Document of

The World Bank = e

FOR OFFICIAL USE ONLY

Report No. 3584-PAK

STAFF APPRAISAL REPORT

PAKISTAN

LAHORE URBAN DEVELOPMENT PROJECT

March 25, 1983

Urban and Water Supply DivisionSouth Asia Projects Department

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Currency Unit = Rupee (Rs)Rs 1 = US$ 0.077US$1 = Rs 13.0

MEASURES AND EQUIVALENTS

1 meter (m) = 39.37 inches or 3.28 feet1 kilometer (km) = 0.62 miles1 hectare (ha) = 2.47 acres or 10,000 square meters1 liter (I) = 1.06 quarts liquid or 0.26 gallons1 marla = 20.9 square meters or 225 square feet1 kanal = 418 square meters or 20 marlas

PRINCIPAL ABBREVIATIONS AND ACRONYMS

ADP Annual Development ProgramARV = Annual Rental ValueGOP Government of PakistanGOPUN = Government of PunjabHBFC = House Building Finance CorporationLDA = Lahore Development AuthorityLMA Lahore Metropolitan AreaLMC = Lahore Municipal. CorporationUNESCO = United Nations Educational Scientific and

Cultural OrganizationWAPDA Water and Power Development AuthorityWASA = Water and Sanitation Agency

FISCAL YEAR

July 1 - June 30

FOR OFFICIAL USE ONLYPAKISTAN

LAHORE URBAN DEVELOPMENT PROJECT

STAFF APPRAISAL REPORT

Table of Contents

Page No.

I. BACKGROUND .......... 1.................................... A. Urban Development in Pakistan ................... .... 1 B. The City of Lahore ...... ............................ 2C. Administration and Finance ..... ..................... 3D. Urban Conditions and Policies ...................... 4E. The Bank's Role in Urban Development ... ............. 9F. New Responses to Urban Needs ..... ................... 10

II. THE PROJECT ............................................. 10A. Objectives ....... ................................... 10B. Main Features ....................................... 11C. Detailed Description ..... ......................... 13

III. PROJECT COSTS, EXECUTION AND FINANCING .. ................ 22A. Cost Estimates ...................................... 22B. Execution ........................................... 23C. Financing ................................................ 23D. Procurement and Disbursement ........................ 26E. Accounts and Auditing ..... .......................... 29F. Monitoring and Evaluation ..... ...................... 30G. Supervision ......................................... 30

IV. COST RECOVERY, AFFORDABILITY AND BENEFICIARYSELECTION ............................................... 30A. Affordability and Income Distribution .... ............ 32B. Beneficiary Selection ............................... 34

V. IMPLEMENTING AGENCIES . ........... ...................... . 34A. Project Organization .. 34B. The Lahore Development Authority ........ .. .......... 36C. The Lahore Municipal Corporation ......... .. ......... 39D. The House Building Finance Corporation ....... ....... 41

VI. PROJECT JUSTIFICATION AND RISKS .......................... 42

VII. AGREEMENTS REACHED AND RECOMMENDATIONS ..................... 46

This report is based on the findings of an appraisal mission toPakistan in February/March 1981 consisting of Messrs. D. Graham (missionleader), B. Menezes, G. Menckhoff, J. Courtney, R. de Silva, A. Malik(IDA), D. Cole, D. Jackson and A. Penn (consultants). A follow-up missionin November 1982, comprising Messrs. D. Graham and R. MacWilliam, updatedthe report.

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

Table of Contents (cont'd)

CHARTS AND TABLES IN THE TEXT Page No.

Table II-1 Summary Cost Estimates 12

Table III-1 Project Financing Plan 24Chart III-1 Flow of Funds 25Table III-2 Estimated Disbursement Schedule 29

Table IV-1 Land Use, Affordability Analysis and DifferentialPricing - Gujjarpura Sites and Services 33

Chart IV-l Household Income Distribution 35

Table V-i LDA - Summary Financial Statements 38Table V-2 LMC - Summary Budget 41

ANNEXES

I Detailed Cost EstimatesII Implementation Schedule and Project PhasingIII Sources and Applications of FundsIV Economic AnalysisV Urban Poverty Impact and Sector IndicatorsVI The House Building Finance CorporationVII Technical Assistance, Consulting Services and StudiesVIII List of Documents and Data Available on the Project File

PHOTOGRAPHS

Walled City, Lahore (historic areas)Walled City, Lahore (utilities)Walled City, Lahore (old housing)Lahore, Pakistan (Katchi Abadis)Lahore, Pakistan - Gujjarpura Sites and Services AreaLahore, Pakistan (urban transport)Lahore, Pakistan - North Lahore Action Area (Markets)

SKETCHES

23242 Walled City - Pilot Area #223040 Walled City - Sewerage and Water Supply23038 Sites and Services, Neighborhood Land Use23039 Sites and Services, Initial Provision and Anticipated 2Development23037 Sites and Services, On Site Development Optio2s (72 m plot)23036 Sites and Services, On Site Development (9O m plot)

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Table of Contents (cont'd)

MAPS

15541 Lahore Metropolitan Area15542 Walled City15540 Gujjarpura Sites and Services

I. BACKGROUND

A. Urban Development in Pakistan

1.01 Nearly 29% of Pakistan's population of 87 million (mid-1982 estimate)live in urban areas. The urban population grew at an average rate of 4.5% perannum during the decade 1971-81 as compared to the 3% general rate of popula-tion increase, and is expected to maintain the same growth rate through the1980s. Over the last ten years, poverty has remained widespread, 1/ althoughPakistan's major urban centers have made a substantial contribution to laborabsorption and improving incomes. The growth of these centers, however, hasresulted in a clear deterioration of urban living conditions; due to rapidpopulation growth and relatively low levels of investment in housing and urbaninfrastructure, a large and increasing backlog of unmet demands for basicservices has been created, particularly in water supply, sanitation, residen-tial land, housing and social services.

1.02 Current and programmed expenditure on urban development is low.Existing financial institutions do not have the capacity to provide adequatefunds for housing loans. Municipal finances of all cities are seriouslylimited. Critical shortages of technical and administrative manpower existat all levels. Major operational responsibility in the planning and manage-ment of urban development lies at the provincial and local levels, but effec-tive coordination of development efforts is hampered by the separation ofmaintenance and development responsibilities, lack of clear objectives andpriorities and serious resource constraints. The three major reasons for thesituation prevailing in the urban sector are: (i) weakness of institutionsresponsible for revenue collection and operation and maintenance; (ii) lackof cost recovery for services; and (iii) shortage of trained manpower.

1.03 While Pakistan has recently fared better than its South Asia neigh-bors in terms of economic growth, it has done less well in terms of socialdevelopment. Its life expectancy at birth and literacy are lower and its rateof infant mortality higher than the average for South Asia. These problemsreflect the inadequacies of the response to basic needs of shelter, watersupply, sanitation, education and health. Failure to address these basicneeds will mean a deterioration in the distribution of income and largernumbers of people living in urban poverty. It is currently estimated thatthe bottom 40% of the population receive about 18% of the national income.

The Province of Punjab

1.04 Punjab, with a total population of about 40 million, has an urbanpopulation of about 12.5 million. This includes Lahore, the provincialcapital and Pakistan's second largest city, after Karachi. It is the largest

1/ Based on the Bank's most recent estimates, 45% of the population inurban areas had incomes below the absolute urban poverty threshold ofUS$200 per capita per year in 1980.

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center in the province with a population of about 3.25 million (i9y81 f;,lowed by 8 cities with populations ranging from 100,000 to 900,000 includingFaisalabad (900,000), Rawalpindi (700,000) and Multan (600,000). In addition,there are some 170 other towns with a population over 5,000.

1.05 As is common in other urban areas in the country, most of thesecities have only partial water supplies, and little or no sewerage; standardsare low and interruptions of service are frequent. More than one third ofurban families in the province live in mudhouses or huts.

B. The City of Lahore

1.06 Lahore is located on the left bank of the river Ravi, close to theborder with India (Map 15541). The city's origins date back more than athousand years. From a mud fort on the banks of the old Ravi and seat of thelocal Hindu rulers, it grew into a fortified city under the Afghans and Turksand spread beyond the walls to include a number of suburbs and gardens underthe Mughals. The city flourished as a regional center under the Mughals inthe seventeenth and early eighteenth centuries, but fell into decline in theensuing hundred years until it was taken over by the British in the mid nine-teenth century. Subsequently, the city became an important industrial andcommercial center and headquarters of the North Western Railway, still thelargest single employer in the city.

1.07 Much of the historical development of Lahore still exists, particu-larly the Walled City and Mughal forts, although many areas are in a seriousstate of overcrowding and physical decline. Because of its historical asso-ciations, Lahore is very much the cultural heart of Pakistan and there is keeninterest throughout the country to arrest the decay in its urban environmentand preserve its heritage.

1.08 Today, Lahore is a sprawling, rapidly expanding city (populationgrowth has averaged 4.5% per annum over the past decade), with a crowdedhistorical center, including the old Walled City whose densities average 1,100persons per hectare, and low density settlements on the outskirts. The cityis structured by a network of major streets and its growth to the north andwest is physically constrained by the Ravi and its flood plain, from which thecity is protected by bunds. The whole region is low-lying and flat, whichcauses many areas to be flooded in the rainy season and remaining so for daysif not weeks.

1.09 The city and its hinterland are characterized by relatively welldeveloped agricultural and manufacturing activities. The urban system aroundLahore, which includes such towns as Gujranwala, Sheikhupura, Gujurat, andSialkot, is relatively well-integrated, but the region as a whole couldbenefit from the introduction of measures to improve transportation and

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communication between its urban centers. Lahore itself has a substantial poolof skilled manpower and entrepreneurial talent and could take advantage of theeconomies of agglomeration needed for the growth of export-oriented manuiactur-ing. It is the country's major center for textiles, carpets, engineering andmachinery industries, many of which are relatively small-scale; this has enecur-aged the emergence of sub-contractor and local technical services.

1.10 Industrial estates have been established along two of the four mainroads leading out of Lahore and industries have also spontaneously developedelsewhere in Lahore, in addition to numerous concentrations of small andmedium-scale manufacturing and assembly workshops. In 1977, the Lahore Metro-politan Area (LMA) provided employment to about 770,000, 28% in community/personal/social services, 28% in commerce, 27% in construction, transportand miscellaneous and 17% in manufacturing, showing the predominance of theservice sector over industries.

C. Administration and Finance

1.11 Planning and land development in the LMA (area 1760 sq km) is theprime responsibility of the Lahore Development Authority (LDA), the Urban Wingof which develops housing and roads. The Water and Sanitation Agency (WASA),an autonomous agency under the LDA Board, is responsible for the provisionof water supply, sewerage and drainage. Municipal services in the urban areaof the LMA are provided by the Lahore Municipal Corporation (LMC, area 404 sqkm) and the Cantonment Board (area 87 sq km). LDA partially coordinates theplanning and development of essential urban services by other agencies, in-cluding the provision of electricity and street lighting by the Water andPower Development Authority (WAPDA), and natural ga,s distribution by SUI Gas.

1.12 While LDA is officially entrusted with the duty to ensure inter-agency coordination for land and overall urban development, its powers overother agencies are limited; however, some inter-agency coordinating commit-tees have been established at the working level. T'hese committees make vitalcontributions to urban management. For example, a traffic management commit-tee was recently established to coordinate the activities of some 15 differentauthorities to improve traffic conditions in Lahore. Similarly, a water andsewerage committee has been functioning for some time.

1.13 Lack of financial resources available to local agencies has seriouslyconstrained their ability to perform their development and operating functions.The LDA has power to levy a betterment fee, with the consent of the Government,but has not used this power as it has not yet embarked on the kind of projects,e.g. area upgrading, where this type of levy might be appropriate. It there-fore relies largely on proceeds of sale of developed land (US$18.0 million in1980/81) and on Federal loans and grants (US$2.5 million in 1980/81) out of atotal development budget of US$25.0 million in 1980/81. At present, LDA'ssingle entry accounting system does not reveal its real resource position.Meanwhile, LDA is expected to operate as a commercial entity. Consultants

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have been appointed to review the management and financial organization ofthe LDA and to assist in implementing improvements (see paras 5.04 to 5.14).

1.14 The principal agency responsible for operation and maintenance ofmunicipal services, LMC, levies octroi 1/ taxes which generate 70% of itsrevenue, and receives a 40% share of property taxes levied by the ProvincialGovernment which accounts for most of the balance of LMC's revenues. Thepresent exemption level for property tax (set at about US$120 annual rentalvalue) results in about one quarter of all households being exempt. Propertyassessments are carried out every five years and the most recent reassessmentcarried out in 1980/81 has doubled the LMC's revenue from this source infiscal year 1982/83.

1.15 The Government of Punjab, which has overall responsibility for LDA(through the Department of Housing and Physical Planning) and LMC (throughthe Department of Local Government) is actively considering ways and means ofimproving inter-agency coordination and the possibility of institutionalizingsome more efficient system. Lack of financial resources is, however, likelyto remain a constraint on the ability of agencies to perform their development,operating and maintenance functions.

D. Urban Conditions and Policies

1.16 Approximately 45% of the population of Lahore is below the 1980 Bankestimated absolute urban poverty threshold of Rs 850 per household per month.This amounts to about 1.5 million people, half of whom reside in squattersettlements (Katchi Abadis), one-tenth reside in the Walled City, and theremainder live at high densities in other established parts of the city.In terms of basic needs the urban poverty group in Lahore lacks basic shelterand adequate water/sanitation services, has almost no health services and isdeficient in primary education.

Shelter

1.17 Lahore is facing a substantial and growing shortage of housing andinfrastructure services, particularly for the lower income groups. Some25-30% of the total population live in Katchi Abadis, where insecurity oftenure, overcrowding in poor housing conditions and limited access to infra-structure and public services are the main features. A further 25-30% of thepopulation live in the Walled City (260,000 people) and adjacent old estab-lished parts of the city in conditions of severe overcrowding, decayinghouses and inadequate urban services.

1.18 Land is expensive around Lahore; prices of $10-$20 per sq m forundeveloped land are common. Developed land is scarce and its market pricecan be three to four times that of undeveloped land. As a result, Katchi

1/ A form of localized customs duty on goods entering the city.

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Abadis are common around Lahore; 100 of them have been officially identifiedby LDA and their population is estimated at about 750,000 or 25% of the LMApopulation. Construction costs also are high, due to high material costsand a shortage of skilled labor resulting from the many construction workershaving left the region to work in the Middle East. A large fraction of theLahore population cannot afford conventional housing, even if financing ismade available. Studies indicate that in Lahore, the cost of constructing aconventional two-room dwelling unit--a size acceptable to the average familyof 6.5--is about US$2,000 which, together with the ciDst of land, could beafforded only by households with a monthly income of at least US$125 equiva-lent. On this basis, given current incomes, conventional housing could notbe afforded by about 60% of the population. In addition, less than 5% haveaccess to credit due to scarcity of funds and collateral requirements oflending agencies.

1.19 Thus, high urban land prices, ineffective planning and inadequatesupply of serviced land, and lack of access to established financial marketshave combined to deny the low-income population access to urban services andhousirg at prices they can afford.

1.20 LDA launched a Katchi Abadi upgrading program in 1977, 1! which hasso far benefitted an estimated quarter of a million people in 30 squattersettlements on state land within the LMA. A further nine Katchi Abadis arecurrently being upgraded and it is planned that the program should move onto settlements on privately owned land in the near future. The programappears to be successful, in that residents obtain security of tenure andservices, while development costs, which, at about US$200 per family areaffordable to beneficiaries and cost about one-tenth of the alternativesubsidized one room apartments, are recovered. One weakness of the programlies in the poor mainteriance of services, due to design problems, apparentlack of community participation and poor service by LMC. A program to remedythese shortcomings is being undertaken by LDA and LMC, with assistance fromUNICEF.

1.21 The existing public sector housing program by LDA has proved inade-quate to cope with the growth in demand and its main beneficiaries have beenmiddle and upper income groups. Virtually all land development in Lahore isdone by the public sector, and most of it by the LDA, which acquires land andsubdivides it after development in collaboration with various agencies. UnderMartial Law Instruction 23, which became effective in 1977, LDA has powers topurchase undeveloped land at a price of US$1,540 per acre (about 35 cents persq m or about one-twentieth of the market price), provided 30% of the landis returned to the original owner, who pays his share of the developmentcost. To date this method of acquisition has been used mostly for LDA'smiddle income housing programs. Between 1975 and the end of 1979, the LDA

1/ Of the 100 Katchi Abadis, 45 are on State land, 25 are on private land,30 are jointly on private and State land. 15 Katchi Abadis, mostly onState land, are scheduled for relocation and 85 are to be regularized.

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provided about 25,000 serviced lots. The LDA current program provides about15,000 lots every year, of an overall annual demand of approximately 25,000. 1/The formal private sector provides about 2,000 and the remaining 8,000 areprovided by the informal sector often in the form of Katchi Abadis and over-crowding in existing low income areas.

1.22 The main source of housing finance for the private sector is theHouse Building Finance Corporation (HBFC) which finances private and coopera-tive housing and provides support to Development Authorities' projects. Sinceits incorporation in 1952, the HBFC has advanced a total of Rs 4,550 million(US$350 million) for the construction or reconstruction of some 380,000 unitsof residential property, nearly half of which were in the Province of Punjab(see Annex VI, paras 10-11).

Infrastructure Services

1.23 The development of infrastructure has not kept pace with urbangrowth, particularly in low income areas, resulting in low service levels inthese areas. Areas of responsibility for provision and maintenance of basicurban services are reasonably well defined and coordination among agencies,which has been weak in the past, has improved as a result of the inter-agencycommittees established in 1980. The Second Lahore Water Supply, Sewerage andDrainage Project, Cr. 630-PAK, 2/ funded by IDA is currently being implementedwith completion due by the end of 1983.

Sewerage and Drainage

1.24 Sewerage and drainage, both of which are being improved underCr. 630-PAK, are partly interlinked, particularly in the high density innercity areas where sewers and drains serve the same function; the long-term aimis to "separate" the two systems. The trunk sewerage network consists mostlyof an old and inadequate piped system draining into open channels, which areoften choked by deposits of solid waste and, carrying raw sewage, can beoffensive in the built-up areas. As the city is generally low-lying, extensiveflooding occurs in the rainy season, when outlets to the Ravi River are sub-merged. Cr. 630-PAK provides for separation of about 50% ofsewage flow from drainage. The new sewerage system will provide benefits tothe densely populated inner city low-income areas, although much of the second-ary and tertiary network in these areas, particularly in the Walled City, hasyet to be provided. Raw sewage discharging from sewers and drains is extensivelyused for crop irrigation with a resultant high incidence of water relateddiseases. Solutions to this problem are being studied by WASA and a pilottreatment plant is under construction.

1/ 22,500 would be to meet new population growth of 146,000 per year (at4.5% per annum, 6.5 persons per household) and the remaining 2,500 wouldbe for replacement. Of the total demand, 10,000 units would be neededto meet growth in the urban poverty group.

2/ The first project, which consisted of infrastructure and studies toestablish an independent authority, was completed in 1975.

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Solid Waste Collection

1.25 Solid waste collection covers nearly 70% of the city's area on anintermittent basis, but reaches less than half of the population, since it ismainly the low density middle and upper income areas that are served. Esti-mated daily production of solid waste in the city is approximately 2,200 tons.Some 40% of the total wastes generated are collected by LMC with a further 40%being collected by farmers in the dry season for use as a soil conditioner orfor land reclamation by dumping. There are insufficient communal dustbinsand wastes are constantly overflowing at collection points and filth depots(transfer stations). Disposal is by crude dumping on any available site wherethe landowner's permission can be obtained. In unsewered areas such as theWalled City, and in areas where connections to sewers are deficient, nightsoil is mixed with solid waste, thereby greatly increasing the health hazardsat all stages in the collection, transfer and disposal chain. Large amountsof solid waste are also dumped in open drains by residents, causing the drainsto block and creating an additional health hazard from stagnant sewage.

1.26 At present, LMC's garbage collection fleet comprises about 160bullock carts, 43 tractor/trailer units and 65 trucks, of which 48 are inservice at any one time. Vehicles are poorly maintained, insufficient innumber and poorly utilized. The productivity of the 6,000 workers employedin the service is low, due to inadequate equipment and limited supervision.

Water Supplies

1.27 The water distribution system, being improved under Cr. 630-PAK, isold with little storage capacity and inadequate secondary and tertiarynetworks, and does not meet peak demands. Unaccounted for water is estimatedto be about 50% of water production. A leak detection and mains replacementprogram aims at reducing this to 40% by 1986. About 60% of the populationhave direct access to water, but are supplied intermittently and at varyingpressures. In the densely populated central areas, including the Walled City,the aged distribution network is hydraulically inefficient, leaking andsubject to contamination under conditions of negative pressure. The supplysituation has been improved recently with the commissioning of new wellsconstructed under Cr. 630-PAK. The remaining 40% of the population, mainlyin low-income areas, are served by standpipes or private wells, the latter,due to their shallow depth and intrusion of sewage, being frequently con-taminated. Health statistics indicate that water-borne diseases are a majorproblem in Lahore.

Electricity and Gas

1.28 Electricity supply and distribution is the responsibility of theWater and Power Development Authority (WAPDA), with responsibility for streetlighting split between WAPDA and LMC. Ongoing projects are improving the ageddistribution system but so far with little benefit to the low-income highdensity areas. Street lighting outside the central area and low-densityhigh-income areas is poor and maintenance inadequate. Natural gas, which isthe cheapest fuel source due to its low, government controlled price, reachesLahore through a 16-inch diameter pipeline. About 20% of households are

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connected to the distribution system of Sui Northern Gas Pipelines. Few lowincome areas are served and the Walled City low-income area is specificallyexcluded due to the danger of fire or explosion in the confined narrow streets.

Transport and Traffic

1.29 Approximately half of the total passenger movement (excluding walk-ing) into the central area is carried by private vehicles, including bicycles(17%), cars and taxis (15%), motorcycles (12%), and trucks and vans (7%).Buses carry about 28%, rickshaws 8%, minibuses 7%, and tongas (animal drawnpublic transport) 6%. In most parts of the city, especially to the south andeast of the city center, the main road network is well developed with wideavenues that permit relatively high travel speeds. In the central area, how-ever, traffic intensity and vehicle mix have resulted in considerable conges-tion which affects both private and public transport. In the large, expandingareas to the west and northeast of the Walled City, there is a complete absenceof major roads, and there is little scope to improve accessibility throughtraffic management measures. The unplanned development of these areas has nowcreated a situation in which access is only possible in small vehicles, whilebuses (even the private minibuses) shy away from the narrow and irregularstreets. The absence of effective traffic control measures, combined withundisciplined driver and pedestrian behavior, has been identified as a maincause for Lahore's excessive accident rate. Near the Walled City, greatnumbers of animal drawn and other slow moving vehicles mix freely with cars,buses and motorcycles, which has resulted in traffic congestion that could berelieved by relatively inexpensive traffic engineering measures.

1.30 Most urban bus services are provided by the Punjab Urban TransportCorporation (PUTC) set up in 1977 under the control of the Federal Government.PUTC is heavily subsidized, as fare revenues cover less than half of itscost. It only operates stage services within Lahore, for which it originallyhad a monopoly. In recent years, however, permits have been issued toprivate operators of about 100 standard buses and 600 minibuses. A PUTCexpansion program is currently underway with Swedish aid, and 600 modernVolvo buses have recently been added to the fleet; this is complemented byextensive technical assistance to modernize workshops and management proce-dures.

Health and Education

1.31 The only recent city-wide health information collected on aconsistent basis has been for cholera. While not covering other key healthindicators, it is indicative of diseases related to deficiencies in water/sanitation services. Areas where high incidence were recorded during theAugust 1980 epidemic include the Walled City and low income settlements inNorth Lahore.

1.32 In the Lahore urban area 83% of the primary school age childrenand 50% of the children of middle and high school age are enrolled: approxi-mately 25% of the primary schools in Lahore are run by LMC (the remainder byGOPUN, private and religious bodies), often in dilapidated buildings lackingplaygrounds, toilet facilities and furniture.

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1.33 For the lower income groups, formal training of children beyondprimary school is all but non-existent. Very little institutionalized voca-tional training is available; it is mostly through informal channels andon-the-job training.

1.34 While the physical aspects of many of the schools may be inadequate,educational programs have been more effective than in the country as a whole.Literacy is approximately 33% for Lahore and 16% for the country as a whole.

E. The Bank's Role in Urban Development

1.35 The proposed project is the second multi-sector urban project to beappraised in Pakistan. During 1974/75, Bank staff worked closely with theKarachi Metropolitan Corporation (KMC) and the Bank was Executing Agency fora UNDP-financed urban planning exercise which was to prepare a project toimprove the Lyari district in Karachi for IDA financing. The project wasappraised, but not negotiated. The reasons related to cost recovery (whichbecame a political issue in the 1977 elections) and the size of the proposedslum improvement program relative to the KMC budget. Efforts to suitablymodify the project were not successful, and the project was abandoned. Localbudget constraints continue to be a problem, but prospects for future urbanprojects in Karachi (and the Province of Sind) are improving. Sector workfocusing on Karachi and Sind, related to a possible urban project, is con-tinuing. Recent Bank economic work on Sind Government finances has indicatedthat there is scope for raising additional revenues in Karachi, particularlythrough more appropriate pricing of public services and increased propertytaxation of high-income groups.

1.36 Bank involvement in the water supply and sewerage sector has sofar been confined to the city of Lahore. A 1967 credit of US$1.75 millionhelped create and equip WASA, and to prepare plans and begin first-phaseconstruction of water supply, sewerage and drainage works there. A secondUS$26.6 million credit (Cr. 630-PAK) was approved in 1976. The project wasdeveloped from an ongoing UNDP technical assistance project, for which theBank was Executing Agency and includes further institutional -eform andextension of water supply, sewerage and drainage works. The project hasencountered delays in final design and procurement, and, although the watersupply components are completed, the sewerage components are about two yearsbehind schedule. A bulk water supply project, now under preparation forKarachi, had been delayed by financial, pricing policy and institutionalproblems but has recently made progress in these areas.

1.37 Consultants financed under Cr. 630-PAK were appointed in late1978 to assist LDA in carrying out urban planning and transportation studieswhich would provide the basis for an urban development project in Lahoresuitable for IDA financing. The findings of these studies have helped toinitiate new responses to urban needs.

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F. New Responses to Urban Needs

1.38 A number of policy responses to deal with the problems facing Lahorehave been initiated or are actively under consideration by Provincial Govern-ment and local authorities. The Katchi Abadi upgrading program has alreadyimproved the living environment of about one-third of the population living insquatter settlements in Lahore. It is planned that this program will continueto upgrade the remaining Katchi Abadis over the next few years. To reducetraffic congestion in the crowded central areas, LDA has recently embarkedupon a series of low cost traffic management schemes, while in the rapidlyexpanding North Lahore area, LDA is undertaking a planning action program toimprove land use and investment strategy in the area.

1.39 The Government is now turning its attention to two related areas,the upgrading of the high density low income areas in the city center andincreasing the supply of serviced lots to meet the demands of the expandingpopulation, particularly the low income groups and small businesses. A keyelement of these new policy initiatives is the strengthening of the institu-tions responsible for delivery and maintenance of urban services, throughimproved management and mobilization of financial resources, and throughimproved inter-agency coordination.

1.40 The proposed project would assist the government and local authori-ties in implementing and further developing these policies.

II. THE PROJECT

A. Objectives

2.01 The basic objectives of this first urban development project inPakistan would be to strengthen the capacity of local institutions to prepareand implement integrated urban development programs which will arrest thedecay in urban living conditions, improve municipal services and developstrategies to cope with continuing urban growth, particularly the deliveryof services and shelter to the urban poor. To achieve these objectives theproject would include:

(a) Integrated physical components to be undertaken asdemonstration schemes in the most critical sectors; and

(b) Training and technical assistance to strengthen the insti-tutions responsible for planning, financing, operating andmanaging metropolitan and municipal services, to enablethese institutions to replicate similar schemes on a largerscale in future.

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B. Main Features

2.02 The scope and content of the proposed project can be summarizedas follows (see Table II-1 for summary cost estimates):

(a) Upgrading in the Walled City Low-Income Area (US$4.6 million;19% of project cost) 1/. (i) Upgrading about 45 hectaresbetween the Delhi Gate and the Lohari Gate in which about50,000 people live, through provision of sewerage, leak detec-tion and replacement of water supply, improvements to streetlighting, upgrading of schools and provision of communitycenters; (ii) Improvement of the solid waste collectionservice; (iii) Provision of investments for house reconstruc-tion; (iv) Preparation of a conservation plan for the WalledCity; and (v) Design and supervision, community development,monitoring and evaluation and training.

(b) Sites and Services in the Gujjarpura Area (US$14.5 million;61% of project cost) 1/. For about 65,000 people, consistingof some 10,000 residential plots, of which over 4,000 would befor low-income beneficiaries in the income groups Rs 400 toRs 1,000 per month (7th to 50th percentile of the urban incomedistribution), 200 commercial plots, 400 industrial plots andsites for education, health and community facilities, allfully serviced with roads, electricity, water supply, sewerage,street lighting and solid waste collection facilities.

(c) Improvements in Solid Waste Collection and Municipal Managementand Maintenance (US$4.7 million; 19% of project cost). 1/Collection, transport and disposal of solid waste on a city-wide basis through provision of bins and containers, vehicles,equipment for the municipal maintenance workshops, upgradingof transfer stations and selection of sanitary landfill sites.Solid waste management studies and street maintenance equipment.

(d) Studies (US$0.2 million; 1% of project cost). 1/ Costs oftraining and technical assistance are included underthe relevant project components above. In addition a studyfor the preparation of a second urban project would be under-taken under the project.

I/ Including physical and price contingencies.

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LAHORE URBAN DEVELOPMENT PROJECTTABLE II-1: SUMMARY COST ESTIMATES

PERCENT PERCENTFOREIGN OF BASE

---- RS MILLION ------------- ------------…US $ MILLION--------- EXCHANGE COSTLOCAL FOREIGN TOTAL LOCAL FOREI£N TOTAL . '.

i.WALLED CITY UPGRADING 45.35 5.90 51.25 3.49 0.45 3.94 11.51 19.56

2.EUjJARPURA SITES&SERVICES 136.01 23.56 159.57 10.46 1.81 12.27 14.76 60.90

3.SOLID WASTE MANAGEMENT 26.67 22,95 49.62 2.05 1.77 3.82 46.25 18.94

4.STUDIES 1.12 0.48 1.60 0.09 0.04 0.12 30.00 0.61

TOTAL BASE COST 209.15 52.89 262.04 16.09 4.07 20.16 20.18 100.00

5.PHYSICAL CONTINGENCIES 13.79 4.98 1B.76 1.06 0.38 1.44 26.55 7.16

6.PRICE CONTINGENCIES 23.90 7.66 31.56 1.84 0.59 2.43 24.27 1,.04

SUB-TOTAL 37.68 12.64 50.32 2.90 0.97 3.87 25.12 i9.20

TOTAL PROJErT COSTS 246.83 65.53 312.36 18.99 5.04 24.03 20.98 119.20

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2.03 The project would, through the initiation of an integrated urbandevelopment program, assist in bringing about important policy changes andimproving the effectiveness of the main institutions responsible for urbanplanning and management. Institution building is a key objective which wouldbe achieved through the training and technical assistance programs includedunder the project and through the experience to be gained in project implemen-tation. An organization, management and finance study would be undertaken forthe principal implementing agency, LDA, to strengthen its capacity to plan,finance and implement similar projects in future. The upgrading proposed inthe Walled City would improve the living environment of about 2% of the urbanpoverty group in the city and would establish a pattern for further improve-ment in Lahore and in other cities of Pakistan on a replicable basis at lowcosts that are affordable to the beneficiaries (about US$600 total cost perhousehold). The sites and services scheme would provide services and shelterfor about 10,000 families, which is about 10% of the demand during the projectperiod. This component would increase the annual output of public sectorhousing by about one-quarter and would greatly increase the delivery ofshelter services to the lowest income groups, at costs that are affordable tobeneficiaries (average cost per household, including design and supervision,building investments, physical contingencies, etc. US$1,300). The solid wastecomponent would improve the urban environment, particularly in low incomeareas that are not presently served. The combined effect of these actionswill bring about a significant shift in policies regarding cost recovery anduse of resources in Pakistan's second largest city, and can be expected tohave repercussions on other urban areas throughout the country.

C. Detailed Description

Upgrading in the Walled City

2.04 The historical Walled City, first built around the Eleventh Century,is a traditional Islamic city of the pre-industrial part of the LMA. Itwas the focus of political events in the life of the Province and the country,and has played a central role in the socio-economic evolution of the region.At present, it is a congested, bustling city in which some 260,000 peoplelive and work. It was selected for upgrading under the project as represent-ing the largest single agglomeration of urban poor in Lahore, with some ofthe worst environmental conditions.

2.05 Population densities in the Walled City are the highest in Lahore,averaging around 1,100 persons per hectare compared with 160 persons perhectare average for the inner metropolitan area. The building stock in theWalled City has not increased in over a hundred years. The structures, mainlyof burnt brick walls and timber floors and balconies, are densely packed intotiny plots (median size 40 sq meters each), rising generally to 3 or 4 storeys.More than half the dwellings are occupied by single households, about a quarter

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contain two households each, while the remainder house three or more householdseach. Overcrowding in the Walled City is serious; while the average householdsize is nearly 7 persons, one-third of the population lives in single roomdwelling units and another third in two-room units.

2.06 As the more prosperous families have moved out of the Walled Cityto areas with better amenities, the composition of the residual population hasbecome more and more uniformly poor. Typical household incomes now range fromRs 300 to Rs 1000 per month and average household incomes are approximatelyRs 850 per month (the 45th percentile of the urban income distribution), withan average income of Rs 600 per month for the head of household.

2.07 Problems to be Remedied. Drainage and sewerage services are providedthrough a system of constricted open drainage ditches in conjunction withnight soil collection to service the dry latrines which prevail throughout thearea. Increasing population density, deterioration of the night soil collec-tion services and the almost complete absence of a solid waste collectionservice has led to increasing discharge of solid waste and sewage into theopen drainage ditches, causing obstruction and deterioration in health condi-tions. The water distribution network is old and inadequate with many leaksand gives an intermittent supply. Individual house connections are overgroundin "bundles" which are hydraulically inefficient, leaking and subject tocontamination under conditions of negative pressure. Cars and light vans, inaddition to animal drawn vehicles, can gain access only along the main bazaarroads; most traffic is pedestrian oriented due to narrow street widths. Accessfor emergency vehicles is severely restricted. The majority of dwellings haveelectricity supply, but distribution is old, neglected and dangerous. Streetlighting is inadequate. Sui Gas is not prepared to bring mains into the WalledCity due to risk of fire and explosion, although mains are available on theperimeter.

2.08 The Walled City is built on a manmade mound of the ruins of previousdwellings. The falling water table in the aquifer under the city coupledwith frequent seepage from leaking water mains has resulted in weakenedfoundations so that many of the aged buildings are structurally unsound andeven dangerous. Of the 22,500 residential lots more than one-eighth lievacant where houses have collapsed and not been rebuilt and more than 1 inevery 12 is structurally dangerous. Surveys carried out during projectpreparation show that the poor conditions of the housing stock is primarilydue to the low incomes of the inhabitants and their lack of access to creditto repair their dwellings. To a lesser extent it also reflects the fact that,while 70% of houses are owner occupied, 30% are occupied by tenants or subjectto multiple ownership resulting from split inheritance, a factor which diffusesthe responsibility for repair and maintenance.

2.09 Location of Project Area. The project area accounts for about 45hectares with a population of around 50,000 and covers about one-fifth of thearea of the Walled City (or about one-third of the residential area in need of

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upgrading). The area is situated between Lohari Gate and Delhi Gate, with thenew development of the Shah Almi Bazaar separating the two parts. The area istypical of the Walled City as a whole, containing narrow residential streetsas well as larger bazar streets, mosques, schools and buildings of historicand cultural value.

2.10 The project area is based on the existing drainage catchment area.It is shown on Map 15542 which also indicates the location of the two areasin which detailed studies were made during project preparation and the loca-tion of the test Sewerage Project carried out during project preparation.

2.11 Proposed Improvements under the project reflect the priorities ofthe inhabitants (expressed in surveys carried out during project preparation)and would include the provision of sewerage and connection of individualtoilets to the system. Improvements to the water supply system and streetlighting systems in these areas are also proposed, together with the upgradingof existing health and education facilities. The solid waste collection systemwould be improved throughout the Walled City. The infrastructure improvementswill generally comprise the following:

(a) Sewerage. Existing gradients make the introduction of sewersfeasible, but sewerage involving excavation is not possibledue to probable weakening of foundations and subsequent col-lapse of buildings. Sewers will be created by laying pipesalong, and at the same level as, the existing drains or bybuilding up and covering the existing channels. Street levelswill be raised, repaved and profiled to make provision forsurface water runoff. Individual covered sewer connectionswill be provided to each property so that internal sanitaryplumbing can be installed. A test sewerage scheme, coveringsome 80 households and including sanitary plumbing installa-tions, has already been implemented. The results of thistest show that the proposed improvements are very acceptableto the residents and can be carried out within the costs andtime scale envisaged.

(b) Water Supply. A leak detection and mains renovation program,will reduce leakage and wastage. The secondary and tertiarynetworks will be renewed and reinforced with connections andhydrants from them to replace the pipe "bundles." Main-layingwill be achieved with little or no excavation, pipe cover beingprovided by the raised street levels.

(c) Solid Waste. Communal containers will be located for the bestvehicular access, to be serviced by collection vehicles providedunder the project. Implementation will be concurrent with, orbefore, sewerage and water supply.

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(d) Street lighting and electricity supply. The street lightingnetwork will be reestablished and extended and, in conjunctionwith WAPDA, the main distribution network will be progressivelyrenewed.

2.12 It is expected that the proposed infrastructure improvements will

revitalize these parts of the Walled City and spur the inhabitants to improvetheir dwellings. The project would assist in this by providing for invest-ments through HBFC for owners to reconstruct damaged buildings.

2.13 Community Facilities - Schools, Community and Health. Within theproject area there are about 20 schools, which would be upgraded under theproject. It is also proposed that four community centers be established inthe project area utilizing properties managed by the Evacuee Trust PropertyBoard (Hindu Auqaf). The project would provide funds for the planning,design and upgrading of these facilities. An important part of these com-munity facilities will be a health dispensary to help provide basic healthcare in the neighborhoods. Funding for the establishment of the healthprogram will be included in the project.

2.14 Community Development-Conservation Plan. The project would alsoprovide for an intensive community development program to ensure residentsparticipation, and for preparation of a conservation plan to preserve theenvironment of the Walled City. This last would be undertaken with assistancefrom UNESCO.

Gujjarpura Sites and Services

2.15 The proposed project component comprises four elements (see Map15540):

(a) a sites and services component comprising about 4,140 resi-dential plots for low income families, who would be ableto purchase the plots through loans repayable in monthlyrepayments.

(b) an "exempt" residential component comprising about 4,350larger plots that will be returned to existing ownersthrough the Exemption Policy.

(c) development of some 740 plots for (i) setting up small scaleindustrial units; (ii) smaller scale establishments with link-ages with the larger units; (iii) residential purposes as wellas for industrial/household enterprises with the owner residingon the premises; (iv) commerce only.

(d) upgrading of and provision of services for areas of the sitealready occupied by spontaneous residential growth (746 plots).

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2.16 These four components will be supported by the necessary off-siteinfrastructure, and sites for community facilities, including schools, openspace, community centers, and health dispensaries.

2.17 Site Selection. The location of the site is shown on Map 15541in the northern area of Lahore. The site was identified as one of the fewundeveloped areas within the flood bund relatively close to business andindustrial employment where reasonable costs for site preparation could beexpected, where off site infrastructure existed or could be provided, andwhere land acquisition would not present undue difficulty. The site is alsopart of the area covered by LDA's North Lahore Action Program (para 1138),

2.18 Land Acquisit:ion. The land will be purchased under the Punjab LandAcquisition (Housing) Act of 1973 under which LDA, by powers granted by thePunjab Government, can acquire, for the purpose of developing housing schemes,any property on the payment of compensation at Rs 20,000 per acre plus theassessment value of any property, crops, trees, etc. that may exist on theland.

2.19 Potential resistance on the part of owners, due to the wide disparitybetween market values and the compensation, is countered by the official"Exemption Policy." At present the exemption policy allows for thirty percentof the original land holdings to be exempted from acquisition, but developednevertheless as part of the overall scheme, and then returned to the owner inthe form of serviced residential plots against the payment of a developmentcharge. The market value of developed "exempted" plots in the project areais currently estimated to be more than the value of the original land holdingplus the development charge which makes the policy acceptable to owners. 1/The exemption policy provides LDA with a practical and expeditious means ofacquiring the site without a massive investment in land acquisition for whichit does not have the resources (Rs 130 to 200 million at market prices versusRs 7 million under the exemption policy plus Rs 38 million for the cost of

1/ Current market values ?f undeveloped land in the site area are estimatedto be Rs 100-150 per m .2 Existing owners will part with 70% of their landat a price of Rs 5 per m and will pay a development charge of about Rs 65per m for the 30% retained, which whSn developed, will have a marketvalue estimated at about Rs 700 per m . On this basis, total profit toexisting owners would be within the range 25-75%, depending upon therelative market values of undeveloped and developed land.

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developing the exempt area). 1/ During project execution the experience ofusing this policy for such a large scale project will be closely monitored andthe results will enable Government to determine whether the percentage of landreturned under the exemption provision should be changed for future develop-ments. LDA declared the site a controlled area in 1979 and has compiled aregistry of existing owners. The owners have been notified of LDA's inten-tion to acquire the site under the 1973 Act and LDA has obtained formalGovernment clearance for the project from the Governor of the Punjab and isproceeding with land acquisition.

2.20 Description of Site. The site comprises 224 hectares and includessome 15 hectares of existing development. It extends northwards from theexisting Gujjarpura neighborhood for a distance of some 2.25 km to the MahmoodBooti Bund Road which forms its northern boundary. It is generally flat andlow lying, and is bisected by the Chotta Ravi Drain, recently improved by WASAunder Cr. 630-PAK. The invert levels of the drain are such that floodstorage will be provided on-site for use when the drain is under bankfullconditions and the site unable to drain naturally. An existing 54" diametersewer runs along the Southwestern boundary of the site outfalling by way of anew 60" diameter sewer, now being commissioned, to the Shad Bagh Sewage Pump-ing Station to the West. A new large diameter trunk water main crosses thesite, and tubewells in the nearby wellfield to the East are already opera-tional. Electricity overhead lines exist on site and supply will be madeavailable from transformer stations incorporated into the layout. Gas canbe made available by Sui Northern Gas Pipelines. Principal access willinitially be from the Mahmood Booti Bund Road and the existing routes fromthe South, the Grand Trunk Road and East (City Center) will be improved asdevelopment proceeds. Employment opportunities exist close to the site andadditional work places will be created on site on the industrial plots andin small scale enterprises that will be created on prime location and largerplots.

2.21 Site Layout and Land Use. The basic physical unit of the proposedscheme is the Koocha. The physical design of the Koocha is based on theorganization of urban space observed in traditional areas in Lahore (e.g.,in the Walled City) and the marginal settlements of spontaneous informalgrowth (Katchi Abadi). The spine street of the Koocha forms the principalelement and provides access to the galis (lanes)--semi private space. Intraditional use, galis perform a number of other functions apart from pro-viding access to the individual houses. A cluster of Koochas makes up thebasic neighborhood (Mohalla). The definition of individual Mohallas (neigh-borhoods) is more diffused. The center of a Mohalla is formed by the location

1/ The cost of developing exempt land could be regarded as a cost of acquir-ing the non-exempt land. In most sites and services projects financed bythe Bank Group, the landowners who receive payment for land acquired forthe project are not treated as beneficiaries. In the Gujjarpura projectthe particular method used to acquire the site has led to the inclusionof exemptee plot owners as project beneficiaries.

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of commercial/institutional activity which will occur on the main accessroads. Mohalla centers also contain institutional land use such as highschoils, community centers, health facilities and accompanying neighborhoodcomfm.Perce

2.22 Of the 224 hectares of land constituting the site, some 16 hectares(7%) are allocated to major infrastructure works. Of this about 6.5 hectaresstands already acquired for existing or planned elements like the Bund Road,the Bhogiwal pumping station and the Chotta Ravi Drain. The remaining 207.5hectares (93%) is available for on-site land use. Table IV-1 shows the land-use allocation for the entire site. Residential land use comprises 111.5hectares (54%) of the on-site land use. A hierarchy of roads ranging fromdistrict distributors with rights of way of 20 meters and carriageway widthsof 9 meters, down to galls with widths of 1.5 meters will give access to alayolte of plots designed to make the most effective use of the land withneighborhoods and communities forming traditional Mohalla and Koocha typedevelopment. Many plots will have pedestrian access only, but no plot willbe more than 100 meters from a street capable of use by emergency and wastecollection vehicles. Primary road frontage will be provided for the largerplots, and plots in prime locations where commercial and small industry can beexpected to be created. Provision is made in the layout for sites for schools,community facilities, mosques and major public facilities which will includea hospital and open market. Open space is generous due to the necessity ofhaving to provide space for flood storage near to the Chotta Ravi Drain. Thesite will have full sewerage, and drainage will be provided by open channelsalonagside streets and along natural drainage routes. Controlled outlets tothe Chotta Ravi Drain will ensure that the latter will not flood the site.Water supply will be achieved by mains in each street with block metering,and electricity will be supplied by an overhead group system and, in an attemptto reduce the running costs, metering will be by blocks rather than individualmeters. Gas mains will be provided in all streets serving exempted plots andin streets serving prime location and industrial plots.

2.23 Plot Size qnd Plot Devplopment. 2 minimum of 4,140 plots with anaverage area of 82 m (max 150 m/min 72 m ) will be provided for the lowincome beneficiaries (se5 para. 4.05), while 4,450 exempted plots will havean average area of 136 m (max 418 /mie 122.5 m ). A further 125 plots havingan average area of approximately 250 m will be sold to private developersfor the building of walk-up flats with strip commerce on the ground floor.Two large plots of 3,670 m will be provided for flats to be byilt by privateenterprise. A total of 405 plots varying in size from 2,090 m to 203 m willbe provided for industry.

2.24 Buildings will not be constructed under the project on any plots.However, investments from HBFC will be provided under the project to lowinccme beneficiaries to help finance on-plot development. Each plot will beprovided with individual water and sewer connections and access to drainage inthae adjoinii-g street. The project will include overhead electricity lines toallow easy connections, and in certain areas gas will be available. Streetlighting will be provided in all streets and solid waste bins sited so thateach plot will be within easy walking distance (50-100 m). The minimum plot

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2(72 m ) option, including a building investment of Rs 8,000 (US$615) would bepriced at Rs 10,000 (US$770) which is affordable by 90% of urban households.

2.25 Commercial and Industrial Plots. Land for industry comprises15.9 hectares--(7% of on-site land use) of the project site. Location of thisarea is at the northern extremity of the site to adjoin the industrial landuse along the northern periphery of Northern Lahore. However, only about halfo5 this land is inte2ded for formal indust5ial use in plots of 5 kanals (2,090m ), 2 kanals (836 m ), and 1 kanal (418 m ) accounting for 135 plots. Theother half includes 270 plots of 10 marlas (203.41 m ) each intended forsmaller informal establishments. Opportunities for household enterprises areto be found within the residential areas. Loans for small enterprises wouldbe available under the ongoing Small Industries Project (Cr. 1113-PAK).Subsectors to be assisted would include light engineering, mechanical work-shops, carpet making units, small brick making plants and food processingventures.

2.26 Land allocation for commerce is 3.9 hectares, about 2% of on-siteland use. This is in addition to mixed commerce with residential land, andthe informal street or corner scale of commerce expected to arise spontaneously.Provision has also been made for large paved pedestrian areas for informalopen air commerce. This has been included in open space shared as a commonfacility by all beneficiaries.

2.27 Common Facilities. The recreational area consists of 14.6 hectares,made up of two elements. About 9.4 hectares is being proposed as recreationalspace, spread over various locations over the site. The principal componentof this is a large family park located at the lowest point on the site. Thiswill also serve as a reservoir for excess runoff during heavy rains. Theremaining 5.3 hectares of land under recreation is being provided as pavedopen space within the Koocha, which will function as play plots for smallchildren and as community space for social occasions.

2.28 Education and health facilities will occupy an area of 14.8 hectares.Land for education comprises 11.2 hectares. There will be sites for 19primary schools and sites for a further 10 primary schools which would be partof secondary schools. Sites are provided for a total of 13 secondary schools,as separate facilities for boys and girls, including a site for one vocationalschool, which may have separate sections for boys and girls. Land has beenallocated for a hospital that will cater to the needs of Northern Lahore.This land, comprising 3.6 hectares may be transferred at cost to the HealthDepartment, or to the private sector for development of a hospital.

2.29 A total of 1.5 hectares are being provided for community facilitiesincluding allocations for community centers, dispensary, and a mosque.

Solid Waste Management

2.30 Initially, the project would seek to provide solid waste servicesto those areas of the city not yet in receipt of such services and to improvethe level of service to the poorest, more densely populated areas where thepresent level of service is low. Concurrently, small scale demonstrations of

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improved waste storage and collection systems would be implemented in pilotareas of the Walled City and in a modern colony to assist in preparingproposals for the extension of the modes found most suitable to cover allof the Walled City and other suitable areas of the city in a phased andcosted program. Consultants have been appointed to augment the data alreadyin LMC's possession to examine in depth the present problems and deficienciesin solid waste management and propose detailed solutions to these problems.

2.31 Provision would be made for the supply of about 50 tipping trucksand 8 front end loaders for the collection, transportation and disposal ofwastes. These vehicles would double the capacity of LMC's existing fleet of65 fixed chassis trucks, of which only 48 are serviceable. The project wouldprovide for transport for supervisory staff (15 vans/jeeps and 100 bicycles)at all levels to improve efficiency and for 2,000 handcarts, improved brushesand miscellaneous equipment for sweepers to increase productivity. Theproject would also include civil works for upgrading vehicle workshops toimprove maintenance, for three zonal vehicle parks with first line servicingequipment to improve vehicle utilization, for six large transfer stations sothat wastes collected in the city area by sweepers, bullock carts or othershort haul vehicles could be bulk loaded to more distant landfill sites andfor the provision of control points and access roads at such sites. Addi-tional storage containers, both fixed and portable, would also be provided.

2.32 The project would include essential equipment to improve the LMC'sstreet maintenance services. LMC on its part will provide buildings andstaff to support a vehicle and plant maintenance program acceptable to IDA.On the organization side, consultants (para 2.30) will assist LMC to improvethe organization and management of its solid waste and maintenance operationsand the implementation of recommendations arising from this study would becompleted during execution of the project (see para 5.21).

Studies, Technical Assistance and Training

2.33 Technical assistance and training are included under each of theindividual components above and described in detail in Annex VII. Rs 1.3million is specifically provided for overseas and local training courses forexecuting agency staff in urban planning. Further training is included undereach of the studies to be carried out by consultants; for example, theconsultancy assistance for final design and supervision of the sites andservices component includes training in project design and implementation.

2.34 In addition to the technical assistance and training includedunder individual components, the project would include funds to prepare asecond urban project.

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III. PROJECT COSTS, EXECUTION AND FINANCING

A. Cost Estimates

3.01 The total project cost, including contingencies and taxes, is esti-mated at Rs 312 million (US$24.0 million). Taxes and duties amount to aboutRs 12 million (US$0.9 million) and the foreign exchange component to Rs 66million (US$5.0 million). Summary cost estimates are shown in Table II-1(Chapter II) and detailed cost estimates in Annex I. Base costs are inDecember 1982 prices. Cost estimates are based on:

(a) preliminary designs for the sites and services scheme;

(b) actual costs obtained from the pilot upgrading scheme inthe Walled City;

(c) recent quotations from suppliers for vehicles andequipment; and

(d) current rates for consulting services in Pakistan.

3.02 Consultant services provided under the project are shown in thedetailed cost estimates in Annex VII. A total of 468 man-months of localconsultants and 10 man-months of foreign consultants would be provided ata total cost of Rs 21.6 million (1982 prices).

3.03 A study of the organization, management and finances of the LDA andthe first stage of the solid waste management study is being financed underCredit 630-PAK, as were the preparation studies for this project. The averageman-month cost for local consultants is Rs 43,500 (US$3,350), while theaverage man-month cost of expatriate consultants, including salary, costs,fees, international travel and subsistence is Rs 124,000 (US$9,500).

3.04 Physical contingencies have been estimated at 10% of base costsfor civil works and equipment, except for the Walled City upgrading component,where the rate is 15%. Price contingencies take into account the projectedimplementation schedule (Annex II-1) and the likely increases in constructioncosts, materials and equipment during execution of the project. For interna-tionally procured equipment, the following rates have been used: 1983, 8%;1984, 7.5%; 1985, 7.0%; and 1986, 6.0%. Rates for civil works, locallyprocured equipment, and consulting services are as follows: 1983, 8.5%; 1984,8.0%; 1985, 7.5%; 1986, 7.0%; and 1987, 6.0%.

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B. Execution

3.05 The schedule for consultants to prepare final design and tender docu-ments for the sites and services, upgrading and solid waste components is shownin the implementation schedule in Annex II. It is envisaged that the work inthe Walled City would commence in the second quarter of 1983 and that the firstcontract for the trunk infrastructure of the sites and services scheme would belet in the first quarter of 1984. Physical works for the solid waste managementcomponent would also start early in 1984. The whole project would be imple-mented in about four and a half years. The expected completion date isDecember 31, 1987.

3.06 The agencies with prime responsibility for project execution wouldbe the LDA and LMC, while HBFC would administer investments under the project.Other agencies, including WASA, WAPDA and Sui Gas would also be involvedin project design and implementation and would maintain those parts of thecompleted project that fall within their jurisdiction. The responsibilitiesof the various agencies are summarized below:

Component Executing Pgency

Project ImplementationWalled City upgrading LDA, in liaison with LMC, WASA

and WAPDAGujjarpura Sites and Services LDA, in liaison with WASA, WAPDA,

Sui Gas and LMCSolid Waste Management LMCStudies LDA

Maintenance:Streets LMCWater, Sewerage and Drainage WASAElectricity WAPDAGas Sui Gas

C. Financing

3.07 The project would be financed by the GOP, LDA, LMC and IDA as shownin the accompanying flow of funds diagram (Chart III-1) and summarized inTable III-1 below.

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Table III-1: PROJECT FINANCING PLAN

Government LDA LMC IDA Total------- (Rs million)

Walled CitySolid Waste 1 - - 1 2Civil works upgrading 17 - - 14 31Loans for house reconstruction - - - 20 20Conservation plan - - - 2 2Design, and supervision,community development,monitoring and evaluationand training - - - 5 5

Subtotal 18 - - 42 60

Gujjarpura Expansion AreaLand - 8 - - 8Infrastructure and Civil Works - 46 - 87 133House building investments - - - 35 35Design and supervision,community development,monitoring and evaluationand training - - - 13 13

Subtotal - 54 - 135 189

Solid Waste ManagementEquipment - - 13 27 40Civil Works - - 17 - 17Studies - - - 4 4

Subtotal - - 30 31 61

Studies - 2 - - 2

Total 18 56 30 208 312

3.08 The proposed IDA credit of US$16.0 million (Rs 208 million) wouldbe used to finance 69% of project costs net of taxes and duties. The creditwould cover 100% of estimated foreign exchange costs (US$5.0 million) and 58%of local costs. An amount of Rs 155 million from the proceeds of the IDAcredit would be made available by GOP to the HBFC under a subsidiary invest-ment agreement to finance 65% of land and infrastructure development for theLDA's Gujjarpura Expansion Area Project, 100% of low income housing invest-ments in Gujjarpura and of house reconstruction investments to residents ofthe Walled City upgrading area. LDA would finance 35% of the GujjarpuraExpansion Area Project, for land and infrastructure, from its own resources.The rest of the IDA credit (Rs 53 million) and the GOP contribution ofRs 18 million would be made available to the implementing agencies (LDA andLMC) through the Punjab Government (GOPUN) Annual Development Program (ADP);GOPUN would allocate these Rs 71 million from its ADP to LDA for the Walled

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LAHORE URBAN DEVELOPMENT PROJECT

Flow of Funds, Rupees Million

Federal Gov't. |1FedernlmGevt. 18 Part of ADP 71~~~~~~Government 18 _

--<IF- ~~~~IDA 208

LDA 56

LMC 30

TI | otal Sources 312

Loan toHBFC 155

HBFC I Govtt. of Punjab

a) Investment to LDA Grants to LDA andfor area develop- LMC for:

;H4 ment 100 a) Walled City 40b) Investments to bene- b) Solid Waste 31

ficiaries for:(i) house bldg. TOTAL 71

in Gujjarpura 35(ii) house recon-

struction inthe WalledCity 201

TOTAL 155

A~~~~~~~~~~~~~~~ MCL D A L M C

Guijarpura Sites Solid Wasteand Services: L Management:Infrastructure Civil works and(LDA) 54 < -- equipment

> Infrastructure (LMC) 30(HBFC) 100 Equipment and Studies

Bldg. Investments (GOPUN) 31(HBFC)_L 35

X Total 189Walled City: _________

Infrastructure 40> House Reconst.

Investmts. CEBFC )J 20Total 60

Studies 2

TOTAL 251 Total Uses 312 TOTAL 61

1/ Used by low-income beneficiaries.

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City infrastructure upgrading (Rs 40 million) and Rs 31 million to LMC for 51%of the cost of the solid waste management component. LMC would finance theremaining 49% of the solid waste management component from its own resources.

Relending Terms

3.09 The terms and conditions of the Federal Government's subsidiaryinvestment with HBFC (Rs 155 million) envisage an onlending rate of 8.5% perannum plus a charge of 0.5% per annum to cover the foreign exchange risk.HBFC would invest the Rs 155 million as follows:

(a) with LDA for area development of the Gujjarpura expansion scheme,an amount of Rs 100 million on a profit sharing basis having areturn of at least 12% per annum and with a three year graceperiod and repayment of principal and profits over a period ofthree years;

(b) with beneficiaries for house reconstruction in the Walled Cityan amount of Rs 20 million repayable over a period of up to20 years on the HBFC's current income sharing basis (seepara 5.25); and

(c) with beneficiaries for house building investmenta in theGujjarpura sites and services scheme, Rs 35 million on the samebasis as (b) above.

3.10 Repayments of principal to HBFC from the ultimate beneficiarieswould be retained by HBFC in a revolving fund for reinvestment in similarprojects (para 5.26). Assurances to this effect and regarding the terms ofthe subsidiary investment to HBFC and HBFC's onlending terms were obtainedduring negotiations. The execution of onlending agreements between theGovernment of Pakistan and HBFC and between HBFC and LDA would be specialconditions of credit effectiveness.

D. Procurement and Disbursement

3.11 Goods, equipment and materials financed under the project wouldbe grouped to the extent practicable to attract competitive bidding. Majorcontracts for the sites and services development in the Gujjarpura ExpansionArea are expected to be let on the basis of International Competitive Bidding(ICB) in accordance with Bank guidelines. It is estimated that three civilworks contracts for trunk infrastructure, total value Rs 72 million (US$5.5million), would be necessary to allow for phasing of on-and-off-site construc-tion works. LDA's consultants will review the packaging of these contractsand the packaging of design/build contracts for on-plot development (totalvalue Rs 61 million; US$4.6 million) and advise on the most appropriategrouping for procurement. Since the design/build contracts are likely to besmall and not attractive to international contractors, they may be let onthe basis of local competitive bidding. The consultants are also to advise onthe practical size for each contract relative to phasing, definition of

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performance specifications, and proposals, which must be acceptable to LDA andIDA for evaluating qualitatively and quantitatively bids for design-build

contracts.

3.12 Civil works for LMC's solid waste management component willconsist of a number of small contracts (maximum Rs 5 million or US$400,000each, totalling Rs 17 million or US$1.3 million) which would be unlikely tointerest foreign contractors and would be let on the basis of Local Competi-tive Bidding procedures, which are acceptable to IDA. Construction in theWalled City upgrading (Rs 7 million or US$0.5 million) would be undertaken byLDA using contract labor (force account) and disbursements would be madeagainst statements of expenditure. The use of force account labor is proposedfor this component based on the experience of the pilot scheme and is due tothe difficulties of planning and scheduling the work in the narrow confinesof the Walled City and finding contractors willing to undertake such work atcompetitive prices. LDA's direct involvement will also help ensure thenecessary community participation.

3.13 Procurement of major equipment for the solid waste component(Rs 37 million or US$2.8 million) would be through ICB. Imported materialsfor the Walled City upgrading (Rs 5 million or US$0.4 million) would beprocured through Local Competitive Bidding, since procurement would be spreadover three years, materials are available locally and individual quantitiespurchased would be small. Locally produced materials such as bricks, sewer-pipes, sand and cement, would be purchased by local shopping (Rs 19 millionor US$1.5 million). Small items of equipment for the solid waste component(handcarts, etc.; Rs 4 million or US$0.3 million) and for the executingagencies (vehicles and office equipment; Rs 2 million or US$0.15 million)would be purchased by local shopping.

3.14 In summary, contract values for the various procurement proceduresare expected to be as follows:

US$ Million

(a) Civil works

(i) international competitive bidding 5.5(ii) local competitive bidding 5.9(iii) force account 0.5

(b) Equipment, goods, materials

(i) international competitive bidding 2.8(ii) local competitive bidding 0.4(iii) local shopping 1.9

3.15 House building investments, amounting to Rs 35 million (US$2.7million) in the sites and services area and house reconstruction investmentsamounting to Rs 20 million (US$1.5 million) in the Walled City, would beawarded to beneficiaries through the HBFC. Consultant and training servicesamounting to Rs 25 million (US$1.9 million) would be procured individually bythe agencies responsible for implementation of the respective project com-ponents on terms and conditions acceptable to IDA.

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Disbursements

3.16 The proceeds of the proposed IDA Credit would be disbursed againststandard documentation as follows:

(a) civil works: 55%

(b) vehicles, equipment and materials:

(i) directly imported, 100% of foreign expenditures;

(ii) locally manufactured, 100% of local expenditures,ex-factory; and

(iii) other locally procured vehicles, equipment and mate-rials (off-the-shelf-procurement) 65% of total costs;

(c) consultants' services and training; 100%, and

(d) investments with beneficiaries in the Walled City for housereconstruction and improvement and for house construction inGujjarpura, 100% of amounts onlent by HBFC.

3.17 Reimbursement for the housing investments would be claimed on thebasis of a certified statement of expenditures which would include a list ofloans disbursed during the reporting period and evidence of disbursements bythe relevant agency. Other documentation relating to the loans would beretained in one central location and made available to IDA staff for reviewon request during supervision mission. Disbursements for civil works onforce account would also be made against statements of expenditure certifiedby the project manager. All other disbursements would be fully documented inaccordance with standard IDA procedures.

3.18 To maintain the momentum of project preparation, retroactive finan-cing not exceeding US$1.0 million is recommended for project related expendi-tures for (a) consulting services for final design of the sites and servicescomponent and (b) implementation of the first part of the Walled City upgradingscheme. These items would be procured in accordance with IDA requirements.

3.19 The Regional disbursement profile for the urban sector indicatesdisbursements covering a six year period. For this project the disbursementperiod is estimated at five years due to (a) the design-build approach adoptedfor the sites and services component, (b) the advanced state of preparationof the Walled City upgrading component, and (c) the fact that IDA funds forthe solid waste component will be mainly disbursed against equipment, whichcan be rapidly procured. The estimated disbursement schedule is shown in TableIII-2.

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Table III-2: ESTIMATED DISBURSEMENT SCHEDULE

CumulativeIDA Fiscal Year Quarter Ending Disbursements Disbursements

(US$ '000) (US$ '000)

84 September 30, 1983 - -December 31, 1983 400 400March 31, 1984 500 900June 30, 1984 600 1,500

85 September 30, 1984 700 2,200December 31, 1984 900 3,100March 31, 1985 1,100 4,200June 30, 1985 1,200 5,400

86 September 30, 1985 1,300 6,700December 31, 1985 1,400 8,100March 31, 1986 1,300 9,400June 30, 1986 1,200 10,600

87 September 30, 1986 1,100 11,700December 31, 1986 1,000 12,700March 31, 1987 900 13,600June 30, 1987 800 14,400

88 September 30, 1987 600 15,000December 31, 1987 500 15,500March 31, 1988 250 15,750June 30, 1988 250 16,000

E. Accounts and Audits

3.20 Both LDA and LMC will maintain separate project accounts and eachof these agencies will prepare quarterly progress reports, including projectfinancial statements for submission to IDA not later than six weeks after theend of each quarter. LDA and LMC will prepare an annual report, includingfinancial statements for the project, audited by auditors acceptable to IDA,for submission to IDA no later than six months after the close of eachfinancial year. Not later than six months after the close of each financialyear suitable financial information, including cash flow statements andbalance sheets as of the year end, accompanied by a report on the accountsand statements by an auditor acceptable to IDA, will be submitted to IDA byHBFC for the whole of its activities as well as for the project. The currentpractice of this institution makes it relatively easy for it to comply withthis requirement. The statements of expenditure for housing investments

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by HBFC and civil works carried out under force account by LDA will be auditedby independent auditors acceptable to the Association. For this purpose, acopy of each such statement of expenditures would be furnished to the auditorsby HBFC and LDA. A copy of each audit report would be furnished to IDA onsemi-annual basis.

F. Monitoring and Evaluation

3.21 In view of the innovative nature of some of the project components,the impact of the project upon beneficiaries will be monitored to test theresponse to the various options available under the sites and services andupgrading schemes. Monitoring and evaluation will be financed under theproject and will be the responsibility of the LDA, which will include in itsquarterly progress reports key indicators of the extent to which the projectis meeting its objectives.

G. Supervision

3.22 About 90 staff weeks of IDA supervision would be required, spreadevenly over the project implementation period.

IV. COST RECOVERY, AFFORDABILITY AND BENEFICIARY SELECTION

4.01 Cost recovery sources for project components would be as follows:

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Component Recovery Source

(a) Walled City:

(i) On-site infrastructure (includ- Connection fees, watering design and supervision) and sewerage charges and

increase in property taxes.

(ii) Solid waste collection service Municipal taxes.

(iii) Investments for house reconstruc-tion Repayments to HBFC

(iv) Upgrading of schools and communityfacilities Not recovered.

(v) Conservation plan and communitydevelopment Not recovered.

(b) Gujjarpura Sites and Services:

(i) Land and on-site infrastructure, Sale of plots.including design and supervision

(ii) Off-site roads Partly through Municipaltaxes.

(iii) Housing investments Repayments to HBFC.

(iv) Training and technical assistance Not recovered.

(c) Solid Waste Management Municipal taxes.

(d) Studies Not recovered.

4.02 About 73% of total project costs would be recovered directlyfrom beneficiaries, through plot charges and sale of plots in Gujjarpuraand through connection fees, investment repayments and the increase inassessable annual rental values resulting from the improvements in the WalledCity to be effected under the project, which will produce an increase inproperty tax and related revenues to the LMC and WASA.

4.03 The costs of developing the Gujjarpura Expansion Area would berecovered by LDA through (a) the sale of plots to low income beneficiaries;(b) the sale of commercial, industrial and some residential plots at marketprices; and (c) through development charges for the exempted area set asidefor existing landowners. As low income residential plots become available they

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will be allotted to beneficiaries, who will have been selected on the basis ofcriteria acceptable to IDA (see para 4.08 below). Title for the plot willpass to the beneficiary on allotment on his making a 15% downpayment to LDAand the remainder would be payable over up to 2 years. The price of the plotwill include the cost of land and development charges, 1/ adjusted by differ-ential pricing within the scheme. The surplus from the Gujjarpura expansionscheme, estimated to be about Rs 73 million in 1980 prices after deductingcross subsidies to low income group beneficiaries of Rs 8 million, would beused by LDA to finance similar projects elsewhere in Lahore (see Table IV-1)and by HBFC for similar projects in Pakistan. House building investments inGujjarpura, and house improvement investments in the Walled City, would berepaid by beneficiaries over a period of up to 20 years under the HBFC'sprofit sharing scheme (see Annex VI). The effective rate of interest underthe scheme is currently 7% for the first three years of repayments, but mayincrease thereafter as properties are revalued and is likely to exceed theforecast rates of inflation, which decline from 8.5% in 1983 to 6% in 1987.

4.04 In the Walled City upgrading area, investments with beneficiariesfor house reconstruction would be recovered by HBFC. The cost of improvementsto the water distribution network and the cost of sewer installation would berecovered through connection fees, water and sewerage tariffs and, togetherwith the cost of improvement to footpaths, electricity supply and streetlighting and solid waste collection, through increases in property taxresulting from reassessment of the annual rental values (ARVs) of propertiesaffected, which would be reassessed to reflect the value of the improvementscarried out. Assurances were obtained at negotiations that, during implemen-tation of the Walled City upgrading, GOPUN and LDA will review the upwardrevaluation of ARVs to ensure that the resulting increase in taxes is suffi-cient to recover the costs of the improvements carried out. The reassessmentof ARVs will also increase water and sewerage tariffs, which are based on ARVs.

A. Affordability and Income Distribution

4.05 Table IV-1 shows the land use, plot options, monthly charges andpercentiles reached in the Gujjarpura sites and services scheme. Surveysin Lahore have indicated that the low-income groups devote from 18 to 25%of their income to shelter and these are the percentages that have been usedto calculate the affordability of the proposed sites and services scheme.The cheapest plot option, including a building investment, would be affordableto households with income ranging from the 12th to 20th percentile of theurban income distribution. All of the low-income plots would be affordableto beneficiaries with incomes below the urban poverty threshold (45th per-centile, Rs 850 per month).

1/ Development charges are payable by both existing landowners and low-income beneficiaries and include the cost of on-site infrastructure,design and supervision and interest during construction.

IAEBLE IV-1 LAHORE: GUJJARPURA LAND USE, COSTS, AFFORDABILITY AND CROSS SUBSIDY JANUARY 10 1983

LAND USE LAND REALLOCATION LAND LAND INFRAST TOTAL

LAND USE M2 '. OF % OF X OF COST COMMUN ON SITE COST COST COST COST

000)) TOTAL USABLE RESIDENT RS.MN FACILITY INFRAST RECOVER PER M2 PER M2 PER M2

LciW INCOME BENEFICIARIES 335.69 15.02 22.96 30.12 1.84 0.26 0.51 2.61 7.76 54. 00 61.378RESIDENTIAL MARKET SALES 38.01 1.70 2.60 3.41 0.21 0.03 0.06 0.30 7.76 62.00 69.78

COMMERCIAL PLOTS 36.97 1.74 2.67 0.21 0.06 0.27 7.(0 62.00 69. 00

INDUJSTRIAL PLOTS 159.42 7.13 10.91 0.67 0.24 1.12 7.00 62.00 69.00

AREA OF EDUCATION&HEALTH 147.93 6.62 10.13 0.81 0.22 1.03 7.00 62.00 69. 00

EXEMPTEES 591.61 26.47 40.50 53.08 EXEMPT 0.47 0.90 1.36 2.30 62.00 64.30EXISTING HOUSING 149.19 6.67 10.21 13.39EXISTING 0.12 0.23 0.34 2.30 62.00 64.30

lOTAL USABLE 1460.82 65.35 100.00 100.00 3.95 0.88 2.21 7.04 4.82

ROADS:A.ON SITE 361.70 16.16 1.98 1.98EB.EXISTINB 49.73 2.22 EXISTING

C.OFF SITE 118.27 5.29 0.53 NOT RECOVERED

SUBTOTAL 529.70 23.70 2.51DRAINAGE

A.ON SITE 42.36 1.89 0.23 0.23B.0FF SITE 42.36 1.69 OWNED

SUBTOTAL 64.72 3.79 0.23

COMMUNITY FACILITIES 14.49 0.65 0.08 0.06OFEN SPACE 145.70 6.52 0.80 0.80 W

TOTAL 2235.43 100. 00 7.56

LOW INCOME BENEFICIARIES AFFORDABILITY OTHERS

ORD PLOT GALIS SPINE A SPINE B PRIME LC TOTAL EXISTING EXEMPT MARKET COMMERCE INDUST ED&<HEALTPLOT SIZE 4M2) 72.00 90.00 90.00 108.00 150.00 200.00 136.00 305.00 182.00 394.00 4931.00PLOI NOS 2783.00 721.00 363.00 79.00 195.00 4141.00 746.00 4350.00 125.00 213.00 405.00 30.00TOTAL AREA 0001M2 200.38 64.89 32.67 8.53 29.25 335.72 149.20 591.60 38.13 38.77 159.57 147.93

COST FER M2 61.78 61.78 61.78 61.76 61.78 64.30 64.30 69.7 69?.00 69.00 69.00

FLOT COST RS 4448.41 5560.51 5560.51 6672.61 9267.51 12860.7 8745.26 21263.9 12557.2 27184.3 340216

SALE PRICE RS 2000. 00 40ttO:.00 4500.00 5500.00 9267.51 14340 9750.00 218750 152280 60140 340216

COtJNECTION FEES 100.O0 100.00 100.00 100.00 IOC0.0o 555.00 555.00 555.00 555.00 555.00 555.00TOT-AL PRICE RS 2100.00 4100. 00 4600.00 5600.00 9367.51 14895 10305 219305 152835 6s695 340773

DUILDINGN LOAN RS 80oo.o0 8000).00 6000.0C0 8000.00 so oooo.oo

MON rHLY PAYMENT 1 01.OC 121.00 126.00 136.00 173.68MIII N; OF I1NCOME 18.0o 18.(00 18. 00 18.00 20.00MAX ' OF INCOME 22.001 22.0C1 22.00 22.00 25.00MIt INC:lNME R6 459.119 550. 00 572.73 618.18 694.70MAX INCOME RS 561.11 672.22 700.00 755.56 868.38MINl PERCENTILE 12.00 20.00) 22.00 25.00 35.00t1AX FERCEN I FILE 20.00 3-4. 00 35. 00 37.00 45.00

CROSS SUBSIDY (RS.MILLION)TDWAL LOST 12.38 4.01 2.02 0.53 1.81 20.74 9.59 38.04 2.66 2.67 11.01 10.21

SALES REVENUE 5.57 2.88 1.63 0.43 1.81 12.33 1 0.70 42.41 27.34 Z32.44 32.46 10.21

SURPLIJS/DlEF- ICITl -- 6.81 -1.1 -. zs -- 0.09 (W.)00 -- 8.42 1.1(1 4.37 24.68 29.76 21.45 (). 00

NET 51 IRPFUI-i 72.95

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4.06 In the Walled City the increase in property tax assessments result-ing from the rise in average annual rental values would range from about Rs20-30 per month per household, which would be affordable to 95% of the WalledCity households (on the basis of 5% of household income being available torepay costs of improvements).

4.07 Income distributions are shown in Chart IV-1.

B. Beneficiary Selection

4.08 LDA would have responsibility for selection of beneficiariesin the site and service area. Beneficiary selection criteria will includethe income of beneficiaries and correspond to the percentage ranges inTable IV-l. Assurances were obtained during negotiations that the selectioncriteria adopted will be satisfactory to IDA. Agreement was also obtainedduring negotiations on the principles to be incorporated in the sales con-tracts between LDA and beneficiaries.

4.09 In the Walled City 50% of the beneficiaries residing in the projectareas are within the urban poverty group. Infrastructure benefits will beequally distributed to all income groups within the project area.

V. IMPLEMENTING AGENCIES

A. Project Organization

5.01 Responsibility for implementation of the project will be with LDAand LMC for their respective components, while investments with beneficiarieswill be provided through HBFC. LDA will undertake the upgrading of theWalled City, the Gujjarpura sites and services and the technical assistancerelating to these components as well as project monitoring and evaluation andpreparation of the second urban project. LMC will undertake the solid wasteimprovement component together with the studies related to this component.Coordination between these two bodies will be achieved through the existingLMC/LDA coordination committee at the official level, and at the workinglevel through a working group already formed by the Chief MetropolitanPlanner, LDA, and the Chief Corporation Officer, LMC. HBFC would be respon-sible for the provision of an investment to LDA for area development in theGujjarpura expansion area and for house building ftinds to the low-incomebeneficiaries in the sites and services area and in the Walled City (housereconstruction).

CHART IV-1

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LAHORE URBAN DEVELOPMENT PROJECTINCOME DISTRIBUTION

lOC

BNi~~~~~~ .,.

90-

(b)

80

70-(c)

60

o a -0

ol I50

20

5)~~~~~~~~~~~~~~~~~~~jd

(c) Gujjarpura Sites and Services, Low Income BeneficiariesIncome Distribution (1980)

(d) Urban Poverty Level (1980) World Bank -23183September 1981

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5.02 Maintenance of project components will be the responsibility of theagencies normally concerned with maintenance in the LMA. LMC will be respon-sible for maintenance of streets in the Walled City and sites and servicescomponents and will improve its street maintenance capability under the projectto meet the obligation. LMC will also maintain the investments made underthe solid waste component. WASA will be responsible for supply of water andoperation and maintenance of sewerage and drainage services in the upgradedparts of the Walled City and in the sites and services area. WAPDA will beresponsible for supply of electric power to the Walled City upgrading areaand the sites and services area and for the maintenance of electrical instal-lations in these areas, except for street lighting, which will be maintainedby LMC. WASA and WAPDA will liaise with LDA project staff during design andimplementation to ensure agreement on standards of design and completed works.Garbage collection in both the sites and services area and the Walled Citywill be the responsibility of LMC.

5.03 Serviced plots of land in the sites and services area that arereserved for schools, hospitals, health centers and community centers willbe sold to the appropriate authorities. Maintenance of upgraded schools inthe Walled City will be the responsibility of the Department of Education.

B. The Lahore Development Authority

5.04 The LDA replaced the Lahore Improvement Trust (LIT) in 1975. LDAis an autonomous body under the Department for Housing and Physical Planning(Government of Punjab), governed by the Lahore Development Authority Act1975. The Authority consists of nine members, in addition to the Chairmenof Municipal Committees, the Director General LDA, the Managing Director ofWASA, and two members of the Provincial Assembly. The chief executive isthe Director General and the Chairman is the Governor of the Punjab.

5.05 LDA has the authority to create agencies--as has been done in thecase of WASA, which is an autonomous agency but under the same Board as LDA.

Functions and Organization

5.06 The LDA has responsibility for development planning and implemen-tation, including roads, land development and housing. In addition, it alsohas a large horticulture department, which is responsible for the maintenanceof the many parks and gardens for which Lahore is famous. It is indirectlyinvolved in water supply, drainage and sewerage through WASA. LDA is alsoresponsible for the formulation of building regulations.

5.07 The legal framework under which the LDA acquires land is essen-tially the Land Acquisition Act of 1894, modified in 1973, which allows theauthority to enter an area while the acquisition procedure is still going on;the Punjab Housing Scheme 1973 "Punjab Acquisition of Land"; and Martial LawInstruction August 1977.

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5.08 Under the present organization structure the Director General LDAis the head of nine sections under the Chief Metropolitan Planner, the ChiefEngineer, the Director Land Development, the Town Planner, the Director EstateManagement, the Director Katchi Abadis, the Director Administration, theDirector Finance and the recently created post of Director of Coordination andImplementation. The organization structure has been reviewed by consultantsappointed to study the LDA's organization, management and finances and theconsultants' recommendations are currently being considered by LDA management.

5.09 The project has been prepared by a team of professionals under theChief Metropolitan Planner. This team, which consists at present of an urbanplanner, a traffic engineer, a civil engineer, an architect, an economist andtwo sociologists with a dozen support staff and draftsmen, has the assistanceof engineering staff from WASA. Final design of project components and pre-paration of tender documents are being carried out by the project preparationteam, with the assistance of a local consulting firm in the case of the sitesand services component.

Performance

5.10 Since 1947, a total of approximately 2,144 hectares have beendeveloped by LIT and LDA. In recent years development has averaged about15,000 plots annually. A review of project time spans shows that projectstend to stretch over at least seven years. The very long time span is partlydue to cumbersome procedures, responsible for at least three years in thepresent method of work. To help meet the demand for serviced sites--20,000to 25,000 annually--LDA needs to significantly increase its output of develop-ed land and to encourage private sector participation in urban development.

5.11 In addition to its normal functions of planning and development LDAhas carried out an important slum upgrading program over the past 3 years,improving conditions and providing security of tenure to some quarter of amillion people in 30 Katchi Abadis. So far this program has concentratedon slums on public land. Costs of providing infrastructure are recoveredfrom beneficiaries in exchange for provision of security of tenure. The nextstage of the program will address the problems of upgrading slums on privateland.

Finance

5.12 Summary financial statements for LDA are shown in Table V-i.The major sources of revenue are development projects and ADP allocations,the latter, including road works and Katchi Abadi upgrading. In the past, theLDA's financial position has been affected by delays in project completion anddelays in selling land according to its timetable.

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Table V-1: LDA - SUMMARY FINANCIAL STATEMENTS(Millions Rupees)

-----------Actual--------------- Budget1979-80 1980-81 1981-82 1982-83

Revenues:

Capital & General Revenues 44.6 43.2 45.1 52.6ADP Allocation 105.9 24.8 49.5 59.0Development Funds of LDA 157.8 177.7 253.6 281.6Other 20.8 5.0 17.8 26.2

Total 329.1 250.7 366.0 419.4

Expenditures

Administration & Operations 51.7 102.1 55.3 76.1ADP Financed Projects 148.9 78.5 66.2 83.4LDA Financed Projects 117.4 165.2 215.2 237.2Other 15.7 5.4 15.5 15.0

Total 333.7 351.2 352.2 411.7

Surplus/(deficit) (4.6) (100.5) 13.8 7.7

5.13 The single entry accounting system maintained by LDA providesinsufficient information for sound management decisions and gives no pictureof assets and liabilities. The report of the organization, management andfinance (OMF) study has recommended that LDA should adopt a double entrybookkeeping system and should also be subject to independent audit by a firmof Chartered Accountants. The OMF Study was completed in 1982 and is beingfollowed by a second stage in which consultants are implementing the agreedrecommendations. Assurances were obtained during negotiations that theserecommendations, including adoption of a double entry bookkeeping system andindependent audit, will be implemented during execution of the project.

5.14 Under the proposed project LDA will provide funding of Rs 56 mil-lion from its own resources. This amount would represent less than 10% ofLDA's own development projects over the three year period and should thereforebe within LDA's financial resources. LDA will use the surplus generated bythe sites and services component (about Rs 119 million in current prices afterrepayment of HBFC's principal and share of profit; see Annex III-4) to financesimilar sites and services projects for low income beneficiaries elsewhere inLahore, in accordance with current practice.

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C. The Lahore Municipal Corporation

5.15 The Lahore Municipal Corporation (LMC) operates according to thePunjab Local Government Act 1975, revised in 1979. It is an autonomous bodyunder the Secretariat of Local Government and Rural Development (Governmentof Punjab). Since the local elections held in November 1979, the LMC hasbeen directed by the elected Mayor and Council of 110 members.

Functions and Organization

5.16 The responsibilities of the LMC are to provide certain urban servicesto the inhabitants of the municipal area, including: (a) maintenance, repair,and construction of roads and streets; (b) control of encroachments; (c) firefighting; (d) provision and maintenance of street lights, traffic signals androad signs; (e) primary education; (f) maintenance of open drains; (g) healthand sanitation, including solid waste collection and disposal; (h) recreation(parks) and social welfare.

5.17 There are seven branches shown in the function oriented organizationchart of LMC with:

- The Chief Officer (in charge of the administration of personneland of the secretariat).

- Chief Engineer (in charge of fire fighting, street lighting,roads, construction works, building control, parks).

- The Education Officer (in charge of the administration of LMCschools and other educational matters).

- The Medical Officer (in charge of public health measures,administration of medical establishments and solid wastecollection).

- Social Welfare and Public Relations Officer (in charge of theadministration of the welfare establishments and publications).

- The Chief Accounts Officer.

- The Taxation Officer.

Finance

5.18 The LMC presents a budget by April 1 of each year for the Council'sapproval. As can be seen from Table V-2, Octroi Tax accounts for 60-70% ofthe LMC's income. The second largest income source is taxes and fees of whichabout 75% is derived from property tax. Since GOPUN took over the responsi-bility for collecting this tax in 1975, the LMC has benefitted considerablyfrom the improved collection results (GOPUN retains 15% and LMC and WASAsplit the balance, receiving 42.5% each). Many of the LMC's tax rates,

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including Octroi and license fees are several years old, and there is noprocedure within LMC for periodic updating of these taxes. Octroi, however,displays a natural buoyancy as trade increases. Property values are reassessedevery five years and the 1980/81 reassessment has more than doubled revenuesfrom this source in 1982/83.

5.19 The major expense for LMC is sanitation (mainly solid waste collec-tion) which has recently risen to about one third of total expenditure. Underthe project assistance to LMC would focus on this activity. The other mainitems of expenditure are schools, roads and drainage. On average, about 50%of LMC's budget is spent on capital development, mainly on civil works fordrainage, roads and schools, and on equipment for solid waste collection.

5.20 The total budget income for fiscal year 1983 is forecast at Rs 292.2million (US$22.5 million). The anticipated participation in the project byLMC of Rs 30 million (US$2.3 million) over three years would represent only3% per year of LMC's current budget income.

5.21 LMC would be responsible for implementing the solid waste andmunicipal maintenance components of the project. Consultants have recentlybeen appointed for further preparation and final designs of these components.LMC has appointed a project director for the solid waste management component.

Table V-2: LMC - SUMMARY BUDGET STATEMENTS(in million Rupees)

Actual Actual Budget1978/79 % 1979/80 % 1982/83 %

IncomeOctroi 109.9 62 137.0 67 187.6 64Taxes and Fees 27.8 15 36.9 18 83.4 29Grants 24.9 14 9.5 4 1.5 -Other 15.9 9 21.1 11 19.7 7

Total Income 178.5 100 204.5 100 292.2 100

ExpensesSchools 24.7 14 28.0 14 47.7 16Sanitation 48.0 27 53.4 26 102.7 35Drainage 18.5 10 40.7 20 57.0 19Roads 28.3 16 29.7 15 43.2 15Other 56.0 31 54.1 26 73.8 25

Total Expenses 175.5 98 205.9 101 324.4 111

Net Surplus/(Deficit) 3.0 2 (1.4) (1) (32.2) (11)

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D. The House Building Finance Corporation

5.22 The House Building Finance Corporation (HBFC), established in 1952,is the only long-term housing finance institution in Pakistan. It is a para-statal body with representatives of each of the provinces and the FederalGovernment on its Board and its share capital owned entirely by GOP. Head-quarters are in Karachi with 3 zonal offices, 13 regional offices and 28district offices serving the entire country. Total staff numbers about900 persons.

5.23 The primary objective of HBFC is to provide finance to individualsfor the construction or purchase of houses. It also finances housing develop-ment projects by making investments with Development Authorities. Since itsinception, HBFC has advanced a total of Rs 4,550 million (US$350 million)for the construction or reconstruction of some 380,000 units of residentialproperty. The vast majority of these were small investments (average valueRs 1,560, US$120) for flood relief (280,000). Although there is no require-ment for HBFC to distribute its investments in any particular ratio betweenthe provinces, they are in fact fairly evenly spread on the basis of popula-tion.

5.24 The growth in HBFC's lending has been quite impressive in recentyears, averaging 35% per annum over the past four years. However, sourcesof finance are entirely provided by GOP and the State Bank, HBFC merelyacting as an administrative on-lending agency for these funds. The demandfor HBFC investments is invariably greater than the supply available.The lending program for 1982/83 amounts to Rs 850 million (US$65 million)which, on the basis of the present average housebuilding investment size ofRs 41,000, would be sufficient to advance about 20,000 investments.

5.25 In 1979 HBFC changed from a basis of interest charges for itsinvestments to a profit sharing basis in conformity with the Government'spolicy of Islamization of the financial sector. Under the new system,profits, or losses, are divided on a predetermined basis between HBFC and theborrower, according to the assessed market rental value of the property. Thepresent level of profit sharing is equivalent to a nominal interest rate of7%, although this is likely to be revised upwards as a result of propertyrevaluations which take place every three years. HBFC's current practice isto provide funds to individual beneficiaries for a maximum of 15 years,although it is empowered to extend this to 20 years. Investments with devel-opment authorities for area development are for 3 years. A more detaileddescription of HBFC's lending policy and finances is contained in Annex VI.

5.26 Under the proposed project HBFC would act as the financial inter-mediary for Rs 155 million of IDA funds, part to be invested with the LDA fordevelopment of the Gujjarpura sites and services project (Rs 100 million) andpart to be invested directly with low income project beneficiaries for housereconstruction and improvement in the Walled City upgrading area (Rs 20 million,see para. 3.09) and for house construction in the sites and services area(Rs 35 million, see para 3.09). Repayments of these funds would be set aside

- 42 -

in a revolving fund by HBFC and used to finance future area developmentprojects for low income beneficiaries, the composition of these projects tobe mutually agreed between IDA and HBFC. This will help to provide a modeststart towards meeting the growing demand for urban services and shelter. Itis also to be hoped that during implementation of this project HBFC willdevelop schemes, which are currently being investigated, to mobilize domesticresources and overseas worker remittances as a source of finance for invest-ment in urban development.

VI. PROJECT JUSTIFICATION AND RISKS

6.01 The proposed project would represent an important step towardsstrengthening the capacity of local institutions to undertake improved urbanplanning and development projects in Lahore. The training and technicalassistance components of the project, coupled with the experience to be gainedfrom implementation of the physical components, are expected to enhance thecapability of the institutions responsible for urban planning, management andfinance. In particular, the organization management and finance (OMF) studyof the LDA, together with implementation of the recommendations arisingfrom this study, should result in a considerable improvement in the manage-ment and efficiency of this institution. The solid waste management study forLMC will help to improve efficiency in this important sector of municipaloperations. These studies can be expected to have extensive spin-off inassisting other Development Authorities and municipalities to improve theirefficiency and management systems.

6.02 The direct benefits of the proposed project would be seen in:

(a) the improved living environment and sanitary conditions ofsome 50,000 persons in the Walled City upgrading area;

(b) the provision of basic infrastructure and shelter servicesto some 65,000 people in the sites and services area; and

(c) citywide improvements in sanitary conditions throughimproved garbage collection service.

6.03 These physical components would demonstrate the effectiveness andreplicability of programs involving appropriate design and planning standardswhich are affordable to low-income beneficiaries and which thus achieve costrecovery.

6.04 The economic rate of return for the upgrading and sites and servicescomponents, representing 80% of project cost, is estimated at 20% (paras.6.05 to 6.07). Rates of return were not computed for other project componentsdue to difficulties in quantifying their benefits. However, alternativeindicators of the economic merit of the solid waste management component arediscussed in para 6.08 below.

- 43 -

Sites and Services and Upgrading

6.05 The valuation of benefits in the sites and services area is basedupon imputed rental values for residential plots and market sale prices forcommercial, industrial and large residential plots. In the upgrading areasbenefit valuation was based upon estimates of increases in rental valuesbrought about by improvements made under the project. Rental values in theproject areas and in areas with similar location characteristics were obtainedthrough surveys carried out during project preparation. The following esti-mates of rental values were used for calculation of benefits:

Before Project After Project

Monthly room rentals:

(a) sites and services not applicable Rs 150(b) upgrading Rs 125 Rs 175

6.06 The following project costs were included in the analysis (seealso Annex IV):

(a) site development costs including land acquisition (for sitesand services scheme only), site preparation and on-siteinfrastructure costs, the share of community facilities andoff-site infrastructure costs allocable to the project site,administrative expenses, design and supervision and physicalcontingencies;

(b) on-plot development costs including costs of self-help build-ing materials and related labor financed through buildingloans and household savings; and

(c) annual operation and maintenance costs estimated at 3% oftotal development costs.

6.07 The sites and services and upgrading components would togetheryield an estimated economic rate of return of 19.8%. Separately, the sitesand services scheme would have a return of 15.0% and the upgrading scheme27.2%. Sensitivity analysis of the rates of return gave the followingresults:

Cost plus Cost less Benefits Benefits10% 10% plus 10% less 10%

Sites and Services 10.8% 20.4% 19.9% 10.4%Upgrading 24.3% 30.8% 30.4% 24.1%

- 44 -

Solid Waste Management

6.08 The quality of the environment in the city would be significantlyimproved by the extended and improved garbage collection service proposedunder the project. The ability of the municipality to maintain the servicewill be increased by the management reorganization and resource mobilizationfollowing from the studies included under this component. Street maintenanceservices will also be improved by the provision of equipment under the project.The proposed solutions have been selected after comparison with more capitalintensive alternatives, and the least cost solutions with the higher propor-tion of local materials and labor have been adopted. While the componentwill benefit the whole of the city's population by improving health conditions,it will mainly benefit the poorer sections of the community since the exten-sions of service will be located primarily in lower income neighborhoods.

Replicability of Sites and Services and Walled City Upgrading

6.09 While the proposed project will increase the output of LDA Sitesand Services during the period, there will still remain a significant backlogand demand for serviced land by the urban poor.

6.10 The annual demand for serviced land by the urban poor is estimatedat about 10,000 plots per year, about 45% of total annual new housing needs.The Gujjarpura site will generate some 4,000 units that are affordable by theurban poor. 1/ This will take approximately three years to complete, provid-ing 1,330 units per year. In order to significantly increase the impact ofthe LDA program on the urban poor, a substantial expansion of their currentprogram would be required in the next five years.

6.11 Replicability of such programs on a metropolitan scale is made pos-sible by the overall surpluses generated by a project of this type which willbe channelized into similar projects (see Annex III-4). Both land acquisitionand development costs can be met from such a fund. The land acquisitionpowers enjoyed by the LDA offer a unique opportunity to bring serviced landand shelter within reach of income-groups otherwise priced out of the landmarket. Surpluses generated from sale of some residential plots on the openmarket, along with sales at market prices of industrial and commercial plotsallow a cross-subsidy 2/ to be provided to low-income groups to make prices ofplots compatible with their ability to make downpayments and monthly repayments.

6.12 The Walled City upgrading program will cost approximately Rs 3,000(US$230) per household and monthly payments would amount to about Rs 30 permonth, which would be about 3% of the household monthly income (Rs 850) at theurban poverty threshold. Such relatively low repayments provide a basis forcitywide replicability of basic services.

1/ Household income of Rs 850/month in December 1980.

2/ The cross-subsidy amounts to Rs 8.42 million (1980 prices, see TableIV-1) or approximately Rs 2,030/plot on average.

- 45 -

Urban Poverty Impact

6.13 In the Walled City, 50% of the upgrading beneficiaries or 25,000people, are in the urban poverty group. In the Gujjarpura sites and servicesproject, 45% of the residential lots (4,200) are affordable by the urban poor.Sixty-five percent of the solid waste component is attributable to the urbanpoverty group. Of the total project cost of US$24 million, 50% or US$12million is attributable to the urban poverty group (Annex V). Urban povertysectoral indicators are shown in Annex V.

Project Risks

6.14 The main risks to the project are seen as arising from (a) thesevere manpower shortages resulting from the drain of human resources tolucrative employment in the oil-rich countries of the Middle East, stemmingmainly from the very low professional and technical salaries that the localimplementing agencies are permitted to pay; and (b) the possibility of con-tinued shortages in critical building materials such as cement and reinforcingsteel.

6.15 A great deal will depend on the ability of the implementing agenciesto mobilize competent teams to supervise and execute components of this proj-ect. Experience during the initial preparation of this project has not beenimpressive. However, from about the time of preappraisal late in 1980 andsubsequently, there has been new momentum and enthusiasm displayed through theperformance of Government agencies and their staff. The project has beendesigned to minimize the potential risks inasfar as is practically possible,through the integration of a selective and intensive training program with aview to rapidly strengthening the institutional capacity of LDA and LMC,particularly for middle-management roles, and through the use of consultants.The introduction of the design-build approach for the Gujjarpura ExpansionArea has been particularly structured to utilize the motivation, ingenuityand management capacity of the private sector to alleviate management andmaterial shortages.

6.16 In the longer term, the replicability of the project at the locallevel is reasonably assured through the surplus generated to LDA from thesites and services scheme and by the low costs of the other components,coupled with increasing municipal revenues and cost recovery in the WalledCity upgrading component. Nevertheless, the scarcity of mortgage financethreatens to inhibit the development of similar schemes on the much largerscale that will be necessary to meet Pakistan's pressing need for urbanservices and shelter. The solution to this problem lies in the ability offinancial institutions, particularly the HBFC, to harness local resources,including remittances from overseas workers, which exceed US$2 billion peryear, for investment in urban services and shelter. This matter is alreadyunder investigation, at both the Federal and Provincial level. Meanwhilethe initiatives taken under the project will start to provide solutions tothe tremendous natural pressure for serviced sites and housing and willemphasize the need for an improved long term mortgage market.

- 46 -

VII. AGREEMENTS REACHED AND RECOMMENDATIONS

7.01 During negotiations, assurances were obtained from the Governmentof Pakistan, GOPUN, LDA, LMC and HBFC that:

(a) LMC will provide buildings and staff to support a vehicle andplant maintenance program acceptable to IDA (para 2.32);

(b) terms and conditions of the Investment Agreement betweenthe Government and HBFC shall be as specified in this report(paras 3.09-3.10);

(c) (i) LDA and LMC will maintain separate project accountswhich will be audited by auditors acceptable to IDA;accounts and audit reports will be submitted to IDAno later than six months after the close of eachfinancial year (para 3.20);

(ii) LDA and LMC will submit to IDA quarterly financialstatements and reports, containing among other thingsthe findings of project monitoring and evaluation,not later than six weeks after the end of each quarter(para 3.20); and

(iii) HBFC will submit audited financial statements to IDAnot later than six months after the close of eachfinancial year (para 3.20).

(d) terms and conditions of cost recovery from beneficiaries willbe as specified in this report (paras 4.01-4.04);

(e) beneficiary selection criteria and sales contracts will besatisfactory to IDA (para 4.08);

(f) LDA will adopt a double entry bookkeeping sytem and will haveannual audits undertaken by an independent firm of Auditorsduring project implementation (para 5.13);

(g) HBFC will place the surplus funds generated under the projectin a revolving fund to be used to finance similar projects infuture (para 5.26).

7.02 Conditions of credit effectiveness will be execution of:

(a) the Investment Agreement between the Government andHBFC (paras 3.09 and 3.10); and

(b) the on-lending agreement between HBFC and LDA (paras 3.09and 3.10).

7.03 The proposed project constitutes a suitable basis for an IDA creditto the Government of Pakistan of US$16.0 million.

LAHURE: UREiAN DEVELOPMENt1IT PROJECT: DETAILED COST ESTIMATES OF 220 NOVEMBER 82COMF'ONENT: WALLED CITTY UJPGRAD INBEXECIJTING AO3ENCY: LAHORE DEVELOPFMENT AUTHORITY

, -.......... .... ..I. .... . . _. _ ..... _.. .. X_. ____.. ._. .__. .

I TEMS BASE FOREIGN LOCAL TAX COMFPONENT'COS'T FOREIGN COST COSrT VALUE

RS.MN RS.MN RS.MN RS.MNA. I NF'RASTRLJCTURE

1. LEAK DETECTION 0.83 20.00 0.17 0. 662. REPLACEMENT OF WATER SIJPPLY 2.85 20. 0H 0.57 2.283. NEW WATER MAINS S.32 30.00 1.60 3.734. SEWERAGE 8.43 10.00 0.84 7.585 .ELECTRICITY & STREE'T' LIGHTING 2.18 30.00 C). 65 1.526.JUPGRADING SCHOOLS &z COMMUNITY FACILITIES 3.60 1 C). 0: 0.36 3.24

SUB TOTAL 23.20 4.19 19.01B.CITY WIDE SOLID WASTE 1.45 30.00 0.44 1.02 20.00 0.29C.DESIGN & SUFPERVISION 2.20 0.00 2.2 0D. CONSERVATION PLAN 2.20 0.00 2. 20E.LOANS FOR' INSTALLATION OF W.C.S 0.00 20. 00 0.00 0.00F. LOANS FOR HOUSE RECONSTRLUCTION 20. 00 5.00 1 .00 19.00G.TRAINING & TECHNICAL ASSISTANCE: 0.C)00 0.00

1 .COMMUNITY DEVELOPMENT 1.10 0.00 1.102. TRAINING 0.55 50.00 0.28 0.283.MONITORING & EVALUATION 0.55 0.00 0.55

SUB TOTAL 2.20 0.28 1. 9.3T OTAL 51.25 5.90 45.35 0.29H.PHYSICAL CONTINGENCIES. 15% OF A & B 3.70 0.69 3.00 0.04

I.PPRICE CONTINGENCIES:l.ON A 4.19 0.76 3.432.ON B 0.26 0.08 O.16 0.053.ON C 0.26 0.00 0.264.ON D 0.28 0.00 0.285.ON G 0.32 0.04 0.28

SUB TOTAL 5.31 0.87 4.44 0. 05

TOTAL 60.26 7.47 52.79 0.39

Li-'HORE UJRBAN DEVELOPMENT FPROJECT-h DE'T-Y'ILED) COST EST'IMA~TES OF' 20- NOVEMBER 82?COMPONENT: GUJ,JA~RFP-RA SITEHS AND SERV ICESE XEC'UT INO3 AGE.N(CY LA~HORE- DEVE:LOPMENT AIJTHOR I"FY

I'TEMS BA~SE . FOREIGN LOCAL TAX COMPONENTCOST FOREION COST COST 'A VALUE

RS.MN 'A RS.MN RS.MN RS.MNA.1 01 N 1) ~~~~~~~~7. 56 7.56

D+.ON SITE INFRA~STRUCTUJRE:1. . WATER SUPP'LY 12.65 30 .00C 3. SC 8.86

2.SEWE ~E16. 8:3 :315. 00 5.89 10).943. IDRA I NAOE 5. 06 0. 00 5. 0)64. ROADS A~ND BFRI DOES 28.97 1 0.0 290C 26. 075. ELF-.CTR-,,ICITY &41 STREET LIGH-TING 10). 1 2 30. 00 3,1 0)4 7.08

~~~~~. O~~~~~~~~~~~~~~~S ~~~~~~~7. 47 :30. 00 2.24 5.237 . Wl(YiE:R,, & SEWER CONNEcT-r I ONS 4.55 30.C)0 1.37 . 19B. SQ3L.I.D WASTE COLLECT ION 1 . 90 0. 00) 1 .90

9.1 L..( NI)S CP r- I NO6 2. 53 C),O00 2.53SLID3 TOTAL L-9.0 1 9.22'. 70. 86C.OFSITIE I NFRASTRUC'T'JRE:

I . R O6)DsI :14.81 1.00 1.48 17.3-3

0. DESIGN AND SUPERV ISI ON a. 3 9 0 * 00 8.739

E..1IOi0JSIlNOl LOANhS 35.0 5 . 00C) 1 .75 3,3. 225

TF`AIh NGI N&~ TECldN I CPI'L. ir'SS I S.T('lNE,. VEH ICLES & EOULJIF PM[EN\T' 1 . 201" 6 C.UU 0".7.72 0 48 4(.0, C)0 . 482I F"R i) N4 1 N~ 50, . 00C 0.7 C3s 0 38

3., COMMUNITY DEVELOPM1ENT 1. . C)l C. 'O 1. 014.W. MN ITOR1 IG NO (ND EV(AL.UAT IC ONC. 76 0,C0 0. 76

Sz:t.JB T OTAL F:3.7 1. 1C) 2.63 0.48

-TOTAl.. ( TO"I F. 159-. 57 23. 56 1 36, 01 0. 48

o . PHiYS EI CAL.I CONTI NGENC IES, IO'%. OF & C 10, 49 2.C7 8. 42

H. F'R I CEI-- CONT I NGENC I ESI.(1\O B & C 1 -7.77 3.51 14,26

2ON D:) 81 C)Q. 00 C 81. ON F( 0.1 C) 2'3 0.C)04

ISU L. ff? OTAL. H 18. 91 3. 61 15, 3(.C) U,04

TfOT AI188. 97 2 . 21 1 59. 7 4 0 . 52

LAHORE URBAN DEVELOPMENT PROJECT: DETAILED COST ESTIMATES OF 20 NOVEMBER 82COMPONENT: SOLID WASTE MANAGEMENT, MAINTENANCE, ORGANISATION MANAGEMENT AND FINANCEEXECUTING AGENCY: LAHORE MUNICIPAL CORPORATION

ITEMS BASE FOREIGN LOCAL TAX COMPONENTCOST FOREIGN COST COST % VALUE

RS.MN % RS.MN RS.MN RS.MNA.SOLID WAST'E EQUIPMENT:I.TIPPING TRUCKIS (50) 17.50 67.00 11.73 5.78 33.00 5.782.FPAYLOADERS, HEAVY DUTY (4) 3.60 75.00 2.70 0.90 25. OC) 0.903.PAYLOADERS, LIGHT DUTY (4) 2.40 75.00 1.80 C0.60 25.00 0.604. SUPERVISOR'S TRANSPORT 0.80 52.50 0.42 0.38 35.00 0.285.MOBILE WORKSHOP (1) 0.20 67.00 0.13 0.07 33.00 0.076.PORTABLE CONTAINERS (10) 1.50 75.00 1.13 0.38 25.00 0.3B7.SWEEPERS HANDCARTS (2000) 2.00 2.00 0.006.MISCELLANEOUS TOOLS 0.50 30.00 0.15 0.35 0 .00SUB TOTAL A 28.50 18.05 10.45 8.00

B. MAINTENANCE EQUIPMENT:1.DUMPTRUCKS (4) 0.60 67.00 0.54 0.26 33.00 0.262.VIBRATING ROLLERS (4) 0.28 75.00 0.21 0.07 25.00 0.073.HAND COMPACTORS (4) 0.16 75.00 0.12 0.04 25.00 0.044.PNEUMATIC EQUIPMENT (4) 0.28 75.00 0.21 0.07 25.00 0.075.FRONT END LOADERS (4) 2.40 75.00 1.80 0.60 25.00 0.60SUB TOTAL B 3.92 2.88 1.04 1.04

TOTAL EQUIPMENT 32.42 20.93 11.49 9.04C.CIVIL WORk'S:

1.WORk- SHOP UPGRADING 2.53 10.00 0.25 2.282.ZONAL VEHICLE PARKS 1.27 10.00 0.13 1.143.ZONAL TRANSFER STATIONS 7.59 10.00 0.76 6.834.FIXED CONTAINERS 1.27 10.00 0.13 1.145.LANDFILL SITES 0.76 0.00 0.76

SUB TOTAL C 13.41 1.27 12.14D.TRAINING & TECHNICAL ASSISTANCE:

1.SOLID WASTE MANAGEMENT 1.60 20.00 0.36 1.44 0.002.O.M.&F. STUDY & IMPLEMENTATION 2.00 20.00 0.40 1.60

SUB TOTAL D 3.80 0.76 3.04'T'OTAL A-D 49.63 22.95 26.67 9. 04

E.PHYSICAL CONTINGENCIES, 10% OF A, B & C 4.58 2.22 2.36 0.90

F.PRICE CONTINGENCIESl.ON A & B 4.26 2.76 1.52 1.192.ON C 2.27 0.21 2.063.ON D 0.39 0.08 0.31SUD TOTAL 6.94 3.06 3.88 1.19

TOTAL 61.15 28.23 32.9: 11.14

- 50 -

Annex II-1LAHORE URBAN DEVELOPMENT PROJECT - IMPLEMENTATION SCHEDULE

1982 1983 1994 1985 1986 ' 1987

91 1 22 9 03 9 04 91 a 92 9 a3 94 i 91 Q Q2 9 Q3 94 91 9 : Q2 ' 93 '94 9 '1 9 Q2 ' 03 I 94 91 9 Q2 9 03 ' 94Oi

:CONSULTANT STUDIESOM&F STUDY LDA :

:I.GUJJARPURA EXPANSION AREA:LAND ACQUISITIONSURVEY a ======APPOINT GEN CONSULTANT : -==APPOINT PROJ STAFF i ======TRUNK INFRASTRUCTURE ,

PREPARE DESIGNS a a a=a

PREP.TENDER DOCS.GOVT/BAfNK REV&APPROV = ,

INVIT/SUB OF TENDERS I a a a a a

AWARD OF CONTRACTS * a a a

CONST. CONTRACT I a a

CONST. CONTRACT 2 a

CONST. CONTRACT 3 a a a

DES6IN BUILD PACKhAES, a a a aP'REP DESIGN STANDARDS: === GGVT/BA^NK REVLAPPROV ', =SELECT CONSORTIA ' a a=aCONSORTIAia PREP DESIGN! a a=aa=

50YOTIBANK REVLAPPROV j == i P,ACKAGE NO I .… =PACKAGE NO 2 .. =======..'PACKAGE NO 3 a a

PACKAGE NO ¶ a a a a

HOMfE BUILDING LOANS . a a…a…a…a

a RENEDIALS & COMP.ROADS a a ……

.SELECTION 0.' BENEF. . ,,,ADVERTISE PLOTS a a = a

PRELIMINARY SELECTION .' . = LOTTERY a a a a

FINAL SELECTION . . a a a

.2.WALLED CITY UPGRADING : a a a a

APPOINT PROJECT STAFF . = , a a

', TOPDSRA^PHICAL SURVEY '. ======== .' SAP,PLE SE.HERAGE . =======',

PREPARATION OF DESIGNS a a a a

CONSTRUCTION PHASE I a …a …= .==== . a

CONSTRUCTION PHASE2 a a

LOANS FOR HOME RECONSTR, a a …a …a …a…a

I.MPROVEMENTS SCHlCO ...... ,M.==.====================.=====..'. CONSERVATION PL.AN .. =========== .'

M 'ONITORING & EVALUATION: ===================================',3.SOLID HP,STE COLLECTION .. ,

AND MtANAGEMiENT. ......APPOINT CONSULt.ANT . = .,''CONSULTANTS STUDY . .======-'i Ea PT LISTS a SPECS '.==…aDESIGN CIVIL ,w,oRKS ' ==. PREPA,RE TEN,DER DOCS .. =. 60VTlB.ANK REVLAPPROVA,L...==.:.INVIT/SUB' TENDERS&AW.......iARD',,,== anEQPT DELIVERY/ICDNSTR a a . a

a .',ONITORING I EVALUATION', a a ……4.S TUDY FOR SECND PROJECT .: , - a - - - a--------------------------------- -

ANIEX II-2

- 51 -

LAHORE LAHORE URBAN DEVELOPMENT PROJECT ANNEX 2041 PROJECT PHASING (RS.MILLION) ESTIMATES OF 23 NOVEMBER 82

BASE PHYS TOTAL - PHASING FACTORS ---- ---- COSTS PRICE TOTALCOST CONT INCPHYS 1983 1984 1985 1986 1983 1984 1985 1986 CONTING COST

CONTA.WALLED CITYlINFRASTRUCT 23.19 3.48 26.67 0.20 0.35 0.35 0.10 5.33 9.33 9.33 2.67 4.19 30.852SOLID WASTE 1.45 0.22 1.67 0.20 0.35 0.35 0.10 0.33 0.58 0.58 0.17 0.26 1.933DESISN&SPN 2.20 2.20 0.50 0.20 0.20 0.10 1.10 0.44 0.44 0.22 0.26 2.464CONSERVATION 2.20 2.20 0.25 0.50 0.25 0.55 1.10 0.55 0.00 0.28 2.485CONM 8EV 2.20 2.20 0.40 0.20 0.20 0.20 0.88 0.44 0.44 0.44 0.32 2.526RECON LOANS 20.00 20.00 0.30 0.40 0.30 0.00 6.00 8.00 6.00 20.00SU8 TOTAL 51.24 3.70 54.94 8.20 17.90 19.35 9.49 5.31 60.24PRICE CONT 0.33 1.55 2.38 1.05 5.31TOTAL A. 51.24 3.70 54.94 8.53 19.44 21.73 10.54 60.24

B.BUJJARPURAILAND 7.56 7.56 1.00 7.56 7.5621NFRASTRUCT 104.90 10.49 115.39 0.70 0.30 0.00 80.77 34.62 17.77 133.153DESISN&SPN 8.39 8.39 0.50 0.35 0.15 4.20 2.94 1.26 0.81 9.204CONM DEV 3.73 3.73 0.60 0.25 0.15 2.24 0.93 0.56 0.00 0.33 4.063HOUSE LOANS 35.00 35.00 0.60 0.40 0.00 0.00 21.00 14.00 35.00SUB TOTAL 159.58 10.49 170.06 13.99 84.64 57.43 14.00 18.91 188.98PRICE CONT 0.26 11.00 7.65 18.91TOTAL B. 159.58 10.49 170.06 14.25 95.64 65.08 14.00 188.98

C.SOLID WASTEIEQUIPNENT 32.42 3.24 35.66 0.20 0.60 0.20 7.13 21.40 7.13 0.00 4.28 39.942CIVIL WORKS 13.41 1.34 14.75 0.70 0.30 0.00 10.32 4.42 0.00 2.27 17.023TRAINING ETC 3.80 3.80 0.30 0.70 1.14 2.66 0.00 0.00 0.39 4.19SUB TOTAL 49.62 4.58 54.21 8.27 34.38 11.56 0.00 6.94 61.15PRICE CONT 0.33 4.26 2.36 6.94TOTAL C. 49.62 4.58 54.21 B.60 38.63 13.91 0.00 61.15

D.STUDIES 1.60 1.60 0.50 0.50 0.00 0.00 0.80 0.80 0.41 2.01PRICE CUNT 0.17 0.24 0.41TOTAL D. 0.97 1.04 2.01

TOTAL 262.04 18.77 280.81 31.38 153.72 101.70 25.58 31.57 312.37312.37

LAHORE URBAN DEVELOPMENT PROJECT

PROJECT SOURCES AND APPLICATIONS OF FUNDS STATEMENT - GOVERNMENT OF PAKISTAN(Rs Million)

1983 1984 1985 1986 1987 1988 1989 1990

A. Sources:

1. Federal Budget Allocations 14 4 - -2. IDA Credit 5 129 50 243. Profits/(Losses) from HBFC - - -_ 13 13 13 13

Total Sources 19 133 50 24 13 13 13 13

B. Applications:

1. Investment with HBFC 6 100 29 20 U,2. Government of Punjab ADP 13 33 21 43. Loan Repayment to IDA

(starts in 1993)

Total Applications 19 133 50 24

Surplus/ (Deficit) - - - - 13 13 13 13

Cumulative Surplus - - - - 13 26 39 52

- 53 - ANNEX III-2

LAHORE URBAN DEVELOPMENT PROJECT

PROJECT SOURCE AND APPLICATIONS OF FUNDS STATEMENT - HBFC(Rs Million)

1983 1984 1985 1986 1987 1988 1989 1990

A. Sources:

1. Investment frQm Federal Government 6 100 29 202. Investment Repayment from LDA 117 17 173. Investment Repayments from LowA

Income Beneficiaries - 3 3 4 3 3

4. Investment Repayments from HouseReconstruction in Walled City 1 2 2 2 2 2

5. Investment Repayments fromReinvested Funds _ __ 117

Sources 6 100 30 25 122 23 22 122

B. Applications:

1. Investment with LDA for AreaDevelopment 6 94

2. House Building Loans to Sitesand Services Beneficiaries - - 21 14

3. House Reconstruction Loans toWalled City Residents - 6 8 6

4. Profits/(Losses) to FederalGovernment 13 13 13 13

5. Operating Expenses 1 Z 2 2 2 26. Reinvestment in similar

projects - 10 - -

Total Applications 6 100 30 22 115 15 15 115

Surplus/ (Deficit) - - - 3 7 8 7 7

Cumulative Surplus - - - 3 10 18 25 32

- 54 - ANNEX III-3

LAHORE URBAN DEVELOPMENT PROJECT

PROJECT SOURCES AND APPLICATIONS OF FUNDS STATEMENT - GOVERNMENT OF THE PUNJAB(Rs Million)

1983 1984 1985 1986 1987 1988 1989 1990

A. Sources:

1. ADP Allocation (from FederalGovernment) 13 33 21 4

Total Sources 13 33 21 4

B. Applications:

1. Grants to LDA forWalled City Upgrading 9 13 14 4

2. Grant to LMC for Solid WasteCollection, Maintenanceand OMAF Components 4 20 7

Total Applications 13 33 21 4

Surplus/ (Deficit)

Cumulative Surplus

ANNEX III-4

- 55 -

LAHORE URBAN DEVELOPMENT PROJECT

PROJECT SOURCES AND APPLICATIONS OF FUNDS STATEMENT - LDA(Rs Million)

1983 1984 1985 1986 1987 1988 1989 1990A. Sources:

1. Own Resources 8 2 45 12. Area Development Investment

from HBFC 6 943. Grants from Government of

Punjab ADP 9 13 14 4

4. Gujjarpura Sites and Services:(a) Development Charges from

Exemptees 79(b) Connection Charges 5(c) Plot Sales:

(i) Residential 22 22(ii) Commercial 26 27

(iii) Industrial 26 27(iv) Health & Education R 8

(v) Low Income - 5 5 5Total Sources .23= __2= .6_ 24 =_ =9

B. Applications:

1. Gujjarpura Sites & Services 14 96 442. Walled City Upgrading 9 13 14 43. Studies 1 14. Investment Repayment to 1HBFC - 117 17 17

Total Applications 23 11)9 50 5 117 17 17

Surplus/(Deficit) - - 5 39 (30) 72 (17)

Cumulative Surplus /1 - - 5 94 64 136 119

/1 The cumulative surplus would be available for investment in similar projects.

ANNEX III-5- 56 -

LAHORE URBAN DEVELOPMENT PROJECT

PROJECT SOURCES AND APPLICATIONS OF FUNDS STATEMENT - LMC(Rs Million)

1983 1984 1985 1986 1987 1988 1989 1990

A. Sources:

1. Municipal Budget 4 19 7

2. Grant from Government of

Punjab 4 20 7

3. Increase in MunicipalRevenues 17 19 21 23 26 28

4. Increase in Property Taxes:(a) Walled City 1 2 1 2 1

(b) Gujjarpura Sites &Services 3 4 4 4 5

Total Sources 8 39 31 23 27 28 32 34

B. Applications:

1. Solid Waste Collection,Maintenance Equipment &Studies 8 39 14

2. Equipment Renewal 12 34 12

3. Maintenance in Project Areas:(a) Walled City 1 1 1

(b) Gujjarpura 2 2 2 3 3

Total Applications 8 39 14 3 2 15 37 16

Surplus/ (Deficit) - - 17 20 25 13 (5) 18

Cumulative Surplus - - 17 37 62 75 70 88

ANNEX IV-1

- 57 -

LAHORE. UURBAN DEVELOPMENT PFROJECTANNEX IV--I ECONOMIC YNALYSISINTERNAL RATES OF RETURN. MARCH 3 1983

WALLED CITY UF'GRADING SITES & SERVICES COMBINED…---------------------- NET CASH FLOW

COSTS BENEFITS NET COSTS BENEFITS NET ---- …----YEAR RS. MN RS. MN RS. MN

1 932 0;, 0 ) f00 0 , 00 0 0)19-33 9.65 0.0 ,( -9.65 15.32 0 --15.32 --'224. 971984 14.99 3.15 -- 1184 82.39 0) -82. 39 -94.231985 16.75 9.45 - 7.3i_:0 48.69 56.11 7.42 .121986 7.76 12.6) 4.84 17,15 67.5 50.35 55.191937 .66 122.6 11.94 3.15 51.45 48.3 6 .241939 .66 12.60 11.94 -3.15 9.00 5.B5 17.791L939 .66 12,60 11.94 3.15 9.0u 5,85 17.79199) .66 12. 60 11,94 3.15 9. 00 5.85 17.791991 .66 1,)60 11.94 3.15 9. 00; 5.85 l17,791992 .66 1 2.6 0S6CS 11.94 3.15 9.0 0) 5.85 17,79199371 .66 1 '12. 60 11.94 3_.15 9. 00) 5.85 17.791994 .66 12. 60 11.94 3.15 9. 00 5.85 17-7.791995 .66 12.60 11.94 3.1.5 9.00 5.85 17.791996 .66 1 2. 60 ) 11.94 3.15 9. 00 5.85 17.79:1997 .66 1 2.60 11.94 3.15 90 (C0 5.85 17. -79

1998 .66 12. 60 11.94 3.15 9. 00 5,85 17.791999 .66 12." 60 11.94 . 15 9.00 5,85 L17.792000 .66 1260 11 .4 3. 15 9.0C0,H 5.85 17 -,7792001(il w <5).66 12.60 11.94 3.15 9.00 5.85 17,792002 .66 12 60 11.94 3.15 9. 00 5.B 17.792003 .66 12.60 11.94 3.15 900( 5.85 17.792004 .66 12.60 11.94 3.15 9.00 5.85 17.792.rS005 .66 12.60 11.94 3.15 9.00 5.85 17.7920fJ06 .66 12.60 11.94 3.15 9.0 (0) S.85 17. 79

I NTERN.-JAL RF)TEOF RE'TURN % 2`7 23 2 32 15. 032 19. 803

- 58 -ANNEX IV-2

LAHORE URBAN DEVELOPMENT PROJECT

ECONOMIC ANALYSIS

WALLED CITY UPGRADING

(Rs Million, 1981 prices)

/1 1983 1984 1985 1986 1987-2006

Costs:

Infrastructure 5.51 7.71 7.71 1.10

Solid Waste (1/3) 0.14 0.18 0.14

Design & Supervision 1.00 0.60 0.40

Technical Assistance, etc. 1.00 0.50 0.50

House Improvement 6.00 8.00 6.00

Maintenance 3% ofInfrastructure costs) 0.66 0.66

Total Costs 9.65 14.99 16.75 7.76 0.66

Benefits:

Increase in Rental Values/2 3.15 9.45 12.60 12.60

Net Cash Flow, + or 9.65) (11.84) 7.30) 4.84 11.94

/1 Costs include physical contingencies, but exclude taxes and price contingencies

/2 7,000 premises, average 3 rooms each;rents per room before upgrading wereRs 125 month, after, Rs 175 month, increase = Rs 50 month per room.

- 59 - ANNEX IV-3LAHORE URBAN DEVELOPMENT PROJECT

ECONOMIC ANALYSIS

GUJJARPURA SITES AND SERVICES

(Rs Million, 1981 prices)

Costs:/l1 1983 1984 1985 1986 1987 198s-2006

Land 7.56Infrastructure 78.67 26.22Design & Supervision 5.73 2.87 0.96Community Development,

etc. 2.03 0.85 0.51Home Construction 21.00 14.00

Maintenance (3% ofInfrastructure costs) 3.15 3.15 3.15

Total Costs 15.32 82.39 48.69 17.15 3.15 3.15

Benefits:

(a) Sale of Plots:(i) Residential,

market prices 15.00 12.34(ii) Commercial,

market prices 20.00 12.44(iii) Industrial,

market prices 20.00 12.46(iv) Health & Education

cost 5.00 5.21

(b) Development Charges:(i) Exemptees 42.41(ii) Existing residents 10.70

(c) Rental Values of Low-IncomeHousing (5,000 rooms atRs 150 per month per room) 3.00 7.50 9.00 9.00

Total Benefits 56.11 67.50 51.45 9.00

Net Cash Flow, + or () (15.32) (82.39) 7.42 50.35 48.30 5.85

/1 Costs include physical contingencies, but exclude taxes and price contingencies

LAHORE URBAN DEVELOPMENT PROJECT

URBAN POVERTY IMPACTS

1 ~~2 3 4 5 6 7 8 9Component % Spent Amount Spent Total No. UP Cost UPP Bene- Urban Poor in Urban Poor Yet RemarksCost on the Poor on the Poor of Bene- Capita ficiaries Need of Service to be Served

$ Million $ Million ficiaries

1. Upgrading Walled City 4.6 50% 2.3 50,000 92 25,000 75,000 50,000 Program would needrepeating twice.

2. Gujjarpura Sites and 14.5 45% 6.5 60,000 260 25,000 180,000 155,000 Assumes that during theServices three year period when

180,000 additional UP willarrive the project willprovide for 25,000.

3. Solid Waste Collection 4.7 65% 3.1 1.5 million 3 1.0 million 1.46 million 460,000 Solid waste will benefitabout 50% of the city, >

mainly low-income areas. 0

4. Studies 0.2 45% 0.1 - - _ _ Studies will have city-wide benefits.

TOTAL 24.0 50% 12.0

- 61 -

ANNEX V-2

PAKISTAN

LAHORE URBAN DEVELOPMENT PROJECT

Urban Poverty Sectoral Indicators

(a) 45% of the residential plots in the sites and servicesarea are affordable by the urban poor (4,200 out of9,350 residential plots).

(b) about 14% of the annual demand for new shelter by theurban poor will be met by this project (4,200 low-income units in three years out of an annual demandof 10,000 units).

(c) 50% (or 25,000) of the population in the Walled Cityproject area are in the urban poverty group.

(d) at the present time, there are some 1.5 million urban poorliving in the LMA, of which about 50% (750,000) live inKatchi Abadis and 7% (130,000) in the Walled City. TheWalled City upgrading program will benefit 2% of the city'surban poor and about 33% of the areas in need of upgradingin the Walled City.

(e) The solid waste component will mainly benefit the poorersections of the community (para 6.08) and about 65% ofthe benefits are expected to go to the urban poor.

- 62 -

ANNEX VI-i

PAKISTAN

LAHORE URBAN DEVELOPMENT PROJECT

The House Building Finance Corporation

Administrative Structure

1. The House Building Finance Corporation (HBFC) was established inApril 1952 under the HBFC Act, Act No. XVIII of 1952. Its main purpose isto finance the construction or purchase of houses. In 1974 the HBFC Act wasamended empowering it to finance the purchase and/or planning and developmentof land on which houses are to be constructed and to undertake housing projectsitself. The HBFC Act was again amended in 1979 when GOP legislated theelimination of interest rate charges on future HBFC investments and the imple-mentation of a profit sharing system. As a result, the HBFC was empoweredto "make investment in collaboration with partners for construction or purchaseof houses or for purchase on development of land". The act states that allinvestments have to be fully secured and cannot be given for a period exceeding25 years. However, the HBFC's present policy is to invest for a period of notmore than 15 years (up to five years for flood loans) and not in excess ofRs 1,000,000. At the present time the HBFC is the only institution in Pakistanauthorized to make long-term housing investments.

2. HBFC's authorized and paid-up share capital amounts to Rs 125million, all of which is owned by the GOP as provided by the HBFC's Act.

3. The HBFC is managed by an eight-member Board of Directors. Fourmembers represent each of the provinces, two members represent the FederalGovernment, one member represents the State Bank of Pakistan and one memberis the Managing Director. Operations are directed by the managing directorworking through a deputy managing director, three executive directors andnine managers. Total staff comprise about 870, including the administration,operations, accounting, auditing, planning and development, project engineer-ing and recovery (collection) departments.

4. HBFC's organization consists of the Head Office in Karachi andZonal Offices in Karachi, Lahore and Islamabad controlling 13 regional officesand 28 district offices. Regional and district offices undertake the initialprocessing of applications, the necessary supervision during construction andthe recovery of deliquent accounts. The role of the Zonal Offices is primarilyone of control and administration. The role of the Head Office is partly oneof overall administration. Accounting, and audit, and partly one of providingsupport services through the Planning, Engineering, Loan Coordination, Opera-tions and Recovery Departments.

- 63 -

ANNEX VI-2

Lending Procedures

5. To obtain an investment from HBFC, applicants must provide proof ofclear title to the land on which the house is or will be constructed, orpermission (assignment) from the lease/title developing authority to mortgagethe property. Approved site and building plans and a building permit must beobtained and under the present policy the individual must have sufficientfunds to make a cash downpayment of at least 20%, a stable income sufficientto meet the monthly installments under the investment and where necessary, aguarantor. The HBFC's legal department reviews all documents and otherdepartments respectively review the credit application, verify proof ofincome and repayment capacity of the borrower and check the building costs.The processing of the application takes an average of 15 to 30 days.

6. For an individual HBFC will not finance a housing unit covering anarea greater that 2,250 sq.ft. The maximum amount of investment by the HBFCis determined as follows:

Type of Unit Investment Per Maximum InvestmentSquare Foot Based on 2,250 Sq.Ft.

(a) Pucca House urban areas Rs 90/Sq.Ft. Rs 202,500(b) Pucca House rural areas Rs 55/Sq.Ft. Rs 123,750(c) Multistoreyed Apartments Rs 80/Sq.Ft. Rs 180,000

7. An individual's repayment capacity is determined as follows:

Maximum Percentage ofIncome Range Verified Income

(a) Up to Rs 500/mo. 15%(b) Rs 501/mo. - 1,000/mo 20%(c) Rs 1001/mo. - 2,500 25%(d) Over Rs 2,500/mo. 30%

8. The HBFC also makes institutional investments to developmentauthorities for land development and the construction of housing projects.A provincial government guarantee is usually required for these investments,which are classified as bulk investments. Bulk investments have been madeto the Karachi, Lahore, Baluchistan, Faisalabad and Capital DevelopmentAuthorities. A third category of investments is made to individuals whosehomes are damaged by flooding. These investments are made under very relaxedlending conditions and are fully guaranteed by the Government of Pakistan.

- 64 -ANNEX VI-3

9. The HBFC had 368,000 investments in its portfolio amounting toRs 2,964.2 million as of June 30, 1980, broken down as follows:

TotalAmount of

Number of OutstandingInvestments % Investments %

Rs Million

Housing Investments 88,034 24 2,331.6 79Flood Investments 279,955 76 437.6 15Bulk Investments 11 0 195.0 6

368,000 100 2,954.2 100

10. As of June 30, 1979 the HBFC had distributed its investmentsbetween the various provinces/regions as presented below. While HBFC doesnot have to distribute its funds in any particular ratio between the variousprovinces/regions, often particularly with respect to flood investments andother investments of this type, funds are earmarked by the GOP for a partic-ular purpose in a particular area of the country.

TotalAmount of

Number of OutstandingInvestments % Investments %

Rs Million

Sind (Excluding Karachi) 137,958 39 431.1 17Karachi 20,674 6 892.9 34Punjab (Excluding Islamabad) 168,912 48 1,014.3 38Islamabad 2,211 1 140.4 5Northwest Frontier Province 16,118 5 134.6 5Baluchistan 1,808 1 28.3 1

347,681 100 2,641.6 100

11. The following is a breakdown of total investments and total amountsgiven by the HBFC from inception through December 31, 1980 according toloan amount category.

Total AverageNumber of Amount of Investment

Investment Amount Investments % Investments % SizeRs Million Rs

(a) Up to Rs 20,000 320,657 84 1,221.0 27 3,800(b) Rs 20,001 to Rs 40,000 33,405 9 1,223.3 27 36,600(c) Rs 40,001 to Rs 60,000 17,948 5 990.9 22 55,200(d) Rs 60,001 to Rs 1,000,000 9,145 2 1,117.7 24 122,200

Total 381,555 100 4,552.9 100

- 65 -ANNEX VI-4

12. HBFC investments are nearly always given for the maximum amount theindividual can afford. Taking this factor into account, 84% of the number ofinvestments and 27% of the total amount of investments relate to the lowestincome levels corresponding to the up to Rs 500 per month income level. Thereis some distortion in the figures due to the fact that the vast majority ofsmall investments were flood relief investments. However, it does indicatethat the majority of the HBFC's investments have been given to the low incomepopulation.

Finance

13. The financial position of HBFC is summarized in Table V-3.

Table V-3: HBFC - SUMMARY BALANCE SHEETS (for years ending June 30)(in Million Rupees)

1976 1977 1978 1979 1980Assets

Investments 906.4 1,447.6 1,796.5 2,275.1 2,964.7/aOther 63.4 35.2 53.1 101.2 47.9Net Assets in Bangladesh 196.2 196.2 209.0 220.1 239.8

Total Assets 1,662.2 1,679.0 2,058.6 2,596.4 3,252.4

Liabilities

Government and State BankInvestments 886.4 1,359.9 1,791.8 2,273.3 2,892.7

Other 229.3 273.8 139.8 177.5 212.3

Total Liabilities 1,115.7 1,633.7 1,931.6 2,450.8 3,105.0

Equity 50.5 45.3 127.0 145.6 147.4

TOTAL LIABILITIES AND EQUITY 1,166.2 1,679.0 2,058.6 2,596.4 3,252.4

/a Includes Rs 472.5 million under the new profit sharing basis.

14. The increase in the investment portfolio has averaged 35% per annumover the past four years, although all of the increase is as a result offunds received from the GOP. Almost none of the funds used to increase theportfolio have been derived from either the reinvestment of roll over fundsor from other sources of financing.

- 66 -ANNEX VI-5

15. Income and expenditure statements are summarized in Table V-4.

Table V-4: HBFC - SUMMARY INCOME AND EXPENDITURF STATEMENTS(for years ending June 30)

(In Million Rs)

1976 1977 1978 1979 1980Income

Interest from investments 51.5 77.2 121.5 180.5 224.5Subsidy from Government of Pakistan 8.4 17.2 22.6 14.7 0.0Other 1.7 3.9 2.1 3.0 3.3

Total Income 61.6 98.3 146.2 198.2 227.8

Expenses

Interest and Charges on indebtedness 60.4 94.6 128.7 164.6 210.3Administrative expenses 5.8 8.7 10.5 14.7 12.6Other 0.1 0.2 0.3 0.3 3.1

Total Expenses 66.3 103.5 139.5 179.6 226.0

Surplus/(deficit) ( 4.7) ( 5.2) ( 6.7) 18.6 1.8

16. Prior to July 1979, interest rates on loans from the GOP ranged from6% per annum to 12% per annum with the average about 10-1/4%. These loans arerepayable over 15 years in 30 equal installments. Investments from the StateBank of Pakistan carried interest rates of 2% below prevailing bank rates.Prior to July 1980, State Bank of Pakistan investments were repayable after 10years. Since the inception of the project sharing scheme, all further StateBank and GOP investments to HBFC are on a profit sharing basis. As of June30, 1980, the HBFC owed Rs 407.7 million to the GOP and Rs 2,485.0 million tothe State Bank of Pakistan.

17. By comparison most of HBFC's housing investments were for a periodof 20-years and most of the flood investments were for a period of 10 yearsprior to July 1, 1979. Since that date, most of the housing investments havebeen for 15 years and most of the flood investments have been for 5 years.

18. The HBFC's profit sharing plan showed a net loss of Rs 2.3 millionduring its first year of implementation to June 30, 1980. Part of the losscan be attributed to the fact that the individual borrower does not pay thefirst installment on the investment until 12 months after the HBFC's firstdisbursement for construction. Based on present rental income figures, theseveral categories of plots are yielding the following "average profit rates"to the HBFC:

- 67 -ANNEX VI-6

Sizes of Plots Size of Unit "Average ProfitCategories of Plots (in square yards) (in square feet) Rates" (%)

I Up to 180 Up to 1080 5.66II 181 to 320 1081 to 1600 6.42III 321 to 500 1601 to 1800 6.88IV 501 and above 1801 to 2250 7.44

19. Another factor with a greater potential impact on the profitabilityof the profit sharing plan is the determination of the rental income valueof the various properties in HBFC's portfolio. Rental incomes are to beadjusted every 36 months, on the basis of the market value of the property,which should greatly increase the profit rates and enable them to keep pacewith inflation or even show a positive return in real terms.

20. Overdue accounts amounting to Rs 193.2 million compared to thetotal outstanding portfolio of Rs 2,964.2 million yielded a delinquency rateof 7% as of June 30, 1980. The total number of delinquent investments (10,680)compared to the total number of investments in the portfolio (368,000) yieldeda percentage delinquency of 3% as of June 30, 1980.

21. The HBFC has retained a "Reserve for bad and doubtful debts" onits books since at least 1975, in the amount of Rs 4.1 million. This amount isless than 1% of the outstanding portfolio, but HBFC justifies maintaining sucha small reserve by arguing that most of the delinquencies involved KatchiAbadis, which respective Provincial Governments are guaranteeing, and therefore,the HBFC's default risk is very low.

- 68 -ANNEX VII-1

PAKISTAN

LAHORE URBAN DEVELOPMENT PROJECT

Technical Assistance, Consulting Services and Studies

Cost, Rs Million (Base Costs)Local Foreign

A. Walled City Upgrading Component

1. Final design and supervision of project,including physical surveys 50 man-monthsof local consultants 2.20

2. Conservation plan, TOR under preparation,50 man-months of local consultants 2.20

3. Community development program (to bedeveloped in association with UNICEF),25 man-months of local consultants 1.10

4. Monitoring and evaluation of projectimplementation, 13 man-months of localconsultants 0.55

5. Training and technical assistance - localand overseas training 0.28 0.28

Sub-total 6.33 0.28

B. Sites and Services Component

1. Final design and supervision of designbuild contracts, including training ofLDA staff, 207 man-months of localconsultants (TOR available) 8.39

2. Community development program (to bedeveloped in association with UNICEF),20 man-months of local consultants 1.00

3. Monitoring and evaluation of projectimplementation, 15 man-months of localconsultants 0.76

4. Training and technical assistance, localand overseas training 0.38 0.38

Sub-total 10.53 0.38

- 69 -ANNEX VII-2

Cost, Rs Million (Base Costs)Local Foreign

C. Lahore Municipal Corporation

Implementation of solid waste managementstudy, stage II (stage I is financed underCr. 630-PAK) and other studies:

50 man-months of local consultants 3.046 man-months of foreign consultants - 0.76

Sub-total 3.04 0.76

D. Studies

Preparation of a second urban projectin the Punjab and assistance withregional planning (TOR to be determined),

28 man-months of local consultants 1.124 man-months of foreign consultants - 0.48

Sub-total 1.12 0.48

Total: Consulting services(468 man-months of local consultants) 1.24( 10 man-months of foreign consultants) 20.3

Training 0.66 0.66

- 70 -ANNEX VIII

PAKISTAN

LAHORE URBAN DEVELOPMENT PROJECT

List of Documents and Data Available on the Project File

1. Lahore Urban Development and Traffic Study, Final Report (LDA,September 1981):

Volume I Urban PlanningVolume II Urban Expansion SchemeVolume III Traffic Improvement SchemesVolume IV The Walled City

2. Model Urban Transport System, Lahore (Volvo, October 1980):

Volume I Summary of Findings and RecommendationsVolume II Progress ReportVolume III Urban Travel PatternsVolume IV Traffic Conditions for BusesVolume V Traffic Engineering and ManagementVolume VI Bus Route NetworkVolume VII Punjab Urban Transport Corporation

3. Solid Waste Management for the City of Lahore by Colonel MuhammadYunus P.E. (November 1980).

4. Review of the Solid Waste Management Component by David Jackson M.B.E.(two papers, January and April 1981).

5. Lahore Urban Development Project, Engineering Aspects, report byAlan Penn, C. Eng. (March 1981).

6. The Land Acquisition Act, 1894 by M. H. Khan (1975).

7. Master Plan for Greater Lahore (July 1973).

8. The Planning and Conservation of Lahore, a Report to UNESCO byAnthony Meats (March 1975).

9. Socio-Economic Survey of Gujjarpura, Lahore (1978).

10. Socio-Economic Survey of the Walled City, Lahore (July 1979).

- /I -

WALLED CITY, LAHORE (historic areas)

@@Flb~~~-4,

*-t r - _-_____K_

The walled city in Lahore has the highest population densities in the city,as shown in the top photo of typical residential sections. It also hassome of Pakistan's more important historic monuments; the mosque currentlybeing renovated in the lower photo is an exampie.

- 72 -

WALLED CITY, LAHORE (Utilities)

* p &~~~~~~_ -F

4

~~~~~~~~~~~~t=

In many parts of the walled city, services are inadequate and insufficient.

The top photo shows the bunching of water pipes which should be replaced by

a larger pipe. The lower photo gives an example of the haphazardly developed

power distribution system, which is difficult to control and maintain.

- /3 -

WALLED CITY, LAHORE (old housing)

Many parts of the walled city have very old buildings which have fallen intodisrepair. The historic detail warrants preserving in some, as shown in thetop photo. In other places, new buildings need to be constructed on the sitesof collapsed buildings, an exanpie of which is shown in the lower photo.

- 74 -

LAHORE, PAKISTAN (Katchi Abadis)

On the fringe of the city, new settlements emerge in an often unplanned anduncontrolled fashion. Referred to as Katchi Abadis, they are shown in theabove photos which indicate their initially relatively low densities and themakeshift nature of the dwellings. The Guijarpura Sites and Services Projectwill help respond to the demand in a more systematic and planned way.

- 75 -

LAHORE, PAKISTANGujjarpura Sites and Sevices Area

The above two photos show the Gujjarpura Sites and Services area. In thebackground of the top photo is some of the existing development that coverssmall parts of the southern site area. In the lower photo is existing develop-ment on the opposite side of the east boundary road.

- 76 -

LAHORE, PAKISTAN - (Urban Transport)

4~

~~~~~~~~- 7

Many parts of the city are congested with conflicting transport modes, particularlyaround the Southern area of the Walled City.

- 77 -

LAHORE, PAKISTANNorth Lahore ActionArea (Markets)

, U

The above two photos show conditions in the major food market ares. Trafficcongestion and lack of organization of the distribution are causing majorproblems.

WALLED CITY - PILOT AREA # 2

s Covered Streets 2 X il Q iai sl-p p Commercial

~~~~Sret n Open Spaces Existi Biling Ln s

Covered Streets ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~DResidentialCOmmercial/Inidustrial

1111Industrial

711 711~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1

Streets and Open Spaces Existing Land Use

Dilapidated 13 ildings MC~~~~~~~~~~~~UCturally Valuable Dilapidated BuildingsVacant/Rulne QM~~~~~~~~~~~~-\jfCultural?y Valuable Buildig

-1~~~~~~~~~~~~~~~~~~~~~~~r

Conditions of Buildings Culturally Valuable Buildings

World Bank- 23242

September 1981

- 79 -

LAHORE URBAN DEVELOPMENT PROJECTWALLED CITY - SEWERAGE AND WATER SUPPLY

Tap forCleansing

Wf f | - t W a~~~~-Wase Pipe WaundlP

Water Closet Floor Level

Floor ain Drn

Waste Pipe

Typical Section of Small StreetSquatting (Existing)

Plate WaterFloor Supply

Ground Floor Water Water Connection Waste

Connection to Upper Floors Pp

X _ C o n W~~~~~_T Nevv Br ick Profiled for_

Typical In-house SanitaryPlumbing Installations

(Options)Wate r Co n n ectilo n - _ I nspectio n/Access

ODriginal Street Level New Water Main

Sewer Connection

AC Pipe Laid in Old Channel

(Alternatively Raise Sides of Channel

in Rendered Brickwork with ConcreteCover Slab)

Typical Section of Improved Street withSewer and Water Main

(Proposed)

September 1981 World Bank - 23040

LAHOREURBAN DEVELOPMENT PROJECT

SKETCH 1 -SITES AND SERVICES, TYPICAL NEIGHBORHOOD (KOOCHA) LAND USE

_~~~~~~~~~~~~~~~~~~~~~~~F -- r

~~~~~~~_j ~~~~~~~~~~~~~~~~~PRIME LOCATION 15Orr2

PLOTS(NOT SHOWN-EXIST ALONGMAIN ACCESS ROAD)

C Eo-g2 PLOTS LOCATED ALONGSPINE STREET INOI SHOWVN)

_____ g~~~~~~~~~ 0~ PLOTS LOCATED ALONG_ SPINE STREETS 7 O- WIDE

fl n2

PLOTS LOCATED INC ACCESS STREETS (GALIS) 3-4Sm WIDE

OC_ _ _ C 830m I- k E E 5 7 5 P/ m F 72r2 PLOTS

X ACTIVITY YARDPLAY YARD

- RELIGIOUS RITES- MARRIAGES

OTHER SOCIAL ACTIVITIESVEHICLE TURNABOUT AND PARKING

APpro,r.imate Scrle 1:1000

World Bank-23038Septem~ber 1981

- 81 -

LAHOREURBAN DEVELOPMENT PROJECT

SKETCH 2- SITES AND SERVICES COMPONENTINITIAL PROVISION AND ANTICIPATED DEVELOPMENT

* VERANDAH ADDED FOR STORAGE

STAGED2

ADDIT IONAL ROOM CONSTRUCTED AND EXTENSIONTO VERANDAH MADE. ACCOMODATING KITCHENROOF MAY NOW BE ENTIRELY OF RE-INFORCEDCONCRETE. SANITARY AREA NOW ROOFED OVER.STAIRSTO ROOFTOP ADDED TO AVAIL UPPER

STOREY OPEN LIVING SPACEHEIGHT OF COMPOUND WALL ALONG STAIRSINCREASED FOR PRIVACY

/~~~~~~~~~~~~BT ADC T\\E ROO N\\\ E OF. E\

T\\ATCH / BUILOING TIMES LTOGSO RROTHE'ONDA

\THEMINIMAL STRUCTUREMMORDAUTIEE ADNTINGSNE RU OM AND VERANDAH, A L- INGNOUR \EEPUTYARD AND TPEN ENCLOSURES FoI

\\ \ / ~~~SAT HAND WC THE RDDFMAY BE DF RE-

\\ w ~~~~~~~IN FDRCED (BRICK INFIL) CONCRETE ORI MUDAS \ ~~~~THATCH ON TIMBER LDGSODRBOTH -OUNDA-

\\ ~~~~~~~TC TiN STRUCTURHE FOR FUTURE ADDITION MIAY\\~~~~~~~I 8BUILT W.,rdEank 23039

INDOOR SLEEPING TAKES 'LACE ONLY IN WINTER Eepw-be 19SI

- 82 -

LAHOREURBAN DEVELOPMENT PROJECT

SKETCH 3-ON SITE DEVELOPMENT OPTIONS (72m2

PLOT)

OPTION A OPTION B OPTION 8

TERRACE

ROOM o ROOM

VERANDAH VERANDAH VERANDAH

CO,.RTYARO BATH r~~~S;Ii~iOOURTYAR.jl Z 1(11

ENTRY w.L ~~~~~~~~~~~ENTRYSTREET STREET

] A_ . t%X_71 ^ V 0 _~~~~~~~~~~~~~~~TAE

STAGEI STAGE I STAGE 4

Room ROOM ROOM Room TERRACEI ROOM

VERANDAH VERANDAH VERANDAH

COURTYARD

'4 N COURTYARD DATH 1 xNN

IBATH IWC.

STAGE 2 STAGE 2 STAGE S

ROOM iTERRACE ~~~~Room ROOM TERRACEL Room

|VERANDAH: l l L VERANDAH VERANDAH

COURTYAR

BATH

0i E ROOM BATH

STAGE 3 STAGE 3 STAGE 6

OPTION A OPTION B

STAGE (GROUND FLOOR: STAGE 1 tGROUND FLOOR, STAGE 4 (UPPER FLOOR)

GSINGLE ROOM. VERANDAH BATH & C (SINGLE.HOM.VERANDAH. SAT, & WC. IVUEANDAH ADDED ON UPPER ELOOR)

FoUNDATION FOR AN ADDITIONAL ROO FOUNDATIONS FOR AN ADDITIONAL ROOMI

STAGE 2 STAGE 2 STAGE S

(ADDITIONAL ROOM AND STAIR TO ROOF tADDITIONAL ROOM, ,ITC.EN ADDED WITH (FOURTH ROOM ADDED ON UPPER FLOOR

IMPROVEMENT TO INITIAL ROOM, STAIRSTO ROOF, IMPROVEMENT TO AT BACK OF PLOT. REMAINING ROOFINITIAL ROOMI SHIELDED FOR PRIVACY)

STAGES 3UPPER FLOOR,

INITIALLY VERANDAH LATER STAGE 3 STAGE 6

THIRD ROOM) EROOM ADOED IN FRONT FOR USE AS (UPPER FLOOR. BATH. LAVATORY ADDED.

SITTING ROOM FOR MEN. FOR A SHOP, FlFTH ROOM ADDED IN FRONT)

OR FOR SMALL SCALE INDUSTRIAL UNIT)

Wo,dHaB-k-23037SepF mber 1981

83 -

LAHOREURBAN DEVELOPMENT PROJECT

Sl<ETCH 4 - ON SITE DEVELOPMENT (90m2 PLOT)

- 1 mo 7,. KIOSKISHOP I . GROOM

- - -IIIt - - - - - }ifZ COURTYARDSN COURTYARD COURTYARD

IL VERANDAH RO_OM!

ENT. || "II 1R0

STAGEI1* N W]CBATH| 3m

STAGE 1

I L_, _Itu t |_ COURTYARDEW ' -F X E R A N D A H //1 I11\ I __

I 11 ~~~~~~~~~~~~~~~~ROOM E|ROOM

- COURTYARD ------- ROOM ~ ~ ~ ~ OURYAR P- -- U.h

SHOP ERNA

ROOM iVERANDAHW. -TATITCHENROIOM E RIOOM

12m W.C. |ATFL 2m - , 3 STAGE 2 W rI1

STAGE 2

TERRACE

ROOM ROOM v

ROOM -~/////,- COURTYARD

~~TAGE 3 ROOM J] AT~~VERADAHROOM ROOM

STAGE 3 1W-CIA

STAGE 3

STAGE 1 tGROUND FLOOR) STAGE 1 (GROUND FLOORI(SINGLE OR TWO ROOMS, VERANDAH OUTDOOR KITCHEN, ISINGLE ROOM, BATH & WC., TEMPORARY KIOSK,BATH & WC., CORNER SHOP. RUN BY FAMILY) FOUNDATIONS FOR TWO INTERNAL ROOMS

STAGE 2 STAGE 2(ADDITION OF SHOPSISMALL SCALE ENTERPRISE IN FRONT) (SUCCESSIVE ADDITION OF TWO INTERNAL ROOMS,(ADDITION OF KITCHEN) VERANDAH, STAIRCASE, CONVERSION Of INITIAL ROOM TO S.S.EE)

STAGE 3(SUCCESSIVE ADDITION OF ROOM AT REAR AND STAGE 3RESIDENTIAL ACCOMMODATION ON TOP OF SHOPS) (ADDITION OF CORNER ROOM, EXPANSION OF S.S E.I

World Bank-23036SsPts1bel 1981

_n ST AG ~ijtO4 ROAD ~ -'~PAK ISTAN

FIRST LAHORE7--- ~ ~ ~ ~ ~ ~ -- URBAN DEVELORPMENT PROJEC

GUJJARPURRA EXPANSION AREAAsrK ' , ~ ---; 9a :01 ; -:--*;r -X5\ SITES AND SERVICES

District Distributor Roads;Str ~ - t1 I f . [i ',x;\" ................. Local Distribotor Roads

Local RoadsKootcha Residence

II =50 _ : - < - - - 1l i iiKootcha Ressidence (lo. income)

Residential, Prime LocationL ~~~~~~~~Residential, Commercial

K' 0 14 1 0 _ ' I - - . D Residential, Small Scale Enterprise

j li :| ~~~~~~~~~~~~~~~~~~~- : Commercilo

Industriol

h ' r - I' ' = X , S - C j CX a- ~~~~~~~~~~~Ed.catloniEisting DrainProposed DrainsOpen Space, Recreation, Flood Catch-

E.iseing D-evlopments

- Esistisig Water MaineE - .- Eising Sewers

i --- h i E.isting Power Lines

f 2 - . . , -x,

1 t0o 200 300 400

B:S~~~~~~~~~~~A

"K-'

46 - L- - -

K m S X | 2 X | t |Drt ~~~~~~~~~~e~~~~~'R' t~~~~~~~~~~~~~~t~~~~ 0j11,I.. .dI-

INDIA E 72 ~ , i * ti

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in '0 is~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

_ / / __ IBRD 1554IlR

PA< STAI

FIRST LAHORE URBAN DEVELOPMENT PROJECT\9t / , Lalhore Metropolitan Area

/ / ' , , L ohofe Actias Arepj Pl1p ,,,A -

A,~o C ~ W. fvd C t Pho I 9 -:, -b f co -,

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