Introduction Bangladesh’s third-largest city, Khulna, is home to an estimated 1.5 million people. More than a thousand slums proliferate on the outskirts of the coastal city, beyond the reach of reliable public utility service, including supply of safe, drinking water. Khulna is one of the most climate-vulnerable areas in the country, and it contends not only with increasing demand for water but also diminishing groundwater and widespread salinity intrusion. Unsustainable groundwater abstraction and saline intrusion are challenges that require governments to invest in radical changes in how water resources are developed and delivered. Without equitable and sustainable urban basic services, cities will not prosper, and low-income communities will continue to bear the heaviest burden of water poverty. A project supported by the Asian Development Bank (ADB) and Japan International Cooperation Agency shows how designs, implementation, and increased technical capacity of the city’s water supply and sewerage authority, and enhanced awareness of the general public, have contributed to the improved livability and resiliency of the city and its people through improved access to clean and sustainable water supply services. Completed in 2019, the Khulna Water Supply Project is an example of how other cities should engage in finding alternatives to natural and chronic water challenges. The transformative changes from the project were possible with the newly established Khulna Water Supply and Sewerage Authority (KWASA), only the third of its kind in the country. Improvements continue under the $160-million Khulna Sewerage System Development Project, which will help KWASA deal with increased wastewater because of the new water supply system. Lessons from preparation and implementation of the Khulna Water Supply Project would be especially interesting for municipal water supply service providers with similar challenges that KWASA faced in improving the coverage, operation, and sustainability of water supply services. This article is adapted from a recent ADB report, From the Ground Up: How Khulna City Shifted Its Water Supply System from Salinated, Diminishing Groundwater to Surface Water. Shifting from Groundwater to Surface Water Many countries in the region share common water security issues, including groundwater over-extraction, increasing saline intrusion because of sea-level rise, and intermittent supply. In Khulna’s case, all households in the city relied entirely on groundwater resources for their daily needs. Less than 20% of the population had access to treated piped water for 5.3 hours per day. To resolve these issues, the project developed a new water supply system using surface water and ICT-based smart water management technologies. It also avoided recurring high costs of desalination treatment. After the project, the coverage was expanded to 65% of the city population, and water became available for 24 hours a day. Table 1: Summary Profile of Khulna Water Supply System and Operation KWASA = Khulna Water Supply and Sewerage Authority, lpcd = liter per capita per day, m3 = cubic meter, MLD = million liters per day, Tk = taka. Sources: ADB. 2011. Preparing the Khulna Water Supply Project. Consultant’s report. Manila (TA 7385); ADB. 2020. Completion Report: Khulna Water Supply Project in Bangladesh. Manila. However, as cities and water supply service providers shift from groundwater reliance to surface water development, the structure of their service organizations changes radically, along with staff needs and skills sets. On top of these changes, the Khulna City project had the exceptional overall challenge in that the implementing agency, KWASA, was a newly established water supply service provider. The challenges it faced were almost unavoidable since KWASA had limited experience with international development partners. The project offers the following salient lessons in coping with these challenges. Study the problem as upstream as possible for better design and greater readiness. The various studies undertaken by the government, independent organizations, ADB, and JICA are examples of detailed and diligent analysis undertaken to identify various options for the project design. Unfortunately, such diligent upstream studies may be overlooked by some projects in the interest of time or mistaken certainty based on historical bias or outdated information and knowledge. Taking time to conduct the upstream studies as done for the Khulna City project will result in better-designed projects and ensure a higher project readiness of implementing agencies. Anticipate challenges, advance action if possible, on land acquisition. About two-thirds of the land identified for the project was owned by one family willing to sell to the municipality, while the other smaller landholders were less willing. The project faced initial delays from residents and advocate groups who objected to the resettlement plans. Implementing agencies that are new to the resettlement policies and procedures of international development partners should expect organized public resistance against resettlement. ADB and its developing member countries can now take advantage of the “advanced action” option when projects are in an early inception phase. Advanced actions also enable capacity building of the government entities that are likely to be implementing near-term ADB-financed investments. Communicate early, often, and clearly on intergovernmental approvals. The project met what seems to have been its most consequential delays from securing the necessary permissions from other government departments and entities to lay the transmission mains. Implementing agencies should communicate early and often with systematic information about the project with other government entities of which memorandums of understanding and approvals will be needed. Larger packages improve international competitive bidding. KWASA leadership has said that the international bidding process was arduous and complicated because it had never been engaged in international competitive bidding or procured to ADB’s standards. KWASA found that civil works for some of the conveyance works could have been grouped into bigger packages to attract contractors with international reputations, higher qualifications, more substantial financial resources, and more experience in large civil works contracts. Fewer but larger contracts will reduce risks in contract implementation and time in managing several contracts. In addition, taking additional time and careful preparation of bid documents and bid reviews will help recruit quality contractors. In large-scale network expansions, especially in dense urban poor areas, ground-truth project ideas and plans. Individual household connections are the optimal choice for increasing the socioeconomic benefits of the water supply. The spatial limitations of Khulna’s streets and low-income areas were an unexpected challenge for KWASA to install as many household connections as initially planned under the project. KWASA opted for 250 new metered connections for shared community water taps (piped, metered, treated surface water) for approximately 10,000 households in place of household or property connections for these areas. Rigorous scoping of low-income communities within the project area is important to test the feasibility of project ideas and plans. Consultations are also essential to conduct with target beneficiaries, especially women, who are primarily responsible for water collection during the project design phase. Unfinished Business Interviews with key stakeholders of the project identified opportunities for KWASA and development partners to further strengthen the coverage, operation, and sustainability of water supply services in Khulna City. Some of KWASA’s unfinished business items will be familiar to many urban water supply providers that struggle with expectations of modern water supply services: whereby 100% coverage, full cost recovery, autonomy, and private sector engagement are becoming the norm but still need renewed commitment and championing. Expanding household connectivity and supply. Approximately 35% of households are still not connected to the household distribution system because they are in uneconomic locations within the service area. With the new surface water source augmenting supply throughout the city, households that do not gain access to the new surface water supply are able to access improved quality and availability of groundwater. KWASA needs to expand the existing surface water treatment plant and distribution network to achieve 100% access to piped water supply within its service area. A longer horizon for the corporate business plan. The plan requires substantial updates before KWASA submits it to the government for approval; it needs to be extended beyond its current 2020 timeframe, providing new projections on operation and maintenance (O&M) costs, revenue collection, nonrevenue water rates, etc., to justify financial and human resource needs and plans. In the meantime, KWASA has relied on legal provisions under the Water and Sanitation Authority Act to implement the necessary tariff increases and the government’s specific approval for staff hiring. The tariff structure and organogram are two important aspects of the corporate business plan that drive the quality of KWASA’s O&M of the newly established water supply system. But to submit the CBP for approval, KWASA needs to update much of the data in the current plan in order to justify its financial and human resource needs and plans. Enhancing operational sustainability. The corporate business plan has estimated annual O&M expenditures to be $3.25 million from 2025 onward, including personnel expense, power cost, chemical cost, and maintenance cost, among others. Until 2025, O&M costs are expected to be incurred in proportion to the water produced at the new surface water treatment plant. To finance the O&M costs, KWASA needs to follow its scheduled water tariff increases. KWASA plans on retaining O&M work internally while many larger urban utilities across the region and the world are turning to various types of O&M contracts with the private sector. For example, civil works packages for both water treatment plant and the piped network in recent ADB-financed water supply projects in India, Bangladesh, and other countries often include O&M for 5 to 10 years, with the contractors responsible for design, build/construct, and O&M (design–build–operate contracts). Private sector engagement in O&M can be a tool to ensure efficient and professional operation that KWASA may need to consider. Resources Asian Development Bank (ADB). 2022. From the Ground Up: How Khulna City Shifted Its Water Supply System from Salinated, Diminishing Groundwater to Surface Water. Manila. Khulna Water Supply Project: Completion Report. Manila. ADB. 2011. Preparing the Khulna Water Supply Project. Consultant’s report. Manila (TA 7385). Ask the Experts Jaemin Nam Senior Urban Development Specialist, Water and Urban Development Sector Office, Sectors Group, Asian Development Bank Jaemin Nam has been in the water industry for over 20 years. He currently leads the administration of water and urban development projects in Central West and East Asia. In his previous role, he led the Jharkhand Urban Water Supply Improvement Project in India and the Khulna Sewerage System Development Project in Bangladesh. He also led several innovative technical assistance projects including promoting smart water management in South Asian cities. Prior to joining ADB, he was involved in developing and implementing water supply, sewerage, and hydropower projects in 15 countries. Asian Development Bank (ADB) The Asian Development Bank is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. Follow Asian Development Bank (ADB) on Leave your question or comment in the section below: View the discussion thread.