Sindh to receive $200m loan from WB to improve Karachi’s municipal infrastructure

ISLAMABAD: A request had been submitted to the World Bank by the Sindh government for a loan of $200 million in order to enhance the institutional performance and management capacity of the Karachi Metropolitan Corporation (KMC) and District Municipal Corporations (DMCs).

According to a local media report, it is to improve the provision of municipal infrastructure in Karachi. Furthermore, it was reported that the WB agreed to sanction the loan and the process had begun.

The project will totally be financed by the International Development Association (IDA), an affiliate of the World Bank group.

The city needs an estimated investment of $9 to $10 billion over the coming years to close the infrastructure and revenue gap, yet infrastructure spending is well below these requirements.

The poor level of urban infrastructure and basic service provision in the city reflects two underpinning challenges.

Moreover, the local governments are financially weak with a high dependence on fiscal transfers from the Sindh government and have limited authority over major sources of own-source revenue such as property taxes.

Under the project, the World Bank will provide technical assistance for devolution of urban immovable property tax to the DMCs.

Thus, the project will address the weak municipal management capacity and limited financial resources for capital expenditure. Moreover, it will focus on strengthening the financial capacity of the KMC and six DMCs to maintain the infrastructure.

Karachi is also one of the least liveable cities in the world. The city ranks 134 out of 140 in the 2017 Global Liveability Index. Karachi’s urban planning, management and services have been unable to keep up with the growing population in the city. Moreover, as of now, 55pc of water requirements are met; less than 60pc of the population has access to public sewerage and 60pc of solid waste never reaches a dump site. Karachi’s high risk to climate disasters, particularly recurrent floods, adds to these challenges that are to be addressed.