ppp.worldbank.org · 2019-05-02 · shortages of water and power characterize urban centers in...

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unicipal managers in Asian cities today arefaced with the formidable challenge of

finding effective and innovative ways of dealingwith rapid urbanization, growing demand forimproved public services, and declining financialsupport from central governments. Moreover, indeveloping countries in Asia, the infrastructurerequirements of the urban sector are so large thatthe multilateral development banks and otherdonors can at best contribute only a small fractionof the total. However, there is a solution to thisapparent dilemma. Because economic activity andwealth in these countries will be largely generatedby the expanding cities, the resources neededfor municipal infrastructure development will beavailable. Tapping these resources, however, willrequire significant improvement in the managementof the cities.

Toward this end, and in recognition of theimportant roles that municipalities will play in theareas of economic growth, human development,and environmental management, the AsianDevelopment Bank (ADB) has identifiedimprovement in management and public servicedelivery at the municipal level as a priority area inits governance agenda.

Since 1997, ADB and the ADB Institute havebeen organizing workshops aimed at creatingawareness of recent developments in public–sectormanagement at the local government level.Participants share experiences of successes inreforming municipalities and in motivating citizensand municipal managers to embrace change.

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Three workshops were held betweenOctober 1997 and March 1998. Two wereorganized under the ADB’s regional technicalassistance on governance and development, whichfacilitated citizen initiatives to promote municipalgovernment reforms in Lahore, Pakistan, and Dhaka,Bangladesh, respectively. The third was the ADBI-sponsored Municipal Management Forum in Tokyo,Japan.

The proceedings of these three workshopswere published in 1999 as Volumes I-III in the serieson Asian Cities in the 21st Century: ContemporaryApproaches to Municipal Management.

• Volume I, Leadership and Change in CityManagement, discusses concepts such asleadership, vision, mission, planning, andcustomer focus to which participants of theTokyo forum were exposed. It also providesexamples of the application of these conceptsby municipalities in tackling their problemsand implementing change programs.

• Volume II, Municipal Management Issues inSouth Asia, discusses issues in selected SouthAsian cities, with a special emphasis onorganizational problems in Lahore. It alsoprovides a review of municipal reforms andurban governance issues in India and SriLanka.

• Volume III, Reforming Dhaka City Management,discusses institutional issues, financialmanagement, and solid waste management inDhaka and provides recommendations onorganizational reforms to deal with these issues.

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Subsequently, two Asian Mayors’ Forumshave been held. The first was in Cebu, Philippines,December 1998, co-sponsored by ADB, ADBI, andthe City Government of Cebu. The second, theproceedings of which are being published asVolume IV, was held in Colombo, Sri Lanka, June1999, and was co-sponsored by ADB, ADBI,Colombo Plan Secretariat, USAID Regional UrbanDevelopment Office for South Asia, US-AsiaEnvironmental Partnership Program, UNDP/UNCHS Urban Management Program, KonradAdenauer Foundation, German Agency forTechnical Cooperation (GTZ), and, of course, theColombo Municipal Council.

Volume IV contains the experiences ofmunicipal leaders from a number of Asian citiesand representatives of development agencies inimproving governance and delivery of municipalservices, particularly through partnerships with theprivate sector and nongovernment organizations.

The Forum was also a venue for presentationand discussion of the experiences to date of ADB’sBenchmarking Project, a pilot project aimed attesting the techniques of benchmarking andcontinuous improvement to enhance the deliveryof municipal services in selected Asian cities.

We are grateful for the invaluablecontributions of the participants and resourcepersons at this Forum. Penelope Price coordinatedthe Forum. Michiko Yoshida assisted in itsorganization. The Colombo Municipal CouncilTeam, headed by His Worship Omar Kamil and Dr.Fahmy Ismail, hosted the Forum and ensured thatall the participants received the best hospitality. RoseBelen transcribed the proceedings. Jay Macleanprovided editing services, and Ramiro Cabrera didthe cover design.

We trust that this series will make a positivecontribution to the literature on municipalmanagement. Further, we hope it will prove to be a

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useful resource for city managers in their efforts toimprove the quality of life of their citizens, and thuspromote the development of responsive andeffective local government.

Masaru YoshitomiDean, Asian Development Bank Institute

Shoji NishimotoDirector, Strategy and Policy DepartmentAsian Development Bank

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Introduction

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ver the past two decades, many countriesin Asia have experienced rapid economicgrowth. This has led to a rapid rise in their

urban populations. However, in spite of a significantincrease in national wealth and personal incomes,the quality of life of an average urban residentremains low. Squalor, slums, traffic congestion, andshortages of water and power characterize urbancenters in Asia. While the national governmentspursue the goals of economic development, it isgenerally left to local governments to managerapidly growing urban areas and provide basicservices for their residents. Given the limitedresources and capacities of urban localgovernments, they have to meet the challenges ofurban growth in partnerships with otherstakeholders. As a result, the concept of urbanmanagement has evolved from its narrow meaningof the functioning of municipal government to thebroader theme of partnerships among urbangovernment, private sector, and civil society.

The Asian Mayors’ Forum has provided aplatform for urban leaders of Asia to share theirexperiences and learn from each other. The firstforum was held in Cebu City, Philippines, inDecember 1998. At that forum, mayors and seniorrepresentatives of 10 Asian municipalities sharedtheir views on key issues affecting municipalperformance, and established a small network ofAsian mayors for continuous exchange ofinformation to help advance the performance ofmunicipal service.

This volume presents the proceedings of thesecond Asian Mayors’ Forum held in Colombo, SriLanka, attended by 75 participants representing 31

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Partnerships for Better Municipal Management

cities in ten countries: the People’s Republic ofChina (PRC), India, Indonesia, Lao People’sDemocratic Republic (Lao PDR), Malaysia, Pakistan,Philippines, Sri Lanka, Thailand, and Viet Nam. TheForum was the result of collaboration among the AsianDevelopment Bank Institute, the Asian DevelopmentBank (ADB), Colombo Municipal Council, ColomboPlan Secretariat, German Agency for TechnicalCooperation (GTZ), Konrad Adenauer Foundation,Regional Urban Development Office South Asia ofthe US Agency for International Development(USAID), US-Asia Environmental Partnership Program,and the United Nations Development Programme(UNDP)/United Nations Centre for Human Settlements(UNCHS) Urban Management Programme.

The increased participation of municipalleaders and sponsors in the Colombo Forum wasindicative of the growing need for exchange ofinformation and experiences on urban governanceand a search for a mechanism for fostering andenhancing networking among municipalities inAsia. Thus, from Cebu to Colombo, the AsianMayors’ Forum has clearly established itself as aplatform for interaction among municipal leadersof Asia. The key objectives of the present Forumwere to provide an opportunity for municipalleaders to share their experiences and to build anetwork of city leaders of Asia. To achieve thoseobjectives, the Forum was designed around thefollowing principles:

• Building a relationship among participantmunicipal leaders so that through thecontacts established at the Forum, they willbe better able to help one another managethe many challenges facing mayors and cityadministrators throughout Asia.

• Sharing information and experiences onstrategic and municipal service issues that can

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Introduction

be applied by municipal leaders to enhancethe level of municipal services.

• Supporting ADB’s concurrent project onbenchmarking selected municipal services,which is taking place in ten of the muni-cipalities represented at the Forum. Thisproject aims to demonstrate that municipalitiescan achieve better services for their citizens bycomparing their service performances with oneanother and then using this information toimprove selected services to their citizens. It wasalso expected that other municipalities anddevelopment agencies would learn from theseexperiences and adopt similar activities intheir own programs.

The Forum began with an exhibition onInnovations in Municipal Governance. Thisexhibition provided an opportunity for theparticipating municipalities and partner developmentagencies to highlight their most importantinnovations in city management and urbangovernance including, among others, city planning,law enforcement, urban renewal, computer systemsapplication, and parking (Box I.1). The exhibitionstimulated useful discussion among the participantsoutside the Forum sessions. For additionalinformation on individual projects/innovations, seethe list of participants for contact details.

The Forum discussions were organized onthe following themes and presented as chapters inthis volume:

• Changing Institutional Culture of AsianMunicipalities

• Public-Private Sector Partnerships forMunicipal Development

• Coordinating Local Governments in Megacities

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• Cities and Development Agencies WorkingTogether to Fund Infrastructure Development

• Serving Citizens: Improving Delivery ofMunicipal Services

• Meeting Challenges in the Next Millennium

The discussion on each theme consisted ofpresentations by one or more resource persons andbreakout group sessions. The discussions in thebreakout groups revolved around three keyquestions: the major issues and challenges facedby city leaders; the actions taken by city leaders toresolve the issues; and the important success factors/lessons of their experience.

In addition, hands-on sessions using theWorld Wide Web were organized to familiarizeparticipants with this powerful tool for accessingupdated information, improving knowledge andcommunication, and establishing partnerships.

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The decentralization efforts in Asia are at an initialstage. There is a lack of empowerment of urbanlocal governments and excessive controls are stillbeing exercised by higher levels of government onthe functional and financial responsibilities of localgovernments. There is a mismatch between thefunctional powers of urban local governments andtheir financial resources. As a consequence, localgovernments are unable to meet citizens’expectations.

Rapid growth of cities and the inability oflocal government to cope with the increaseddemand for services have in many cases led to thetakeover of a number of local government functionsby parastatal agencies. This has eroded the

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Introduction

Box I.1. List of Exhibition Participants

MUNICIPALITIESBangalore, India Customer Complaint SystemCebu City, Philippines GIS Application Development on Fire Hydrant

Inventory and Tax Map Control RollBusiness Permit Renewal: One Stop Shop

Fuzhou, PRC Overall City Planning“ 110” Social United Service NetworkIntensifying the Afforestation and Construction of aGarden-Like City

Ho Chi Minh, Viet Nam The Program of Drainage for Ho Chi Minh CityIpoh City, Malaysia Law Enforcement ManagementKuantan, Malaysia Movable Parking Booth

Usage of a Filter in a Toilet BowlMandaluyong City, The Marketplace: First BOT Project in the PhilippinesPhilippines “ Pamahalaan sa Pamayanan” (Bringing Government

to the Grassroots)“ Oplan-Lingap” (Anti-Drug Abuse Drive)

Peshawar, Pakistan Rehabilitation and Upgrading of Vendor Cabins andKiosks

Semarang, Indonesia Housing Urban Renewal and Development

Colombo City and other neighboring municipalities in Sri Lanka, including Kandy City,Negombo Municipality, Badulla Municipality, and Nuwara Eliya Municipality

DEVELOPMENT PARTNERSAsian Development Bank Sustainable Cities: Environmental Challenges in the

21st CenturyThe Benchmarking Project

Colombo Plan Secretariat The Colombo PlanGerman Agency for Technical Garbage to Gold and Dialogue for Democracy:Cooperation (GTZ) “ Urban Development and Public Participation in

Bandung, Indonesia”Integrated Slum Improvement Project (Nagpur, India)

Regional Urban Development Indo-US Financial Institutions Reform andOffice-South Asia (USAID) Expansion (FIRE) ProjectUNDP’s The Urban The Urban Governance InitiativeGovernance InitiativeUNDP/UNCHS Urban Overview of UMP’s Program Activities in Asia, AlongManagement Programme With Two Case Studies in Lalitpur (Nepal) and

Phuket (Thailand)UNDP-World Bank Water and Sanitation Program-South AsiaWater & Sanitation ProgramUS-Asia Environmental The US-Asia Environmental Partnership ProgramPartnership Program

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importance of local governments in Asia. At the citylevel, government organizational structure is highlycentralized and the management style is verybureaucratic, with a lack of vision and customerorientation. An important challenge to municipalmanagement in Asia is to change the institutionalculture of the municipalities.

The keynote address by Mr. Karu Jayasuriyahighlights the shift from a reactive bureaucraticsystem to a managerial and proactive system ofgovernance in Colombo during the past two years.Through various examples, he demonstrates the“ people-friendly” nature of the Colombo MunicipalCouncil, the various public-private sector partnerships,and the involvement of citizens in planning anddecision making.

In the discussions that followed, theparticipants identified a number of actions thatmunicipal leaders in Asia have taken to change theculture of municipal organizations. Many leaders

Key Issues and Challenges for Changing Institutional Culture

• Centralized organizational structure— no delegation of authority• Bureaucratic management style— lack of vision, no customer

orientation• No empowerment— control by higher levels of government, e.g.,

personnel appointments, functions• High expectations of citizens and elected officials• Fear of change among municipal staff resulting in maintenance of

status quo• Conflict of interest between elected leaders and civil servants• Weak governance, characterized by poor enforcement of rules and

laws

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Introduction

have focused on building the capacity of municipalstaff through a human resource developmentstrategy. Specific training was given to staff on theintroduction of the new management culture, e.g.customer orientation. Greater devolution ofauthority and responsibilities was also key tochanging the culture of the organization. Bringingthe local government closer to the people throughdecentralized administration at the ward/zone levelhas also enabled creation of citizen-friendlymunicipal governments. In a few cities, partnershipswith the private sector and civil society stakeholdershave also helped to bring about changes withinmunicipal organizations. Development of municipalcharters and assessment of the municipal performanceby citizens’ report cards have also made localgovernments more responsive.

The key lesson that emerged from thediscussions of the success stories in Asia was thequality of leadership. It was seen that a goodmunicipal leader was one who built trust amongthe staff and elected members of the organization,provided encouragement by shifting the focus ofthe organization to a “ can do” approach, increasedthe credibility of the organization by strictenforcement of existing rules and laws, and builtpartnerships with the private sector and civil society.There was also a general consensus that theinitiatives of municipal leaders need to beinstitutionalized so that the process of changing theorganizational culture is sustained.

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A UNDP policy document [Governance forSustainable Human Development, January 1997]states that:

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Governance includes the state, buttranscends it by taking in the private sectorand civil society. All three are critical forsustaining human development. The statecreates a conducive political and legalenvironment. The private sector generatesjobs and income. And civil societyfacilitates political and socialinteraction— mobilizing groups toparticipate in economic, social andpolitical activities. Because each hasweaknesses and strengths, a majorobjective of our support for goodgovernance is to promote constructiveinteraction among all three.

The term “ governance” is now used todescribe various processes of participatorydevelopment in which the governments are just oneof the many actors. This broader meaning of theterm largely stems from the fact that thegovernments, by themselves, have not been able tofulfill the goals of human development. In thecontext of the urban areas of the developing world,the inability of local government to cope with theprovision of basic services and infrastructure isstarkly visible. In many cities in Asia, public-privatesector partnership projects have been initiated todeal better with these problems.

Councilor Rhina Bhar presents the case ofThe Sustainable Penang Initiative (SPI). SPI is thefirst community indicator project in Malaysia, andpossibly in Asia. It represents an initiative of thecivil society that has now become an importantpartner with local government. Launched at the endof 1997, the SPI has organized various public forumsand roundtables. This initiative has led to theformation of new citizens’ groups related to water,transport, and the disabled. A citizens’ report cardcalled the Penang People’s Report, which contains

Introduction

the performance of 40 indicators identified by thevarious roundtables, was also prepared.

Dato’ Mohamad Bin Saib discusses KuantanMunicipal Council (MPK) experiences with public-private sector partnerships. Kuantan City is theadministrative, financial, and investment center ofPahang State, Malaysia. In order to strengthen andbroaden these functions, a vision for Kuantan wasformulated. A participatory approach to fulfill thevision evolved, involving the people and the privatesector. Strategic plans were formulated andimprovement of MPK’s administrative system wasundertaken judiciously. This resulted in the awardof the ISO 9001 last year and MPK gainedinternational recognition for its workingprocedures. The city is confident that MPK as thelocal authority will play its role to achieve its visionsthrough closer partnership with the private sector.

Mayor Benjamin Abalos Jr. describes howthe build-operate-transfer (BOT) arrangementenabled his city, Mandaluyong, Philippines, torebuild the public market after it was destroyed byfire in 1991. He emphasizes the challenges facedby the city, which is a part of a larger metropolitanarea, and advocates a mechanism for smaller citiesto take independent initiatives.

Congressman Ignacio Bunye, Muntinlupa,Philippines, talks about the need for residents’participation as a means of improving service delivery.The key to his success was due to a participatorystrategy, recognizing that nongovernmentorganizations (NGOs) and people’s organizations areimportant partners in development. Peopleparticipation in governance or the “ bottom-up”approach maximizes the potential of the “ governed” ,enabling them to become effective and active partnersin the search for solutions to the challenges they facein their socioeconomic environment.

Mayor Phummisak Hongsyok discusses theexperiences of Phuket in promoting a participatory

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approach to urban environmental management. Thetropical island of Phuket is Thailand’s premier touristdestination and is visited by about 3 million touristsevery year. The sudden drop in European tourists,following reports in the European media aboutPhuket’s environmental problems, caused the cityto evolve a participatory approach to environmentalmanagement. Since 1994, the city has embarkedupon developing a collective vision, and hasgenerated the support of the business community,NGOs, and local communities toward environmentalimprovement.

Issues and Challenges for Public-Private Sector Partnerships

• Maintaining a balance between the social-service objective of thepublic sector and the profit motive of the private sector

• Need for transparency in partnership arrangements due to lack ofmutual trust among the partners

• Consistency of macropolicies of national governments with localpolicies of privatization and partnerships

• Special focus on the poor, who may be adversely affected bypublic-private sector partnerships

• Poor contract management skills with local governments• Threat to municipal staff due to private-sector participation

These experiences of successful public-private sector partnerships highlight the efforts ofcity leaders to overcome many challengesassociated with partnership initiatives. Throughthese experiences, one can see a distinct paradigmshift among the stakeholders. The local governmentssee a shift in their role from provider or doer toenabler/facilitator and initiators of partnerships. TheNGOs and community-based organizations (CBOs)

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Introduction

in the city have begun to move away fromconfrontation (activism) to collaboration with thecity government. The private sector has also begunto consider partnerships in city development notfrom the pure profit motive but from a sense ofcorporate citizenship. These paradigm shifts arequite important in ensuring partnership ofstakeholders in city development.

Lessons for Initiating Public-Private Sector Partnerships

� Increased transparency is necessary in dealing with the private sector,through public consultations and use of open bids

� Strong local government is a necessary condition for successfulpartnership; this has often been done by increasing the resource baseof the local government

� Good corporate citizenship is essential for private–sectorparticipation

� It is important to recognize the need to “ connect with people” andrealize that “ governance is not a one-person show”

� Forums for sustainable consultative processes should beestablished

� A long-term vision needs to evolve collectively, with action programsin which people can participate

From the discussions, it became clear thatsuccessful partnership initiatives resulted whenprojects chosen for partnerships demonstrated a“ win-win” situation for all partners and reduced thechances of incompatibility of objectives among thepartners. The city governments also took care towin the confidence of the municipal staff byconsultations with them. Care was taken to ensurethat the poor residents in the city were not adverselyaffected by the partnership arrangements. New

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procedures and systems were introduced to reducebureaucratic delays and to institutionalizepartnership arrangements.

These innovative public-private sectorpartnership cases provide some important lessons.The foremost among these is that a strong localgovernment is important in order to providecredibility with the partners. Cities also need a long-term vision that is collectively evolved by allstakeholders. This enables commitment andownership among the stakeholders. A transparentprocess of engaging the partners and provision of aproper system of accountability are also crucial tosustaining partnership arrangements.

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One of the important features of Asian urbanizationis the emergence and rapid growth of megacities.Management of these megacities, especially thosethat have multimunicipal structure, has confoundedpolicymakers. With rapid growth of servicesprovision, particularly water supply, sewerage,transportation, and waste disposal that havemetropolitan character, the question arises whetherthere should be a single metropolitan-levelgovernment to provide all municipal services or caneach individual authority in the metropolitanregion provide these services? Should the functionsof a local authority in a metropolitan context bedifferent from those of other local governments?What are the experiences of metropolitanmanagement in Asia? These are some of the issuesdiscussed by Congressman Ignacio Bunye of thePhilippines.

Congressman Bunye describes the Manilasituation, where an attempt was made to have a

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Introduction

centralized government for this megacity throughthe Metropolitan Manila Commission. This was,however, in sharp contrast to the avowed goal oflocal autonomy. According to Congressman Bunye,while there is a need to evolve a structure forcoordination of metropolitan services and problemsthat transcend political boundaries, the autonomyof the local governments has to be retained.

The forum participants emphasized thatwhen local governments perform their assignedfunctions effectively and coordinate their activitieswith other local governments, the task ofmetropolitan management becomes easier. It wasalso concluded that while the autonomy of localgovernments should not be removed, in ametropolitan context, certain functions related tometropolitan planning and development,metropolitan transport, water supply, and sanitationrequired a coordinated effort. It was also felt thatthese functions were best carried out by anindependent agency that worked closely with localgovernments.

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The role of the development agencies has undergonechange in recent years. With globalization andrelatively free flow of capital across the nations,more funds are available to cities now than everbefore. External support agencies have also begunto recognize a shift in their role from being a mereprovider of finance to an enabler for cities to accessthe global capital market. The city governments, inturn, have to prepare themselves to compete withthe private sector and national governments intapping this vast capital market.

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Mr. Keshav Varma of the World Bankhighlights the new challenges facing internationalinstitutions. These, according to him, are increasingtheir involvement through decentralization,simplification, innovation, and creation of newlending instruments. The World Bank now promotesthe philosophy of making cities livable, competitive,manageable, and bankable. This is being donethrough city development strategy preparation,capacity building of local governments, andreplication of best practices.

Mr. Preben Nielsen of ADB discusses thechallenges of urbanization in Asia, the financialrequirements, and the need for donor coordinationand partnerships. He notes that ADB can provideadvice as well as funds and provides examples thatillustrate ADB’s views on poverty-related issues andmeans of service delivery. He suggests that the roleof international development finance institutions isto promote reforms and policy changes for betterurban management.

Mayor Alvin B. Garcia of Cebu City,Philippines, illustrates the process of evolving along-term vision, encouraging private business topromote tourism, engaging in public-private sectorpartnerships through BOT projects, joint ventures,and the use of promissory notes as instruments toraise funds.

Mr. P. U. Asnani, Director of the US-AsiaEnvironmental Partnership Program, Ahmedabad,India, describes the dramatic turnaround in thefinancial situation in that city. The city’s taxrevenues doubled in one year, not because thecity raised taxes, but through plugging leakages,reducing corruption, and professionalizing theadministration. He also explains the efforts of thecity in raising Rs1,000 million (US$25 million)through municipal bonds.

These presentations illustrate the paradigm shiftin the traditional role of the donor agencies. They see

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Introduction

themselves more as partners of city governments forfinancing infrastructure, than as the sole provider offund. External support agencies are moving towardflexible lending instruments like infrastructure fundand municipal development facilities. There is alsoa greater emphasis now by donor agencies on policyreform in the urban sector and capacity building oflocal governments. As the examples of Cebu andAhmedabad demonstrate, it is possible for cities toobtain resources through partnership arrangementsand domestic or international capital markets,provided the governments establish their credibilitythrough improved performance.

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Responsive municipal government is a key toimproved governance. Municipal institutions can nolonger be considered a traditional governmentalsystem but must be viewed as service organizationswith customer orientation. Within this perspective,municipal organizations need to shift their focus tocustomer orientation and consider the taxpayingcitizens as their consumers. Such a shift in approachwould enable municipal institutions to be responsiveto citizen demands, improve services, and recoverthe cost of provision of municipal services.

Mr. Naved Hamid describes ADB’s on-goingBenchmarking Project in which 10 Asian municipalitiesare participating. This project provides an opportunityfor the participating municipalities to compare theirservice delivery and establish a program for enhancingthe level of their service. At present, the project isfocused on two services: resolution of complaints andpublic grievances and solid waste management.

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� No clear delineation of responsibilities� Lack of technology, e.g. computerization for handling complaints� Corruption and inefficiency among staff� Weak mechanism for action on complaints received� Problems of classifying/filtering complaints� People want to complain to the “ big-boss”

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Complaint resolution and customer orientation aretwo sides of the same coin. Mr. P. U. Asnaniadvocates the use of a citizens’ charter, whichclearly delineates the responsibilities of themunicipal government and lays down the servicestandards and mechanism for resolution ofcomplaints and grievances. He believes that the keyto a successful complaints-resolution system is tokeep it easy to access and well-publicized. It shouldalso deal with complaints with reasonable speed. Itshould be simple, both to understand and use, andthere should be fixed time limits for action. Thecomplaints should be kept confidential to protectstaff and the complainants. The system shouldprovide information to management so that servicescan be improved.

Mr. H. B. S. Aradhya, representing theBenchmarking Project coordinators, notes that inmany cities a systematic approach to handlegrievances is lacking. A few cities have a dedicatedunit, while others have a “ day-in-the-week” whenall complaints are received and resolved. Throughthe Benchmarking Project, Bangalore realized theimportance of a one-stop approach for dealing withcomplaints, increasing the number of receiving

Citizen Complaints-Resolution System: Key Issues and Challenges

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Introduction

points, monitoring complaint performance bymiddle management, and sending unresolvedcomplaints to higher levels of management.

In developing an effective citizen complaintssystem, municipal institutions face many challenges.In general, municipal staff are averse to being madeaccountable to the people. In the absence ofadequate delegation of powers, complaints may notbe resolved. City governments with effectivecomplaint systems have developed procedures formonitoring and prioritizing complaints, andproviding effective means of their redressal. In manycities, key municipal staff have mobile phones toenable them to resolve complaints quickly. In somecities, an “ open-house” is arranged once a week toenable the citizens to meet top municipal officers.

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With growth in urban population, and increase inper capita income and commerce and industry, therehas been a rapid expansion in the amount andcomposition of waste generated in Asian cities. Thisincrease is set to continue for the foreseeable future.Asian cities have a lower rate of waste generationper capita than western cities, but the tropical Asian

Key Actions for Solid Waste Management

� Community involvement— separation of garbage in colored bags� Strict enforcement with on-the-spot fines� School education; informal education through street plays� Publicity campaign on the “ green city”� Involvement of the private sector

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climate with high rainfall and humidity aggravatesthe waste management problem.

Mr. Nathaniel von Einsiedel, RegionalCoordinator of the UNDP/UNCHS Urban ManagementProgramme, underscores the need to focus on all thestages of the waste disposal process, viz. generation,collection, transport, disposal, and treatment. Heexplains the various issues at each of these stages andprovides examples of best practices.

On behalf of the Benchmarking Projectcoordinators, Ms. Suzanne Ardosa adds educationand enforcement to the list of waste disposal issues.She notes that most Benchmarking Project cities havesome ad hoc education programs, and that schooleducation programs are widely implemented. Alesson from the current experience is that multiplechannels of mass education are the most appropriatestrategy for waste-related education. On enforcementthere are varied approaches, with some cities usinglocal law enforcement units and others using thecommunities. Publicity campaigns with a focus onhot spots and use of mobile enforcement units werethe suggested approaches for enforcement.

The key issues and challenges in solid wastemanagement are the adoption of the principles ofreduce, reuse, and recycle. Reduction of wasterequires attitudinal and behavioral changes amongthe residents. If the local community and theprivate sector are also involved in the wastecollection process, the problem becomes moremanageable.

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The next millennium is often referred to as the urbanmillennium, and at the turn of the millennium nearlyhalf of Asia’s population resides in urban areas.

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Introduction

According to Mr. Keshav Varma and Alvin Garcia,the coming millennium will bring greater challengesbut also more opportunities to improve livingconditions in the cities. However, to take advantageof these opportunities in the new millennium a newsystem of municipal management is imperative— onethat fosters true citizenship, builds sustainableinstitutions, and improves quality of life.

Mr. Terry Barnes outlines the process usedby the Fairfield City Council in Australia forimproving resource management. The processbegan with the community’s identification of a clearvision that was translated into a series of communityoutcomes. A major change in the organizationstructure involved the establishment of a CityOutcomes Department. The responsibilities of thisdepartment include the effective use of resourcesto achieve the community outcomes identifiedthrough the vision. This is separate from the CityServices Department, which is responsible for theefficient use of those resources allocated to thedelivery of services. The focus of this improvedorganizational structure of the Council waseffectiveness and efficiency. The supporting systemsintroduced within the Council have output-basedbudgets, in which the opportunity cost of eachdecision is analyzed, and detailed project evaluationis undertaken.

Municipal budgeting and resource allocationare often driven by past expenditure patterns ratherthan by current and future needs. In the absence ofrational procedures, scarce municipal resources areallocated on the basis of the personal preference ofa few individuals or external agencies. However,as in the case of Fairfield City Council, if aconsultative process is adopted and a cleardelineation of functions related to resourceallocation is made, it is possible to develop astrategic vision for financing the development of thecity. Improvements in the resource situation of cities

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are also seen when qualified staff are engaged inresource management activities.

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Mr. S. B. Chua of the ADB Institute summarizes theForum proceedings and highlights some of the keymessages, i.e.

• share experiences and learn from oneanother;

• establish partnerships with NGOs, theprivate sector, and the internationalcommunity in order to serve people better;

• interact on problems through electronic mailand other means;

• address, in particular, the importance ofgovernance;

• connect with the citizenry and establishmechanisms through which people canparticipate in local government affairs;

• establish a customer-focused vision that isbased on outcomes rather than activities;

• continue to strive for the best organizationalstructure in metropolitan areas for optimalcoordination and cooperation;

• remember that often the megaproblems ofmegacities can be solved in simple ways;

• engage development agencies in consultationsbefore proceeding with plans for projects thatrequire their assistance;

• seek ways of financing without getting too muchinto debt;

• be aware that cities will soon face challengesvery different from those of today; and

• cities will be competing with one another forresources in similar areas.

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Introduction

Mr. Chua reiterates the need for a continuousdialogue among the municipal leaders of Asia andhopes that the co-sponsors will support the nextforum and the activities that will take place in theinterim period.

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Opening Statements

his chapter contains the statements madeby Mr. Omar Kamil, Mayor of Colombo;Dr. Masaru Yoshitomi, Dean of the ADB

Institute; Dr. Sarat Chandran, Secretary General ofthe Colombo Plan Secretariat; and the HonorableS. Alavi Mowlana, Minister of Provincial Counciland Local Government in Sri Lanka, during theOpening Session of the Forum.

Mayor Kamil welcomes the participants toColombo, and encourages them to take advantageof the opportunity offered by the Forum to engagein dialogues and share experiences among localgovernment leaders. Next, on behalf of theADB Institute, Dr. Masaru Yoshitomi outlines thestructure of the Forum and its objectives: buildingrelationships among city leaders, sharinginformation and experiences on strategic andmunicipal service, and supporting ADB’sBenchmarking Project. He also stresses theimportance of collaboration among partners toensure sustainable and continuous exchange ofinformation for better municipal service delivery.Dr. Sarat Chandran observes that efficient urbangovernance entails the right skills and expertise,resources, and wisdom of those directly involvedin the process. Finally, Mr. Mowlana encourageseveryone to learn as much as possible from thediscussions, and to continue coordinating andcooperating with one another for the bettermentof humankind.

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Omar Z. KamilMayor, Colombo, Sri Lanka

I welcome with a very warm heart the mayors andmunicipal leaders from the cities of the Asian regionwho have taken time off from their busy schedulesback home for this forum. I welcome withappreciation the resource persons who have offeredtheir valuable time and expertise to articulate theissues, and I welcome with gratitude the manysponsors whose generous support has made this allpossible. To you Excellencies, honorable members,distinguished ladies and gentlemen, I extend a verywarm and cordial welcome.

We are meeting in the City of Colombotoday, and the citizens of Colombo welcome youall with the typical Sri Lankan hospitality. It is apleasant city with an abundance of fauna and flora,where a rich history, a modest way of life, and avibrant modernity have met conveniently and withmutual respect. Since our former Mayor Hon. KaruJayasuriya, who initiated this Asian forum of mayors,took office as Mayor of Colombo, the city hasregained a new life, and I am in a better positionwith his support to welcome you to a city with manychanges yet maintaining the traditional Sri Lankanhospitality, the smile of its people, and the greeneryof its landscape.

The Colombo Municipal Council is thelargest local authority in Sri Lanka and one of theoldest in Southeast Asia. We are 134-years old andduring this period the city has developed into thecommercial capital of this country. We are facedwith many challenges and opportunities and ourvision is to make Colombo a model city in Asia,providing a high quality of life to the people.

Colombo has a mixed ethnic population,which we see as a potential for development, aresource and source of color for its vibrant city life,and as offering opportunities for mutual interaction

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Opening Statements

and progress. The Colombo you see today is aresult of the labor of love of many people, manymayors before me, its citizens, a dedicated andcommitted team of top and middle management,and hard-working staff of the Colombo MunicipalCouncil. They work very hard to maintain the city’sinfrastructure and innovate solutions to its manyproblems. Our vision has been to improvecollectively the quality of life of people whileretaining the culture, heritage, social system, andphysical fabric.

I believe this Forum offers us the opportunityto engage in dialogue among ourselves on issuesthat confront us individually, in our own cityoffices, and to share the experiences that we havegained in resolving them within our own culturalsettings. But I am sure we will learn that there areinteresting similarities and that there are commonexperiences that we can share for the betterment ofcities in the Asian Region.

This is an opportunity to exchange ideas thatcan provide us the insights, understanding, andenergy that we need to face up to the day-to-dayissues that confront us as much as the ones that wewill have to face together in the years ahead. Itoffers us the opportunity to recognize our mistakes,learn from the experiences of others, and build abroader understanding about our people, urbanproblems, urban potentials, and urban futures.

Today we are at the doorstep of the nextmillennium, and it is widely believed that the nextmillennium belongs to Asia, and in particular, tothe cities in Asia. The people in this region will lookfor new technologies, new social reforms, newurban developments, and new visions for organizingtheir life styles.

It is in this context that we are meetingtoday, and it is in this spirit that we are going toengage ourselves in this forum. As the Mayor ofColombo City, and on behalf of the citizens, let me

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once again offer a very warm welcome to all of youand wish that you will have a pleasant stay here. Ialso wish that you will find this forum fruitful,exciting, invigorating, and offering opportunities forgreater cooperation among our cities and ourcountries.

Dr. Masaru YoshitomiDean, ADB Institute

On behalf of the ADB Institute, let me extend a verywarm welcome to you to this Mayors’ Forum. TheADB Institute is indeed pleased to have thisopportunity to organize this forum with our co-sponsors, ADB Headquarters, Colombo PlanSecretariat, USAID Regional Urban DevelopmentOffice for South Asia, US-Asia EnvironmentalPartnership Program, the UNDP/UNCHS UrbanManagement Program, Konrad AdenauerFoundation, the German Agency for TechnicalCooperation (GTZ), and, of course, the ColomboMunicipal Council. We are particularly grateful tothe Colombo Municipal Council for the excellentarrangements and warm hospitality.

The involvement of the ADB Institute inthe Mayors’ Forum is to lend support to ADBHeadquarters’ work on governance. This is becausegovernance has been recognized as critical for thelong-term sustainable development of alldeveloping countries. We also recognize that a wayof improving governance is to build capacity in theareas of first, public administration and second,public expenditure management, both of which arecentral to core governance. Therefore, contributionsby the ADB Institute to build capacity in these twoareas, both at the federal and provincial level, couldgo a long way towards helping developing countriesachieve sustainable economic development. Forthese reasons, we have included in our work

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Opening Statements

program three integrated programs to build capacityin the public management area. One of these is theMunicipal Management program, which we are co-hosting with other donors in the form of this AsianMayors’ Forum.

This is the second forum that the ADBInstitute has sponsored. The first was held in Cebu,Philippines, in December 1998, co-sponsored bythe ADB Headquarters and the City Government ofCebu, where we had a gathering of around 10Mayors. Mayor Garcia, whom I am very pleased tosee again here today, hosted that forum wonderfully.

In organizing such gatherings, the questionof sustainability and continuity of the undertakinghas always been in our minds. So following lastyear’s forum, we established a World Wide Website for the mayors and their coordinators to gainaccess to a vast knowledge base on best practicesof local governments, to participate in worldwidediscussion forums, and to exchange experienceslong after the forums are over. We have indicatedthat the mayors’ group had to be expanded so thatthe sharing of experiences could be widened.By this process, we hope that learning from oneanother through the Internet can take off. It was forthis reason that we decided to sponsor the secondAsian Mayors’ Forum with an increase in thenumber of participating mayors. In today’s forum,the number of mayors represented has trebled. Iam happy to be advised of the very good responseand interests expressed by many for this gathering.I am even happier to note that the number ofsponsors has more than trebled compared to theprevious occasion. This is an indication that we aremoving in the right direction.

Now that we have some indication ofsuccess, it might be appropriate to remind ourselvesof the key objective of the forums, and that is tohelp cities improve the living standards of the

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general population. This could be achieved throughthe following three steps:

• Building relationships among participatingcity leaders so that through the friendshipsestablished in this gathering, we are betterable to help one another manage the manychallenges facing mayors and cityadministrators throughout Asia.

• Sharing information and experiences onstrategic and municipal service issues so thatwe can apply this knowledge to enhancingthe services that each municipality offers toits residents.

• Supporting ADB’s concurrent project onbenchmarking selected municipal services,which is taking place in 10 of the citiesrepresented here today. This project aims todemonstrate that cities can achieve betterservices for their citizens by comparing theirservice performances with one another andthen using this information to improveselected services to their citizens.

In today’s gathering, there are 32 city leadersfrom 12 countries and 10 resource speakers withoutstanding credentials in urban management.Organizing such an event is no small task. We wereable to do this because of the tremendous amountof cooperation that is evident here today. To makethis Forum a reality has not only required theefforts and resources of the Institute but alsopartnerships with our co-sponsors and, of course,our gracious host, the Colombo Municipal Council.We are most grateful for the Council’s dedicatedeffort in answering our many queries and tirelesslyorganizing a host of activities for the occasion.

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Opening Statements

They, like us, perceive that to succeed weincreasingly need to learn from one another becausewe do not have the luxury of time to experiment, tomake mistakes, or simply muddle through. We needto partner with others to create collective strengthgreater than the simple sum of our individualcapacities and efforts.

The forum is organized to help participantsanswer the following key questions:

• What are the good practices of urbanmanagement?

• What lessons can we learn from what othershave done?

• What have been the challenges faced byothers? and

• What are the factors for success?

The program has been designed so that eachparticipant may leave Colombo equipped with newinsights on how to address appropriately the keyissues that are critically important in the performanceof mayoral duties.

This morning, the focus will be on changingthe organization’s culture to remove major barriers toimproved service delivery, and on gettingorganizations to work in a cooperative, customer-oriented or customer-focused manner. Then theprogram moves to discussions on how to harnessthe capabilities of residents through a participatoryapproach to help enhance service delivery. As agroup, you will look for better ways to work withcentral and provincial government counterparts,through their various public agencies, and withadjacent cities, to achieve your objectives.

Funding has always been a constraint on thekind of services you can provide. This issue will beexplored through an in-depth analysis of howpublic-private sector partnerships can be tapped asa means to overcome funding constraints.

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Different modes of public-private sector partnershipswill be discussed and their applicability for differentservices examined. This will be followed by a sessionon evaluation of appropriate techniques for betterresource management. Next, there will be an updateon the progress of the benchmarking of services inten cities, and finally a session is included to identifyclearly some emerging issues and possible solutionsfor cities as we move into a new millennium. Includedin most of the sessions are practical examples of howissues are addressed and problems resolved.

You will recall that we wish to fosterprofessional friendships among cities to encouragetheir sharing of knowledge as the need arises. Thisforum will provide part of that opportunity throughbreaking up into small group sessions. This featurehas been introduced as a result of feedback fromthe Cebu forum.

The second innovation of this forum is tointroduce all of you to the World Wide Web, todemonstrate how relatively easy it is today to obtainextremely useful information, whether it be seriouslocal government matters, world cricket, or onlinenewspapers. Using E-mail as an effective andinexpensive tool to communicate and exchangeexperiences with one another will also be covered.I trust you will enjoy this experience, which youwill find surprisingly easy.

We need your active participation andparticularly your assessment of what we could dobetter to help you, your city, your country, and yourregion. I sincerely hope that this forum willcontribute to further your efforts to enhancemunicipal service delivery. In the longer term, wehope there will be increasing involvement by somecities, maybe joining forces together to co-host sucha gathering with the Institute and others, andhelping organize meetings and other friendshipgatherings as well. This will result in sustainabilityand continuity of the program in the future.

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Opening Statements

Dr. Sarat Chandran, Secretary-GeneralColombo Plan Secretariat

The Asian Mayors’ Forum has provided anopportunity for the Colombo Plan to collaboratewith other organizations like ADB, ADB Institute,USAID, and UNDP, to focus on capacity andinstitution building and governance issues, whichform an important sphere of activity andspecialization of the Colombo Plan.

As you may all know, the Colombo Plan isone of the oldest intergovernmental organizationsin this region. It was established in 1951 for thecooperative economic and social development ofthe countries of Asia and the Pacific. It started asan initiative of seven Commonwealth countries andevolved in the same pattern as the Marshall Planfor the speedy economic and social developmentof Asian countries. I must say that Sri Lanka playeda very crucial role in setting up this organization,which has over the years grown from a strength of7 to 25 countries spanning Southeast Asia, CentralAsia, and the Pacific.

The Colombo Plan is one of the few inter-governmental organizations that fashions itsprograms and activities around the theme ofhuman capital development. Human capital isgoing to be even more crucial in the comingmillennium because the world is entering into anage of information and knowledge revelation.The Colombo Plan is also one of the few inter-governmental organizations, specializing in south-south cooperation. It has a unique comparativeadvantage in this field because its membercountries are in varying stages of economicdevelopment and integration with the globaleconomy, and each has its special developmentalexpertise to share. In this context, the Asian Mayors’Forum provides a special opportunity for countriesin the region to share with one another experiences

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in the complex management of cities and provisionof urban infrastructure. Hopefully, out of thediscussions and debate, new paradigms will evolvefor better governance practices, resulting in greaterefficiency and cost reduction.

The efficient running of a city and itsinfrastructure is extremely challenging and daunting.It is as complex as, or more complex than, runningthe most elaborate industrial enterprises. Manyissues are involved in the efficient and orderlyfunctioning of a city, including the delivery ofinfrastructure and related services, wastemanagement and pollution control, providing forthe safety of citizens and facilities for entertainmentand other civic amenities, transparency andaccountability, and strategic planning for the future.The aspects involved are so multifaceted andmultidimensional that the human capital skillsrequired in the management of modern cities areimmense. In view of this, all of you representingdifferent cities around the globe bring togetherexpertise and experience rarely assembled inone place.

The cities in this region have becomeborderless, and one critical issue they face is theoverburdening of their infrastructure. The increasingpopulation growth and migration in search of bettercivic amenities and employment have also putpressure on them. Therefore, the development ofthe city and its periphery should go hand in hand.City management cannot be looked at in isolation;its strategic planning should take into account howthe issue of improving infrastructure can be tackled.

City administration is often faced with theproblem of raising adequate resources to meet thecosts of services for residents. Since most taxrevenues are within the ambit of national and stategovernments, flexibility available to cities in the areaof taxation is rather limited. Cities have to useextremely innovative schemes for increasing

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Opening Statements

resources that do not adversely affect efficiency andinvestments. Evolving financial products to generatelong-term funds for infrastructure projects is also achallenge cities face. This is another important areathat the mayors in this forum will be addressing.

The issue of good governance is as importantin city management as it is to a private corporation,or for that matter, a state or national government.Transparency of rules, citizens’ participation in cityadministration, effective grievance redressalmechanisms, and financial accountability allcontribute to efficient functioning of a city.

Coordination plays a very vital element inthe efficient running of a city. Many activities needto be coordinated to precision. In the coming years,information technology tools will play a greater rolein city coordination. Therefore, skill developmentof personnel involved in the management of a cityneeds to be given close attention.

I have touched upon a few important aspectsthat go into the efficient functioning of a moderncity. In the next few days you will be having fruitfuldialogue and interaction and exchange of ideas onthese as well as many other important matters, intrying to evolve a set of best practices for cityadministration.

Before I conclude, let me leave a thoughtwith you. In the coming millennium we should allaspire to make our cities more efficient and morehumane, places where citizens can live comfortablyand in the right environment to develop their fullpotential as human beings. To achieve this, weshould not only have the skills to face the challengesof the future, but also the expertise, the resources,and the wisdom to shape and fashion the future forthe benefit of all.

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Hon. S. Alavi MowlanaMinister, Ministry of Provincial Counciland Local GovernmentSri Lanka

It gives me great pleasure to be associated with youall on this memorable occasion. First of all, let meextend my gratitude to the organizers of thisdistinguished gathering of about 70 delegates from10 Asian countries: the People’s Republic of China,India, Indonesia, Lao PDR, Malaysia, Pakistan,Philippines, Sri Lanka, Thailand and Viet Nam.

The Asian continent can boast of manysuccesses this year in contributing to the bettermentof humankind. However, the nations in the regionare still classified as third-world countries. I hopewe can qualify as developed countries in the nearfuture; gatherings of this sort will enable us todiscuss matters that will help us achieve ourobjectives and assist us to take our due place in theworld arena.

I see in the audience a galaxy of talents—mayors and other officials who will coordinate andcooperate in order that institutions can operate. Forme, that is the most important factor.

I am fully aware of the enormous tasks beforethe mayors of our region. Because of urbanization,mayors become financially constrained and unableto provide adequate facilities, proper garbagedisposal, safe drinking water, etc. They are facedwith the urgent need to enhance the delivery ofmunicipal services and develop the capability oftheir cities to handle such situations. They have tofind solutions to these seemingly insurmountableproblems within a short span of time. They spendsleepless nights trying to find the right mix to solvethese problems.

Mayors also have to contend with oppositionaround them, but at the same time being consciousof the fact that criticism should be taken in good

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Opening Statements

spirit, and used to restructure for a successfuladministration. In Colombo, for instance, themedia are very quick to criticize new concepts, butwe always allow them to express their views. Theopposition in the Colombo Municipal Council isalso encouraged to coordinate and cooperate withthe present administration to find solutions to ourproblems. We believe that if we listen, we canimprove. After all, the true test of a good leader isbeing able to win the opposition and criticsby making them partners in planning andimplementation of government programs.

This gathering will allow us to discuss ourcommon problems and share different solutions thatwill enable our respective cities to move forwardto the future. Our approaches may be different, butwe can learn from each other and improve thewelfare of our own people.

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Changing Institutional Culture of Asian Municipalities

very organization has a unique culture, whichis the result of doing things in a certain wayover a long period of time. However, with

rapid changes in the external environment of theorganization, its traditional role or modalities needto be changed. Whenever someone tries tointroduce reforms, there is considerable resistancefrom within the organization.

Mayors face the same dilemma . Althoughthey want to improve the quality of life of theircitizens, they will often discover that their verymunicipal org anization has become a majorba r rier to improved se rvice del ive ry. Theorganization may be bureaucratic and hampere dby regulations, and thus have become unresponsiveto the need for reform.

How can mayors change the existingorganizational culture so that it supports rather thanhampers their objectives to improve the city and itsservices? Mr. Deshabandu Karu Ja yasuriya sharesthe practical steps he undertook to change the workand service culture of the Colombo MunicipalCouncil, which resulted in improved services andquality of performance of its workforce.

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Deshabandu Karu JayasuriyaFormer Mayor, Colombo City, andLeader of the OppositionWestern Provincial Council

Since the inauguration of the Colombo MunicipalCouncil 134 years ago, the city population hasincreased from 80,000 to 800,000 with a floatingpopulation of yet another half a million. Urbanmigration has brought in a large number of citizenswho are left without proper shelter and withoutaccess to basic amenities such as safe water andsanitation. The density and increase in commercialand industrial activity have also brought greaterpressure on the functions of the Council. Unplannedpatterns of urban growth have caused economicinefficiency, environmental degradation, andhuman misery.

Planning mechanisms had failed to addressthis dramatic increase and the mass migration intothe city. The delivery of municipal services did notmeet the expectations of the community. City sprawland the demand for transport had far outstrippedroad capacity. The administration was not verysuccessful in trying to improve the lot of the urbanpoor, constituting nearly 45% of the city population.

Urban financing had collapsed under severepressure and was incapable of maintaininginfrastructure services. Funding that used to comefrom higher levels of government was shrinking asthe latter also faced a resource crunch. Centralgovernment debts continued to be unpaid. Thefinancial base re mained narrow and stagnant. Yet,over the years, this city has steadily progressed tobecome a modern city throbbing with activity andstruggling to contain itself within its boundaries. It

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has enjoyed the blessings as well as the strains ofbeing the commercial capital of the country.

When I was elected in April 1997, this wa sthe environment into which the new administrationentered, quite unknowingly. It was the first time thatI entered the political arena and I had no doubt thatthe people elected us convincingly because theyneeded a change. We assumed office and realizedthat if our vision of a livable, clean, and sustainablecity was to be a reality, a change was imperative.

I have been thoroughly involved in thegrowth of the private sector in this country, heldoffice in a number of companies, institutions, andChamber of Commerce, and had the opportunityof steering Sri Lanka’s first privatized enterprise tobecome a leading and successful business institutionin this country. We were associated with the flexiblemarket-based management system. Successdepended on the achievement of the designedobjectives. We measured performance by outcomesnot inputs. We were driven by goals, visions, andmissions, not by rules and regulations. Our clientswere customers and we offered them choices. Oureffort was on earning and not simply on spending.Above all, we focused on catalyzing all sectors—public, private, and volunteer—into action to solvetheir needs.

It was not a surprise to discover that theColombo Municipal Council was no different fromother public institutions. The rigid, hiera rchicalbureaucratic form was the traditional model ofpublic administration. Officials adhered to rules andregulations and were mainly concerned with doingthings correctly. Often we heard of the poorperformance of public bureaucracies, cumbersomered tape, unpleasant officials, poor services, andcorrupt or irregular practices. There was ademoralized staff with over 35% vacancies, noovertime, lack of machinery and equipment, and

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no decision making. Most of the staff believed that“no work means no problems.”

We looked for change in a profession thathad seen little change over a long period. A societythat is changing fast requires systems of governmentthat can keep pace with the growing needs ofpeople. We realized that such major changesrequired good leadership and team spirit. There wasa need for better management rather than mereadministration. There had been no attempt to seekbest practices, despite potential for innovation andimproved efficiency. There was a need to shift fro mthe traditional form of public administration topublic management.

Before our term, power was seen to residewithin the Town Hall. Pol i t ic ians spent aconsiderable amount of time trying to gain powerthere. Chief officers were running the departmentsand provided services to different groups of people.The services were generally initiated, developed,and delivered within the Town Hall, which wa sconsidered a direct way to solve social problems inthe locality. Politicization was at its peak, whichresulted in a significant decline in the performanceof the Council.

Several steps were taken to overcome thisissue. First, prior to the elections, every effort wasmade to include several professionals as candidateswhile allowing for grass-root politicians. I selectedmy likely successor before the election. This enabledme to work with a strong team representing diverseinterests. I also accepted the position for a limitedperiod of one to two years over the full term of fouryears.

Second, all policies set out by the councilorswere based on the needs of the electorate. Theexecutive handled the implementation. There wasa very high degree of delegation to the deputy mayorwho coordinated the link between the electedrepresentatives and the officials.

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Third, we changed the old idea thatdemocracy is equated to elections by minimizingwasteful interparty confl ict and poli t icalconfrontation. Members of the opposition politicalparties in the Council were elected as chairpersonsof 5 of the 15 statutory standing committees.Together they formed my inner cabinet. This was anew concept, with 33% of my inner cabinetappointed from the opposition. Looking back, weare hap py that we were able to draw up the four-year development plan for the City of Colombo withthe participation of all political parties.

Fourth, we increased the power andaccountability of managers. Empowerment wasimplemented by delegation. Rather than beingcontrolled administrators they became empoweredmanagers so that they could exercise their owninitiatives in responding to customer needs. Thisgave them managerial freedom, due recognition andresponsibility, and ab ove all an opportunity for apluralism of service-delivery mechanisms.

The Council used to have a rather dominant,closed, secretive, and anxious relationship with thepublic, especially when criticisms were made. Byundertaking innovative measures, we changed theimage of the Council and how local authoritiesviewed the public.

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A 100-day program was developed to create animpact in the community of the overall services ofthe Council with particular emphasis on

• providing better amenities to the poor;• giving a facelift to the city;• involving the private sector; and• creating awareness among the people so that

they would join hands in providing ane ffective service to the city.

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The response was great and all sections ofthe community including foreign ambassadorsjoined us to make this program a success. Followingare the elements of the Program.

• A Directory of Services, which was producedduring the time of my predecessor, wa sdistributed to households. This book gave thecitizens an insight into the roles and activitiesof the Council and how best to contact localofficials when in need.

• A 24-hour Information Center and ComplaintDesk was opened to help the citizens.Complaints were taken, recorded, and ascheme to follow-up intro d u c e d . Weinsti tutionalized a Public Day everyWednesday. The ma yor, deputy ma yor,municipal commissioner and all heads ofdepartments are accessible to the public atone place on this day. In this way the publiccan have their problems resolved directly andquickly. Usually, 200-300 people are presenton a Public Day.

• Advisory Committees were established,comprising leading citizens recognized fortheir expertise, experience, and reputation inthe relevant fields who contribute voluntarilyto the development of the city. Fifteen suchcommittees, covering activities ranging frompublic health, sports, markets, and planningto finance, were formed.

• Similarly, a City Watch Committee, consistingof civic leaders and professionals, was formedto initiate and maintain regular dialogue withthe Council on matters pertaining to the city.These committees have made and continueto make a most useful contribution to the city.

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Through these efforts we were able to winthe confidence of the people. The citizens saw whatwas happening and felt that they were wanted. Theyrealized that the Council was working with apurpose.

This was also the beginning of a number ofpartnerships that we built. Through partnershipswith NGOs and the private sector we were able tojoin hands in maintaining dispensar ies ,roundabouts, a traffic lighting system, commonamenities to the poor, street name boards, etc.

Partnerships with professional groups suchas the Institute of Architects, the Organization ofPro fessional Associations, and the Institution ofEngineers resulted in the formulation of “V ision forthe City of Colombo—Y ear 2000.” Par tnerships withthe business sector were also initiated and I amhappy to state that the present mayor has alreadyinaugurated a Colombo Business PartnershipProgramme.

The international community also showeda tremendous interest and responded favorablyt owa rds our efforts to develop the city. Theg overnments of the Netherlands, Norwa y, Gre a tBritain, and Australia helped us in ma ny projectsdirectly while the governments of Germany andJapan have made commitments to majordevelopment projects. In addition to this, donoragencies, particularly the Konra d AdenauerFoundation and Friedrich Naumann Foundation,have been working with us very closely in manyactivities.

Partnerships with other local authorities havealso been formed. We are the largest local authorityin Sri Lanka and it was our responsibility to giveleadership to the other local authorities. We did thisby forming the National Chapter of Mayors of SriLanka, a body comprising the 14 mayorsrepresenting the 14 municipal councils in Sri Lanka.Today, this is an established forum where the ma yors

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meet irrespective of different political ideologies.This body has not only initiated collective actionbut also made possible a study tour to Singaporefor the mayors and deputy mayors, municipalcommissioners, and leaders of the opposition.

Private contract of some services was a newintroduction by the Council. Conventionally, it wa sbelieved that public services were not as effectiveand efficient as the private sector in terms ofwas t age , supervision, and value for money.Although there were initial criticisms andobjections, it proved to be a successful venture.Today ma ny services, such as janitorial, security,and garbage collection, are carried out on contractby the private sector.

To ensure that this participatory approach issustainable, there was a need to make everyemployee conscious of the fact that the customer isthe most important person for the Council. Ane ffective public-relations and customer-focustraining program was introduced covering allsections of the Council. This brought about themuch-desired attitude of staff toward their customersand created a new atmosphere in the Council.Training became an important part of the Councilagenda, in fact, every year at least one officer isundergoing specialized training somewhere. As partof this program, we arranged for most of themunicipal councilors and key officials to visitSinga pore as a model city. These were sponsore dvisits not using public funds.

Developing a vision, mission, and a plan forthe Council was essential for city management. Ihad a vision, but a truly viable vision is a confluenceof ideas from all stakeholders. We developed amission statement defining how we would get there.We determined a sense of direction with a validcorporate plan in order to know what was requiredin the management of the city and whether we weremeeting our goals. This was the first time that a

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corporate plan was made public by a local authorityin Sri Lanka.

One of the important aspects of this plan isto meet the needs of the young people for the nextmillennium. They are our future leaders and it isour responsibility to direct them to meet thechallenges ahead. For this we initiated intensive,job-or iented t ra ining programs, a careerd evelopment center, and a millennium park givingthe opportunity for the poor to keep abreast withinformation technology. We have plans to traina bout 5,000 youths annually.

Societies throughout the world will continueto change rapidly during the foreseeable future.They will be driven by changes in values, changesin technology, and changes brought about by globaltrade. Councils that are structured and motivatedto change and recognize the need for it are thosethat will succeed and be seen as useful andnecessary by the public.

Looking back at the 26 months of the newadministration, we have every reason to be satisfied.Although the City of Colombo was not turned upsidedown during this short period, we were able toachieve quite a lot through team effort. The creditof our achievements and the bouquets were givento our team. I took criticism and brickbats. We ye thave a long journey but I feel that we will reachour goal. We have the right team and the rightapproach.

Ladies and gentlemen, I wish to extend mydeep appreciation and gratitude to the ADB Institute,ADB, and all the sponsors for inviting me to deliverthis keynote address. For us in Colombo, it is a greathonor and privilege to have such a distinguishedg a t h e ring. Your pre sence i s i ndeed anencouragement to all of us. I wish all the visitingparticipants a very pleasant and memorable stay inSri Lanka and in the City of Colombo.

4747

Public-Private Sector Partnerships for Municipal Development

ocal governments around the world havebegun to experiment with various strategiesfor delivering better public services. Wishing

to provide better services but severely hamperedby lack of funds or expertise, they have engaged inpartnerships with residents and the business orcorporate sector. These partnerships range fromplanning and implementation to monitoring ofpublic services. Over the past decade, many Asiancities have adopted some form of partnership withcivil society or the private sector. These experiencessuggest that partnerships are based on mutual trustand respect among the partners, but that the citygovernment has to play a leading role in initiatingsuch partnerships.

This chapter demonstrates how five Asiancities were able to improve their servicessuccessfully through such partnerships. The firstexample is the Sustainable Penang Initiativepresented by Councilor Rhina Bhar of Penang,Malaysia. This initiative for developing community-based indicators for sustainability and livabilitythrough a process of popular consultation, hasbecome a very important strategy for addressing thechallenges of sustainable development in Penang.

The experience of Kuantan, Malaysia, aspresented by Dato’ Mohamad Bin Saib, Presidentof Kuantan Municipal Council, exemplifies how theinvolvement of the private sector in local

L

IV. PUBLIC-PRIVATE SECTOR

PARTNERSHIPS FOR

MUNICIPAL DEVELOPMENT

4848


government processes can help a council achieveits vision. Dato’ Saib also emphasizes the need fora long-term vision derived through consultationsamong the stakeholders.

Mayor Benjamin Abalos, Jr. of MandaluyongCity, Philippines, proudly cites the build-operate-transfer (BOT) arrangement that was undertaken byhis city in rebuilding a large marketplace after itwas destroyed by fire in 1991. The existence ofnational BOT legislation has helped many cities inthe Philippines to initiate such partnerships withthe private sector.

Congressman Ignacio Bunye of MuntinlupaDistrict, Philippines, shares his experience of howcommunity participation transformed his city’sdistressingly large urban poor sector into a well-managed settlement area. He emphasizes that theart of effective governance involves the principleof three Cs—consultation, collaboration, andcoordination.

Finally, Mayor Phummisak Hongsyok ofPhuket Municipality in Thailand describes howPhuket evolved a participatory approach to manageits environment on a sustainable basis in order tomaintain its status as the premier tourist destinationin Thailand.

All these practices prove one point: the keyto successful partnerships is an establishedmechanism where people and government can talkto each other about what is best for their society,and how best they can work together.

The art ofeffective

governanceinvolves theprinciple ofthree Cs—

consultation,collaboration,

andcoordination.

4949


THE SUSTAINABLE PENANGINITIATIVE

Rhina BharCouncilor, Penang, Malaysia

The Sustainable Penang Initiative (SPI) is the firstcommunity indicator project in Malaysia, andpossibly in Asia. It is an attempt to forge a popularconsultative process to address the challenges ofsustainable development in Penang and at the sametime an attempt at innovative, decentralized, andparticipatory governance. In time, it is hoped thatthis planning philosophy will permeate what iscurrently a top-down planning process relying onconventional macroeconomic indicators andfragmented planning, which does not give a holisticpicture of environmental and societal impact.

This project is conducted by Penang’s newlyestablished think tank for sustainable development,the Socio-Economic and Environmental ResearchInstitute, or SERI Penang. It is sponsored by theCanadian International Development Agencythrough the Canada-Association of Southeast AsianNations (ASEAN) Governance Innovations NetworkProgram, which is coordinated by the Institute onGovernance. It is also supported by UNDP and theUN Economic and Social Commission for Asia andthe Pacific (UN-ESCAP).

Penang is one of the 13 states of Malaysia,covering an area of 1,031 km2 with a population ofabout 1.28 million. It consists of two parts: an islandand an adjacent strip on the mainland, the two partsbeing linked by a bridge and a ferry system.

The Municipal Council of Penang Island isresponsible for Penang Island, with a population ofabout half-a-million people and a landscape of greatecological, economic, and cultural diversity. GeorgeTown, the historic port and capital of Penang, has

SPI is anattempt toforge a popularconsultativeprocess toaddress thechallenges ofsustainabledevelopment inPenang and atthe same timean attempt atinnovative,decentralized,andparticipatorygovernance.

5050


an urban history of over 200 years. Apart from beingan administrative and commercial capital, the innercity is also Penang’s cultural and spiritual capital,with a rich multicultural heritage eligible for WorldHeritage listing. Komtar, the center of Penang’sgovernment, is situated in the city center of GeorgeTown. This building houses the offices of the federal,state, and local governments. Batu Feringghi, aninternational tourism resort, is located along thenorth beach, and finally, the island’s water catchmentarea and nature reserve are at Penang Hill.

From 1992 to mid-1997, Malaysia had aneconomic growth rate of 12 percent. With suchgrowth, Penang Island faced some uniqueenvironmental challenges and opportunities,including

• encroachment on the water catchment areaand nature reserve due to hill farming anddevelopment;

• pollution of river systems and coastal watersfrom domestic waste, agricultural waste, pigfarming, and industrial effluents;

• threats to air quality from local traffic andindustrial pollution as well as trans- boundaryhaze;

• rapid motorization, urbanization, and large-scale property development causingenvironmental stress on the land-scarceisland and its ecologically fragile areas; and

• lack of open space and recreational areas.

In the past, environmental controversiesmay have created tensions between NGOs andgovernment. However, immediately after the RioSummit, the Malaysian Government and thePenang State Government put increasing emphasison environmental concerns. The goals ofenvironmental sustainability and improved qualityof life became priority.

5151


Although the Department of Environment, thePenang State Government, and Municipal Councilfaced financial, land, and staffing constraints, theytried to spearhead and support local environmentalefforts through greater popular consultation andpartnerships with NGOs and community groups. Forexample, when environmental groups objected to amassive development proposal for Penang’secologically sensitive Penang Hill, the localgovernment encouraged participation fromcommunity groups through a local planning process.

The SPI was established in late 1997, at thebeginning of the economic slowdown—which wasalso a time when government, business, and civilsociety were becoming more environmentallyinformed and aware—to provide an informationframework and common networking among thevarious sectors, stakeholders, and proponents ofsustainable development and environmentalinitiatives.

Objectives

As a pioneering process of popular consultation forinputs into holistic development planning, itsobjectives were

• to develop a broad series of indicators forgauging sustainable development;

• to develop the model for a holistic and sustainabledevelopment plan that takes into considerationsocial, cultural, and environmental dimensionsbesides the conventional economic ones;

• to establish a mechanism for public input andconsensus-building based on partnershipbetween government, the business sector, andcivil society; and

• to channel the output of the consensusprocess to relevant authorities in order to

5252


influence development planning and policyformulation.

The SPI has organized or co-organized ninepublic forums, participated in total by about 400people, contributing a total of about 5,000 peoplehours. Participants have come from the government,schools and universities, business and industry,youth groups, community groups, and NGOs.

The SPI Process

Five roundtables (Figure IV.1) were convened toexplore systematically the themes of ecologicalsustainability, social justice, economic productivity,cultural vibrancy, and popular participation.Linkages between these five themes were alsoexplored to promote a holistic understanding ofdevelopment and its consequences. Through thisprocess, we have gained a better understanding ofthe effects of rapid economic growth onenvironment and society. After the five mainroundtables, two more roundtables, in BahasaMalaysia and Chinese, respectively, were held toovercome the language constraints.

The participants identified issues andindicators affecting Penang’s sustainability andquality of life. The environmental issues includedair pollution, acid rain, coastal water quality, lackof open spaces, river water quality, loss ofmangroves, public access to recreational beaches,hill cutting, traffic congestion and safety, bicycleusage, flooding, urban trees, water consumption,noise pollution, pesticides, waste management, andpopulation growth.

Some issues required established indicatorsthat were already being monitored by governmentdepartments, but which needed to be communicatedto a wider public audience. In other cases,

Through thisprocess, we

have gained abetter

understandingof the effects ofrapid economic

growth onenvironmentand society.

5353


community environmental monitoring projects wereinitiated to produce the indicators.

One example of the latter was a crow countorganized by the nature society. Crows wereidentified as an indicator of unmanaged waste, andthe distribution of crows was just as telling as thenumber of crows.

Citizens’ groups also championed mostissues, but where no champions existed, three newgroups were formed that have since grown into theirown movements. The first is Water Watch Penang,

Figure IV.1. The Sustainable Penang Initiative: Roudtable Process

Good Discussions

Good Discussions

Prioritize Specific IssuesIdentify Indicators

Source of Data

Feedback

What needs to be done?Who will do it?

Adopt IndicatorsRecruit Volunteers

Community Indicators

Identify Burning Issues

Roundtable Process

Good Discussions

Group Presentations

5454


which is working with the Penang Water Corporationto monitor water resources and to promote waterconservation and recycling. Another is SustainableTransport Environment Penang (STEP), which isworking with the State Government and MunicipalCouncil to promote public transport, walking, andcycling. The third group is Sustainable, IndependentLiving and Access (SILA), a network of people withdisabilities, which together with UN-ESCAP and theMinistry of Housing and Local Government, isworking to promote and create disabled-friendlyenvironments within the city.

The roundtables were conducted by SERIas proactive, facilitated workshops. Therecommendations and inputs gathered will be usedin the formulation of the Penang strategic plan forthe next decade (2001–2010). As a researchinstitute, SERI will also be the consultant undertakingthe strategic plan.

Recently, the SPI organized a People’sForum which brought together the StateGovernment and about 200 members of the publicto look at a “report card” of the 40 issues andindicators affecting Penang’s sustainability andlivability. The Penang People’s Report, whichcontained the performance of 40 indicators (BoxIV.1) identified by the various roundtables, waspresented to the Chief Minister of Penang.

These indicators can be separated into 4status categories:

• The Good News: indicators that show thingsgoing in the direction of sustainabledevelopment.

• Some Mixed News: indicators whose impactis difficult to determine; some of them maybe interpreted as good depending on actionstaken.

• The Challenges Ahead: indicators of areas that

5555


require much work being done or have roomfor improvement.

• Questions and Challenges: indicators aboutwhich conclusions cannot be made due toinsufficient or unreliable information.

One indicator of Good News is urban trees.It is encouraging to note that we have achieved 82%of the target of 180,000 trees planted by the end of2000. Indicators in the Mixed News categoryinclude disabled access to public facilities, childcarefacilities and healthcare expenditure. Regardingaccess by disabled to public facilities, although thereare no buildings complying with Malaysianstandards 1184 and 1183, barrier-free issues havebeen highlighted and there are ongoing efforts toimprove accessibility to several public places. SomeChallenges Ahead indicators include issues onchildren at risk, social ills, domestic violence,unplanned pregnancies, persons with HIV, andtraffic safety. The indicator on housing affordabilityfalls under the Questions category. Despite the factthat housing affordability is a critical issue,information on the number of low-cost housingplacements as a proportion of applications is difficultto obtain.

Members of the public have been invited tocomment on and monitor these indicators. Severalinterest groups including academe, NGOs, theprivate sector, and individuals have volunteered tomonitor some indicators.

Conclusions

The success of the SPI project can be attributed tovarious factors. First, Penang (the island, inparticular) is a compact, relatively developed, andurbanized state with the human and infrastructureresources to sustain broad-based citizens’ initiatives.

5656


1. Acid Rain pH value of rainfall 2. Air Quality Air Pollution Index 3. Environmental Violations No. cases prosecuted 4. Coastal Mangroves Acreage 5. Unmanaged Waste No. crows 6. Coastal Water Quality % monitored coastal waters classified

unsuitable for recreation or aquaculture 7. River Water Quality Water Quality Index 8. Water Consumption and

Production 9. Environmental Noise Equivalent-A-weighted sound level10. Private Vehicle Ownership Highest 2-way, 16-hour average

volume on road11. Traffic Congestion12. Cycling as Sustainable

Transport No. cyclists crossing by ferry13. Urban Trees No. trees planted under the

National Tree Planting Campaign14. Parks and Open Spaces Ratio of open space to population

Indicators of Community

15. Disabled Access to Public No. accessible public and commercialFacilities buildings

16. Child Care Facilities17. Children at Risk No. reported child-abuse cases18. Social Ills Among Youth No. incidents of reported juvenile crimes19. Domestic Violence No. wife battery cases reported20. Unplanned Pregnancies No. single mothers in homes21. Persons with HIV & AIDS No. new AIDS cases and HIV carriers

detected

Box IV.1. List of 40 Indicators of Sustainabilityand Livability in Penang

Indicators of Environment Indicator

(continued on next page)

5757


22. Healthcare Expenditure % state health care expenditure to GDP23. Breastfeeding No. babies born in baby-friendly hospitals24. Housing Affordability No. low-cost housing placements25. Traffic Safety No. casualties and fatalities from road

accidents per 100,000 persons26. Occupational Safety & Health No. industrial accidents

Indicators of Economy

27. Corporate Environmentalism No. companies certified MS ISO 1400128. Economic Diversity29. Tourism Industry Hotel occupancy rate30. Fisheries Yield Total landings of marine fish31. Informal Sector No. licenses for itinerant hawkers32. Rice Yield

Indicators of Culture

33. Cultural Infrastructure No. built venues for arts events34. Heritage Conservation No. inventoried buildings demolished35. Public Library Usage No. users and loans36. Signage Culture No. appropriate street signs

Indicators of Participation

37. Women and Employment Proportion of women employed at variousjob levels in the manufacturing industry

38. Public Participation in % population taking part in publicTown Planning participation programs

39. Voter Participation No. registered voters40. Environmental Complaints

Box IV.1(cont.). List of 40 Indicators of Sustainabilityand Livability in Penang

Indicators of Community Indicator

5858


Second, Penang has had a longstanding tradition ofNGO activism, and provides the headquarters for aremarkable number of international and regionalNGOs. Local voluntary organizations are similarlyactive, and the accumulated experience andnetworks between such organizations andindividuals were crucial to SPI’s rapid launch. Thirdis the highly competent and enthusiastic staffemployed by the SPI project. Fourth are theexperienced and motivated supporting staff and SPIvolunteers. Fifth are the liberal, open-mindedelements within the State Government leadership,receptive to ideas of broader-based governance.

Needless to say, the SPI project has alsoexperienced shortcomings from a lack of consensusamong project staff on basic issues of concept,strategy, tactics, goals, governance, approaches tosustainable development and social change, andformat and content of roundtables. There wasinadequate project oversight and monitoring,manifested in part as ad hoc communication withinthe project team and steering committee. There wasan absence of a coherent strategy for developingsustainability indicators and nurturing itscontinuance (e.g. by getting the community toidentify with it, linking it with popular participation);and uncertainty about the right balance to strikebetween technocratic tools and mobilizational aid.The cleavages within Penang society, accentuatedby linguistic and cultural heterogeneity, whichresulted in quite unbalanced representation at theroundtables, also posed a serious threat. Also, thelimited jurisdiction of state governments in theMalaysian federal system severely constrained thepossibilities of meaningful local inputs intodevelopment planning.

As a result of the SPI, the Penang StateGovernment itself will be taking a more consultativeapproach in developing its own strategic plan forthe next decade. It is also encouraging government

The PenangState

Governmentitself will be

taking a moreconsultativeapproach in

developing itsown strategic

plan for thenext decade.

5959


departments to use indicators to monitor their ownperformance and also as a tool for publiceducation—in short, to adopt a culture of indicatorsas part of a culture of transparency andaccountability.

Perhaps even more important than thistechnocratic exercise itself is the fact that the peopleof Penang are becoming better informed, arebuilding a common vision of sustainable Penang,and will feel collectively more responsible as acommunity for their environment. The SPI has alsoopened up many opportunities for the governmentsector, business sector, and civil society to realizetheir common goals—not to continue to fault eachother for environmental problems, but to worktogether through new partnerships.

The project is also seeing success beyondits borders, as two similar initiatives are beingplanned that draw inspiration from it: in MedanBagus in Indonesia and Iloilo in the Philippines.In both projects, the local authority will be amajor partner.

SOCIAL AND COMMUNITYDEVELOPMENT WITHIN LOCALPLANNING AUTHORITY AREAS

Dato’ Mohamad Bin SaibPresident, Kuantan Municipal CouncilKuantan, Malaysia

Local planning authorities are directly involved withurban and social planning. Targets of urbanplanning are documented in structural and localplans, a process that implies social objectives andeconomic targets. It is recognized, however, thatwith limited resources within the municipalities tocater for the needs and wants of the populace, the

The SPIhas alsoopened upmanyopportunitiesfor thegovernmentsector, businesssector, and civilsociety torealize theircommon goals.

6060


role of the private sector has now become anintegral part of overall development pursuits. Thementality that only the municipality should fulfilsocial obligations and responsibilities has nowchanged.

While the Kuantan Municipal Council mayhave many plans and ideas for efficiency and qualityin its core business of serving the people, the privatesector is the main force to execute them. Of coursein any partnership, the best deal is a win-winsituation. A symbiotic relationship, once established,will definitely pave the way towards a masterpiece,i.e., creation of the ideal city, a city excellent inurban image and ever growing.

The Kuantan Municipal Council or MajlisPerbandaran Kuantan (MPK) was established on 1September 1976 under the Local Government Actof 1976 (Act 171). As a local authority, MPK isresponsible for planning, coordinating, andcontrolling development and provision of publicplaces and urban services within its area. It coversan area of 324 km2 and has a current population of310,000.

The local authorities have autonomy infinancial and administrative functions. Inaccordance with the Local Government Act,licenses of commercial and industrial activities andproperty assessment are the main source of revenuefor a local authority. With such limited sources ofincome, many local authorities find it difficult toperform all the roles stated in the Act and fulfill thedemands of the populace. Thus, MPK embarked onpublic-private sector partnerships aggressively.

The Kuantan Vision

Kuantan, being the state capital of Pahang, plays animportant role as the administrative, financial, andinvestment center, and most importantly the provider

6161


of quality services to the public. In order to strengthenand broaden these functions, a vision for Kuantanwas formulated, which is a challenge for MPK, theprivate sector, and the public to achieve:

• A city supportive of development andfacilitating private- and public-sectorinvolvement.

• A center conducive for investors.• A financial center.• A regional, commercial, and retail hub.• A prominent tourist destination.• A friendly and harmonious population.• A green and environmentally sustainable city.• A well-planned city with unique images and

interesting features.• A city with high-quality urban services.

To achieve this vision, strategic planswere formulated and improvements in MPK’sadministrative system were judiciously made. Theseresulted in the award of the ISO 9001 last year andMPK gained international recognition for its workingprocedures. The Prime Minister Award received byMPK is also a proud achievement, in recognition ofits overall role and function as a progressive localauthority.

Areas for Private-Sector Participation

In the past, the private sector has contributed rathersparsely toward social obligations, which weremostly confined to event sponsorship and small-scalesocial projects such as bus stops. This happenedbecause of the lack of understanding between theparties on the importance of working together. Whileprivate companies continue to support social eventsand social facilities, MPK is speeding up theirinvolvement in development activities.

6262


As a local authority, MPK has used a win-win concept in many social and communitydevelopment projects since the mid-1980s. We haveidentified five areas in local government processesfor private-sector participation.

The first is the planning process. Overalldevelopment of Kuantan is based on the StructuralPlan and Local Plan prepared in 1994 and 1997,respectively. These plans are subject to review everyfive years. Previously, private-sector involvementin the planning process was indirect andnonstatutory. However, with these plans and inaccordance with Sections 9 and 13 of the Townand Country Planning Act, the public can makerecommendations, suggestions, and objections tothe plans.

The second is revenue generation. Becauseour resources were limited, we made efforts toincrease and diversify our income. At present, theprivate sector has responded well to projects andservices offered under privatization, joint ventures,and sponsorship. To attract investors, we allowcertain procedures to be waived, give speedyapprovals, and pave the way for better infrastructuraland investment climates.

The third area is municipal services. Withthe expansion of the local authority area, financialconstraints, and manpower problems, municipalperformance had suffered a slight deterioration inservice quality. To ensure that quality wasmaintained, MPK privatized several of its servicesincluding sewerage treatment, garbage collection,landscaping facilities, and parks maintenance. Withthese programs, MPK has been able to monitor theoutputs of contractors and ensure they are up to itsstandards.

The fourth area is community development.MPK is very active in organizing communitydevelopment programs with the residents. Theseprograms are mostly toward the promotion of

To attractinvestors, MPKallows certainprocedures to

be waived, givespeedy

approvals, andpave the way

for betterinfrastructural

and investmentclimates.

6363


cleanliness, beautification, social interaction, safety,sports, recreation, and education. The private sectorhas sponsored and jointly paid for these programs.They are normally held yearly, monthly, oroccasionally, based on certain themes and needs.

The fifth area is promotion of events. Wehave invited the private sector to participate inpromoting events related to sports, recreation,tourism, and religion. For example, we have theKuantan Beach Run, an international eventsponsored by the private sector. We also have theinternational Kuantan parachute jump, SUKMA, aninterstate game, an international regatta, and others.All these are successfully held with the involvementof certain associations, NGOs, and residents’associations. Table IV.1 summarizes these differentavenues for public-private sector participation inKuantan.

We are confident that the private sector reapsas much benefit as does the MPK. We were able toimprove the quality of life of our citizens throughefficient public services and sustainabledevelopment. We expect to get high value for ourproperty, and maintain our city status as a well-planned city. The private sector receives moreeconomic gains through increased business andinvestment opportunities in services, manufacturing,and construction, and also benefits from reducedrisk investment and higher purchasing power.

We are still working with some of thesegroups to enable them to play more dominant rolesand participate in the areas of research anddevelopment, technology transfer, specialiststraining, environmental conservation, humanresource development, and social well-being. Withthese public-private sector partnership programs,we hope to stimulate and revitalize economicactivities and social and community developmentin MPK in the coming millennium.

We areconfident thatthe privatesector reaps asmuch benefit asdoes the MPK.

6464

Partnerships for Better Municipal ManagementTa

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THE MANDALUYONG CITYEXPERIENCE

Benjamin Abalos, Jr.Mayor, Mandaluyong City, Philippines

Mandaluyong City is located in the center of MetroManila. Only 11 km2, it is one of the smallest citiesin metropolitan Manila and the first city under the1986 Constitution. Today, Mandaluyong’s totalrevenue is close to 1 billion pesos (P)1 , comparedwith only P41 million in 1996.

In 1991, our main public market wasdestroyed by fire and its rebuilding needed at leastP50 million. At that time it was not advisable toborrow money because of high interest rates,averaging 18 percent per annum. Also, Mandaluyongcould not rely on increasing charges to stall ownersto cover debt servicing because the stall ownerswould have to pass on the increased costs to theirlow-income customers. Instead, we thought ofimplementing a BOT scheme.

The old market was located on 7,500 m2 ofland along a main public transit route and one ofthe busiest roads in the city. We invited people fromthe private sector to invest through a BOTarrangement. I must say that we encountereddifficulties in attracting investors to the project. Ourformer Mayor had to literally chase business peopleto convince them to bid on the project. The GulfWar also added uncertainties about the oil price inthe Philippines, which made the bids of interestedcompanies less attractive.

After a few months of bidding andnegotiations, we awarded the contract to MacroFounders and Developers Inc. (MFD), a business

1

US$1.00 ~ P40 in 1999, and ~ P26 in 1996

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consortium organized specifically for the project.The proposal for a seven-storey commercial centerworth P300 million was a combination of a build-transfer (BT) arrangement with a develop-operate-transfer (DOT) component. It was called theMarketplace (see Box IV.2).

Under the BT arrangement:

• MFD builds the public market and thentransfers it to Mandaluyong.

• Mandaluyong constructs 50 percent of thestalls inside the market, with the rest to beconstructed by the stall owners (the city madethis decision jointly with the Association ofStall Owners).

• Mandaluyong collects the stall fees.• MFD maintains the public market and

provides security.

Under the DOT arrangement:

• MFD is given the right to construct a six-storeycommercial complex above the public marketin exchange for building the market structure.

• MFD operates the commercial complex andhands it over to the city government after40 years.

Box IV.2. The Marketplace

6th Floor : Movie houses5th Floor : Bowling lanes3rd-4th Floors : Parking lots1st Floor : Commercial shops and department storesGround Floor : Public market and street-front stores

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• Mandaluyong provides free use of the landon which the market has been constructed.

• Mandaluyong does not collect any dues fromMFD for the operation of the commercialcomplex.

I am proud to say that the Marketplace wasthe first BOT project implemented in the Philippines,and considered by television station CNN as thecleanest market in Asia. Today, not only do we havea mall worth P450 million, but also additionalrevenue of at least P20 million annually. Theproperty in that area has increased tremendouslyin value from about P8,000 per m2 to at leastP50,000 per m2. I would say that Mandaluyong wassuccessful in its public-private sector partnershipbecause we took the risk, and we were optimisticabout the outcome.

RESIDENTS’ PARTICIPATION AS AMEANS OF IMPROVING SERVICEDELIVERY

Ignacio R. BunyeCongressman, Lone District, City of MuntinlupaFormer Mayor, City of Muntinlupa

Former President Corazon A. Aquino appointed meas officer-in-charge of the then Municipality ofMuntinlupa in 1986. In the beginning, I saw myrole as a local executive and technocrat in asimplistic way. Moreover, I thought that with myprivate-sector experience, my legal background, andmy experience with the media, my job would bean easy one. I was in for a rude surprise. I realizedsoon enough that the world of work in the privatesector is far from the realities of my municipality.I discovered during my journey as a neophyte in

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the realm of local politics that the most challengingaspect of the job was learning how to balance thecompeting demands and expectations of amultisectoral constituency from all walks of life!

I learned very quickly that it is not enoughthat one has a vision and a sense of mission. It isnot enough that one is technically competent. It isnot enough that one is honest, hardworking, andindustrious. All these special skills and attributesmust work in combination with cathexis—a sinceredesire to “connect” with the people and nurturerelationships, and to breakdown physical andpsychological barriers to communication.

I believe that government cannot uplift thequality of life of citizens alone. I see that theimportant role of government is to act as a catalyst,as a facilitator, resource provider, and linker increating opportunities for the citizenry. I see theimmense potential of our constituents as effectivepartners in their own development because Isubscribe to the principle that people are the primaryreasons for development and that they, in turn, arethe prime resource for development. Thus, I believethat investing in human capital is one of the keys toeffective governance.

In the City of Muntinlupa, we met with somemeasure of success because of our tripartite strategy.We recognized that NGOs and people’s organizations(POs) are important partners in development. The artof governance involves the principle of the threeCs—consultation, collaboration, and coordination.These take place at different levels and involve manystakeholders in development.

Essentially, the purpose of consultation is tofind out what people are thinking and at the sametime to let them know what you are thinking. Inother words, exchanging ideas. This process isespecially crucial at the decision-making stage. Asmayor, I consulted widely and regularly with myconstituents.

I see that theimportant roleof governmentis to actas a catalyst,as a facilitator,resourceprovider, andlinker increatingopportunitiesfor the citizenry.

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Collaboration takes place when ideas ofdiverse origins are put together to form a cohesivewhole. Coordination begins when the results ofconsultation and collaboration become themechanisms for implementing a series of projectsor programs.

It is our belief that helping people helpthemselves by creating opportunities and sharingresources is the most effective and sustainableapproach to alleviating poverty.

People participation in governance, the“bottom-up” approach, maximizes the totalpotential of the “governed”, enabling them tobecome effective and active partners in the searchfor solutions to the challenges they face in theirsocioeconomic environment. It is worth noting thatcontemporary development schemes emphasize theaspect of sustainability. I am happy to report thatsustainability has been mainstreamed in the varioussectoral agenda of Philippine NGOs and serves asa basic framework for all efforts at all levels ofdevelopment work.

People’s Participation in Governance:The Philippine Experience

In February 1986, the world witnessed what is nowrecorded in history as the EDSA Revolution or thePeople Power Revolution. A turning point in therestoration of democracy in the Philippines, this wasfollowed by a sequence of unexpected events—unexpected most of all by the main player, the widowof the assassinated political leader, former PhilippineSenator Benigno Aquino. When Corazon C. Aquinowas elected President, she vowed to restoredemocracy in the country. During the first few monthsof her presidency, a constitutional commission wasconvened to revise the constitution of the martial lawregime and a new constitution was enacted in 1987.

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There are two features of the 1987Constitution that are relevant to this discussion. Thefirst is the mandate that “the state shall secure theautonomy of local governments”. The other is theparticipation of “non-governmental, community-based or sectoral organizations that promote thewelfare of the nation” in the process of governance.

The response of the Aquino administrationon the issue of local autonomy is the enactment ofRepublic Act 7160 also known as the LocalGovernment Code of 1991. It was signed on 10October 1991 and became effective on 1 January1992. This landmark legislation substantiallydecentralized the powers of the nationalgovernment, transferred authority and responsibilityto the local government units, and devolvedfunctions such as the delivery of basic services.

We are pleased to note that the Code is oneof the most radical decentralization measures in theworld. This significant legislation in the politicalhistory of the Philippines has spurred major changesin the dynamics of governance. The Code hasseveral important features. Germane to ourdiscussion today is the direct and activeparticipation of civil society in local governmentprocesses through NGOs and POs.

The transfer of power represents a “powershift”, at the same time creating a “mind shift” (or anew mind set) for local executives departing fromthe culture of dependence on the nationalgovernment.

Former President Aquino played a veryimportant role in shaping the Code. According toSenator Aquilino Pimentel Jr., the acknowledgedauthor of the Code, “…it was she who principallygave impetus to the phenomenon of people powerwhich toppled the dictatorship in 1986… andrecreated the democratic space, and brought backfreedom, justice and peace in the country that made

This landmarklegislationsubstantiallydecentralizedthe powers ofthe nationalgovernment,transferredauthority andresponsibilityto the localgovernmentunits, anddevolvedfunctions suchas the deliveryof basicservices.

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local autonomy relevant, vibrant and vital to thedevelopment of the nation.”

Former President Fidel V. Ramos, underwhose six-year administration the fullimplementation of the Code took place, involvedthe NGO community as a distinct social sector innumerous consultative mechanisms. NGOs haveparticipated in significant initiatives in sociopoliticalreform, most notably the various social summits thatevolved into the Social Reform Council and theconsultations on the Social Reform Agenda.

The Code mandates local government unitsto promote the establishment and operation ofNGOs and POs to become active partners in thepursuit of local autonomy. Their membership ismandatory in several special bodies where keypolicy decisions at the local administrative levelare made: Local Development Council, HealthBoard, School Board, and Peace and Order Council.

Further, the Code also provides forestablishing linkages with NGOs and POs. Underthis provision, “… local government units may enterinto joint ventures and such other cooperativearrangements with people’s and non - governmentalorganizations to engage in the delivery of certainbasic services.”

Galing Pook Awards

In 1993-1994, the Asian Institute of Management,the Local Government Academy of the Departmentof Interior and Local Government, the FordFoundation, and the Canadian InternationalDevelopment Agency launched a program calledGaling Pook Awards (Box IV.3). This annual eventrecognizes executives of local government units andtheir respective development partners, the NGOsand POs, for excellence in local governance.

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Box IV.3. Award-Winning Programs of theGaling Pook Awards Illustrating that a Government by the

People is the Best Way to Go

1. The Return of the Mangroves of Kalibo, Aklan

There was a time when the swamplands at the mouth of the AklanRiver in Kalibo, Aklan were abundant with mangroves. By 1989, asthe population kept growing, the mangroves, widely used asfirewood, had practically vanished. Without the mangroves, thewaves and the tidal currents gradually pushed inland the shorelinesof the coastal towns. Fish and shellfish were affected and eventuallygrew scarce. The income of those who relied on the sea for theirlivelihood alarmingly decreased.

With the help of a local NGO in coordination with the localgovernment, fishers and other residents were organized to save themangroves from extinction. Everyone agreed that the participationof the community in such efforts was indispensable. A three-yearplan for the reforestation of a 50-hectare swampland was drawn upwith the help of a national agency, the Department of Environmentand Natural Resources. The community and the local governmentundertook the implementation. Fifty one-hectare lots were assignedto families. They took care in clearing the plantation area, staking,replanting, maintaining, and protecting the trees.

The swamplands of Kalibo are back. Tidal flats that were softand muddy before the reforestation have hardened, and sevenhectares have been added to the original 50 hectares planted tomangroves. (1995)

2. From Indifference to Enlightened Participation

In the remote town of Sampaloc in Quezon Province, the problemof insurgency seemed insurmountable. People’s involvement incommunity affairs was very minimal. Because of apathy and lackof grass-roots participation, government programs usually turnedout to be irrelevant to the needs of the community, thus alienatingfurther the people of Sampaloc from the government. A new set ofelected officials decided to reach out to the people by visiting them


7474


Box IV. 3 (cont.)


in their respective communities and started a series of consultations.In addition, the Mayor introduced a program that integrated people’sorganizations in the formal government structure in 1988 (beforethe enactment of the Local Government Code).

Essentially, the program afforded the people the opportunity to beinvolved in community affairs either through consultations or actualparticipation in community and government activities. The programbridged the gap between the government and the community andfostered a lasting partnership between the two sectors. “Hands-on”experience in government affairs sharpened the managementcapabilities of the people in the dispensation of justice, realty taxcollection, health care membership and premium collection,environmental protection, and enforcement of peace and order.

The community involvement has shifted the role of governmentfrom program implementor to that of town manager. Sampaloc isnow a picture of a clean, orderly, and peaceful community. Thecrime rate is practically zero and this is maintained by monitoringvisitors in the area. The insurgency has been neutralized so thatnow, people can devote more time to agricultural production. Cropproduction has increased by 30%, while an additional 10 hectaresof fish ponds have been built. (1995)

3. Butuan City’s Child Labor Program

As far back as 1992, children from Butuan City had been driven byextreme poverty to seek employment in order to survive. Unskilledand unschooled, these working children were household helpers,peddlers, and beggars. Many were abused and exploited, raped,and forced into prostitution. Intervention came with the launchingof the Child Labor Program by UNICEF and Butuan City was selectedas one of the pilot areas.

The program was integrated in the local development planthrough an executive order issued by the mayor. A census of workingchildren was undertaken, followed by an intensive information andeducation campaign addressed to parents as well as the communityat large. Today, some 500 children are in school because variousNGOs and national and local agencies have worked together. Butuan

7575


Box IV. 3 (cont.)


City’s Child Labor Program is a model of its kind in the country,having successfully demonstrated how to combat the exploitationof children. (1997)

4. Saving the Coastal Waters in Aparri, Cagayan

The beaches of the municipality of Aparri had been neglected for along time: “a body of water that has suffered in the hands of anirresponsible and uncaring people.” Aggravating the problem wasthe indiscriminate practice of disposing of garbage in the oceanand the stench caused by human wastes and mounds of trash dottingthe beach areas. In 1993, a series of consultations took placebetween the local government and POs calling attention to theunsanitary conditions. These were attended by all sectors of thecommunity, who brainstormed solutions to the sanitation problem,environmental protection, and the promotion of tourism in the area.

The ideas presented to the people were accepted withenthusiasm, leading to the program dubbed as “A Clean Sea, AHealthy Community”. Once underway, the local leaders andresidents worked cooperatively in a massive clean-up. Subsequently,picnic sheds, public toilet facilities, and artesian wells wereconstructed. Visitors from other communities started frequenting thebeach, thus downstreaming certain livelihood activities for the localresidents. A public market was also constructed. In addition, residentsavailed of low-interest, short-term loans from the local governmentto assist them in various livelihood projects.

It is obvious that the people played a major role in the successof this program. They realized that a clean environment leads toimproved living conditions, better health, additional incomeopportunities, and a beautiful recreation area. They were propelledto render their services free and asked to exercise diligence in themaintenance of a clean and green environment. (1997)

5. Health Care for the People of Sebaste, Antique

There are approximately 12,700 residents in Sebaste. To get to thenearest hospital they had to pay P500–P1,000 to hire a vehicle and

7676


Box IV. 3 (cont.)

travel a rough 16-km stretch of road. The better-equipped hospitalsare located in the capital town of San Jose (109 km) and in the cityof Kalibo (75 km).

The local government could not afford to build a hospital, andthe cost of operating and maintaining one would have beenprohibitive. But the people were not deterred by this obstacle. Whena new leadership took over in the early 1990s, it went into highgear to raise the needed funds. Financial help initially came fromformer residents, now affluent, living in other cities. Later, donationsof cash, equipment, and supplies poured in from Filipino associationsin Austria, Hamburg and Brunsweig in Germany, and in Hong Kong.Individual donations from Germany, Austria, and Switzerlandfollowed. The municipality contributed a share from its InternalRevenue Allotment. The poor people of Sebaste, 70% of whom livebelow the poverty line, now enjoy affordable health care at aminimal cost of P50/day, while other public hospitals charge P75-100/day. (1998)

6. Tools to Build a Community in Marikina City

“A hammer and a wrench can build communities”. This was therallying cry of a community shop that was launched to lend varioustools and equipment to residents of the community. This programwas initiated by the local government to ensure the upkeep andmaintenance of facilities throughout the city. City officials declaredthat neatness and sense of order in each community would redoundto civic mindedness and discipline of the residents. The program ispopular both with adults and youth. Program initiators explain thatin addition to sports, the opportunity to grow in a well-maintainedand orderly community will instill among the youth a sense ofresponsible citizenship. In addition, as a workshop, the program servesas a training ground in plumbing, electrical works, and welding. Theacquisition of new skills has emboldened some beneficiaries to ventureinto other income-generating projects. (1998)

Source: Innovations Magazine – a publication of the Local Government Academy,Department of the Interior and Local Government (Philippines)

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Since they began, the Galing Pook Awardshave recognized more than one hundred programsof excellence in local governance all over thePhilippines, from a selection field of more than athousand.

Four criteria are used in the selection of anaverage of 20 winners per year from a total ofapproximately 400 semi-finalists:

• Effectiveness of service delivery.• Positive socioeconomic and/or

environmental impact.• Promotion of people empowerment.• Replicability or transferability.

In 1996, the City of Muntinlupa became aGaling Pook awardee for its program on humansettlements (socialized housing). This successfulprogram was the result of a tripartite partnershipamong the local government, an NGO (MuntinlupaDevelopment Foundation), and several POs. Theprogram has extended financial and technicalassistance to urban poor groups, enabling them toacquire affordable housing through the communitymortgage program of the national government.

The local government’s participationinvolved land banking and interim financing whilethe NGO took responsibility for all aspects ofcommunity organizing. It is very important toemphasize the community-organizing effort of theMuntinlupa Development Foundation. It took painsto orient and give proper values training to therecipients of the program. As a result, our collectionrate was close to 95 percent, compared with othernational housing programs where the collection ratefor loans averaged only about 50 percent.

The tripartite approach was cited as aneffective tool in managing urban development. Itcreated a “people-friendly” environment that is just,

Our collectionrate was closeto 95 percent,compared withother nationalhousingprograms wherethe collectionrate for loansaveragedonly about50 percent.

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ecologically sustainable, politically participatory,economically productive, and culturally vibrant.

Another program of which we are proud isthe joint undertaking of the City of Muntinlupa withthe Zonta Club of Muntinlupa and Environs. Aspartners, we established “Sagip,” a center that assistsvictims of sexual abuse and domestic violence. TheCity of Muntinlupa provided physical facilities whilethe Zonta Club trained the center’s managementteam and provided the initial maintenance andoperating expenses. This project is now considereda model for similar centers all over the country.

Central to the success of all these programsis harnessing the power and energy of the mostimportant resource in development—the people.In the Philippine setting, civil society, made up ofNGOs and POs, continues to be a very dynamicsector in the sociopolitical landscape. The greatestbenefit accruing to the government is a wealth ofmultifaceted and multilevel perspectives thatspring from the collective experience and wisdomof its citizens.

A PARTICIPATORY APPROACH TOURBAN ENVIRONMENTALMANAGEMENT

Phummisak HongsyokMayor, Phuket, Thailand

The tropical island of Phuket is Thailand’s premiertourist destination. It is a tourism center ofinternational standing, visited by about 3 millionpersons every year. It is also the regional servicecenter for southern Thailand and contributessignificantly to the country’s economy. This wasespecially evident during the height of the economiccrisis in 1998 when income from Phuket’s tourism

Central to thesuccess of all

these programsis harnessing

the power andenergy of the

most importantresource in

development—the people.

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industry was instrumental in keeping Thailand’seconomy afloat.

Phuket’s continued success as an internationaltourism center and as a major contributor toThailand’s economic development demands anunspoiled clean environment. Ironically, Phuket’sattraction as a tourist destination is also threateningits environmental quality. While tourism is themainstay of Phuket’s economy, it is also a biggenerator of waste. The growing number of touristsand the increasingly affluent and consumer-orientedlocal population are major challenges to Phuket’scapacity to handle wastes.

The realization that these challenges neededto be addressed became clear in the early 1990swhen Phuket experienced a sudden drop inEuropean visitors following negative reports inGerman newspapers about Phuket’s pollutionproblems. This spurred the national government toundertake various actions, notably the constructionof an incinerator, the expansion of the existinglandfill, and the installation of a wastewatertreatment plant. It was also around this time thatthe municipal government learned about theconcept of sustainable development and LocalAgenda 21, following the United NationsConference on Environment and Development (TheEarth Summit). We in the municipal governmentthen realized that the initiatives of the nationalgovernment on the waste disposal problem werenot enough to address other issues related toPhuket’s urban environmental problems.

Against this backdrop and based upon theprinciples of sustainable development, themunicipal government launched the Phuketenvironmental improvement program in 1994.

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Benefit of a Long-Term Vision

Prior to 1994, various government, nongovernment,private business, and community organizationswere carrying out activities to improve aspects ofPhuket’s environment. While they were wellintentioned, these activities were largelyuncoordinated and often resulted in duplication ofefforts and consequent waste of resources. Whatwas missing was a common direction, a sharedfuture vision of Phuket, which could providecoherent and guided individual actions. Thus, theprogram initiated the drafting of a long-term vision(Box IV.4) through a series of meetings among thevarious stakeholder groups in Phuket.

Box IV.4. Phuket’s Vision Statement

“To preserve Phuket as a tourist destinationof international standard, as a model city insustinable development with its own identity of localarchitecture, tradition and culture”

This vision statement evolved from thestakeholder groups’ discussions of how the principlesof sustainable development could be adapted toPhuket, which meant balancing the social andeconomic needs of Phuket residents with thecarrying capacity of the natural environment, bothfor present and future generations. Thus, wedeveloped three strategies focused respectively on(a) environmental quality and its implications fortourism; (b) Phuket’s role as the regional center forsouthern Thailand and the Andaman Coast; and (c)urban governance and the capacity of the municipalgovernment in urban management.

What wasmissing was a

commondirection, a

shared futurevision of

Phuket, whichcould providecoherent and

guidedindividual

actions.

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This shared vision has resulted in a numberof benefits, and provided a common direction forcertain activities of tourism enterprises and NGOsin Phuket. For example, rental of beach umbrellas,lounging chairs, and food stalls were organized, andtheir fees and location standardized. The jointactions by hotels and small enterprises in Phuketresulted in cleaner beaches and orderly touristfacilities.

The Value of Stakeholders’ Participation

Aside from the development of Phuket’s long-termvision, stakeholders are also very much involved inenvironment quality. Their involvement is basedupon a common realization that government alonecannot tackle the enormous challenge of solvingPhuket’s environmental problems, and thatcommunity groups and business enterprises haveroles to play in protecting the environment.

To structure the participation of stakeholdersgroups, the Phuket Urban EnvironmentalManagement Committee was organized in 1994 tooversee and direct the activities of the program.Some members of the Committee plus additionalvolunteers representing the business sector, NGOs,local communities, academic institutions, andmunicipal, provincial, and national governmentsubsequently formed the Urban EnvironmentalPolicy Drafting Subcommittee with 79 members.Its mission is to draft an overall policy to guidePhuket’s urban environmental planning andmanagement actions. The members have dividedthemselves into five groups focusing on thefollowing areas of concern:

• Solid waste and special wastes management.• Green areas, building environment, and

land use.

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• Traffic, air, and noise pollution.• Community environmental health

management.• Water pollution and drainage.

The first draft of the policy has beencompleted and is now being discussed in a seriesof stakeholders’ consultation workshops. While thepolicy is still to be finalized, the involvement ofstakeholders in its preparation has yielded a numberof benefits, including

• the cash and in-kind contribution of some 36hotels, 5 restaurants, 11 tourism-relatedbusinesses, and Thai Airways International tothe Solid Waste Management ImprovementProject;

• increased awareness of local communities inenvironmental issues and their role inaddressing these issues—two communities,Lang Salaklang and Lang Hor Prachum, haverequested pilot activities in community-levelsolid waste management;

• wider interest in the “three Rs” (reduce, reuse,recycle)—private business groups and themunicipal government are seriouslydiscussing a city-wide waste separation andrecycling program;

• installation by several hotels of compostingboxes within their premises, thereby reducingthe volume of wastes collected by themunicipal government.

Linking the Long-Term Vision to ImmediateActions

Most Phuket residents did not easily understand theconcept of sustainable development. Many alsofound the long-term vision too abstract and

8383


unrealistic. At the same time, there were criticalproblems that needed urgent attention. To createdeeper understanding of sustainable developmentamong Phuket residents and businesses, and toensure their support for the long-term vision, weinitiated the Solid Waste Management Project in1994. It focused on improving the efficiency ofoperations at the landfill, commercializing wastecollection and treatment, and maximizing thepotential for composting, incineration, andprivatization. The project was complemented bythe expansion of the existing landfill and theconstruction of an incinerator as well as awastewater treatment plant. These three majorprojects were designed and implemented by thenational government.

The project, under the guidance of thePhuket Solid Waste Management Committee,demonstrated the direct linkage between the long-term vision of environmental sustainability with theimmediate and urgent need to solve Phuket’sgarbage problem. Specifically, the projecthighlighted this linkage by

• improving efficiency in using scarce landfillspace through shaping and compactinggarbage, thereby extending the life of thelandfill;

• controlling landfill seepage (leachate) toprevent contamination of underground water,thereby safeguarding public health in thelonger term; and

• initiating steps towards cost recovery throughuser charges (tipping fees), thereby enhancinglong-term viability of financing landfilloperations.

Through the project’s public informationcampaign, Phuket’s residents and businesses havedeveloped a better understanding of sustainable

8484


solid waste management and of sustainabledevelopment in general. At the same time, theirappreciation and support of the long-term visionhas improved.

The Need for Capacity Building

The Phuket Environmental Improvement Programrecognizes the important role of the municipalgovernment in achieving the objectives of theprogram. It also recognizes the serious lack ofcapacity of the municipal government in performingits role. For instance, the municipal governmentdoes not have the necessary technical skills,organizational structure, manpower and financialresources to operate and maintain the landfill,incinerator, and wastewater treatment plant oncethese are turned over by the national government.Neither does it have adequate capability for long-term environmental planning, environmentalimpact assessment, financial management, andenforcement of environmental regulations.

Thus, the program places significantimportance on strengthening the capacity of themunicipal government and its partners in the fieldof urban environmental planning and management.The capacity-building component of the programstarted in October 1998. It included a training-needsassessment undertaken by the Asian Institute ofTechnology (AIT), and an introductory trainingcourse on environmental planning with severalsessions each month delivered by environmentalmanagement experts from AIT and the ThailandEnvironmental Institute. Participants in this trainingcourse include staff of the municipal governmentand other agencies as well as local communityleaders.

The environmental planning course iscomplemented by more intensive training for landfill

The programplaces

significantimportance onstrengthening

the capacity ofthe municipal

government andits partners.

8585


personnel under the Solid Waste ManagementImprovement Project. A comprehensive capacity-building program will be finalized soon withtechnical support from the UNDP/UNCHS UrbanManagement Programme, covering not only trainingbut also the broader scope of human resourcemanagement, performance management, andorganizational development.

Although little has been achieved instrengthening the capacity of the municipalgovernment to date, the initial activities havebrought to the attention of Phuket’s stakeholders theneed to address obstacles to more effective andefficient environmental management, such as

• antiquated national civil-service rules andregulations that govern the municipalgovernment’s personnel management andcompensation system;

• lack of local autonomy, which constrains themunicipal government’s ability to expand itsrevenue base, access capital markets, or enterinto BOT arrangements with the privatesector; and

• unclear delineation of functions andresponsibilities between the municipal,provincial, and national government inenvironmental planning, management, andregulation.

Key Elements of Success

The achievements of Phuket towards sustainabledevelopment may perhaps be small compared withthose in other cities. However, we believe that theseachievements represent major breakthroughs inseveral areas, including increased support andvoluntary collaboration of all levels of government,the business community, NGOs, and local

8686


communities toward environmental improvement,and effective use of resources in carrying out variousenvironmental improvement activities. It is alsoimportant to note that most residents now havebetter and broader understanding of the principleof sustainable development, and a deeperappreciation for more effective urban environmentalplanning and management systems. Thesebreakthroughs have been made possible by a sharedvision of the future, a participatory and consultativeprocess, an action-oriented long-term strategy, anda special focus on capacity building.

8787

Coordinating Local Governments in Megacities

large metropolitan area may consist ofseveral neighboring municipalities. Inmany cases, they need to cooperate to

provide public services, such as maintenance ofroads or sewerage lines that run through them.The question is how to coordinate activities, poolresources, and define responsibilities among themunicipalities with regard to such services.Similarly, national and provincial governments aswell as government-controlled agencies may beresponsible for the delivery of some services likepower, telecommunications, or a mass-transitsystem. The question again is how to coordinate,plan, and allocate responsibilities between themunicipality and the agency with regard to suchservices.

Municipal residents do not understand thesebureaucratic problems but see the outcome ineither no or delayed actions, inconsistent resolutionof problems, and varying service levels. Localgovernments in a metropolitan setting also resistthe efforts of the national or provincial governmentsto create megagovernments for the metropolitancities, as they deem this to be a subversion of localautonomy.

This chapter illustrates how plans andactions are coordinated in one city, Manila.Congressman Ignacio Bunye discusses theevolution of the Metro Manila Development

V. COORDINATING

LOCAL GOVERNMENTS

IN MEGACITIES

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Authority (MMDA) as an agency responsible forplanning, supervising, and coordinating certainbasic services, and passing ordinances in themetropolitan area that comprises 17 cities andmunicipalities. Congressman Bunye frankly admitsthat due to a major turn of events in the Philippines,the provision of more autonomy to localgovernments, Metro Manila is still searching forthe right solution. It is seeking an appropriate mixto reduce conflict between MMDA and theautonomous local government units in its task ofcoordination, while at the same time addressingproblems of metro-wide scope and concern.

METROPOLITANIZATION:THE METRO MANILA EXPERIENCE

Ignacio R. BunyeFormer Mayor, City of MuntinlupaFormer Chair, Metro Manila AuthorityCongressman, Lone District, City of Muntinlupa

The geopolitical entity known as Metropolitan (orMetro) Manila covers 17 cities and municipalities.It includes among others, Manila, the capital city;Quezon City, the former capital; Makati City, thefinancial center; Mandaluyong City, a majorbusiness center; and the City of Muntinlupa ofwhich I was Mayor for 12 years and now representin the Philippine House of Representatives.

Metropolitan Manila is the political andbusiness capital of the Philippines. It has apopulation of approximately 10 million, whichswells in daytime by another half a million. This isroughly 14 percent of the total population,congested in a combined area of only 636 km2.

Because of common problems like traffic,solid waste management, and environmental

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pollution—problems that respect no politicalboundaries—there is a need for integrating andcoordinating the 17 cities and municipalities.

The evolution of 17 local governments intowhat is now known as Metropolitan Manila (alsoknown as the National Capital Region) has takenplace over three different periods of our history.The first happened during the martial law regimeof Ferdinand Marcos from 1975 to 1986; thesecond during the incumbency of former PresidentCorazon A. Aquino from 1986 to 1992; and thethird during the presidency of former PresidentFidel V. Ramos from 1992 to 1998.

Metropolitan Manila was created in 1975as a geopolitical unit during the martial regime ofFerdinand Marcos. It was governed by a nationalagency called the Metropolitan ManilaCommission (MMC). This was in response to theincreasing population resulting from unchecked in-migration from depressed rural areas that startedin the 1960s. This unprecedented increase strainedthe “carrying capacity” of an already burdenedurban area that did not have a comprehensive land-use policy. The spillover from Manila of homelessand dislocated families to adjacent jurisdictionsposed problems for basic services and housing.

Local government authorities tackled theseproblems within their areas of jurisdiction withmixed results. Predictably, only the minority withadequate resources were able to address thesocioeconomic problems adequately. Problemsrelating to housing, water, drainage, roadimprovements, transportation, and trafficmanagement began to be increasingly felt.

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Metropolitan Manila Commission (MMC):1975–1986

In 27 February 1975, a referendum was synchronizedwith the local elections to decide whether or not 17localities in Manila should be integrated, along withthe creation of a manager-commission type ofgovernment. These 17 localities consisted of threecities—Manila, Quezon City, and Pasay City—and14 municipalities. Of the 14 municipalities, 13 werepart of the then premier province of Rizal and onewas part of the province of Bulacan, just north ofManila.

Since the result of the referendum wassupposedly “overwhelming”, Ferdinand Marcosissued a presidential decree (P.D. 824) creating thepublic corporation known as Metropolitan Manilaand the Metro Manila Commission as the centralgovernment to manage the public corporation.

Many believed that the referendum wasrigged to suit the political objective of Marcos. Onthe surface, it appeared that the creation ofMetropolitan Manila and the Metropolitan ManilaCommission was in recognition of the need to havea simultaneous and unified approach to coordinatedplanning, administration, and operation of manypublic services. It was also perceived to havebrought together several fragmented provincialand local governments in an urban region.

As now recorded in history, this move wasactually designed to consolidate the powers ofMarcos. Metro Manila became the minikingdomof his wife, Imelda, and her training ground inpreparation for her succession after her husband.Ferdinand appointed her as Governor of MetroManila. In this light, the Commission could beviewed more as an instrument for personal powerthan as an institution for metropolitan governanceand management.

TheCommission

could beviewed more as

an instrumentfor personal

power than asan institution for

metropolitangovernance and

management.

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The first casualty of this political exercisewas the province of Rizal, which until that timewas the country’s premier province. The nextcasualties were the different cities andmunicipalities because soon their respectivelegislative councils were abolished. Lawmakingpowers became concentrated in the MMC.Taxation powers were also exercised by the MMC.

In the manager-commission type ofgovernment as employed by the MMC, alllegislative and executive powers were vested ina single, five-member governing board made upof the Governor, Vice Governor, and onecommissioner each for planning, finance, andoperations.

The final casualty was the MMC itself. Itlost all power when by virtue of anotherpresidential decree (P.D. 1274-A), the Governorwas made the sole decision- and policymaker forthe area. It is safe to say that the MMC during themartial law era was an absolute one-woman ruleand the chief executives of the integrated localgovernments were mere figureheads.

Being the central government for the wholeof Metro Manila, the Commission was responsiblefor planning and development of the metropolis,including the provision of services for solid wastemanagement and traffic management. Otherpowers granted to this Commission were to

• levy and collect taxes and specialassessments;

• borrow and expend money and issue bonds,revenue certificates, and other obligations ofindebtedness;

• charge and collect fees for the use of publicservice facilities;

• allocate money for the operation of themetropolitan government and reviewappropriations of the local authorities within

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its jurisdiction with authority to disapprovethe same if found to be not in accordancewith its established policies;

• enact or approve ordinances and resolutions,and to fix penalties for any violations;

• establish a fire-control operation center todirect the fire services of the local authorities;

• establish a disposal operation center to directgarbage collection and disposal;

• establish a transport and traffic center todirect traffic services;

• coordinate and monitor governmental andprivate activities pertaining to essentialservices such as transportation, flood controland drainage, water supply and sewage,social health and environmental services,housing, and park development; and

• monitor the undertaking of comprehensivesocial, economic, and physical planning anddevelopment of the metropolis.

In 1978, three years after its creation, thedirect supervision of the President over theCommission was transferred to the Ministry ofHuman Settlements, of which Imelda Marcos wasthe Minister. Having gained this, she exerciseddirect control over two of the most powerfulgovernment agencies during the time of FerdinandMarcos.

Nathaniel von Einsiedel, one of theparticipants in this forum, was nominally a deputygeneral manager for planning of the MMC. Hecorrectly observed that the Commission wascreated with correct intentions but was being runfor the wrong reasons, i.e., the selfish ends of theMarcoses. Having seen where MMC was headed,he resigned from government.

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Metropolitan Manila Commission (MMA):1986–1994

In 1986, when Corazon A. Aquino becamePresident in the aftermath of the bloodlessrevolution, “people power” clamored to expungeall vestiges of the Marcos rule—its abuses, graft,and corruption. The Commission, because it wasseen primarily as an instrument of Imelda Marcos,was not spared. The campaign promise made bythe opposition party to abolish the Commission,however, did not materialize. One of thecompelling reasons was that the Government didnot have the funds to pay for the separation benefitsof the huge workforce numbering approximately15,000. But perhaps a more cogent reason was thefact that levelheaded political advisers of formerPresident Corazon Aquino still saw the real needfor a coordinating agency for metropolitanconcerns. The Commission continued to exist, butthis time, with diminished powers.

Moves to dismantle the MMC were finallyscuttled when the Constitutional Commissionwrote into the 1987 constitution a provisionthat recognized the need for a metropolitanorganization to oversee the governance of MetroManila. This metro organization was supposed tohave been created by law but the Eighth Congressof the Philippines (1988–1991) failed to pass a lawcreating such body. For a long time, Metro Manilagovernance was in limbo.

In 1988, with the first truly democraticelections after the dismantling of the Marcosregime, legislative councils in the various localgovernment units of Metro Manila were elected.The legislative councils then started questioningthe rule-making powers of the MMC.

Continued congressional inaction did littleto alleviate the situation. It was later found out that

Levelheadedpolitical advisersof formerPresidentCorazonAquino still sawthe real need fora coordinatingagency formetropolitanconcerns.

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the problem in Congress was the result of bitterpartisan politics. In the House of Representatives,a vociferous opponent of metropolitanizationbelonged to a powerful family from the provinceof Rizal, which was dismembered with the transferof its resource-rich cities and municipalities toMetro Manila. The family resented the fact thatRizal Province, regarded as the premier provincein the country prior to martial law, had beeneffectively reduced to third-class status.

Furthermore, the capitol of Rizal Provinceremained in Pasig City, now a part of MetropolitanManila. Due to its financial dismemberment, RizalProvince did not even have enough resources torelocate its provincial capitol within its own territory.

To break this impasse, former PresidentAquino issued an executive order (E.O. 392) in 1990creating an organizational structure to be knownas the Metropolitan Manila Authority or MMA. Itwas clear that it was to serve only as an interimbody until Congress passed a law. The MMAfunctioned as a planning and coordinating agencybut without legislative powers. Other structuralchanges included the following:

• The MMA no longer exercised the power toreview the budgets of the componentlocalities. This power now rests with theDepartment of Budget and Management. Inorder to appease the rebellious localgovernment units, the mandatory contributionformerly paid by the 17 cities andmunicipalities was reduced from 20 percentto 15 percent of the local government units’estimated annual income from regular sourcesin their general funds.

• The power to appoint city and municipaltreasurers, assessors, and their deputies wasremoved from the MMA and transferred tothe Department of Finance.

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• The power to tax was returned to the localgovernment units.

• The governing board was abolished. It nevertruly functioned anyway during the martiallaw regime. An interim council composedof 17 mayors from the local government unitsreplaced it.

The Authority was headed by a Chair,elected by the other mayors from amongthemselves and who served for a period of sixmonths. Why six months?—because it waserroneously anticipated that Congress would passa law creating the new Metropolitan body. At onepoint, I was elected as Chair of MMA for three termsor a total of 18 months. This set-up proved difficult.A term of six months was too short to be able toreally do any forward planning. Moreover, the headof the agency was working part-time as he alsohad to attend to the needs of his own city ormunicipal constituents.

The professional staff, headed by a generalmanager, assisted by a deputy each for planning,finance, and operations, respectively, managed theday-to-day operations of the agency. The limitedpowers of the MMA were to

• exercise jurisdiction over the delivery ofbasic services requiring coordination;

• integrate city/municipal plans or prioritieswith sectional or regional plans;

• provide technical assistance in preparinglocal development plans;

• review legislation proposed by locallegislative assemblies or councils to ensureuniformity among local authorities and toensure consistency with the regionaldevelopment plan (the review power did notinclude the power to amend or revoke);

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• undertake periodic reviews of functions,structure, and impact of programs or projects;and

• submit periodic reports to the President.

What used to be a very strong organization,enjoying wide powers and financial resources, hadbeen severely emasculated.

Another development took place, whichaffected the course of metropolitan governance.This was the passage into law of the LocalGovernment Code of 1991 (LGC). The cornerstoneof the LGC was local autonomy and the weaningaway of local governments units (LGUs) from thecentral authority.

With the passage of the LGC, the biggerand more financially stable LGUs wanted to breakaway from Metropolitan Manila. Soon the LGUsstarted to withhold their payment of dues to theMMA. Once again, talks of dismantling the MMA,even from within the ranks of the mayors who madeup the council, began to be heard. Without thepower that it used to enjoy in the Marcos regime,MMA could not even force the mayors to pay.

Metropolitan ManilaDevelopment Authority (MMDA):1995 to the Present

The election of Fidel V. Ramos as President in 1992boosted the confidence of the MMA to a new high,upon his announcement that one of the prioritiesin his administration’s agenda was the creation ofa strong metropolitan body for Manila.

In the House of Representatives, somecongressmen echoing the wishes of President Ramosbatted for a strong Metro Manila government. Butquite unlike the MMC of the Marcos regime, thehead of this political unit was to be elected at large

Without thepower that it

used to enjoy inthe Marcos

regime, MMAcould not even

force the mayorsto pay.

9797


by the 10 million residents of Metro Manila. In effect,what was desired was a “super province”. It wouldhave all the powers and resources of the MMC buthopefully, none of the abuses. President Ramosseemed to prefer this structure.

The creation of a “super province” wouldnecessitate that the question be submitted to aplebiscite. It was very doubtful that such wouldgain approval among the larger LGUs, e.g. Manila,Quezon City, Makati, and Mandaluyong, given thefact that LGUs had found new powers andprerogatives by virtue of the LGC. These largeLGUs accounted for more than half of the registeredvoters in Metro Manila. Thus, the idea was doomedfrom the start.

The only viable alternative was a specialbody directly under the Office of the President.Instead of being elected, the head of the agencywould be appointed by the President, upon therecommendation of the Council. To give theposition more power, the agency head was to begiven a Cabinet rank.

In 1995, Congress passed Republic Act 7924creating the Metropolitan Manila DevelopmentAuthority (MMDA) and designated Metro Manila asa Special Development and Administrative Region.Decision- and policymaking were vested in anexpanded Metro Manila Council. In addition to themayors, new members were added, namely theMetro Manila Vice-Mayors League and thePresident of the Metro Manila Councilors Leagueas voting members. Their inclusion was meant toassuage the legislative councils, which hadcomplained about the diminution of the autonomyguaranteed to the LGUs under the LGC. Ex-officiomembers from the national government were alsoincluded, such as the secretaries of the Departmentof Transportation and Communications, PublicWorks and Highways, Tourism, and Budget andManagement; the head of the Housing and Urban

What wasdesired wasa “superprovince”. Itwould have allthe powers andresources of theMMC buthopefully, noneof the abuses.

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Development Coordinating Committee; and theChief of the Philippine National Police.

The MMDA is responsible for planning,supervising, and coordinating certain basicservices and it can pass ordinances related to thefollowing services:

• Development planning.• Transport and traffic management.• Solid waste disposal and management.• Urban renewal, zoning, and land-use

planning.• Health and sanitation, urban protection, and

pollution control.• Public safety.

The power of MMDA to pass ordinancescovered in these areas was criticized by MMDAcritics as being anomalous considering therestoration of legislative powers to the different cityand municipal councils. The ordinance-makingpowers of the MMDA contradicted anotherprovision of the MMDA law that in the executionof its functions, the Authority can in no waydiminish the autonomy of the LGUs. In a situationlike this, MMDA has a difficult balancing act toperform.

It cannot be denied that there are problemsthat transcend political boundaries. Land use hasto be coordinated. If the different localities actedindependently, and without any coordination, ananomalous situation could arise where a residentialarea and a factory site could exist side by side alongthe common boundary of two localities. Air andwater pollution respects no political boundaries;neither does traffic; neither does crime; neitherdoes the stench of garbage. Individually, the LGUscannot tackle these problems.

Metro Manila is still searching for the rightanswer to the dilemma. We are still looking for the

The ordinance-making powers

of the MMDAcontradicted

anotherprovision of the

MMDA law.

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so-called “right mix” to abate the discord betweenMMDA and the autonomous LGUs in addressingthe problems of coordination and delineation ofresponsibilities. Perhaps the answer lies in whatNathaniel von Einsiedel offered: let the MMDA takecare of formulation of policies while the LGUs takecare of their execution.

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Cities and Development Agencies Working Together

rban populations are expanding very rapidlyand infrastructure needs are increasingproportionately. Yet, public sector resources

are limited. Consequently, most cities are finding itdifficult to expand their infrastructure fast enoughto maintain even existing levels of service. However,there are several options for cities to fund theirinfrastructure development. This section presentstwo viewpoints on this issue: from the developmentagencies and the cities, respectively.

Mr. Keshav Varma of the World Bank andMr. Preben Nielsen of the Asian Development Bankconfirm that there is a paradigm shift in the lendingpolicies and traditional approaches of donoragencies. Most of them are increasingly seeingthemselves as partners in urban development. Theyrecognize that they do not have more than 5 percentof their total funds for urban development, andtherefore need to develop new instruments forlending. These new modalities demand much betterperformance on the part of local governments, andbetter coordination among donors.

Mayor Alvin Garcia and Mr. P.U. Asnani talkabout the experiences of Cebu City, Philippines, andAhmedabad, India, respectively, on how they wereable to fund their infrastructure services and raise

U

VI. CITIES AND DEVELOPMENT

AGENCIES WORKING

TOGETHER TO

FUND INFRASTRUCTURE

DEVELOPMENT

These newmodalitiesdemand muchbetterperformanceon the partof localgovernments,and bettercoordinationamong donors.

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revenues through BOT, joint ventures, promissorynotes, bond flotation, and support from internationalagencies. Cities, however, need to establish theircredibility first in order to attract capitalists for localinvestments.

DEVELOPMENT AGENCY PERSPECTIVES

World Bank

Keshav VarmaManager, Urban Development Sector Unit,East Asia and Pacific Region

Decentralization is taking place in most parts of theworld today. This trend poses a challenge to theWorld Bank because as an international institution,we have to do the right job with thousands morepartners (complex cities, megacities, regional cities,secondary cities), and new kinds of problems. Theserequire the right skill mix, simplified procedures,innovative instruments, and decentralizedoperations in our institution. We have to concentrateon building institutions and local capacities. Wehave to experience and learn best practices at thelocal level, so that we will know how to replicateand disseminate them in other cities. We shouldalso learn how to manage and apply at the globallevel, knowledge from the various experiences thatwe have accumulated.

In response to this challenge, we havecreated a new instrument called adaptable projectlending (APL) because there has to be moreflexibility in our lending policy. The APL permitsyou to continue for 20 years or more on aprogrammatic concept.

We have to dothe right job

with thousandsmore partners

and new kindsof problems.

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City Development Strategy

We have also developed the city developmentstrategy. This is a strategy in which we partner withcities in developing long-term visions and priorities,and creating capacities that are specific to theirneeds. There are already 12 cities participating inthis exercise, 7 of which are in the Philippines. It isa very proactive exercise, which is giving goodresults and providing our partners, consultants, andcities with good lessons.

When international institutions gravitatetoward enthusiastic cities with credible, respected,and client-oriented leadership, there is a tendencyto overlap projects and clutter resources. If you lookat Ho Chi Minh in Viet Nam, you will see aprogressive city that is showing great results.Because of this, the Overseas EconomicCooperation Fund of Japan (OECF), the JapanInternational Cooperation Agency (JICA), ADB,World Bank, and other international institutions areheading for Ho Chi Minh. I think it is importantthat cities also manage international institutionscarefully so that they get the best out of them.

Another challenge for all internationalinstitutions is to create resource cities. Part of ourcity development strategy is to try and developlong-term partnerships in creating such cities. Thesecan serve as regional demonstration centers whereofficials from other cities can come and see what ishappening and learn from their experiences. Forinstance, the cities of Shanghai, Ho Chi Minh,Calcutta, and Surat can act as regional resourcesfor other cities. I think city managers learn best fromother city managers, and cities learn from citiesmuch faster than when people from the World Bankcome and give lectures and advice.

Sensitivity to environmental and socialissues, especially commitment to fight urban povertyand ensure equitable growth and development, is

I think it isimportantthat citiesalso manageinternationalinstitutionscarefully so thatthey get the bestout of them.

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another challenge. I have used deliberately the wordequity because when I was looking at figures of percapita investment in the developing world, it istotally an unacceptable situation. The investmentper capita in the developed world is more than 10to 15 times that of the developing world. And wewill have to invest in urban poverty, equity, andgrowth and development rapidly, consciously, andcontinuously.

Willingness to form partnerships and erecttransparent frameworks to facilitate public-privatesector partnerships is another important challengebecause there are not many resources to really meetinfrastructure requirements. For East Asia, the WorldBank and the International Finance Corporationhave evaluated the infrastructure requirement atabout US$200 billion per year. In the Urban andWater Sector of the World Bank, our total portfoliois only US$4 billion of which US$600 million isgiven to projects per year. The other requirementscan be supplied through transparent public-privatesector partnerships. I would like to emphasizetransparency because in the minds of city mayorsand managers, there is the suspicion that public-private sector partnerships do not necessarily leadto equity that would benefit the poor.

The World Bank and many internationalinstitutions are strongly focused on privatization toaugment infrastructure requirements. In myexperience, privatization is good but there is notenough private capacity in the world to take overall the available utilities. For example, thePhilippines has over 1,500 municipalities; totalprivatization is not even 1 percent. Now, even ifwe expect 25 percent privatization of all utilities inthe world, there would still remain 75 percent ofpresent assets. However, we can start working onoptimizing the present assets by incorporation ofurban utilities. In the PRC, all water utilities and

Privatization isgood but thereis not enough

private capacityin the world to

take over all theavailableutilities.

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utilities concerning sanitation and solid wastes arenow corporations, and this is working very well.

Our President recently announced that“development should not only be seen from thepoint of view of an engineer. Development issomething more comprehensive that we shouldlearn to go beyond projects and look at outcomes.”We have begun to integrate several facets ofinfrastructure investment in order to create anoverall impact in the area. We have promoted theintegrated provision of environmental infrastructuresuch as water, sanitation, drainage, andmanagement of hazardous solid wastes.

Lessons from Projects

Let me now share some lessons that we have learnedfrom projects implemented with our partners. Onecritical factor that ensures high quality of projectimplementation is the professionalism of the projectmanagement team, with clear understanding ofdevelopment objectives. Commitment to long-termand comprehensive engagement adds value. It isvery easy to work with long-term partners, for 10years or more, because they have mastered ourestablished procedures in project implementation.Long-term engagement also creates an incrediblyhigh efficiency and synergy.

Our efforts towards enhancing institutionaland client capacity also lead to sustainability ofprojects. Good financial management practiceslikewise ensure quality implementation. This isanother important lesson demonstrated very clearlyin the PRC and Viet Nam.

Lastly, it is critically important to discusseach project with political leaders at the national,provincial, and city levels right at the beginning ofthe project. If they are not clear on the issues andextent of the project, you will not get their support.

One criticalfactor thatensures highquality ofprojectimplementationis theprofessionalismof the projectmanagementteam.

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In our experience, political will to ensure tariff andinstitutional reforms is crucial in sustaining projectgains.

The city development strategy we areinvolved with is very interesting but complex.However, our task managers find the job mucheasier now than before because there are new andassertive leaders in the provincial and citygovernments, and new environments are emerging.

Asian Development Bank

Preben NielsenManager, Water Supply,Urban Development andHousing Division (West)

Urban agglomerates have become increasinglyimportant to national economic developmentstrategies but necessary investments have typicallynot kept pace with demand for urban services,generated by urban population growth and a rise inincomes of the middle class. However, this situationis changing with the increasing awareness of thecomplexity of the urban development challenge,which requires not only massive investment inphysical infrastructure but also greater emphasis onthe means for achieving more sustainable andequitable urban development. This is the contextfor ADB’s involvement in urban development today.One of the major strengths of ADB lies in its strictguidelines for planning and financing infrastructuredevelopment from both the public- and private-sector perspectives. ADB can build on its strengthsto further benefit developing member countries, toimprove the efficiency of allocation of resourcesfor the urban sector, and to speed up servicedelivery.

One of themajor strengthsof ADB lies in

its strictguidelines forplanning and

financinginfrastructuredevelopmentfrom both the

public- andprivate-sectorperspectives.

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The funding gap for urban development isever increasing in the face of population growthand deteriorating existing physical structures. Thenature of this funding gap can be illustrated by aquote from our recent India Urban Sector Strategy.

In addition to serving as a majorconstraint to economic growth andproductivity, the lack of adequateinvestments in urban infrastructure,municipal services, and housing is notwithout social ramifications, especially forthe urban poor. According to someestimates, as much as 30 percent of theurban population lives below the officialpoverty line; the Planning Commission’smost recent estimates indicate that thepercentage of population below thepoverty line in urban areas was 32.2percent in FY1993/1994. In the 23 citieswith populations in excess of 1 million,approximately 28 percent of the peoplelive in slums. The slum populationincreased from about 28 million in 1981to about 51 million in 1991 and isexpected to exceed 100 million by 2000.The health and environmentalimplications, sprawling slums, andhouseholds’ lack of access to potablewater, sewerage, drainage, sanitation, andwaste disposal facilities are staggering.

ADB’S Role

Now, what can ADB do to help? It can provide notonly financing but also advice from its resource baseon governance and institutional development andcost-recovery measures.

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In view of our President’s recent declarationthat poverty reduction is ADB’s overarchingobjective, we are redesigning our catalytic tools. Itis well recognized that attacking poverty has to befrom several fronts. One area, of course, isstimulating economic growth, which in East Asiaearlier led to substantial reduction in poverty.However, in southern Asia, the economic growthmodel has not worked well and poverty pocketshave expanded. There, it may be better to intervenewith direct poverty-reducing measures such as acombination of physical infrastructure like water,sanitation, and paved footpaths, with streetlights,social infrastructure like health clinics, CBOs,education, etc., and income-generating measuressuch as skills training, job advisory consolidationservices, and microcredit.

A major challenge of urbanization is toimprove economic efficiency and productivity whileconcurrently reducing poverty and facilitatinggreater equity. More direct targeting of the poor willbe done by ADB with slum improvement programsbased on integrated packages of social, economic,and physical improvements. Access to safe watersupply, investments in education, health, andpopulation programs focusing on reproductivehealth are likely to give rise to clear and substantialsocial and economic developmental returns.

In Bangladesh, India, and Pakistan, ADB isactively involved in slum improvement, particularlyin secondary towns or cities. Slum networking andtwinning arrangements with exchange ofinformation on impact are aspects stronglysupported by ADB. I recall a slum improving projectthat we attempted in 1997 in Dhaka, addressingthe livelihood of about 400,000 squatters ongovernment land. We worked on that project forthree years but in the end we utterly failed becausethe government was not in a position to provide a10-year non-eviction assurance. This direct

109109


intervention could have uplifted the lives and spiritsof the beneficiaries and given them peace of mindto actively pursue employment opportunities. I takethis example because although we failed, werealized that we should have dealt directly with thegovernment in promoting the issue of povertyreduction.

In connection with its lending modalities,ADB has advocated strong governance at the localgovernment level. Examples are our urbandevelopment and housing projects in India. In theseprojects we built on the 74 th ConstitutionalAmendment Act, which supports institutional andfinancial decentralization from the centralgovernment to the states and subsequently to themunicipal corporations. The reform-minded Indianstates we worked with were Karnataka, Rajasthan,Gujarat, West Bengal (in Calcutta, the city of joy),and Madhya Pradesh. In most of these, state financecommissions have been established to empowerlocal governments (through empowered committeesand urban development finance corporations) tomake decisions concerning local resources and stateloans or grants. In other states, we providedtechnical assistance to form such finance bodiesand build local capacity in accounting and humanresource development. Similar measures have beenundertaken by ADB in Sri Lanka and Nepal. Also inLaos, decentralization is taking place in an orderlymanner with the establishment of urbandevelopment administrative authorities, which aftera learning period will become fully-fledgedmunicipalities.

Public-Private Sector Partnerships

ADB cannot finance everything because of its limitedresources, so our contribution on a national scale islike the famous drop in the bucket. Therefore, we

110110


are advocating public-private sector partnershipssuch as for Kathmandu and Colombo. To protect thepoor from excessive charges for water, we advocateprovision of a discount up to a certain consumptionlevel. In Kathmandu, the private-sector managementcontract would be based on a share of profit as wellas performance-based bidding criteria.

For water supply systems, which could beprivatized, we advocate establishment ofindependent regulatory agencies with not more thanfive members. These agencies should have thecapacity to contract services to the private sectorfor monitoring the performance of private utilityproviders and administering government water-supply policy. This policy would include tariff-setting mechanisms, public hearings, andcommunity and NGO consultations. Publicrelations campaigns would be also required.Examples are the newly formed Regulatory WaterSupply and Wastewater Authority in Lao PDR,which is receiving strong ADB support. Suchsupport is also extended to Karachi and Colombo.In Colombo, no decision has yet been reached onthe private-sector contract modality. However, itcould be a clean private-sector managementcontract on a fee basis with a local contractor inassociation with a foreign tie up, if required, andchosen through public bidding. We also expectperformance-based bidding criteria in Colombo.

For securing financing for solid wastemanagement schemes, we advocate that the privatesector run the sanitary landfill sites, bulk transport,and transfer stations, while the local councils operatecollection services with CBO and NGO support.

In the wastewater management sector, whereour biggest project is in Samut Prakarn Province,Thailand, we advocate the “polluter pays” principle.In practice, this means that everybody pays a flatrate, an environment charge if you like, through themunicipal taxes, plus a surcharge on the water bill if

In thewastewater

managementsector, we

advocate the“polluter pays”

principle.

111111


you are connected to a sewer, plus a biochemicaloxygen demand (BOD) charge related to industries;a standard BOD is measured by category ofmanufacturing process. By the way, in SamutPrakarn, all underground construction is by tunnelingusing sophisticated drilling robots and pipe-jackingto avoid open trenching and the resulting trafficchaos, as well as delays caused by resettlement andunforeseen events. The tunnel machines do not strikeand work 20 hours a day churning the soil. InCalcutta, where we have just started a study, wemay agree with the government to use suchmachines and avoid resettling 50,000 people.

Other financing modalities include directuser charges, bond issues if credit worthiness isestablished, and lending from insurancecompanies, pension funds, and other financialinstitutions.

ADB has basically three public-sectorwindows: the Ordinary Capital Resources andAsian Development Fund with current interest ratesof close to 6 percent and 1–1.5 percent,respectively, and 25–32 years to pay includinggrace periods; in addition to market-based lendingat LIBOR or SIBOR rates (London or Singaporeinterbank overnight rate). The private-sectorwindow provides funds for viable private-sectorprojects of considerable size with both equity andlending. In all cases, the Ministry of Finance orequivalent is the interface for ADB operations. Loanprojects need to be approved at the national levelbefore ADB can consider them.

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CITY PERSPECTIVES

Cebu City, Philippines

Alvin B. GarciaMayor, Cebu City, Philippines

The need for infrastructure is really a chicken-or-egg question. Do you need the infrastructure first,or do you need some kind of development beforeyou put up the infrastructure? Regardless, there is aneed to fund infrastructure development to realizethe socioeconomic development objectives of cities,whether they are as simple as farm-to-market roadsor postharvest facilities, or as complex as a lightrailway transit, an overpass, or road-widening.

For the period 1999–2004, Cebu City willrequire more than US$330 million to finance majorinfrastructure projects. These major infrastructurerequirements include roads, bridges andtransportation, water and environmental projects,telecommunications, power, housing, and propertyacquisition. At present, we have a 300-hectarereclamation project in the city, which is beingcovered by a loan from OECF. We are also workingwith a Malaysian company through a BOT schemeon a dam project to produce about 100,000–150,000cubic meters of water. Another important undertakingis the waterfront development project. This is anurban renewal project where we are trying to savethe port area from becoming an industrial slum, inthe tradition of Fishermen’s Wharf in San Franciscoor Darling Harbor in Sydney. This is the vision thatwe have and this would need a lot of financing.

In your country and mine, one of thetraditional sources of funds is the nationalgovernment’s block grant. We have local revenuesfrom business taxes, mayor’s permit fees, realproperty taxes, and amusement taxes. Local

For the period1999–2004,

Cebu City willrequire morethan US$330

million tofinance majorinfrastructure

projects.

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revenues constitute more than 50 percent of ourfund sources. We also have a share in the internalrevenue allotment, as well as funds from theCountrywide Development Fund, President’s SocialFund, bank loans, and development assistance fromdonor agencies.

For obvious reasons, local government unitshave relied mostly on their share of nationalgovernment wealth. However, this has proveninadequate in responding to their increasing needs.Innovative financing schemes are necessary, andone such scheme is BOT, which I will discussextensively here.

Innovative Financing Schemes

BOT is a major source of development assistancein Cebu. It is a contractual arrangement betweenthe government and private sector whereby theprivate sector finances, constructs, and in somecases operates and maintains a facility or project.The private proponent is allowed to charge user feesto recover investments through tolls, fees, rentals,and other charges from facility users for up to 50years. The project proponent also recoversinvestments through shares in project revenues, andnonmonetary payments. Government and privateproponent share project risk.

In the Philippines, the sectors that areallowed to undertake BOT include power plants,highways, roads, railways, toll roads, ports, airports,transportation systems, telecommunications,information technology, canals, dams, landreclamation, sewerage, drainage, tourism estates,health facilities, etc. The level of authority neededto approve a scheme depends on the cost of theproject (Table VI.1). In Cebu City, projects beingundertaken under BOT are the waterfrontdevelopment project, the waste management and

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sewerage system, and development of the Manangaand Lusaran dams.

We have also used joint ventures, in whichthe local government unit puts up a certain propertythat another company develops. Many of you werein Cebu last year and you stayed at Marriott Hotel.Marriott is located at the Cebu Business Park, whichwas a joint undertaking of the Cebu ProvincialGovernment and Ayala Land Corporation. Theparties infused P1 billion to develop that area, whichused to be a 50-hectare golf course that was notearning anything for the provincial government.

Table VI.1. BOT Approval Bodies for Local Government Projects

Cost of Project Approving Authority

Up to P20 million Municipal Council

P20-50 million City/Provincial Council

P50-200 million Regional Development Council

Above P200 million National Economic and Development Authority

The city government has issued promissorynotes to build socialized housing projects, beforethey can proceed with the project. The Philippinesmay be unique in having a national law thatrequires real estate developers to allot for socializedhousing purposes, 20 percent of the total cost or20 percent of the area being developed in a project.The city has to certify that this requirement has beenaccomplished. The result is that most first-classsubdivision estate developers do not want toproceed with such projects. The city is offering todevelopers the choice of depositing the required

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amount with the city, whereupon the city willundertake the socialized housing work. We givepromissory notes to this effect to the developers.

Other innovative schemes that we haveimplemented are economic enterprises anddonations through sister city networks. We expectto earn US$1.43 million this year through economicenterprises such as the Pardo Public Market, whiledonations from sister cities worldwide complementour efforts in meeting infrastructure needs, includingschool building improvements and transportfacilities.

I would like to focus the last part of mypresentation on the characteristics of officialdevelopment assistance (ODA) or soft loans and howthey can be reformed to become more responsive tothe needs of local governments.

ODA is generally oriented towards thenational or central government. Donor agenciescannot provide direct loans to a municipality or citywithout the approval of the national government.For instance, I was given a grant by JICA for night-soil treatment but our central government turned itdown because they said that the City of Cebu had alot of ODA already. However, it cannot be given toanother city because of the absence of prefeasibilitystudies, which is another requirement. ODA shouldbe more autonomous so that donors can makedecisions without central government interference.To address the issue of prefeasibility requirements,perhaps the ODA playing field should be leveledby first building the capacity of each municipalityor city for project development and preparationbefore any ODA or financial window is opened toLGUs.

Lastly, I am proposing an ODA fair in thefuture where all funding agencies (ADB, WorldBank, JICA, OECF, CIDA, etc.) can get together andpresent their grants/loans portfolio to LGUs, whichcan then develop appropriate project proposals for

ODA shouldbe moreautonomousso that donorscan makedecisionswithout centralgovernmentinterference.

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submission to the donor agencies. Under yourguidelines, I can organize this ODA Fair.

Ahmedabad, India

P.U. AsnaniVice President, City Managers’ Association ofGujarat and Director, US-Asia EnvironmentalPartnership, Ahmedabad, India

The process of urbanization in Asian countries iscreating a very serious problem for urban managersand district authorities, for the principal reason thatthe rate of urbanization is so fast that infrastructuredevelopment cannot keep pace with development.This has resulted in chaos in urban areas in termsof environmental pollution, traffic congestion, lackof water supply and sewerage services, and verypoor infrastructure for solid waste management.

Local bodies have to tackle these problemsthemselves. They cannot depend on central or stategovernments and they cannot put out their handsfurther than the higher authorities. The urban localbodies should set their house in order, raise financialresources through the improvement of internalfinances, and create an internal capacity to enablethem to access the market to finance infrastructuredevelopment.

I will share with you the way that theAhmedabad Municipal Corporation turned its financesaround to raise funds for infrastructure development.

The city of Ahmedabad is a very old city. Itis the seventh largest city in India, with a populationof 3.2 million on an area of 190 km2. It suffered aserious financial crunch from 1984 to 1994, whenit had a Rs220 million (US$6.28 million) overdraft,and had accumulated cash losses of Rs350 million(US$10 million). During that time, the elected body

The urban localbodies shouldset their housein order, raise

financialresources

through theimprovement of

internalfinances, and

create aninternal

capacity toenable them to

access themarket to

financeinfrastructuredevelopment.

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was superceded and all executive powers werevested in the Municipal Commissioner.

Eighty percent of the Ahmedabad MunicipalCorporation’s income is derived from octroicollections and property taxes. Octroi collectionsare levied on goods imported into the city whileproperty taxes are levied on both residential andnonresidential properties. Unfortunately, thecollection rate was very bad because antisocialelements were bringing goods into the city withoutpaying the duty, and most properties were not taxedbecause they were not on record.

Setting the House in Order

We felt that raising taxes could not solve theproblems of the city. The first and foremost thingwas to set the house in order and this we did byadopting the following strategies:

Octroi collection

• Antisocial elements engaged in octroi evasionwere arrested with the help of the policedepartment.

• A market-research cell was developed in theoctroi department to prepare valuation bookson the basis of prevailing market rates so thatall goods were properly valued and assessedwith the help of chartered and costaccountants.

• A system of random physical verification ofgoods entering the city was introduced toprevent under-invoicing and under-valuationof goods.

• Thirteen additional vigilance squads wereintroduced for round-the-clock checking ofvehicles entering the city.

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• All octroi check posts were equipped withwireless telecommunications systems forrapid communication.

Property tax collection

• A series of coercive measures was takenagainst property tax defaulters.

• Water supply and drainage of defaulters weredisconnected.

• Warrants were issued for attachment ofmovable and immovable properties.

• Properties were put to auction for tax recovery.

Table VI.2. Comparative Increase of Octroi and Property Tax(Rs million)

1993-1994 1996-1997 % Increase

Octroi 132 227 72

Property tax 47 94 100

Only one week after taking these measures,the city’s income went up by 50 percent. After amonth, the income went up by 100 percent. Therecovery of property tax also increased substantially.The comparative figures of both octroi and propertytax in Table VI.2 show the results. For the first timein 10 years, the Corporation registered a surplus,and by 31 March 1995, the Corporation’s 10 yearsof accumulated deficits and loans were paid out.I must say that the credit goes to Mr. Keshav Varma.He was the Commissioner of Ahmedabad duringthat time, when the city experienced a massivetransformation.

Only one weekafter taking

these measures,the city’s

income went upby 50 percent.After a month,

the incomewent up by 100

percent.

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Table VI.3. Project Profile of the Ahmedabad Municipal Corporation

Project Cost (Rs million)

Bridges and Flyovers 50

Roads 38

Water Project 310

Drainage Project 50

Solid Waste Management 10

Pay-and-Use Toilets 10

Narmada Linkages (water charges) 130

TOTAL 598

Immediately after realizing financialimprovements in the Corporation, we startedcorporate planning. In India, most mayors aretransferred or changed every year so they think ofonly a one-year plan. We decided to prepare a five-year plan for the city with a budget of Rs598 millionfor development projects (Table VI.3), which theCouncil unanimously approved.

In spite of our improved finances, we thoughtthat they would not be adequate to carry out alldevelopmental activities. We decided to accessloans and grants from government, financialinstitutions, and debt markets, and undertakeprivatization. The money from our accumulatedsurpluses was used toward debt servicing.

When we decided to access the debt market,we had to show that we were able to repay debts.The Corporation received very good technicalassistance from USAID to obtain a credit rating. Weenlisted the services of a credit-rating agency toassess our inherent strength and financial position.

The city ofAhmedabadwas the first inSouth Asia toobtain a ratingof A+.

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The rating was based on the financial soundness ofthe Corporation, its organization structure andmanagement, the economic scenario, analysis ofprojects and project reports, and proposed paymentmechanism.

The city of Ahmedabad was the first in SouthAsia to obtain a rating of A+. After six months, therating was improved to “AA”, which did not requirean external guarantee because the rating was higherthan that of the government. At that time, theCorporation went to the debt market to raise US$25million for its infrastructure development throughmunicipal bonds. Details are given in Box VI.1.

The municipal bonds were issued on 16January 1998 and closed on 27 January 1998. Theresponse from the 5,106 investors wasoverwhelming, which was a manifestation that thecity had established very high credibility in the eyesof the people. The amount that we received wasmore than we wanted.

Ahmedabad is one of the few cities in Indiatoday where the annual budget exceeds Rs10billion. On this budget, the city is operating a widerange of municipal services, including water supply,sewerage, city transport, medical services, andmedical education. All these activities are in thefold of the urban local body, which is managingthem from its sources without any governmentfunding, loans, assistance, or grants.

Our experience has shown that it is possiblefor an urban local body to raise finances frominternal resources by improving its internalmanagement system .

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Box VI.1. Terms of the Ahmedabad Bond Issue

Issue size: Rs1 billion, of which Rs750 million is ona firm allotment basis

Underwriting commitment: Net public offer of Rs250 million fullyunderwritten

Face value: Rs1,000 at par

Redemption: In 3 tranches of Rs333, Rs333 andRs334 at the end of the 5th, 6th, and 7th

year, respectively

Interest: Interest @ 14% per annum payable semi-annually on the outstanding principle

Deemed date of allotment: 1 February 1998

Credit rating: AA

Security structured: Charge/mortgage on Corporation properties

Structured obligation: Escrow on octroi revenues of theCorporation

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Serving Citizens: Improving Delivery of Municipal Services

he provision of municipal services is the corebusiness of municipalities, and beingresponsive to citizens’ needs and concerns

is the key to effective and efficient service delivery.Among the more critical services is solid wastemanagement. Another is resolving publicgrievances. Mayors will be judged by how wellthese and other services are provided to theirmunicipality’s residents.

Systems of resolution of public grievancesand complaints and of solid waste management arecurrently being studied in 10 Asian municipalitiesthrough ADB’s Benchmarking Project. The projectis using the techniques of “benchmarking” and“continuous improvement” to record currentpractices, what is “best practice”, and how eachmunicipality can improve its services. Mr. NavedHamid of ADB provides a brief introduction to theproject.

On systems of resolution of publicgrievances and complaints, Mr. P.U. Asnani of theCity Managers’ Association of Gujarat (CMAG),India, describes Ahmedabad’s citizens’ charter andpublic complaints redressal system, and the role ofCMAG in promoting these instruments in GujaratState. Mr. H.B.S. Aradhya, Coordinator of theBenchmarking Project in Bangalore, India, presentsthe findings, improvements identified, and expectedbenefits from better public complaints systems in

VII. SERVING CITIZENS:IMPROVING DELIVERY

OF MUNICIPAL SERVICES

T

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Asian municipalities participating in theBenchmarking Project.

In the area of solid waste management,Mr. Nathaniel von Einsiedel of the UNDP/UNCHSUrban Management Programme discusses thevarious approaches in use in Asian cities. He stressesthat the key to effective solid waste management isits social acceptability to the public in terms of costs,location, technology, and environmental and healthconcerns. From his experience, acceptability canbe facilitated through a proper information andeducation campaign on the choice of waste disposalpractice. Ms. Susan Ardosa, Benchmarking ProjectCoordinator in Cebu City, Philippines, presents thefindings, improvements identified, and expectedservice benefits in solid waste management througheducation and better enforcement in Asianmunicipalities participating in the BenchmarkingProject.

INTRODUCTION TO THEBENCHMARKING PROJECT

Naved HamidSenior Strategy and Policy OfficerAsian Development Bank

ADB is helping selected municipalities to enhancetheir capacity to deliver better municipal servicesthrough the Benchmarking Project, using twomanagement techniques: benchmarking andcontinuous improvement. The idea underlying thisproject is that service delivery is the key role of localgovernments, and that there is a considerablepotential for improving service delivery even withinexisting financial expenditures and resources.

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Benchmarking and Continuous Improvement

The term “benchmarking” sounds complicated butthe concept is quite simple and has been aroundfor a very long time. It uses two techniques: metricor quantitative benchmarking and processbenchmarking. Quantitative benchmarking is likebowling or batting averages in cricket, which can beused to compare the performance of different players.It could also be like the ranking of cities in specifiedareas (similar to the annual ranking published byAsiaweek), enabling cities to compare themselves. Forinstance, if Ahmedabad collects X amount of revenueand your city, which is the same size, collects onlyhalf that amount, then you know there is somethingwrong or that you can do better. Quantitativebenchmarking tells you where you are. However, itdoes not tell you how to improve your performance.

I imagine that process benchmarking startedthousands of years ago when a farmer saw that theyield of her crop was much less than that in theneighbor’s field. She went over to the neighbor,asked her how she did it, observed her work, andthen applied the same techniques to her own field.Process benchmarking is looking at those who aredoing something well, documenting how they doit, and comparing that with your own technique.You then discover what you are doing differentlyand how you could improve your performance.

Benchmarking achieves greater success if itis conducted in the context of a continuousimprovement strategy. Continuous improvementdescribes an organization’s operating culture, inwhich it is always seeking ways of improving itsproducts, services, and performance of managementand staff. Usually, the focus of the organization ison meeting the needs of the customers; feedbackfrom them is a critical factor for improving theorganization.

Continuousimprovementdescribes anorganization’soperatingculture, inwhich it isalways seekingways ofimproving itsproducts,services, andperformance ofmanagementand staff.

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Benchmarking has been used extensively inthe private sector and is being used progressivelyin the public sector in Australia, the US, and otherOECD countries. Little benchmarking has beendone in developing countries, so it was decided topilot test its effectiveness in improving municipalservice delivery in Asia. ADB first invited a largenumber of Asian municipalities to participate in thisprogram. Sixteen municipalities responded, fromwhich we selected 10 (Box VII.1) on the basis ofthe commitment of the mayor, nomination ofsuitably qualified municipal staff for training asBenchmarking Coordinators, track record inimplementing change, contacts with othermunicipalities, customer orientation, teamwork,monitoring and evaluation of municipal programs,and relationship with ADB.

Benchmarking Coordinators andWork-Based Teams

Instead of hiring local consultants, we decided toimplement the project by training some existingmunicipal staff to lead work-based teams toundertake process mapping, adopting new

Box VII.1. Asian Municipalities Participating in the Benchmarking Project

• Bandung, Indonesia • Lahore, Pakistan

• Bangalore, India • Peshawar, Pakistan

• Cebu City, Philippines • Semarang, Indonesia

• Colombo, Sri Lanka • Shanghai, PRC

• Kuantan, Malaysia • Surabaya, Indonesia

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performance standards, and implementing thecontinuous improvement program. It was felt thatgiven their knowledge of the municipality’s scopeof services, personnel, problems, and systems,they would be much more effective agents ofchange than would consultants. Moreover, theirinvolvement would result in greater ownershipof the process by the municipality. Therefore, acritical factor to the success of our benchmarkingand continuous improvement pilot project was theappointment and training of two municipal officersper city; we called them Benchmarking Coordinators.

The Benchmarking Coordinators attended atwo-week intensive training program on teamcreation and management, tools and techniques ofbenchmarking and continuous improvement,performance measurement, and process mapping.The training program took place in Cebu City on22 November to 4 December 1998. In that training,the Coordinators agreed on six common municipalservices for benchmarking, based on theirimportance to the municipality and its residents,and potential for improvement. The six selectedservices (Box VII.2) are being studied in groups oftwo over three rounds to ensure that they can bemanaged well by the Coordinators.

Immediately after the training, thecoordinators organized, trained, and led the first-round teams to map the processes of selectedservices, collect performance data or indicators forbenchmarking, analyze data, and identify areas inwhich the delivery of services could be improved.The performance indicators were collected on thebasis of timeliness, quality, cost or price of theservice, and customer satisfaction. Once the datahad been collected, the participating municipalitiesexchanged and compared information with oneanother. Based upon the comparisons, the teamsidentified improvements that could be made in theexisting services and, through a continuous

Based upon thecomparisons,the teamsidentifiedimprovementsthat could bemade in theexistingservices.

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improvement process, will implement the changesbased on the improvement proposals.

The municipalities are being assisted by theAustralian Continuous Improvement Group,international consultants, and through constantexchange of information via city visits, E-mail, andthe project’s World Wide Web home page.

The Benchmarking Coordinators participatedin the Second Coordinators’ Workshop at Kuantan,Malaysia, on 26-30 April 1999. They shared processinformation and compiled their assessments of “bestpractices” for solid waste management (educationand enforcement), and customer handling and publiccomplaints. This workshop marked the beginning ofthe second round of benchmarking, which meantforming new teams to start work on two new services,property tax assessment and collection, and parkingregulation. Meanwhile, the first-round teams arecontinuing with their continuous improvement tasksand developing service innovations based on whatthe other cities have done. The project started inSeptember 1998 and was expected to be completedin the first quarter of 2000.

Box VII.2. Six Services Selected for Benchmarking

• Solid waste management (education and enforcement)

• Customer complaints resolution service

• Parking regulation

• Property tax assessment and collection

• Street vendors

• Integrated computer systems

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Networking

Part of the implementation of this project is settingup a network of Asian municipalities thatcollaborate in benchmarking their processes anddriving change through their own continuousimprovement programs. Apart from electronicexchanges and participation of the BenchmarkingCoordinators in the regional workshops, the mayorsof these municipalities are also given theopportunity to meet face to face and exchangeinformation with one another through the Mayors’Forum. The first Forum was held concurrently withthe Coordinators’ Workshop in Cebu City.

This project has also brought togetherseveral donor agencies that are active in the urbanareas of Asia. Although ADB is the lead agency, wewere able to involve the Urban ManagementProgramme of UNDP/UNCHS, which is sponsoringLahore (in Pakistan), and the German Agency forTechnical Cooperation (GTZ), which is sponsoringBandung and Surabaya (in Indonesia). The ADBInstitute is actively supporting the project by fundingits home page, the Mayors’ Forum, the productionof training manuals, and publication of projectmaterials. It is expected that these partners will applythe lessons learned from the project to the otherAsian municipalities they are working with, andexpand these overlapping networks for continuousexchange of experiences and best practices.

The latest information on all services beingbenchmarked and links to all participatingmunicipalities and project partners are availablefrom the project’s home page at http://asiancities.benchmarking.acig.com.au/.

It is expectedthat thesepartners willapply thelessons learnedfrom the projectto the otherAsianmunicipalitiesthey areworking with,and expandtheseoverlappingnetworks forcontinuousexchange ofexperiences andbest practices.

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Expected Benefits of Benchmarking

This project is not intended to provide funds fordevelopment of physical infrastructure in themunicipalities, but to improve delivery of municipalservices through better management. TheBenchmarking Coordinators and the work-basedteams, by developing their skills in problem solvingand process improvement, will be able to assist theirmunicipalities in providing better quality and greatercoverage of municipal services, faster responsetimes, lower costs, and higher customer satisfaction.After all, municipalities will be judged not by theextent of their physical infrastructure but on howwell this infrastructure is managed and theassociated services made available to the citizens.

CITIZENS’ CHARTER AND REDRESSINGPUBLIC COMPLAINTS INGUJARAT STATE, INDIA

P.U. AsnaniVice President, City Managers’ Association ofGujarat, and Director, US-Asia EnvironmentalPartnership Program, Ahmedabad, India

In the state of Gujarat, in southern India, themunicipal bodies have come together and formedthe City Managers’ Association of Gujarat (CMAG)to focus attention on the problems of urban areas.CMAG is affiliated with the International City/County Managers Association of the US, whichhelps us to develop certain mechanisms inimproving urban governance.

The principal objectives of CMAG areinformation exchange and dissemination ofinformation on urban issues, best city managementpractices, technologies, and across-country

Municipalitieswill be judged

not by theextent of their

physicalinfrastructure

but on howwell this

infrastructureis managed

and theassociated

services madeavailable tothe citizens.

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management experiences; upgrading training skillsfor professional development; and advocacy.Advocacy is done to raise the sensitivity of stateand central governments to the importance of urbanareas vis-à-vis serviceable areas, and fund sharingamong local bodies in view of the growing problemsof urbanization.

Among the other issues advocated byCMAG for improving urban governance are

• bringing the urban agenda to the attention ofthe state and central governments;

• inclusion of cities in the infrastructure masterplans of the state and central governments;

• nonobligatory services to be exclusively run/financed by the state;

• tax exemption for municipal bonds;• devolution of full powers to strengthen the

financial base of urban local bodies, such asby upward revision of taxes;

• total autonomy of municipalities to raisenontax revenue; and

• privatization.

With a view to enhancing the capacity ofthe urban local bodies in Gujarat, CMAG conductedworkshops on improving the financial resources ofthese bodies, operation and maintenance of watersupply and sewerage systems, citizens’ charters, andcomplaints redressal systems. In this paper, I willfocus on complaints and mechanisms linked withthe citizens’ charter for the urban local bodies.

The Citizens’ Charter

The citizens’ charter for urban local bodieswas organized by CMAG in association withthe School of Planning and Department ofAdministrative Reforms in India. The main purpose

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of a charter is to improve access to public servicesand to promote quality by helping peopleunderstand what an organization does, how tocontact it, what to expect by way of services, andhow to seek a remedy if something goes wrong.

A model charter was prepared and circulatedto all the urban local bodies of the state based onclear expectations (Box VII.3). The local bodies thenprepared their own charters based on localconditions and capabilities to handle local problemseffectively.

Through the charter, citizens are given theopportunity to learn what the local bodies do, whatservices are provided, whom they should approachto obtain the services, and when they can meet theconcerned officer. These are very important aspectsand each local body must strive to make them moreeffective in the field. For fast treatment of publiccomplaints, citizens should know where acomplaint can be registered, either by telephone,in person, or by post.

Redressing Public Complaints

CMAG conducted a workshop on PublicComplaints Redressal Mechanisms, participated inby urban local bodies to discuss guidelines forsetting up a mechanism of dealing with complaints.CMAG also downloaded from the Internet theguidelines for setting up a mechanism to deal withcomplaints. The guidelines were circulated anddiscussed; from them we chose what would workfor Ahmedabad (Box VII.4).

Ahmedabad’s citizens’ charter providesspecific time frames for responding to publiccomplaints in relation to water supply, sewerage,drainage, roads, footpath maintenance, property taxassessment and property transfer, passing of buildingplans, issuance of service licenses, public health

For fasttreatment of

publiccomplaints,

citizens shouldknow where acomplaint canbe registered,

either bytelephone, inperson, or by

post.

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Box VII.4. Basic Principles for an Effective Complaints System

A complaint system should be:• Easy to access and well publicized• Speedy, with fixed time-limits for action and keeping people

informed of progress• Confidential to protect the staff and complainants• Informative, providing information to management so that

the services can be improved• Simple to understand and use• Fair, with a full procedure for investigations• Effective in dealing with all points raised by the citizen and

providing suitable remedies• Regularly monitored and audited to make sure that it is

effective and improving

Box VII.3. Citizens’ Charter Expectations

• Set clear standards of service that users can expect• Be open. Communicate clearly and effectively in plain

language• Consult and involve present and potential users of public

services• Make services easily available to everyone who needs them• Treat all people fairly• Put things right when they go wrong• Use resources effectively to provide best value for taxpayers

and users• Always look for ways to improve the services and facilities

offered

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and sanitation, solid waste management, and birthand death registration, as well as quick redressal ofpublic grievances.

For instance, if a complaint is lodgedconcerning a hole in the footpath, it is to berepaired within 24 hours. Complaints about watercontamination are to be attended to within 4 hours,while complaints on broken manholes areexpected to be serviced within 24 hours. Surfacingof potholes is to be done within 3 days.

Formerly, people who complained wereliable to feel discriminated against. However,complaints provide free feedback about ourservices, and handling complaints properly showshow important customer care is to our organization.It shows that we listen to users, we learn from ourmistakes, and we are continuously trying to improvethe services.

When we institutionalized the redressalsystem in Ahmedabad, we learned that peoplewould only complain if they felt that we would listento their complaints and act on them. So we make ita point to investigate complaints thoroughly andfairly, and whenever possible we find a remedy. Weuse the complaints to improve our services andnever allow the users to suffer or be discriminatedagainst as a result of any complaint. The top tentips for dealing with complaints also served as ourguide (Box VII.5).

All complaints (whether written, bytelephone, or in person) are recorded. People wholodge their complaints in person are given a copyof their complaint; another copy is immediatelypassed to the concerned section; and one copyremains in the complaint office. The concerneddepartment is required to act on the complaintwithin 24 hours. The attending officer makes arecord that the complaint has been addressed, andgives feedback to the complaint office. The boardofficer reviews the complaints everyday, while the

Handlingcomplaints

properly showshow importantcustomer care

is to ourorganization.

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zonal officer, who handles five to seven wards,makes sure that all complaints within his commandarea have been properly addressed.

Every week, the chief executive officerreceives a report of all complaints in the entire city,containing the nature of complaints, how manywere disposed of, number of delayed responses,causes of delay, and remedial actions to be taken.This report is accompanied by feedback fromindependent sources so as to ascertain that thecomplaints system is really responsive to the needsof the public.

I have outlined the full mechanism, whichyou can use to design your own complaint system.However, it will only work if the administration is

• Keep it simple and avoid long forms• Use the phone more often than sending a letter• Find out straight away what action the complainant wants• For less serious complaints, a quick apology is better than a

long letter• Give the person specific reply. A standard reply will only make

things worse• Follow the “mother principle”: treat people as you would like

your mother to be treated• Don’t pass the buck. If you need to refer a complaint to

someone else, make sure that the customer gets full details.• Be clear on what remedies you can offer• Let your customers know about improvements made as a result

of their complaints• More complaints can be good news! It shows that your

customers trust you to take them seriously

Source: http://www.cabinet-office.gov.uk/servicefirst/index/library.htm

Box VII.5. Top Ten Tips for Dealing with Public Complaints

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adequately decentralized, and the staff fullyempowered to take full responsibility andaccountability in dealing with the complaints. Thisway, there is no need for the mayor or the chiefexecutive officer to worry about the quality of actionor response on the complaints, and timely andaccurate feedback to improve the services can beexpected.

GOOD PRACTICE ON RESOLUTION OFCOMPLAINTS AND PUBLIC GRIEVANCES

H.B.S. AradhyaBenchmarking CoordinatorBangalore, India

Bangalore is situated in southern India in an area of225 km2. It has 100 elected and 5 nominatedcouncilors. The Bangalore City Corporation has17,000 staff in five major departments. The annualbudget is about US$180 million.

Bangalore is known as the Garden City ofIndia, with more than 400 parks, gardens,boulevards, and nurseries. It is one of the fastestgrowing cities in India because of its geographicallocation, congenial climate, and businessopportunities.

Due to rapid industrialization between 1950and 1970, the population increased at a rapid rate.The current population stands at 5 million, andduring working hours swells by more than 1.2million. With the extension of boundaries in 1995,it has not been possible to reverse the flow ofmigration towards the city.

In view of these developments, the demandsfor improving existing services such as water supply,sewerage disposal, garbage removal, andmaintenance of roads have increased. It has become

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mandatory to concentrate on efficient managementof municipal services given our limited resources.Bangalore City Corporation has taken steps to meetthe increasing demand on civic services. It is thefirst municipal corporation to float bondssuccessfully (worth Rs125 crores or US$28.6million) with a view to improving civic amenities.

Under these circumstances, the system ofredressal of public grievances has been revived inthe Bangalore City Corporation by adopting moderntechnologies through the processes ofbenchmarking and continuous improvement. Inearlier days, Bangalore’s system of hearing publicgrievances did not have any records of complaintsresolved or pending cases. The public had a negativeattitude toward making complaints because theCorporation was not acting on them.

Bangalore is participating in the ADBBenchmarking Project. In the initial months of theproject, one of the services that was consideredcritical for city residents and businesses washandling public grievances. It involves receiving andacknowledging complaints, directing them toappropriate personnel, resolving complaints,feedback to complainants, and monitoring theeffectiveness of the system.

In April 1999, the Benchmarking Coordinatorsparticipated in a regional workshop in Kuantan,Malaysia, where they identified and discussed bestpractices in this particular service. Among the veryattractive and results-oriented practices are thefollowing:

• United Action in Shanghai.• Public Day in Colombo.• Access through many zones in Bangalore.• One stop shop in Indonesian cities.• Daily radio program in Cebu City.• Weekly report to the chief executive and radio

feedback to the public in Kuantan.

It has becomemandatory toconcentrate onefficientmanagement ofmunicipalservices givenour limitedresources.

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Table VII.1. Performance of Bangalore in HandlingCustomer Complaints

Performance Measure Range of Performance Bangalore’s Score

Number of justifiable 14–1,500 168complaints per 10,000population

Cost per complaint lodged US$0.09–48.30 $0.70

Time taken per complaint 0.1–12 person hours 0.75 person hours

Average (median) time 5 minutes–10 days 10 minutesto first response

Average (median) time 3–36 days 3 daysto final resolution

Proportions of complaintsresubmitted 1– 63% 30%

These practices were measured in terms ofjustifiable complaints for every 10,000 adultpopulation, handling cost per complaint, averagetime to first response and to resolution, andcustomer satisfaction with complaint resolutionprocesses (Table VII.1).

Improvements in Complaint Handling

Bangalore has made dramatic improvements inhandling public complaints and grievancesfollowing benchmarking. We have established 35receiving points for entertaining customercomplaints. The list of such receiving offices, theirlocations, telephone numbers, and the procedurefor lodging complaints, have been published for theinformation of the public. All complaints are filedin triplicate copies—one copy to the complainant,

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another copy to the concerned department foraction, and the third copy to the computer sectionfor recording and tracking of complaints. Necessarytraining has been given to the staff handling thecomplaints.

We have formulated an acknowledgmentform, enumerating the most frequent complaints ineach department, prescribing the time limit forredressal of each complaint, and specifying thedepartment to deal with it. We have produced adirectory of community services and made itavailable to the citizens of Bangalore, and haveundertaken a publicity campaign to educate thepublic regarding their right to bring their grievancesto the attention of the authorities and how to lodgetheir inquiries and complaints.

The Honorable Minister for Bangalore CityDevelopment is very enthusiastic about the redressalof public grievances. He inspects some parts of theCity every day and assures the people in the localitythat their complaints are being addressed, byinstructing the concerned officers on the spot. Heresponded to public complaints during a call-inradio program on 23 May 1999, and conductedpublic grievances meetings in three zones on 2-4June 1999. Hundreds of complaints were receivedat these meetings and the public response was verygood. The mayor conducts public grievancemeetings in each zone office on a pre-specified dayand time, to receive and hear complaints and publicgrievances. Also, all executive officers have beeninstructed to remain in their respective officesbetween 3 and 5 p.m. every day except Wednesdaysand Saturdays to receive complaints and hear publicgrievances.

A middle management team, composed ofthe revenue officer, executive engineer, and deputyhealth officer, is responsible for monitoring thecomplaint response performance; the team meetsevery week to review the complaints received,

The mayorconducts publicgrievancemeetings ineach zoneoffice on apre-specifiedday and time.

140140


complaints addressed, and action taken. If there areany unresolved complaints, they are brought to theexecutive management level for discussion with thecommissioner.

We have also opened a 24-hour call servicein a control room at the head office with wirelessconnections to senior officers including those onthe Water Supply and Sewerage Board forimmediate resolution of complaints. There is aspecial team in the control room to attend to anynatural disaster at night.

Based on these improvements, we havebeen able to provide faster and guaranteed responseto the public in resolving their complaints. We havereduced the costs of dealing with complaintsbecause they are addressed promptly and efficiently,and citizens express greater satisfaction aboutmunicipality services and accountability.

Our experience has shown that redressal ofpublic grievances is not an easy task. It requiresproper infrastructure for attending to the complaints/grievances, either through sufficient budgetallocation or delegation of powers. Every municipaladministration must act to improve theinfrastructure necessary to resolve complaints/grievances at the local level.

Furthermore, unless a proper feedbackarrangement is institutionalized, the senior officerswill not be able to monitor the action taken. Forthis purpose a well-structured training program forstaff at various levels has to be developed andrefresher courses organized at regular intervals.

We havereduced the

costs of dealingwith complaints

because theyare addressedpromptly and

efficiently.

141141


CRITICAL CONSIDERATIONS OF SOLIDWASTE DISPOSAL IN ASIAN CITIES

Nathaniel von EinsiedelRegional Coordinator for Asia PacificUNDP/UNCHS Urban Management Programme

The economic and demographic growth of Asiancities is posing serious challenges to urban localauthorities. Such growth is increasingly stressingthe urban environment, whether this is regarded asthe built-up surroundings of urban dwellers, the“natural support system” that sustains the city, or asthe effect of urbanization on the working and livingconditions of others, such as downstream fishingcommunities. As Asian cities experience rapid urbangrowth, environmental degradation occurs over alarge and growing area. Prominent effects are thedeterioration of air and water quality, growingproblems of waste disposal, and more intensecompetition for increasingly congested spaces. Theworsening urban environment in Asia is affectingpeople and nature in a number of ways: health, safety,productivity, amenities, and ecological integrity.

About 35 percent of the urban populationin Asian developing countries do not have accessto adequate sanitation. A significant amount of thesolid waste generated in urban centers isuncollected (see Table VII.2) and either burned inthe streets or deposited in rivers, creeks, marshyareas, or empty lots. Waste that is collected is mainlydisposed of in open dumpsites, many of which arenot properly operated and maintained, therebyposing a serious threat to public health. Only a fewAsian cities, such as Hong Kong, China; Singapore;and Tokyo, have adequate solid waste disposalfacilities, and even these cities have their share ofproblems in dealing with the increasing volume ofwastes being generated.

The worseningurbanenvironmentin Asia isaffecting peopleand nature in anumber ofways: health,safety,productivity,amenities,and ecologicalintegrity.

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Table VII.2: Characteristics and Rates of Collection of Solid Wastes inSelected Asian Cities

Bangkok 8,000 0.90 0.25 75

Songkla n.a. 0.89 0.42 46

KualaLumpur 348 n.a. n.a. 80

Penang 5,000 0.75 0.25 70

Jakarta 4,625 0.50 0.33 70

Manila 2,650 0.65 n.a. 70

Mumbai 5,800 0.55 0.33 86

Calcutta 3,500 n.a. n.a. 55

Delhi 3,880 n.a. n.a. 62

Dhaka 3,000 0.50 n.a. 50Colombo 750 0.75 0.35 90

Karachi 4,500 0.55 n.a. 33

Source: UN-ESCAP (1995). Status of the Environment Report, Thailand. Bangkok: ESCAP.

Total Weight Generation Rate Bulk Density Rate ofCity (tonnes/day) (kg/person/day) (tonnes/m3) Collection (%)

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Context of Solid Waste Management in Asia

Demography

The urban population in Asia is growingsignificantly. By the year 2020, an additional 1.5billion people will be added to Asia’s urban centers.Such a massive number of people will needadequate infrastructure and services, prominentamong them being water supply, housing, andsanitation facilities. An adequate facility for solidwaste disposal is required to ensure an urbanenvironment conducive to the well-being andproductivity of residents.

The quantity of waste generated per capitain an urban area may appear insignificant whenviewed from studies that indicate that per capitawaste generated in Asia varies from a low of 240grams to a high of 484 grams per day. However,the management of this waste becomes a problemwhen the waste is concentrated in a particular areawith high population density and diverse economicactivities. Moreover, an increase in population sizeaccompanied by an increase in per capita incomeand industrial activity in an area leads to an increasein the amount and complexity of the solid waste inthe area. This, combined with the increasing scarcityof disposal sites in Asian cities, makes the situationeven more difficult.

Economic Growth

The increase in the income of Asian cities hasresulted in a proportionate increase in consumptionand consequently waste generation. A recent studyby the World Bank concludes that urban wastegeneration will increase substantially over thecoming years as GNP per capita increases (see TableVII.3). While Asian cities have a lower rate of waste

By theyear 2020,an additional1.5 billionpeople will beadded to Asia’surban centers.

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generation than cities in the West, the problem ofwaste management in Asia is more complex: percapita waste generation is low but the amount ofwaste is high, owing to the higher population sizeand density in Asian cities.

As Table VII.3 also shows, residential wastein Asia makes up only about 30 percent of the total.However, it receives a disproportionate amount ofattention. As Asian cities continue to urbanize, moreattention is needed to the industrial and commercialwaste stream, especially since this should be thefirst material to be collected by the private sector.

The high level of poverty in the region is arelated aspect. Asia is a frugal society, which is theoutcome of widespread poverty. This frugal natureof Asians is manifested in the thriving, privaterecycling market, both formal and informal, in mostAsian cities.

Culture and Social Behavior

As noted above, Asia has a culture of recycling.Households at the lowest rung of the informalrecycling market sell items like used polythene bags,newspaper, glass bottles, tins and plastic cans, oldwood, old clothes and shoes, etc. These householdsand the entire informal sector involved in theprocess of recycling of inorganic solid waste do notreally perceive it as waste because they are awareof its value.

Unlike in western countries, disposed wastein Asia (other than in Japan and Singapore) isunlikely to consist of refrigerators, television sets,video players, or old clothes. Even the quantity ofhousehold food waste is low because a large sectionof the population cannot afford to throw food away,and even if there are leftovers, they are given away.The implication for solid waste management isaddressing the large number of persons who rely

Asia has aculture ofrecycling.

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on recyclable waste for their livelihood in manycities of developing Asian countries. Their presenceis perceived by some as making operations ofsanitary landfills more difficult.

Another cultural consideration is the NIMBY(not in my backyard) phenomenon. While this maybe a concern common to other regions of the world,the increasing scarcity of land in Asian cities fordisposal sites is making it more difficult to deal withthis phenomenon. Neither urban nor rural residentswant dumpsites in their vicinity, even when “clean”technology is employed. The case of Taipei,Chinais a typical example; the government’s plans toexpand existing disposal sites or build new onesalmost invariably meet with vigorous localopposition, despite generous compensationpayments to affected communities by the provincialadministration’s department of environmentalprotection.

Climate

Most Asian cities have a tropical climate with highlevels of rainfall and humidity. This aggravates theproblem of solid waste disposal, particularlybecause the common disposal method in Asia isopen dumping. The leachability of the dumpedwaste increases as a result of high precipitation.Under such conditions of high rainfall and humidity,incineration is more expensive because more fuelis required to maintain the necessary temperature.Moreover, heavy rains easily damage the structureof conventional sanitary landfills. However, thehumid climate hastens biodegradation, therebyfacilitating disposal methods such as composting.

Another culturalconsideration isthe NIMBY (notin my backyard)phenomenon.

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Table VII.3: GNP Per Capita and Waste Generationin Selected Asian Countries, Current and Projected to 2025

Country

GNPPer Capita

1995

1995 PopulationUrban WasteGeneration

Total(million)

Urban1

(% ofTotal)

GenerationRate

(kg/cap/day)Total Waste

(tonne/day)

Current

LOW-INCOME COUNTRIES

Nepal 200 21.5 13.7 0.5 1,473Bangladesh 240 119.8 18.3 0.49 10,742Myanmar 2402 46.52 26.2 0.45 5,482Viet Nam 240 73.5 20.8 0.55 8,408Mongolia 310 2.5 60.9 0.6 914India 340 929.4 26.8 0.46 114,576Lao PDR 350 4.9 21.7 0.69 734PRC 620 1,200.2 30.3 0.79 287,292Sri Lanka 700 18.1 22.4 0.89 3,608

MIDDLE-INCOME COUNTRIES

Indonesia 980 193.3 35.4 0.76 52,005Philippines 1,050 68.6 54.2 0.52 19,334Thailand 2,740 58.2 20 1.1 12,804Malaysia 3,890 20.1 53.7 0.81 8,743

HIGH-INCOME COUNTRIES

Korea, Rep. of 9,700 44.9 81.3 1.59 58,041Hong Kong, 22,990 6.2 95 5.07 29,862ChinaSingapore 26,730 3 100 1.1 3,300Japan 39,600 125.2 77.6 1.47 142,818

(continued next page)

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Country

PredictedGNP PerCapita

Predicted Population

Predicted UrbanWaste Generation

Total1

(million)

Urban1

(% ofTotal)

GenerationRate

(kg/cap/day)Total Waste

(tonne/day)

2025

LOW-INCOME COUNTRIES

Nepal 360 40.7 34.3 0.6 8,376Bangladesh 440 196.1 40 0.6 47,064Myanmar 580 75.6 47.3 0.6 21,455Viet Nam 580 118.2 39 0.7 32,269Mongolia 560 3.8 76.5 0.9 2,616India 600 1,392.1 45.2 0.7 440,460Lao PDR 850 9.7 44.5 0.8 3,453PRC 1,500 1,526.1 54.5 0.9 748,552Sri Lanka 1,300 25 42.6 1 10,650

MIDDLE-INCOME COUNTRIES

Indonesia 2,400 275.6 60.7 1 167,289Philippines 2,500 104.5 74.3 0.8 62,115Thailand 6,700 73.6 39.1 1.5 43,166Malaysia 9,440 31.6 72.7 1.4 32,162

HIGH-INCOME COUNTRIES

Korea, Rep. of 17,600 54.4 93.7 1.4 71,362Hong Kong, 31,000 5.9 97.3 4.5 25,833ChinaSingapore 36,000 3.4 100 1.1 3,740Japan 53,500 121.6 84.9 1.3 134,210

Note: 1 United Nations, World Population Prospects2 assumed GNP Country waste generation rates are based on weighted averagesfrom different cities within the country

Source: World Bank

Table VII.3 (cont.).

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Current Solid Waste DisposalPractices in Asia

It is difficult to generalize the description of currentsolid waste disposal (SWD) practices in Asia giventhe very wide diversity of conditions among thecountries in the region. However, there are specificcases that may be said to be representative of currentpractices in several Asian cities and, as such, provideuseful inputs to this overview.

Landfill

As shown in Table VII.4, the predominant choice forSWD in many Asian cities is land disposal or landfill,probably because it is the cheapest technology.However, it is the most damaging to public health.

In the case of Mumbai, India, for instance,solid wastes are deposited in four landfill sites. Thesesites are not sanitary landfills, and no measures havebeen taken to prevent pollution of underground andsurface waters. The wastes are not covered. Aserious problem is the smoke from continuouslysmoldering fires, allegedly caused by personscollecting recyclable materials. According to healthauthorities, 90 percent of the population livingaround the sites are suffering from respiratoryailments. Interestingly, the general perception ofmunicipal and elected officials is that the currentpractice in Mumbai is the best that is possible underthe prevailing circumstances.

Composting

Composting is the second most common methodof SWD in Asia. Almost all the large cities of thedeveloping countries in Asia installed importedmechanical composting plants in the past. Most arenow defunct and the remaining ones are not

Landfill isthe most

damaging topublic health.

Almost all thelarge cities of

the developingcountries in

Asia installedimported

mechanicalcomposting

plants in thepast.

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operating at full capacity (e.g. Bangkok, Hanoi,Shanghai, Tokyo, New Delhi, and Mumbai) for thefollowing reasons:

• high operating and maintenance costscompared to open landfilling (includingforeign exchange costs for replacement partsof imported plants);

• higher cost of compost than commercialfertilizers (both purchase cost and labor costto apply to agricultural fields);

• incomplete separation of materials such asplastic and glass, making the compost poorfor agricultural application; and

• poor operation and maintenance of facilities.

Table VII.4. Disposal Methods for Municipal Solid Waste inSelected Countries/Territories of Asia

Bangladesh 95 - - 5Brunei Darussalam 90 - - 10Hong Kong, China 92 8 - -India 70 - 20 10Indonesia 80 5 10 5Japan 22 74 0.1 3.9Korea, Rep. of 90 - - 10Malaysia 70 5 10 15Philippines 85 - 10 5Singapore 35 65 - -Sri Lanka 90 - - 10Thailand 80 5 10 5

Source: Megacity Management in the Asian and Pacific Region. Manila: Asian Development Bank

Country/Territory

Disposal Method (%)

Landfill Incineration Composting Others

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Incineration

As a preferred method for SWD in Asia, incinerationis third to landfill, but only operates well and likelyto remain popular in cities of industrialized countriessuch as Australia; Hong Kong, China; Japan;Republic of Korea; Singapore; and Taipei,China.

Incineration has had very limited use formunicipal solid waste and has not had much successin the cities of Asian developing countries where ithas been installed, because most of these cities haveencountered many problems with importedincinerators, either due to design problems or highoperating and maintenance costs.

Factors Affecting Selection ofSWD Options in Asia

The existing problems of SWD practices in Asiandeveloping countries may be attributed to severalfactors. However, the root of the problem is thebroad lack of awareness and understanding amongAsians of the environmental and related healthconsequences of improper SWD practices.Governments are often blamed by the public foruncollected wastes but not as much for unsanitarylandfill operations, a manifestation of the “out ofsight, out of mind” attitude. This general apathy islikely to change in the near future as Asian citiesbecome even more crowded and the competitionfor land further intensifies, forcing SWD facilitiesto be located closer to where people live and work.While environmental education has started to bringabout some awareness of cleanliness and pollution,this has generally not reached a critical mass topressure governments into taking more positive andappropriate action.

The root of theproblem is thebroad lack of

awareness andunderstandingamong Asians

of theenvironmental

and relatedhealth

consequencesof improper

SWD practices.

Incinerationhas had very

limited usefor municipal

solid waste.

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Site Location

Most of the existing SWD facilities in developingAsian cities are located in sites that generally havebeen neither properly studied nor prepared. The siteshave been chosen mainly on the basis of theirdistance from residential and commercial areas, aresponse to the NIMBY attitude. Many of these sitesare low-lying areas where the waste that is depositedis used as landfill.

The increasing congestion of manydeveloping Asian cities, and the intensification ofland competition makes site location for SWDfacilities within city boundaries very difficult. Recentattempts to site SWD facilities outside a city’sjurisdiction, as in Metro Manila, have brought aboutinterjurisdictional conflicts. Without any nationallegislation on solid waste management in mostdeveloping Asian countries, the municipalities areleft on their own to resolve such conflicts. The resultis either a standstill where nothing is resolved or longdelay in implementation due to protractednegotiations. This situation can be avoided with aproper national legislation on solid wastemanagement, including provisions for intermunicipalcooperation in operating SWD facilities. But again,such legislation is unlikely to be promulgated unlessit is representative of a popular cause.

The experience of Japan in addressing suchinterjurisdictional conflicts is worth noting. Japanhas a law that requires municipalities to dispose ofall their waste within their own borders. This hasobviously left them with no option but to incinerateall waste. Thus, a huge incinerator industry hasdeveloped and is one of the most influential politicalgroups in the country.

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Technological and Cost Considerations

The capital investment for a new disposal plant is amajor consideration in many Asian cities. Asmentioned earlier, the prevalent technology for SWDin Asia is landfill or open dumping, and the factremains that attempts at other technologies havelargely failed. While incineration can be framed asa cost-effective decision in most countries, it is still5 to 10 times more costly than sanitary landfill, evenafter discounting energy revenues (see Table VII.5).Therefore, the social acceptability of the choice oftechnology and its associated costs are majorconsiderations of decision makers.

Table VII.5: Costs Per Tonne (US$) of Alternative DisposalTechnologies for Large Cities

Technology Low-Income Middle-Income High-IncomeCountry Country Country

Average GNP 370 2,400 22,000per capitaOpen dumping 0.5-2.0 1.0-3.0 5.0-10.0Sanitary landfill 3.0-10.0 8.0-15.0 20.0-50.0Tidal land reclaim. 3.0-15.0 10.0-40.0 30.0-100Composting 5.0-20.0 10.0-40.0 20.0-60.0Incineration 40.0-60.0 30.0-80.0 20.0-100.0

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Environmental and Health Concerns

Citizens are becoming more conscious of the healthand environmental implications of the mishandlingof certain technologies. In Japan, for example, therecent State of the Environment report shows a hugeincrease in dioxin levels, 90% of which come fromincinerators, thus prompting Japanese officials tolook at other options including composting,recycling, and waste reduction. Environmentalprotection groups are also using similar reports inother Asian countries in campaigning againstincinerators. These efforts are gaining popularsupport, perhaps because of the “scare ” tactics usedby such groups in associating the increase in dioxinlevels with the increased incidence of cancer. ThePhilippines, for example, recently passed nationallegislation banning the use of incinerators.

However, public awareness of the risks ofopen dumping is not as equally developed. Thepollution of surface and groundwater by leachatesfrom landfills, for example, is not understood bymost people including political decision makers. Itusually needs a crisis situation before people willtake action and adopt changes to existing practices.

In Surat, India, the outbreak of a plague inlate 1995 prompted the citizens and local officialsto clean up the city’s uncollected rubbish, cloggeddrains, and general unsanitary conditions. Throughconcerted actions by local authorities, privatebusinesses, and the community, the city achieveddramatic improvements in terms of overallsanitation and public hygiene, and mostinterestingly received an award as the secondcleanest city in India in 1997—just two years afterthe crisis. Lessons such as these should perhaps beused to enhance greater public awareness aboutthe health risks of existing improper waste disposalpractices.

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Social Concerns

The general lack of understanding of SWD is alsothe reason behind the negative view towards wastepickers and so-called scavengers. They are generallyperceived as a nuisance and may be treated likecriminals. However, they depend on waste as theironly source of income, sometimes even for food.Their presence in streets and dumpsites is anothermajor consideration for decision makers in theselection of SWD facilities. In efforts to “modernize”waste collection and landfill operations, wastepickers are inevitably affected as they are removedfrom their only source of livelihood. In the case ofthe “Smokey Mountain” dumpsite in Metro Manila,for instance, many of the waste pickers violentlyresisted being relocated from the site when thegovernment closed it down for development ofhousing and light industry. The contribution of wastepickers to reducing the volume of waste, which, inturn, prolongs the life of disposal sites, is not widelyappreciated. It has been shown in many cases, thatwhen properly organized, trained, and supervised,waste-pickers can be valuable partners in addressingthe problems of SWD.

Management and Administrative Capabilities

Another consideration facing decision makers in theselection of SWD options is the management andadministrative capabilities of the authoritiesresponsible for the facility. This is rarely consideredseriously because of the lack of understanding ofwhat SWD entails. Most government officials andpoliticians, especially at the local level, perceivesolid waste management as a simple matter. Theyare generally not aware of alternative waste disposalmethods or the skills required. Thus, SWD is usuallygiven the lowest priority in terms of fund allocation

In efforts to“modernize”

waste collectionand landfilloperations,

waste pickersare inevitably

affected as theyare removed

from their onlysource of

livelihood.

SWD isusually given

the lowestpriority in

terms of fundallocation

and staffrecruitment.

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and staff recruitment. Municipal staff at mostdisposal sites do not have the proper technical skills.Engineers with the right qualifications are reluctantto work in such an environment due to the generalperception that it is a low-status job, unpleasant,and hazardous to one’s health.

The above-mentioned considerations facingdecision makers in selecting SWD options, whilerequiring individual attention, need to be addressedas a whole since they are interrelated and affecteach other. From the decision maker’s perspective,the common thread that runs through all theseconsiderations is social acceptability —that is, whatthe public will accept in terms of location,technology, improvements in managerial andtechnical capacity, contractual arrangements, andthe costs of all of these.

Emerging Trends and Challenges

Improving existing SWD practices in Asia requiresfirst and foremost more effective educationprograms and public information campaigns ontheir environmental and health implications. Theseshould help generate wider public awareness topressure decision makers to take more serious actionon the problems of improper SWD practices. Thesecan also help increase citizens’ awareness of theirresponsibilities and roles to improve the existingsituation, such as by segregating biodegradable fromnonbiodegradable household wastes. After all,environmental sanitation is everyone’s responsibility,not only government; government cannot solve theproblem alone.

From the technological viewpoint, and giventhe increasing scarcity of land in most Asian citiesand the NIMBY phenomenon, innovations areneeded to reduce the amount of land required forSWD facilities as well as the dangers of pollution

Environmentalsanitation iseveryone’sresponsibility,not onlygovernment;governmentcannot solvethe problemalone.

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from certain technologies. Recently, garbageprocessors that recycle organic household wasteshave been introduced in Japan to deal with theseproblems. It is obvious that trends and conditionsin Asia support the need for innovations to enhancewaste reduction, reuse, and recycling.

The recycling issue returns us to the situationof waste pickers and scavengers, which number tensof thousands throughout Asian cities. There is anincreasing number of nongovernment initiatives inorganized waste segregation and recycling. Theseare mainly through the efforts of NGOs such asSEWA and EXNORA in India, Women BalikatanMovement in the Philippines, the Environmentaland Community Development Association inThailand, and the Urban Poor Consortium inIndonesia. Some of these initiatives are linked withlocal universities, which provide technical trainingand support. Through these universities, knowledgeabout waste minimization, segregation, andrecycling is spreading. These initiatives areenhancing appreciation of the positive contributionof waste pickers and scavengers to the reduction ofwaste to be collected and disposed of by municipalauthorities, and consequently the costs involved.However, the extremely unhealthy environment inwhich these scavengers live, often in the vicinity ofthe dumpsites, remains a critical problem. Thus, toalleviate the working conditions of scavengers, theiractivity should not be simply treated as illegal; ratherthey should be incorporated as partners in the solidwaste management process, for example, in house-to-house collection and manual segregation of wasteprior to final disposal.

Partnering with waste pickers and scavengersrequires an understanding among municipal officialsof the technical aspects of SWD. This suggests theneed for proper skills training and improvements inorganizational structures and procedures. While therehave been a number of capacity-building programs

The extremelyunhealthy

environment inwhich these

scavengers live,often in the

vicinity of thedumpsites,remains a

criticalproblem.

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on urban environmental planning and management,most of these have been add-on components ofinfrastructure projects and are not sufficiently in-depth and comprehensive. SWD operationsinvariably require knowledge of a range of skills otherthan technical skills, such as conflict management,negotiation with adjacent municipalities for jointoperations of common SWD facilities, and organizingscavengers for house-to-house collection.

One other skill that needs to be strengthenedamong municipal authorities concerns the fundingof SWD operations, including the acquisition of theappropriate technology or improvements to existingfacilities, and operations and maintenance. Mostdeveloping Asian cities lack sufficient financialresources to build, operate, and maintain betterSWD facilities. However, possibilities exist foralternative funding and operating approaches suchas privatization of the facility, as has been done inMalaysia, or through BOT schemes as was done inHong Kong, China.

Adopting such approaches requires specialtraining of municipal officials in the areas of projectfinancing and contract management. It also requiresthat appropriate legal and financial frameworks forsuch contractual arrangements with the privatesector be put in place, together with an effectiveperformance monitoring system.

With increasing urbanization and economicgrowth in Asia, effecting the necessaryimprovements to existing SWD practices indeveloping Asian cities needs comprehensivenational legislation to provide the appropriateenvironmental and health guidelines, technicaldesign standards, and operating procedures. Suchlegislation should also provide guidelines forintermunicipal cooperation for common facilities,contractual arrangements with the community andprivate sector, and partnerships with waste pickers.This legislation is essential not only in setting the

One other skillthat needs to bestrengthenedamongmunicipalauthoritiesconcerns thefunding of SWDoperations.

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overall policy for solid waste management, but alsoin providing the necessary “rules of the game” forall the actors involved. After all, improvements toexisting SWD practices are not the responsibility ofgovernment alone.

GOOD PRACTICE ON SOLID WASTEMANAGEMENT

Suzanne ArdosaBenchmarking CoordinatorCebu City, Philippines

The ADB Benchmarking Project providedtraining, focused on the tools and techniques ofbenchmarking and continuous improvement, fortwo Coordinators from each of the 10 participatingcities. As one of the Cebu City Coordinators, I thenstarted training teams that were organized to takepart in the benchmarking process in our city.

We have been saying that our resources arescarce, and that the problems and demands aregetting bigger, but we have to remember that westill have the most important resource—the people.In the Benchmarking Project, we focus on thecapability of the work force. We organized the teamswho were responsible for delivery of services, andtrained them on how they can improve the waythey do things in the city.

During the first three months of the project,we focused on two services—solid wastemanagement (education and enforcement), andhandling public grievances and complaints.

During the first Regional Coordinators’Workshop, we had the opportunity to compare andlearn from one another. When we returned home,we shared our new knowledge with our respectiveteams and all the people involved in the process,

In theBenchmarking

Project, wefocus on the

capability of thework force.

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and used this knowledge to improve our servicedelivery process.

Our advantage in this project is that we areable to see things that most mayors, chief executiveofficers, and managers cannot see, because we workwith the front-line service providers. Therefore, wecan be more detailed in approaching the problems,and eventually help in solving them without anyadditional cost to the city. It is just a matter ofmaximizing the use of available human resources.

Some of the mayors here have not been toCebu, so I would like to give you a little backgroundon my city. It is called the “Queen City of the South”and has a population of about 662,000. Because itis the center of education, commerce, and trade inthe southern Philippines, the daytime populationcan reach one million or more. We have 18councilors, 16 of whom are elected, while the othertwo represent the Association of Barangay Councils(the lowest LGU in the Philippines), and the youthcouncil, respectively. We have 5,314 personnel, andour budget in 1999 was about P2.8 billion(US$70 million).

There are 20 departments. For easycoordination in the delivery of the services, theyare grouped into six clusters:

• fiscal management;• social services (health, education, and social

welfare services);• infrastructure (planning and engineering);• support service (supply and property

management);• law and order (police, traffic management);

and• environmental services (agriculture and

public services).

Solid waste management is the first servicethat we worked on under the Benchmarking Project

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because it is a critical service for city residents andbusinesses. There are five key elements in solidwaste management: education, collection, transfer,disposal, and enforcement. Under the project, wefocused only on education and enforcementbecause these areas are manageable. Besides, citieshave varied approaches in collection, transfer, anddisposal of garbage, issues that were too big tohandle in this project.

Education Approaches

Under the education process, we learned about thebest practices in other cities, which we could adoptor learn from, improve on the strong points, andsubsequently apply in our respective cities.

In Indonesia, the Adipura Awards acted as anational incentive in implementing cleanlinessprograms in the cities. Semarang has the “K-3”program (Kapersihan, Kaindihan, and Katartiban:cleanliness, beauty, and orderliness). Kuantan,Malaysia, uses the health license requirement forfood handlers to ensure health education, includingsolid waste practices. Before a health license isissued, the applicant has to undergo a seminar onhealth education and solid waste managementpractices. Shanghai practices waste recycling;households separate wastes at source for privatesale. This is a very successful practice because itreduces the volume of garbage by 30 percent. Inthe cities of Cebu (Philippines) and Colombo (SriLanka), a pilot project involving school children incomposting and recycling of wastes is beingimplemented in model schools.

In the Benchmarking Project, we talk aboutmeasurements, not as a way of determining who isdoing well or badly, but as a way of monitoring ourperformance. We need to know if we are costeffective, and if the people are satisfied with the

There are fivekey elements in

solid wastemanagement.

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level or quality of service that we are giving them.In the education program, we are looking at thecost per head of population, the number of personsreached by the program, the change in solid wastepractices attributable to program, and the level ofsatisfaction of the people.

In Cebu City, the education program is anad hoc program that we implemented at thecommunity level, and we were successful in doingit in the schools because it has been integrated intothe school curriculum. We were able to reach 100percent of the target group, or 116,000 students ata cost of US$0.43 per student.

We shared the experiences of other citieswith our city teams, and from those experiences,they have proposed to create a solid wasteeducation unit in the Department of Public Servicesfor an integrated approach to waste reduction,segregation, and recycling. It was also proposed toexpand the target groups to include housewives andother sectors of society to increase public awarenesson the importance of solid waste management.

Enforcement Approaches

In the enforcement process, the best practicesinclude

• deputizing individuals and CBOs in Cebu Cityto enforce the law and issue citation ticketsfor offenders;

• using a neighborhood watch in Indonesia;• annual refresher training courses using several

agencies in Shanghai;• subsidizing the costs of bins; and• notification of and commitment to collection

times in Bangalore.

We were ableto reach 100percent of thetarget group, or116,000students at acost of US$0.43per student.

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We measured our performance by lookingat the number of complaints about solid wastenuisance per head of population served, the averagetime from initial report to inspection or officer’sreport, and the average time from report tocompliance or further action.

In Cebu City, we have very strongparticipation of the private sector and activeinvolvement of some village captains. The strongpolitical will of our mayor is helping greatly intackling the issue of solid waste management. Wehave an adequate budget in this undertaking. Thecity is providing vehicle and other support as needed,and appropriate city ordinances are in place.

There are still challenges to face, likedefining the roles of participating agencies so thatthere will be no overlapping or buck-passing as towho should do what. We also had to contend withsome adverse public reaction and poor participationof some barangays officials during the initialimplementation of project. We need to increase thevisibility of enforcers and improve their morale byproviding them with uniforms, and upgrade ourcomputer database to allow no-compromisepenalties for repeat offenders.

In summing up, benchmarking is a strategythat we find very effective in driving continuousimprovement because we are able to compare ourcity with other similarly situated cities. We are ableto learn about and improve on the experiences ofothers, and allow rank-and-file employees toparticipate in improving their ways of doing things.This is made possible by recording processes,analyzing them, and applying improvements.

In closing, I would like to say that we canalways do something to improve the service deliveryof our cities. If we are good today, we can be bettertomorrow, and the improvement will go on. Thereis no perfect way of doing things because there isalways a better way.

If we aregood today,

we can bebetter

tomorrow,and the

improvementwill go on.

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Meeting Challenges in the Next Millenium

n this era of globalization, competitiveness,rapid urbanization, and localization (i.e.,shifting of powers, responsibilities, and

accountabilities from national governments to localgovernments), we cannot ignore the role ofmunicipalities in attracting investments, providingemployment, and delivering basic services. At thesame time there are increasing pressures on themunicipal governments as a result of rising residents’expectations with regard to the quantity and qualityof public services. These trends are likely toaccelerate in the future.

Mr. Keshav Varma of the World Bankdescribes the likely environment that municipalitieswill find in the 21st century, and how municipalitiescan successfully meet the challenges that they willface. He also discusses the role that donors and otherdevelopment agencies can play in assisting themunicipalities to successfully meet their challenges.

Mayor Alvin Garcia of Cebu City, Philippines,shares his vision for Cebu in 2010, and outlines hisstrategy for achieving this vision.

Mr. Terry Barnes of Fairfield City Council,Australia, discusses how the City of Fairfield hasused new strategies, systems, staff structure, andarrangements to tackle the complex problems andissues that face his community at the eve of thenew millennium. The Council, with theparticipation of the community, first set a clear

I

VIII. MEETING

CHALLENGES IN THE

NEXT MILLENNIUM

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vision, then translated it into outcomes, alsoensuring that the supporting systems (e.g. output-based budgets, opportunity costs, and projectevaluation) were in place.

AN OVERVIEW

Keshav VarmaManager, Urban Development Sector UnitEast Asia and Pacific Region, World Bank

This presentation is about the 21st century. I willmake an effort to take you through a different kindof perspective from the one we have beendiscussing, to include not only the perspective oflivability, which includes quality of life and solidwaste management, water, and sanitation, but thatof competitiveness and good governance as enginesof growth. I will also discuss the role that we expectcities to play in the future.

I came across several interesting forecastsabout what the future holds on urbanization. Mostfuturologists say that more than 90% of the worldpopulation growth will be in developing countries,and that crime will be the fastest growing industryin the world. They also say that the disparitybetween the poor and the rich will continue toincrease, and technology will have no respect forinternational boundaries. Interestingly, thecomplexity of infrastructure will need to bedeveloped more underground than above ground.

All these issues lead us to look at cities in adifferent perspective because of globalization, theintense pace of urbanization, devolution to localgovernments, and empowerment of the people.

It is estimated that by 2010 half of the world’spopulation will be living in the urban area, and halfof them will be poor. But by 2020, two thirds of the

It is estimatedthat by 2010

half of theworld’s

population willbe living in the

urban area, andhalf of themwill be poor.

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world’s population will be living in urban areas.Cities will become the loci of growth, jobs, andwealth but what roles can they play as fundamentalspatial units for global economy?

The new challenges that cities will be facingare poverty and slums, pollution, unemployment,social tensions, crime, and insufficient urbanservices, especially water, sanitation, solid wastes,transport, and traffic. Once globalization andinformation technology take center stage, the shapeof cities will dramatically change, and antiquatedlaws and insufficient frameworks will put morepressure on them. Small solutions to enormousproblems will likewise be a continuing challengeto most city managers.

Globalization

Globalization is a fact of life. It will determine theforces that will affect the roles of cities in the globalenvironment. One such force is informationtechnology. Information technology will create anew definition of the work place and workingpractices. It will change the way we work and wherewe work. It will influence urban planning—whetherto go for development of central business districts,with a core right in the middle of the city ordecentralized work spaces. Information technologymay no longer require people to travel from thesuburbs to the central core, as it will be moreconvenient to work at home.

The rise of the middle class as a focal pointto global aspirations is another important force. InIndia, for instance, it is estimated that the numberof middle-class people will be between 200 to 300million. This middle class is going to play a verymajor role in the future of our cities, which is veryclearly evidenced in cities like Bangalore andHyderabad where the middle class already has

Globalization isa fact of life. will determinethe forces thatwill affect theroles of cities inthe future.

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global aspirations, e.g. in developing humanresources to meet the needs of informationtechnology, computer software development, etc.

In the world of globalization, cities will haveto reinforce their competitive advantage. They willbecome vulnerable to stagnation if they remaininefficient and unproductive. They cannot hidebehind national boundaries because the globalenvironment will not tolerate mediocrity, or below-par skills in human resources. A competitive milieuthat abounds with many specialized suppliers willdefinitely change the labor market, and provide easeof international sourcing. City managers willtherefore have to look at the future under a totallydifferent paradigm and determine how their city—like Bombay or Bangalore or Bangkok or Manila—is contributing to the global economy and how thecity can improve its present position. I think theentire way of thinking of city management will haveto be redefined. City managers will have toconcentrate on building sustainable institutions bybringing professional people into the business ofcity government, enhancing morale, and buildingexternal alliances. Rapid urbanization is inevitable,but city managers will always be in a strategicposition to plan for it. They need to have a visionof the future, and be prepared for it.

Four Pillars of Urban Policy

As a development partner of cities, we at the WorldBank are looking at four pillars of urban policy forcities of the future: good governance, livability,competitiveness, and bankability.

Good governance requires professionalism,transparency, and accountability of local officialsto maintain high morale of city employees. It shouldbe supported by continuous capacity building ofemployees. Governance is also fragile, and building

We at theWorld Bank

are looking atfour pillars ofurban policy

for cities ofthe future: good

governance,livability,

competitiveness,and bankability.

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sustainable governance structure is a long-term goal.Good governance requires close partnerships withCBOs and ensuring that the urban poor areempowered and equipped to participate in decisionsthat affect them.

Another concern that we have right now islivability of cities. Rapid urbanization and highconsumption rates are rapidly expanding theecological footprints of cities. Cities will need tocompletely reinvent solid waste management, andwater and urban sanitation. They have to improvethe use of green spaces and urban agriculture, andoptimize present assets and utilities. They mustmake some very tough decisions to really maintaincities in harmony with the environment andecological principles.

An important aspect, which will have adirect bearing on livability of cities, is crimeprevention. As mentioned earlier, crime will be thebiggest growth industry in the urban world. Citieswill therefore have to deal with it directly andpublicly, and the best thing to do is attack organizedcrime first.

The last point is bankability. There is ascarcity of resources in cities, such that per capitainvestment in infrastructure is unacceptably low.We will need to run cities in such a way that theycan be credit rated, so that they can becomebankable in accessing capital markets. However,bankability is not merely a financial issue. It shouldalso be seen as an aspect of civic pride,empowerment, partnership, and a more assertiverole for cities.

Crime will bethe biggestgrowth industryin the urbanworld.

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DEVELOPING A VISION AND STRATEGY

Alvin B. GarciaMayor, Cebu City, Philippines

Former US President John F. Kennedy, during hisinauguration in 1960, said: “The torch has beenpassed to a new generation of leaders born in thecentury.” I find this quote very relevant to us todaybecause as centennial mayors, we will be bringingour cities to a new millennium. I think this is a greathonor, but it entails a very great responsibility todo something for our cities.

Today, cities are confronted with so manyproblems that they are “cities under siege.” Theyhave to address rapid population growth,environmental degradation, and increased demandfor infrastructure and basic services. They are alsobaffled by rising standards and expectations ofpeople, and devolved functions of nationalgovernments without adequate support and fundsto carry them out. I would also like to add that citiesare competing in a global community because afterall, when everything is said and done, you and I,all the mayors are actually in competition with oneanother—for foreign direct investments, exports,and tourism.

Cebu City had almost 700,000 foreign andlocal tourists in 1998.That may not seem many, butfor a small city like ours, it can mean a lot ofdifference to the local economy. Our export andimport trade reveals that we export more than weimport, although this is not the general case in thePhilippines. We have a very strong furniture andfashion jewelry industry, which is the main sourceof exports.

As of March 1999, our total labor force was322,000. Of these, 1.6 percent or 5,207 wereunemployed, while 35,793 were under-employed.

All the mayorsare actually in

competitionwith one

another—forforeign directinvestments,exports, and

tourism.

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The labor and tourism statistics are very importantto me because our vision of Cebu will have a heavybearing on these two parameters.

Cebu City’s Vision

Cebu City’s Executive and Legislative Agenda spellsout the vision of the city in 2010. We do not wantto just deliver the basic services; we want to go astep further to bring about increased tourism, zerosquatting, full employment, and improved internalsystems and procedures.

The principal part of the vision concernstourism. We want to be a major tourist destinationlocally and hopefully regionally in Asia. For thispurpose, we are trying to benefit from our culturalheritage by projecting Cebu as the capital ofChristianity in Asia because it is where FerdinandMagellan, the Spanish conqueror, landed and died.We are making parks and monuments of Magellan,and sprucing up old buildings to make them moreappealing to tourists. We also expect that ourwaterfront development project will convert theindustrial slum into something like Fishermen’sWharf in San Francisco, and make it a favorite touristdestination in the future. This project has beenstarted and it will be finished in 2004.

One of the main problems that we have issquatting, which is mainly caused by the inabilityof the government and the private sector to providehomes at affordable prices. We have observed thatall real estate developers are concerned withbuilding concrete roads, gutters, and sophisticateddrainage in their housing projects. But most peopledo not need those. They probably need a few squaremeters of land, a small house, gravel road insteadof asphalt road, open canal instead of sophisticateddrainage, and for sure, more affordable housing.Right now, we are allocating much of our resources

One of the mainproblems thatwe have issquatting.

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to buying land so that we are ready in the event ofa demolition or relocation of squatters.

Another aspect of the vision is fullemployment by the year 2010. I dream that by thenthere will be no person in my city who will say he orshe does not have a job. It seems to be a very difficultthing to do, but we have started on the path torealizing this dream. One way is through the 300-hectare reclamation that we are pursuing, which isfunded by a US$100 million loan from Japan’s OECF.This area will not be sold as commercial or residentialland, but leased out as an industrial zone. It willbecome another export processing zone, and therebyprovide more employment in the future. Right now,we have a 100-hectare export processing zone thatis very close to the city. It employs 35,000 people.So if we have 300 hectares, we will have more than100,000 jobs available. The Waterfront DevelopmentProject, which will have souvenir shops, hotels, andrestaurants, will employ another 20,000 persons.

The fourth part of the vision is improvementof our internal systems and procedures for bettermanagement and control, better delivery of services,and better public accountability.

Achieving the Vision

We realize, of course, that we cannot achieve thevision by ourselves or by government funds. That iswhy we engage in partnerships with the privatesector in building our infrastructure facilities. Wealso advocate corporate citizenship wherebysuccessful corporations are encouraged to give backsomething to society in the form of outright grantsfor human resource development. After all, they owetheir success to the people who patronize theirbusiness.

We are also engaged in benchmarking andcontinuous improvement. That is why I fully

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supported the Benchmarking Coordinators toparticipate in the workshops of ADB’s BenchmarkingProject, and allowed the Coordinators to train teamsto improve our public services.

Another strategy is human resourceempowerment. In everything that we do, we alwaysconsult with stakeholders so that they can playactive roles in our activities, and to obtain their fullsupport to develop the city. For instance in thewaterfront project, we called all the vendors,squatters, and all the affected citizens, and had adialogue with them. We told them our plans,showed them the benefits that they can receive, andoffered them a relocation site, so that the area forwaterfront development would be emptied.

Use of information systems is anotherimportant strategy. I think that our city is the mostadvanced in the Philippines in information systems,particularly geographic information systems (GIS).GIS enables us to plan easily and we have manyapplications. We also constructed a new officebuilding where every department head will have acomputer connected to a network. This way, I willno longer write memos on pads because we cancommunicate via the network. The cabling alonefor this project will cost us about P11 million.

Forging sister city relationships, especially ifyou have a sister city in a developed country, canbring you many benefits because such cities havemuch to offer. Many hospitals in Australia andCanada are closing down because of the installationof new hospital systems. Through sister cityarrangements, you can ask them to donate hospitalbeds and other hospital equipment to your own city.

I have a sister city arrangement with Xiamen,China, so we have an exchange. The Chineseteachers in Cebu speak the dialect of Xiamen, so Iasked the Chinese community to send up to 15teachers to Xiamen. In return, they gave me a brandnew fire truck. The other sister city of Cebu is

In everythingthat we do, wealways consultwithstakeholders sothat they canplay active rolesin our activities.

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Kaohsiung. I sent a dance troupe of about 30 peopleto perform there so that they would become familiarwith Philippine culture. I am proud to say that inreturn, they gave us 100 buses (7-year-old), whichenabled us to run a bus transport system in the city.

I mentioned at the outset that municipalitieswill be competing with one another in the globalcommunity. However, as we approach the newmillennium, there is a need to work together toachieve our common goals. One way is byinstitutionalizing an Asian Cities Forum, similar tothe present Forum. We all know that the assistanceand guidance of the ADB Institute and other donorpartners will not be there forever. In a few years,we will be left to our own resources. Before thattime, we should institutionalize what we havestarted and learn from one another’s best practices,as in benchmarking. We should try to have a life ofour own without really getting any external help.In the end, it is ourselves and our communities thatwill make the improvement—not ADB, not theWorld Bank, not anybody else.

REINVENTING GOVERNMENTIN A DEVELOPED CITY

Terry BarnesCity Manager, Fairfield City Council, Australia

Fairfield City Council is the fifth-largest localgovernment in Australia. It has twice theunemployment rate of the State of New South Walesand a resident population of which more than50 percent were born overseas. The issue ofmanaging limited resources amongst competingpriorities has been high on the organization’sagenda. Traditionally, the majority of expenditurehas been tied to existing commitments. Other key

In the end,it is ourselves

and ourcommunities

that willmake the

improvement—not ADB, not

the WorldBank, not

anybody else.

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projects have competed with resources at themargins. Fairfield City, under the leadership of theelected members and City Manager has madesignificant progress towards addressing thefundamentals of effective resource allocation. Theprocess includes establishing a clear vision andpriorities, identifying outcomes and outputs,restructuring the organization, establishing servicestandards, identifying opportunity costs, andimplementing criteria for project evaluation.

Local Government in Australia

Australia has three levels of democratic government,i.e., the national government, state governments foreach of the six states, and approximately 750 localgovernment authorities.

Councils vary greatly in size of populationand area. For example, in Western Australia, whichhas the largest landmass, there is a Council with anarea of 184,000 km2 and a population of less than1,000. Many city councils in cities such asMelbourne and Sydney service populations between40,000 to 200,000 with areas between 30 and 100km2. The largest Council in Australia is BrisbaneCity Council with a population of almost 1 million.

Fairfield City Council

Fairfield City Council, which is one of forty Councilsin the Sydney metropolitan area, has a populationof just under 200,000, services an area ofapproximately 102.5 km2 and incorporates 27suburbs. While mainly residential, Fairfield City ishome to regional industrial estates at Wetherill Parkand Smithfield as well as local industry at Yennoraand Lansvale. There are two major business andretail centers at Fairfield and Cabramatta and a

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number of suburban shopping centers. Largeexpanses of nonurban residential land characterizethe suburbs of Horsley Park and Cecil Park.

Accommodation in Fairfield comprisesmainly detached housing with some relatively smallpockets of residential apartments surrounding theolder established town centers. In recent times, therehas been a growth in medium density development,such as townhouses and villa homes throughout thearea.

Fairfield’s population is characterized by ahigh degree of ethnic diversity, with 53.5 percentof the population born overseas. A large number ofyoung families and a growing number of agedpeople also characterize Fairfield. The culturaldiversity is the most outstanding feature of FairfieldCity and is reflected in the new city motto:“Celebrating Diversity”. It is estimated that 191,000people live in the City of Fairfield, making it thefifth most populated local government area inAustralia.

Framework for Effective Resource Allocation

In early 1997, the Councilors of Fairfield CityCouncil decided to review the direction of theorganization and assess the environment in whichthey were operating. They identified a wide rangeof agents of change impacting on the Council.

As a result of strategic thinking, the Councilhas had a major overhaul of its direction. A clearand achievable vision is driving the planning andbudgeting system. Place and system managementis providing solutions to complex problems. Anorganizational restructuring has improvedaccountability. A purchaser/provider partnership isincreasing our responsiveness to issues andopportunities. Greater value for money and moreappropriate staff management strategies are in place.

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Thus, the Council is ready to tackle a wide range ofcomplex problems and issues that face thecommunity. New strategies, systems, structure, andstaff arrangements provide opportunities that werenot possible a year ago.

One of the most important elements in thesechanges is the effective management of limitedresources amongst competing priorities. Fairfield’sresources, including the Council’s budget, are nowbeing managed within the context of a 10-pointvision that defines community outcomes andstrategic outputs. The system Fairfield now has inplace “unpacks the information” relating toresources across a strategic plan, management plan,service-level agreements, business plans, andindividual work plans.

The environment in which local governmentoperates has changed considerably over the last fouryears. In taking stock of these changes, the Councilorsof Fairfield City Council wished to address thefollowing:

• Accountability—structural reform; per-formance reporting and Independent Pricingand Review Tribunal issues.

• National Competition Policy—Trade PracticesAct; market testing/competitive tendering;costing methodologies; business classi-fications. National competition is a policybeing pursued by the national government inrelation to microeconomic reform. It is apolicy adopted by government enterprises andgovernment departments to demonstrate theircompetitiveness in relation to potentialalternative providers of government servicessuch as the private sector.

• Increased demands and roles as a serviceprovider—customer demands; informationtechnology; environmental pressures; social

One of the mostimportantelements inthese changes isthe effectivemanagement oflimitedresourcesamongstcompetingpriorities.

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pressures; global economy; financialpressures; and expectations for smallergovernment.

• Increased focus on deliberative democracyand achieving outcomes for the community—informed communities; more partnerships;improved direction setting; making asustainable difference for the community.

Fairfield City Council took a strategic viewof its resource allocation and recognized thatallocation of resources, in order to be effective,needed to be integrated with the total futuredirection of the organization and Fairfield City. Thisresulted in a process that started with identifyingthe community priorities and the 10-point vision.These became the foundations for the organizationstructure and the strategic plan. The strategic outputsalso identified through this process form the basisfor output-based resource allocation and budgeting(Box VIII.1).

The main principles identified by FairfieldCity Council were

• Setting the city vision and priorities.• The organization structure: separating

responsibility for effectiveness and efficiency.• A department responsible for outcomes.• Place management and systems management.• Changing the organization culture.• Criteria to support effective resource

allocation

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Setting the City Vision and Priorities

The Councilors worked together to develop a clearvision for Fairfield City. The following ten statementsset out a clear direction for all activities within theCouncil, and drive priority setting.

• A clean and green Fairfield with restoredwaterways and a wide range of open spacesand recreation areas connected into a regionalopen space for recreation and the watersystem.

• Attractive residential areas with avenues oftrees, landscaped streets, and whereinfrastructure is well maintained, with lessconflict and inappropriate activities.

Box VIII.1. Framework for Effective ResourceAllocation in Fairfield City

Why are we doing it

What are we delivering

Is it the most effective &efficient way?

Community PrioritiesCity Vision & PrioritiesCommunity Outcomes

Strategic OutputsCustomer Service Standards

Organization StructureService-Level Agreements

Key Performance IndicatorsOutput Budget

Project Evaluation

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• Employable young people, encouraged tosucceed, able to take advantage of theintegration of schools, opportunities forfurther education, employers, and theCouncil’s information and study assistanceprograms.

• Revitalized urban centers, safe places forpeople to live in, commercial and residentialareas, as well as retail stores, restaurants, andstreet life, taking advantage of the rail stationsand the unique cultural mix.

• Enterprising retail and commercial areas thatprovide opportunities for a full range ofenterprises, from starter business to majorfirms.

• Thriving industrial areas, especially WetherillPark, encouraging high-tech industry andtaking full advantage of its size and regionalposition and links with Asia.

• An accessible city where transport andmovement are safe and convenient, andactivities have been integrated physicallywhere possible.

• A city where services are delivered to meetthe needs of the community on an equitablebasis.

• A city that has maintained its stock of publiclyowned assets in a manner that is fair tocurrent and future generations.

• A place that has a reputation as an excellentplace in which to live, invest, and prosper.

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Figure VIII.1. Fairfield City’s New Structure

ELECTED COUNCILORS

CITY OUTCOMES CITY SERVICES

ENVIRONMENTALSTANDARDS

CORPORATESUPPORT

COMMUNITY

MANAGER

MAYOR

The Organization Structure

To drive the new directions and priorities, andimprove responsiveness to issues and opportunities,the Council restructured the organization (Fig.VIII.1). The new structure provided a partnershipbetween the purchasers of outcomes for the city,and providers of services. It also increased the scopefor partnerships with external agencies and otherlevels of government.

Program and Place Managers workedtogether to ensure that the Council’s activitiesfocused on the outcomes in the vision. Staff withpriority-setting and service-specificationresponsibility (the purchasers) became part of thenew City Outcomes Department.

In keeping with the principles of the NationalCompetition Policy, value-for-money services weredelivered by the new-look Business Units in the CityServices Department.

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The Environmental Standards Department asthe Council’s regulatory arm, deals with buildingand development approvals and environmentalmanagement issues. The clear separation of theresponsibility for managing the regulatory systemfrees those with an outcome responsibility toplay a facilitating role. The Corporate SupportDepartment provides best-practice support services,helping improve decision making and trim costs.

A Department Responsible forAchieving Outcomes

A major change in the organization structurewas the establishment of a City OutcomesDepartment (Box VIII.2). The responsibilities of thisdepartment include the effective use of resourcesto achieve the community outcomes identifiedthrough the vision. This is separate from the CityServices Department, which is responsible for theefficient use of those resources allocated to thedelivery of services.

Box VIII.2. The New Outcomes Department

• Responsible for achieving community outcomes through programs andprojects

• Multidisciplinary team

• Place management

• Staff adopt a suburb (Suburb Support Officers)• Partnership with service providers, industry, government, community groups,

and individuals

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The main program areas within CityOutcomes are

• An accessible city where transport andmovement is safe and convenient andactivities have been integrated physically,where possible.

• A city where services are delivered to meetthe needs of the community on an equitablebasis.

• A city that has maintained its stock of publiclyowned assets in a manner that is fair to currentand future generations.

• A place that has a reputation as an excellentplace in which to live, invest, and prosper.

Place Management and Systems Management

To implement this vision, the Councilors decidedto introduce within the Outcomes Department aninnovative place management model thatrecognizes the unique character of places andsystems within the city. This model is supported bya new organizational structure.

Fairfield City Council faces a range of verycomplex problems that span the entire range ofservices provided within the Council, or in factwithin government. In the past, these problems werebroken down into simplistic actions taken by a“guild” or small self-contained unit of officers fromone profession. All the staff made a contribution tosolving the problem, but no one was accountablefor ensuring delivery of a solution. Frequently,problems that needed integrated actions ended upin the “too-hard basket”.

With a strong focus on the outcomesdetermined in the vision statement, Fairfield CityCouncil has broken that pattern. An alternative wayof looking at the problems is that they are usually

An alternativeway of lookingat the problemsis that they areusuallycontainedwithin either a“place” or“system”.

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contained within either a “place” or “system”. Notall the complex problems that Fairfield City Councilfaces are in a tightly contained “place”. In someinstances, the problems span an entire system, suchas the five creeks of the area, or the open-spacesystem. The system, like a place, becomes the primeresponsibility of an officer. Accountability forimproving that system in line with the vision restswith the officer.

Changing the Organizational Culture

The changes introduced in Fairfield City Councilduring 1998 provide staff with excitingopportunities:

• Role clarity—the purchaser/providerpartnership ensures that some officers taketime out to provide a long-term strategy formaking the vision come true. It removes theconstant battle between day-to-dayoperational issues and the need to be strategicand forward looking. Service-provision staffretain a critical role as advisory experts duringthe development of need assessments,strategies, and priorities, but have theopportunity to find the most efficient way todeliver agreed outputs.

• Ownership—staff can take ownership of aproblem and develop innovative ways toresolve it. They are not limited to oneprofessional discipline; they are not restrictedto historical measures. Problems are notpassed around the organization and do notend up in the “too-hard basket”.

• Leadership—many of the projects ormanagement tasks are performed using teams.This provides team leadership opportunities

Staff can takeownership of a

problem anddevelop

innovativeways to

resolve it.

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for a range of staff, at various levels withinthe organization. In some instances, thisincludes taking on a leadership role incommunity-based activities.

• Accountability—one officer has the authorityand ownership of a problem, and isaccountable for delivering the outcome. Asingle point of accountability is simpler forall the people involved and performance istransparent.

• Improved communication—with a singleaccountable officer, it is easier to locate theright person to deal with an issue or provideinformation to answer inquiries.

• Recognition—in light of all the aboveimprovements, it is easier to identify goodperformance and ensure that staff receiverecognition for their efforts.

An Integrated Approach

The key to Fairfield City Council’s approach toresource allocation has been integrating this issuewith the city’s strategic plan. Resources are managedin the context of the city’s priorities, the desiredoutcomes for the community, and the strategicoutputs of the Council. This integrated approach,together with a review of the organization structureand management processes, forms the foundationfor sound decision making and addresses both theeffectiveness and efficiency of resources. FigureVIII.2 describes Fairfield City Council’s integratedplanning approach.

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Figure VIII.2. Delivering the Outcomes

Priorities & Strategy ..... OutputBudget ..... Budget

Outcomes Department

CommunityPriority

Outcome StrategicOutput

KeyProjects

ServiceDepartment

Less:• Visual pollution• Dirty streets• Rubbish• Syringes

A city freefrom litterandgarbage

Streetcleaning

• Collect dumped garbage• Laws and fines• Education campaign

City services

Environmentalstandards

Criteria to Support Effective ResourceAllocation

Many councils in Australia have developed criteriaby which projects are prioritized. Typically theseinclude the impact on achieving the city’s outcomes,implications of not proceeding with the project, andlong-term budget implications. At Fairfield CityCouncil these are incorporated into a ProjectPlanning Program (PPP). The criteria used byFairfield City Council and Brisbane City Councilare summarized in Box VIII.3.

Fairfield City Council also utilizes anopportunity-cost table. This allows elected officialsto make a conscious choice between competingalternatives. For example, for A$20,000, planting

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Fairfield Brisbane Council

• Link to strategic priority • Whole-of-life costing• Project objectives • Payback period• Anticipated community and • Sensitivity analysis

council benefits • Risk analysis• Preliminary work needed • Environmental, social, economic• Implications of not proceeding assessment• 5-year budget projection • Community impact by ward/region• Consultation and involvement • 21-year budget projection

of others• Asset conditions• What are the alternatives?

2,000 seedling trees to achieve a “green city” iscurrently considered a higher priority, given theforthcoming Olympic Games, than constructing 20park bench seats. An extract from this table isprovided in Table VIII.1.

Summary

Faced with the dilemma of limited resources and alow rate base to service the increasing needs of itscity, Fairfield City Council developed an integratedapproach to strategic planning and resourceallocation.

Instead of working at the margins of the city’sresources, Fairfield

• worked out what is to be achieved through a10-point priority statement;

• is currently working out what is being spenttowards each community outcome;

Box VIII.3. Criteria for Prioritizing Resources

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• is assessing whether this expenditure patternfits with strategic plan priorities;

• allocated clear responsibility andaccountability for achieving identifiedoutcomes;

• plans to allocate the budget to the CityOutcomes Department, which has theresponsibility to demonstrate the effectivenessof resource allocation;

• plans to allocate clear responsibility to theservice departments for efficient provision ofservices purchased by the OutcomesDepartment.

The support of Linda Williamson,Manager, Corporate Planning,Fairfield City, for the preparation ofthis paper and accompanyingconference presentation is gratefullyacknowledged.

Table VIII.1. Allocating Resources Through Opportunity Cost

A$10,000 buys.... A$20,000 buys..... A$500,000 buys.....

• 20 park seats • 8 car parking spaces • repair of 850 m of regional• 2 turf cricket pitches • 1 playground unit road 4 lanes wide• 2,000 seedling trees • footpath scrubbing • 14 km of concrete path• mini roundabout machine • pedestrian overbridge• 2 pollutant traps • basic cycleway • 2 amphitheaters• 2 network PCs • 2 steel bus shelters • 2 garbage trucks with• High-pressure hot- • 4 sports field robotic arms water washer irrigation systems

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Concluding Remarks

S.B. ChuaAsian Development Bank Institute

am sure that you will agree with me that wehave tremendously enjoyed the past three days,all made possible by Mayor Kamil and his

dedicated officers. We are grateful for all theexcellent arrangements, not just for the Forum butfor the wonderful dinner and the rich culturalentertainment as well. I would also like to thankthe resource speakers, our co-sponsors, and theparticipants for their collective efforts in makingthis Forum a success.

I have listened with great interest to ourspeakers, and studied the papers on public-privatesector partnerships and residents’ participation asa means of improving service delivery. I noticedthat everybody participated in one way or another,and the breakout sessions were well conducted.The open discussions aroused a lot of interest, andalthough we had an exhausting Forum, nobody fellasleep. I think we have achieved our objectivesand we did it very well.

I am sure we will be going away enrichedwith the friendships that we established here. Withthe knowledge that having met face-to-face throughthis Forum, we can now communicate andexchange views with one another, and helpcontribute to solving one another’s problems,especially through E-mail. If you do this on asustainable basis, you will have contributed to

I

IX. CONCLUDING REMARKS

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meeting one of the key objectives of theMayors’ Forum.

Finally, our resource speakers would like usto carry the following messages back to ourrespective cities:

• The Honorable Minister Mowlana conveyedto us that in today’s world where we are fastbecoming integrated into one globalizedenvironment, we need to share ourexperiences and learn from one another sothat we can contribute to the collectiveupliftment of cities in the Asian region.

• Mr. Jayasuriya, former Mayor of Colombo,and Dr. Masaru Yoshitomi, Dean of the ADBInstitute, would like us to take note that weneed to establish partnerships with others,such as NGOs, the private sector, and theinternational community, in order to be ableto serve our people better.

• A message from Mayor Kamil is that we mustcontinue to interact on issues that confrontus in our work and share our experiencesthrough electronic and other means to helpone another in solving urban managementproblems.

• Dr. Sarat Chandran, Secretary General of theColombo Plan Secretariat, together with Dr.Masaru Yoshitomi, stressed the importance ofgovernance as an issue we must address.

• We must connect with people, engage inconsultations with them, and establish amechanism where people can participate inthe affairs of local government. This is themessage that the mayors from Penang and

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Concluding Remarks

Kuantan of Malaysia, and Mandaluyong,Philippines, have conveyed to us.

• According to Mr. Terry Barnes, Chief ExecutiveOfficer of Fairfield City Council, Australia, weshould establish a vision and focus onoutcomes, not on activities. We should becustomer-focused so that we can deliver therequired services to our citizens in the mostefficient and effective way.

• Congressman Bunye of the Philippineswanted us to remember how to achievemetropolitan coordination and cooperationthrough the continuing search for anappropriate organizational structure.

• Mayor Chatterjee told us that megacities have“megaproblems.” He emphasized with a firmconviction, however, that megaproblemscould be solved in simple ways. Federalgovernments can establish the framework butlocal governments must handle theimplementation.

• Mr. Keshav Varma from the World Bank andMr. Preben Nielsen from ADB, who speakfrom the donors’ perspective, told us that ifwe need their financing, we need to gothrough a consultative process with them sothat they can tell us when and how they canlend money to us.

• Mayor Garcia replied with his innovativeways of attracting financing. He told us howto get things done with other people’s moneywithout getting too much into debt. Wecertainly have to remember him for this.

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• Mr. P. U. Asnani, Director, US-AsiaEnvironmental Partnership Programme, wasoptimistic when he told us that we must notgive up hope. If Ahmedabad has been able toturn around its financial position fromhopelessness to profitability within a month,so can we. We can learn from the strategiesthat they have adopted and, if we succeed,he has demonstrated his point. If we fail, wemust have slept during his presentation.

• Mr. Von Einsiedel from UNDP/UNCHS toldus how to handle our solid garbage. Heemphasized the importance of striking abalance in the consideration of critical factorsfor handling and managing solid wastes.

• Our Benchmarking Coordinator from Cebu,Ms. Suzanne Ardosa, spoke to us on the useof best practices for continuous improvementof service delivery.

• The presentation by Fuzhou City in the PRCimpressed us a great deal. It showed how goodmanagement can produce manyimprovements very quickly and effectively.

• The session on good practices for resolutionof complaints and grievances given by Mr.Asnani, Vice President, City Managers’Association of Gujarat, and Mr. Aradhya,Benchmarking Coordinator, Bangalore, wasmuch appreciated by all because the advicewas practical. In different ways, they haveidentified very practical ways for us to followto handle public grievances and complaintssuccessfully without going through a shoutingmatch.

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Concluding Remarks

• On municipalities in the next millennium, Mr.Varma informed us that we will have to facenew challenges—challenges that will be verydifferent from those of today, given theexpected rapid pace of urbanization andintegration of the world into a globalizedeconomy. Cities will be the engines of growth.

• Mayor Garcia noted that in the nextmillennium, cities will be competing with oneanother for the same resources and in thesame areas, e.g. for foreign direct investmentand tourism.

The next question we need to ask ourselvesis “What’s next?” Cebu lit the torch in 1998 andpassed it to Colombo. Colombo is obviously lookingfor someone to carry the torch into the nextmillennium. In our co-sponsors’ meeting yesterday,all indicated their continuing support for the nextForum. With regard to timing, perhaps the eventshould coincide with Mayor Kamil’s birthday tokeep up a tradition that we have now establishedby coincidence, but which has proven to be well-timed for us all.

There is a lot of information to carry backand a lot of good practices to practice. May you allact in a way that will enable you to deliver goodand effective services to the 100 million people that,as a group, you represent.

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List of Participants

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Mr. Weng FulinMayorFuzhou Municipal GovernmentE-mail: [email protected]

Mr. Li HongDirector GeneralForeign Affairs Office of FuzhouMunicipal GovernmentE-mail: [email protected]

Mr. Wu MingdaDirector of ComprehensivePlanning DivisionShanghai Municipal ConstructionCommissionE-mail: [email protected]

Mr. Song ManingVice Section ChiefShanghai Municipal ConstructionCommissionE-mail: [email protected]

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Mr. K.H.N. SimhaMayor of BangaloreBangalore City CorporationE-mail: [email protected]

Mr. Asim BarmanMunicipal CommissionerCalcutta Municipal CorporationE-mail: [email protected]

Mr. Prasanta ChatterjeeMayorCalcutta Municipal CorporationE-mail: [email protected]

Dr. P. K. MohantyCommissioner & Special OfficerMunicipal Corporation of HyderabadFax: (91-40) 322 9430

Dr. Kalpana PandeMayorNagpur Municipal CorporationE-mail: [email protected]

Mr. Uma Shankar GuptaMayorBhopal, IndiaE-mail: [email protected]

Ms. K. Bharati VyasMayorVadodara, Gujarat, IndiaFax: (91-265) 433060; 431505

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Shri T. Venkateswara RaoMayorVijayawada Municipal CorporationE-mail: [email protected]

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Mr. Drs. H. Muchatif Adi SubrataSecretary of SemarangSemarang MunicipalityE-mail: [email protected]

Mr. A. Wasis PoerwawinataHousing AgencySemarang, IndonesiaE-mail: [email protected]

Mr. Bambang SungkonoChairman of Regional DevelopmentPlanning BoardJakarta Capital City AdministrationFax: (62-21) 5262849

Mr. Sugiono SoewahjoJakarta, IndonesiaFax: (62-21) 8091056

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Mr. Thongvanh Phan-RajsavongPresidentVientiane Urban Development andManagement CommitteeE-mail: [email protected]

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Mr. Saisana PrathoumvanVice PresidentVientiane Urban Development andManagement CommitteeE-mail: [email protected]

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Dato’ Talaat Bin HusainMayorIpoh City CouncilE-mail: [email protected]

Dato’ Mohamad Bin SaibPresidentKuantan Municipal CouncilE-mail: [email protected]

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Mr. Mohammad YousafAdministrator, Peshawar MunicipalCorporationE-mail:[email protected]

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Mr. Benjamin Abalos, Jr.City MayorMandaluyong CityE-mail: [email protected]

Mr. Gelacio ManalangMayorTarlac CityE-mail: tar [email protected]

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Mr. Erlito DuduacoChief Information OfficerTarlac CityE-mail: tar [email protected]

Dr. Jerome LapenaCity Health OfficerTarlac CityE-mail: tar [email protected]

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Mr. Omar Z. KamilMayor, Colombo Municipal CouncilColombo City, Sri LankaE-mail: [email protected]

Mr. M. A. V. PereraMunicipal CommissionerColombo Municipal CouncilColombo CityE-mail: [email protected]

Dr. Fahmy IsmailDeputy Municipal CommissionerChief Municipal Veterinary SurgeonHead-Institution Development DivisionColombo Municipal CouncilColombo CityE-mail: [email protected]

Mr. Charan AmaratungaSecretary, Advisory CommitteeColombo Municipal CouncilColombo CityE-mail: [email protected]

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Mr. A.T.K. ChandradasaMayor, Municipal Council MoratuwaMoratuwa, Sri LankaFax:(94-1) 645384

Mr. Rohana DissanayakeMayor, Matale Municipal CouncilMatale, Sri LankaTel: (94-66) 22276

Mr. Harindra DunuwilleMayor, Kandy Municipal CouncilKandy, Sri LankaE-mail: [email protected]

Mr. A. H. M. JafeerMayor, Badulla Municipal CouncilBadulla, Sri LankaFax: (94-55) 22114

Mr. Ananda MunasingheMayor, Negombo Municipal Council,Negombo, Sri Lanka

Mr. Jayaratne PereraMayor, Dehiwala-Mt. LaviniaMunicipal Council,Dehiwala, Sri Lanka

Mr. A.W.D. Bandula SeneviratneMayor, Nuwara-Eliya Municipal CouncilNuwara- Eliya, Sri LankaFax: (94-52) 2274

Mr. G. H. Nimal Chandrasiri de SilvaMayor, Kurunegala Municipal Council,Kurunegala, Sri Lanka

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Mr. S. Chandra SilvaMayor, Kotte Municipal CouncilKotte, Sri Lanka

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Mr. Vu Hung VietVice-ChairmanPeople’s Committee of Ho Chi Minh CityHo Chi Minh City, Viet NamE-mail: [email protected]

Mr. Pham Duc TriAssistant to the DirectorMinistry of Foreign AffairsHo Chi Minh City, Viet NamE-mail: [email protected]

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Dr. S. R. MaleyExcel Industries LimitedMumbai, IndiaE-mail: [email protected]

Ms. Choong Tet SieuAssociate EditorASIAWEEK HongkongE-mail: [email protected]

Mr. Dinesh WeerakkodyDirectorSmithkline Beecham Mackwoods Ltd.,Colombo, Sri Lanka

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Mr. H.B.S. AradhyaDeputy CommissionerBangalore City CorporationBangalore, IndiaE-mail: [email protected]

Ms. Ma. Suzanne O. ArdosaExecutive Assistant IIICebu City GovernmentCebu City, PhilippinesE-mail: [email protected]

Mr. P.U. AsnaniVice PresidentCity Managers Association of GujaratCentre for Environmental Planning &TechnologyAhmedabad, IndiaE-mail: [email protected]

Mr. Terry BarnesChief Executive OfficerFairfield City Council, NSW, AustraliaE-mail: [email protected]

Ms. Rhina BharCouncillor/WhipPenang, MalaysiaE-mail: [email protected]

Mr. Ignacio BunyeFormer Mayor of Muntinlupa Cityand Congressman,House of RepresentativesQuezon City, PhilippinesE-mail: [email protected]

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Mr. Alvin B. GarciaCity MayorCebu City, PhilippinesE-mail: [email protected]

Mr. Robert HoodAustralian ContinuousImprovement GroupMelbourne, Victoria, AustraliaE-mail: [email protected]

Mr. Phummisak HongsyokMayorPhuket, ThailandE-mail: [email protected]. Karu D. JayasuriyaFormer Mayor, Colombo CityColombo, Sri LankaE-mail: [email protected]

Dr. Dinesh MehtaRegional Adviser (South Asia)Urban Management Program(UNDP/UNCHS)New Delhi, IndiaE-mail: [email protected]

Mr. S. Alavi MowlanaMinisterMinistry of Provincial Councils andLocal GovernmentSri Lanka

Mr. Keshav VarmaManager, Urban Sector (East Asia)World Bank, USAE-mail: [email protected]

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Mr. Nabaroon BhattacharjeeProgram Officer & RegionalTraining AdvisorRegional Urban Development Office/USAIDNew Delhi, IndiaE-mail: [email protected]

Dr. Sarat ChandranSecretary-GeneralThe Colombo Plan SecretariatColombo, Sri LankaE-mail: [email protected]

Mr. Nathaniel von EinsiedelRegional CoordinatorUrban Management Program(UNDP/UNCHS)Klong Luang, Pathumthan, ThailandE-mail: [email protected]

Mr. Christoph FeyenTeam LeaderSri Lankan-German DevelopmentCooperationColombo, Sri LankaE-mail: [email protected]

Ms. Sharadbala JoshiSenior Programme OfficerGTZ Coordination OfficeIntegrated Slum Development NagpurNagpur, IndiaE-mail: [email protected]

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Mr. Ananda MallawatantriDirectorUS - Asia Environmental PartnershipProgramColombo, Sri LankaE-mail: [email protected]; [email protected]

Mr. Akira MurataDirector, Programme forPublic AdministrationThe Colombo Plan SecretariatColombo, Sri LankaE-mail: [email protected]

Ms. Pushpa PathakUrban SpecialistWater and Sanitation Programme-South AsiaUNDP-World Bank, New Delhi, IndiaE-mail: [email protected]

Mr. Prafulla Man Singh PradhanProgramme ManagerThe Urban Governance Initiative (UNDP)Kuala Lumpur, MalaysiaE-mail: [email protected]

Ms. Noelin PereraUS-Asia Environmental PartnershipProgramColombo, Sri LankaE-mail: [email protected]

Ms. Allyson ThirkalWorld BankColombo, Sri Lanka

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Mr. Preben NielsenManager, Water Supply,Urban Development and HousingDivision (West)ADB Headquarters, PhilippinesE-mail: [email protected]

Mr. Tadashi KondoResident RepresentativeSri Lanka Resident MissionColombo, Sri LankaE-mail: [email protected]

Mr. Naved HamidSenior Strategy and Policy OfficerADB Headquarters, PhilippinesE-mail: [email protected]

Mr. Munawar AlamProject Implementation OfficerAsian Development BankNew Delhi, IndiaE-mail: [email protected]

Ms. Mildred R. VillarealConsultantADB Headquarters, PhilippinesE-mail: [email protected]

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Dr. Masaru YoshitomiDean, ADBITokyo, JapanE-mail: [email protected]

Mr. S.B. ChuaDirector, Capacity Building, ADBITokyo, JapanE-mail: [email protected]

Ms. Penelope PriceLearning and Training Methods Specialist,ADBITokyo, JapanE-mail: [email protected]

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Abbreviations

ADB Asian Development BankBOT build-operate-transferBT build-transferCBO community-based organizationCIDA Canadian International

Development AgencyCMAG City Managers’ Association of

GujaratDOT develop-operate-transferGDP gross domestic productJICA Japan International

Cooperation AgencyLGC Local Government Code

(Philippines)LGU local government unitMFD Macro Founder and

Developers Inc.(Philippines)

MMA Metropolitan Manila AuthorityMMC Metropolitan Manila CommissionMMDA Metro Manila

Development AuthorityMPK Majlis Perbandaran Kuantan

(Kuantan Municipal Council)NGO nongovernment organizationNIMBY not in my backyardODA official development assistanceOECF Overseas Economic Cooperation

Fund (Japan)PO people’s organization

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SERI Socio-Economic andEnvironmental Research Institute(Penang)

SPI Sustainable Penang InitiativeSWD solid waste disposalUNCHS United Nations Centre for

Human SettlementsUNDP United Nations Development

ProgrammeUN-ESCAP United Nations Economic and

Social Commission for Asiaand the Pacific

ppp.worldbank.org · 2019-05-02 · shortages of water and power characterize urban centers in...

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