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Satyanaranya (2003) notes that the Government of Karnataka is currently working on development of urban water policy and a pooled finance framework for 8 cities in Bangalore metropolitan There are certain lessons that can be learnt from the sewerage and sanitation sector development through various projects in the past:

There is a lack of co-ordination between BWSSB and other institutions as a result of which storm drainage and sewage cannot be managed in a comprehensive manner.

Administration and co-ordination shortcomings have resulted in investments in additional capital works for water supply ignoring complimentary investments needed for sewerage systems, sewage treatment plants (STPs) and recycling.

The absence of a comprehensive master plan of the city resulted in sectional development of Bangalore and non-integration of sewerage with other developmental schemes.

There is a need to link or ratify the master plan as a component of comprehensive development plan. Even though in the present scenario, the Bangalore Development Authority (BDA) is responsible for the City Master Plan, the BDA should be under the overall control of the city and its elected body.

Water supply, waste water treatment and sanitation need to be dealt with in a more integrated way, involving more actors and private capital.

Financial management system reform

Decentralisation requires more local revenues. However, the need for financial reform at the municipal level should be mentioned if municipalities want to qualify for loans to finance their infrastructure. Decentralisation is the trend (Van Dijk, 2000a), but the financial means also need to be available at lower levels of government to carry out the tasks assigned to them are often lacking. A solid and sound financial management system should comprise an improved municipal accounting system, but also a better budgeting system and budgetary control, improved internal control systems, internal audit systems and modern data processing facilities. A number of reforms at the municipal level are necessary to qualify for support in the framework of an urban infrastructure project in Andhra Pradesh (Van Dijk, 2000a and Box 1).

Box 1 Reforms at the municipal level

a. Improved financial systems, such as the budgeting and accounting system. In particular the introduction of double accounting (going from cash based to an accrual-based system) and of cost centers at the municipal level.

b. Improvement of the planning capacity at the municipal level, resulting in the preparation of a Municipal Action Plan for Poverty alleviation. The population needs to be consulted and involved in the formulation and execution stage of the project (participatory planning and execution).

c. Improvement of the project preparation and appraisal capacity at the municipal level.

d. Reform the municipal finance system to generate suitable indicators allowing a comparative assessment of the financial capabilities of the municipality.

e. Setting up a monitoring and evaluation system, which generates information on the extent to which the activities undertaken are actually benefiting the urban poor.

f. Improved personnel management and human resource development to achieve human

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