and sewerage systems (WS&SS), and hand them over to the PHEO for operation, maintenance and service delivery. This pattern continues today.

The PHEO provides Water Supply and Sewerage (WS&S ) services and undertakes activities, including planning, operation, maintenance, management, monitoring and quality control of WS&S as well as construction of minor capital works for WS&S in all urban areas of Odisha, including Bhubaneswar city. In addition, PHEO carries out “deposit works” for ULBs, new suburban colonies, etc., and maintains all state-owned buildings and staff quarters, including important buildings such as Raj Bhavan (the Governor’s Residence), the State Assembly and Secretariat, etc. The Orissa Water Supply and Sewerage Board (OWSSB) executes major water supply and sewerage augmentation projects and hands over the completed projects to PHEO for operation and maintenance (O&M).

The fund requirements of OWSSB for preparation of DPRs and execution of projects are generally met from the budgetary allocation of Government of Odisha, grants of GoI (JNNURM, National River Conservation Directorate), and funding (loan) from multilateral funding agencies/financial institutions, like Housing and Urban Development Corporation Limited and Japan International Cooperation Agency, etc. It has no independent source of income to meet its administrative and other expenses. These expenses are generally borne out of the contingency of the projects, expressed in terms of a percentage of the total project cost.

Reforms in Urban Water Supply and Sewerage Services were among the time-bound reform initiatives committed by the state government to the GoI, to access central funds under the JNNURM. The water supply function currently handled by the PHEO was to be transferred to the state’s local bodies by 2009-10. Government of Odisha took the decision to transfer the assets and liabilities to the Bhubaneshwar Municipal Corporation (BMC), corporatize the PHEO by setting up a state-owned Water Utility Corporation, and provide WS&S services through a performance-based management contract (PMC) with the ULBs which opt for such an arrangement. On a pilot basis, the GoO has decided to implement the corporatization arrangement in Bhubaneswar Municipal Corporation (BMC). Accordingly, the GoO has accorded in-principle approval to create the Orissa Water Corporation (WATCO) under the provisions of the Companies Act, 1956. Hence, the WATCO would provide WS&S services to the citizens of Bhubaneswar city, under a performance-based management contract (PMC) with BMC. Various options were discussed with the concerned stakeholders, including PHEO and BMC to implement this and address the issues of service conditions of government employees due to their deputation to WATCO.

In Bhubaneswar, as elsewhere, the OWSSB is responsible for development of an integrated sewerage system, including networks and treatment plants. The Integrated Sewerage System for Bhubaneswar City is not a newly conceptualized project but has been envisaged by the GoO as part of its Vision 2020. The Vision 2020 of the Odisha Water Supply & Sewerage Board is to cover all municipal areas in Odisha with sewerage or low cost sanitation systems, in a phased manner.

It is estimated that these projects would require around Rs. 2727 crores at present rates. External funding is being contemplated, in addition to the state’s own resources. These works are funded under the JNNURM (Bhubaneswar and Puri), the National River Conservation Program (NRCP) and by the Japan International Cooperation Agency (JICA). A project is also under implementation at Talcher under NRCP.

Development of an “Integrated Sewerage System for Bhubaneswar City” (ISS) was proposed under the JNNURM in 2006, and following approval, the Orissa Water Supply and Sewerage Board is implementing the project, with a sanctioned amount of Rs. 49891.35 lakhs.

In the ISS design, Bhubaneswar city has been divided into six sewerage districts for implementation so that the total work could be projectized in parts and separate sources of funding could be accessed for various areas. Out of the 6, only districts III, IV and V are being implemented under JNNURM; districts I and II are being taken up with the 12th finance commission funds and district VI is being implemented with support from JICA. In 2006, IIT Roorkee was awarded the assignment of preparing the DPR for the project. The Project was approved by the CSMC in February 2007, and the project review was conducted in July 2010.

The ISS project has been hamstrung by a number of administrative and implementation problems. Delay in DPR submission by IIT Roorkee (the Consultants) and approval from the GoI initially delayed the funds from the Centre. Of the three districts funded by JNNURM, work has commenced only in district III. Tendering for districts IV and V has been delayed due to legal issues in the earlier bidding process—a disqualified bidder has put a hold on the bidding process by securing a stay order from the Court—and it has now been started afresh. Tendering for district III has been completed and the work of topographic survey, design of the sewerage system and laying of sewer lines has been awarded to East Coast Construction and Industries Limited (ECCI), Chennai; and M/s. Meinhardt Singapore Pvt. Ltd. has been appointed as the Project Management Consultant. The contract with M/s. Meinhardt Singapore ended in 2013 and since then the OWSSB has been managing the project. No implementation action has been taken in respect of the Pumping Stations and STPs.

Staff in OWSSB (and some officers too) feel that the work of the PMC is not being properly monitored by the Board and the Consultants are therefore not keeping the process to schedule. Nor has any revised scheduling or planning done to overcome the delay which has already happened in the project. Mistakes in construction are apparently rampant as the contractors are not systematically performing the necessary quality checks during the execution of the project.

OWSSB is currently responsible for execution and management of the sewerage system work in district III, though a separate institutional mechanism was envisaged in the plan – a Project Implementation Unit (PIU) in the DH&UD, to implement the Sewerage Project. It was to be headed by an IAS officer, assisted by a team of technical and accounts personnel. This PIU had been expected to serve as a nodal agency for projects under JNNURM, other programmes of the Government of India and externally funded projects. It was to be responsible for the procurement of different components of the project, evaluation and award of contracts, fund/cash flow planning and management, and interaction with the project preparation and Design Cell. A Project Monitoring and Reform Cell (PMRC) was also to function independently under DH&UD to co-ordinate/liaison with the other related state departments, Ministry of Urban Development, government of India and consultants. Administrative expenses of these cells were earmarked in the DPR.

As the PIU-PMRC structure was not instituted, the BMC does not have any role or reach at present – the implementation process remains the same as for non-JNNURM projects before. The current set up is shown alongside. Though the Government of Odisha has already approved the reform memorandum by which BMC will be responsible for O&M of the Integrated Sewerage System, and all the PHEO staff (in Bhubaneswar) will be transferred to BMC for this purpose, it has not been operationalized. The BMC on its part, appears unconcerned, even relieved, as there is no experience and inadequate capabilities for this task; and the lack of operationalization of the reform is also taken to be a “normal” situation. Also, in the reform spirit of encouraging PPP in the O&M of public utilities, the GoO had indicated that sewage treatment plants (STPs) would be maintained by private organizations with annual O&M contracts; but this is not applicable as STPs are not completed.

The case of the Integrated Sewage Project is an interesting case for studying changes in the governance ecosystem. For one, the machinery for this sector was long since instituted in the state and has been evolving. Secondly, the project was conceptualized way before the JNNURM and some parts of the project were already being funded through the JICA and other agencies. Third, reforms linked to the sector, including the creation of a corporatized body (WATCO), which would sign a performance contract with the BMC and the handing over of these functions to the ULBs was also being conceptualized in parallel. The change that the JNNURM sought to bring in was the creation of PMUs and PIUs which would also involve the BMC. It is the inability to form a PMU or a PIU that has seriously affected the advancing of the project. The CAG appraisal (2013) observes that there are a number of vacancies in the PMU in Odisha and the PIU was not even formed. Thus, the BMC was only peripherally involved. According to one of the councilors, BMC only acted as a nodal agency for approving the project while having nothing to do with its implementation. Its small involvement in implementation came only when land owned by the BMC was involved. Fourth, significant dimension of the emerging governance ecosystem is the role of consultants. Consultants were not just expected to fill in major capacity gaps but also push the project at multiple levels. Yet, critical gaps remain and the principal of these is the ability to negotiate a project across different groups of stakeholders. This is what seems to have fallen through in the case of ISS. The DPR for the project did not even look into land acquisition which is a major issue that has affected the project. Even the little extent of execution has already caused a threat to the vendors who operate along the streets. In these evictions, there is no evidence of the operationalisation of the street vendor policy. Given that a lot of poorer settlements in the city are located along drains and nullahs that are ‘less value’ land in this planned city, the sewage plan, if executed completely may further relegate slums to the periphery of the city.

This sector demonstrates the difficulty of attributing any governance transformations to the JNNURM. Hardly anything seems to have changed. On the other hand, the notional addition of BMC to the set-up of sewerage may introduce new dynamics in the future. This sector reiterates the almost deterministic approach to keep away politics from decision-making and reinforce the role of the ‘technocratic expert’. It also exposes the weakness of this model in governing the city. The dimension of public private partnerships in finances, user charges have not entered the picture nor have the more citizen centric reforms such as public disclosure or community participation law which remain paper exercises in Bhubaneswar.


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