Karnataka Model: Sustainable Urban Water Service Delivery

Future generations of Karnataka can now enjoy sustainable water services. Photo credit: Karnataka Urban Infrastructure Development and Finance Corporation

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Published: 11 February 2021

Project interventions evolved to create a virtuous cycle in water services, using performance-based contracts, participatory planning, behavioral change campaigns, and institutional reforms.


A major challenge of urbanization in South Asia is the provision of continuous water supply with 100% coverage of households, and ensuring sustainable water service delivery. In most of the cities in the region, the urban population suffers from intermittent water supply services with partial coverage, limited connection to households, and water quality issues.

Poor water supply services create a downward spiral, leaving customers unwilling to pay water tariffs, insufficient revenue for scientific system maintenance and improvement, and further service deterioration. Even new infrastructures often fail to sustain quality water services because of the service provider’s lack of technical, institutional, and financial capacity, and limited social support.

To address these challenges, the State Government of Karnataka and the Asian Development Bank (ADB) have been working on urban water infrastructure development projects. This article is adapted from 25 Years of Partnership with Karnataka: Evolving Model for Sustainable Urban Water Service Delivery, an ADB report that looks at pioneering projects and lessons learned that can be replicated in urban sector interventions in South Asia.

Interactive Partnership for Improved Interventions

Project interventions in urban Karnataka have evolved in the last 25 years, reflecting lessons from previous projects and innovations in new project design and scope to improve urban water services, and operation and maintenance arrangements.

The partnership started with sector analysis and capacity building through technical assistance, followed by policy dialogues that identified required investment interventions and policy actions. Procedural, technical, and institutional challenges in implementation and operation and maintenance were jointly reviewed and corrective actions were taken. Lessons learned from past programs were shared during consultations held for designing the ensuing interventions.

The success of project-specific interventions have been scaled up and institutionalized to bring broader changes in subsequent phases. The interactive partnership has promoted institutional transformation, adopting a phase-wise programmatic and inclusive approach to ensure sustainable service delivery in urban Karnataka.

Ilkal Model: Achieving 24/7 Water Supply

Ilkal, a small town in North Karnataka known for its silk sarees and red granite, suffered from intermittent water supply services. Public water supply coverage reached only 57% of residences with intermittent water service.

Karnataka Urban Infrastructure Development Finance Corporation, under an ADB-supported project, introduced good water supply practices to the local municipality and Ilkal became the first municipality in India to achieve 100% water supply coverage all day, every day in every household.

The Ilkal model provided service connections to individual houses, imposed district-metered areas to reduce water losses, introduced an innovative contract modality (performance-based construct and operate contract), used participatory planning, and conducted rigorous community development through sensitization and behavioral change campaigns.

The performance-based construct and operate contract was designed to ensure optimal risk allocation between the public sector for project design and a private operator for project construction and operation, and a performance-based payment to encourage the private operator to complete construction in a timely manner and deliver a better quality of service to the customers.

The private operator carries out construction after validation of the detailed designs provided by the public sector and operates the system for 4 years before transferring operations and maintenance back to the public authority. This model works well for water supply improvement because it holds a single contractor responsible for both construction and operations and maintenance. The arrangement ensures that contractors deliver high-quality infrastructure because their future remuneration depends on their performance during the operations and maintenance phase.

Modality of a Performance-Based Construct and Operate Contract

PBCOC = performance-based construct and operate contract.
Source: Adapted from Asian Development Bank. 2017b. 24/7 Normalized Water Supply Through Innovative Public-Private Partnership: Case Study from IIkal Town, Karnataka, India. Manila. Table 1. p. 4.

This arrangement succeeded in providing Ilkal continuous water supply, reducing nonrevenue water, encouraging water conservation, and recovering costs for operations and maintenance. Through district-metered areas, physical losses fell to less than 8% from 50%. Also, water consumption was significantly reduced to below 100 liters per capita per day, against the average India standard of 135 liters.

While ADB initially provided operation and maintenance cost support, this expenditure was fully covered by user charges by 2019, and the contract has been extended between the municipality and the contractor. High tariff collection efficiency ensured full recovery of the operation and maintenance expenditures.

Other key features of the Ilkal model are extensive participatory planning and enhanced community awareness programs to facilitate inclusion and behavioral change of customers, sensitizing communities on hygiene, water supply, and waste management aspects, and encourage a willingness to pay and the adoption of volumetric tariffs. Community involvement in the program from its inception made planning process grounded, established local ownership, generated an enabling environment that addressed stakeholders' concerns about metering and volumetric tariffs, and clarified the role of the private operator.

KIUWMIP Model: Building a Robust Virtuous Cycle in Water Services

The Karnataka Integrated Urban Water Management Investment Program (KIUWMIP) was designed to enhance sustainable water security and coordinate the planning, development, and management of urban water resources. The program incorporates several key designs that include 24/7 water supply, 100% coverage, house service connections, and nonrevenue water reduction through district-metered areas in all project towns.

The performance-based construct and operate contract modality piloted in Ilkal is applied to all water supply contracts under the KIUWMIP. The program avoids complex project scope, limiting interventions to only 7 towns in 2 tranches. This model also includes transformative policy and institutional reforms at the state level to ensure sustainable water service delivery. In addition to state-level policy reform, the initiative introduced innovative implementation mechanisms in project towns, such as dedicated funds to incentivize reform implementation, and the introduction of newly developed information technology modules for service delivery and dynamic asset management.

An incentive fund was set up to motivate urban local bodies to implement reforms and become efficient and responsive municipal service providers. The incentive fund is implemented in 3 stages: financial and commercial capacity enhancement; technical capacity enhancement; and sustainable management capacity enhancement. Eligible expenditure under these activities and incentives allocated are given upon successful accomplishment of the reform actions.

Enhanced information technology modules were also developed to help the urban local bodies operate their water services sustainably. The modules are designed to improve information management—with enhanced data capture, including establishment of comprehensive customer database, analysis, benchmarking, dissemination, and monitoring—and management decisions on water services. The integrated modules enable the urban local bodies to make timely management and planning decisions in asset management through the digitalization of property-linked customer databases, GIS mapping, and supervisory control and data acquisition.

Building on the Ilkal model, the KIUWMIP model established a robust virtuous cycle for sustainable water service delivery.

How the Ilkal Model Evolved into the Karnataka Integrated Urban Water Management Investment Program Model

IT = information technology, KIUWMIP = Karnataka Integrated Urban Water Management Investment Program, KUIDFC = Karnataka Urban Infrastructure Development and Finance Corporation Limited, O&M = operation and maintenance, PBCOC = performance-based construct and operate contract, UIF = urban local body incentive fund, ULB = urban local body.
Source: Asian Development Bank.

Virtuous Cycle of the Karnataka Integrated Urban Water Management Investment Program Model for Sustainable Water Services

IT = information technology, KIUWMIP = Karnataka Integrated Urban Water Management Investment Program, O&M = operation and maintenance, PBCOC = performance-based construct and operate contract, UIF = urban local body incentive fund.
Source: Asian Development Bank.

Lessons Learned

Evidence-based project design, participatory planning, support from local beneficiaries, and institutional arrangements are key to create a virtuous cycle for sustainable water services. The experiences in Karnataka provide lessons for urban development in other Indian states, South Asian countries, and beyond.

  • Access to high-quality services must be an explicit target of water projects. Maximizing project impact to beneficiaries and providing a complete solution should be the top priority and the first round of a virtuous cycle for water services.
  • Well-defined project design and scope minimize implementation problems. During project preparation, capacity should be assessed to find the right balance between project complexity and implementation capacity.
  • Extensive community awareness programs are essential for making the planning process grounded and inclusive. Technical interventions aided with community engagement are key factors for bringing success and inclusivity in water projects.
  • Institutions matter. Continuous institutional transformation and business process reengineering of project interventions help ensure sustainable water service delivery at a larger scale.
  • A virtuous cycle cannot be built in a day. Interventions have evolved over decades through constant interactions among stakeholders and establishment of trust-based development partnerships. Development partners should learn from past experiences, adopt a programmatic approach, and continue to reach out to beneficiary communities to ensure sustainable service delivery.

A. Matsunaga, S. Dasgupta, and S. Majumder. 2020. 25 Years of Partnership with Karnataka: Evolving Model for Sustainable Urban Water Service Delivery. Manila. Asian Development Bank (ADB).

ADB. 1993. Technical Assistance to India for Urban Infrastructure Development Project. Manila.

ADB. 1997. Proposed Technical Assistance for Karnataka Coastal Environmental Management and Urban Development Project. Manila.

ADB. 2006. Report and Recommendation of the President to the Board of Directors: Proposed Multitranche Financing Facility to India for the North Karnataka Urban Sector Investment Program. Manila.

ADB. 2014. Report and Recommendation of the President to the Board of Directors: Proposed Multitranche Financing Facility to India for the Karnataka Integrated Urban Water Management Investment Program. Manila.

World Bank. 2019. Reform and Finance for the Urban Water Supply and Sanitation Sector. Washington, DC.

Akira Matsunaga
Senior Urban Development Specialist, Asian Development Bank

Akira Matsunaga works primarily on urban and water service infrastructure programs in India. Prior to ADB, he worked as the energy sector division director of the Japan International Cooperation Agency. He holds master’s degrees in Law from Stanford University and Development Policy from the University of Wisconsin in Madison.

Saugata Dasgupta
Senior Project Management Specialist, Water and Urban Development Sector Office, Sectors Group, Asian Development Bank

Saugata Dasgupta formulates and implements various urban infrastructure projects and programs, compact urban planning and urban planning-transport integration projects, climate-resilient infrastructure projects, and post-disaster rehabilitation and re-construction projects in South Asia. He is a structural engineer and holds a master’s degree in Business Management.

Sourav Majumder
Senior Project Officer, India Resident Mission, Asian Development Bank

Sourav Majumder worked on complex urban infrastructure projects in India, handling planning, and engineering design and implementation before joining ADB. He has an academic background in civil engineering and holds a master’s degree in Urban Planning from the School of Planning and Architecture in New Delhi.

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