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Bhutan's Development |
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Loan
to Improve Urban Infrastructure and Services in Bhutan's Cities
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| A
US$24.6 million loan aims to improve urban infrastructure facilities and
basic urban services in Thimphu and Phuentsholing, Bhutan's two largest
cities, as well as in Dagana, a regional center.
Urban
settlement is a new phenomenon in Bhutan. But the quickening pace of urbanization
in the last 15-20 years is already putting pressure on the country's cities.
The 4.1% unemployment rate in urban areas, for instance, is much higher
than the countrywide rate of 2-3%. |
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Thimphu
and Phuentsholing face the full force of urban migration and urban
sprawl, as a result of limited job opportunities in rural areas.
One
result is that the expansion urban infrastructure is not keeping up with
demand, for instance in the area of water coverage.
Dagana,
meanwhile, faces water shortages at times during the year and lack of water
treatment facilities and intermittent flows pose a public health risk.
In Thimphu,
the project will develop a new water supply system, upgrade a wastewater
treatment plant, and improve solid waste management infrastructure. Local
urban infrastructure, such as secondary roads, tertiary water distribution
pipes, drainage, and sewerage, will also be provided in four new areas
in the southern part of the city.
In Phuentsholing,
roads and drainage, footpaths and a pedestrian bridge, and social infrastructure
such as fire hydrants and street lighting will be provided.
Dagana,
located in the same geographical corridor as the two project cities, is
one of 20 regional centers that is yet unassisted by external aid. Under
the project, water supply sources will be augmented, and the treatment
and distribution system as well as sanitation will be improved, and roads
and drainage upgraded.
"ADB's
past assistance in the capital Thimphu and commercial center of Phuentsholing
has been well received," says Tomoo Ueda, an ADB Urban Development and
Planning Specialist. "By further improving health and general living standards,
the project will boost the growth potential of these three areas and assist
the Government's drive toward meeting the Millennium Development Goals
targets."
About
55,000 people will directly benefit from improved urban infrastructure,
while around 19,000 in poor areas will benefit from improved water supply
and sanitation.
The
project will also help increase awareness in the communities of proper
hygiene, and boost management of urban facilities by government agencies.
ADB's
loan, which covers 80% of the project's total estimated cost of $30.75
million equivalent, comes from its concessional Asian Development Fund.
It carries a 32-year term, including a grace period of 8 years, with interest
charged at the rate of 1% per annum during the grace period and 1.5% per
annum after. The Government will finance the $6.15 million balance.
The
Department of Urban Development and Engineering Services at the Ministry
of Works and Human Settlement will serve as the executing agencies for
the project, which is due for completion in 2012.
| Source:
Asian Development Bank 2006 |
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