Decentralization Pakistan

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Water and SanitationProgram for South Asia 1

Pakistan's Decentralization:Implications and Challenges forDelivering Water and Sanitation

Services

Raja Rehan Arshad


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Big Bang Decentralization

Local Government Ordinancepromulgated on August 14, 2001

Devolution of political and fiscal authority toelected Local Governments

Decentralization of administrative authority


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Pre-Devolution Context Four Provinces

Sind

Balochistan North-West Frontier Province

Punjab

Districts

Sub-divisions for deconcentrated arms of theprovincial government administration andtechnical line departments

W&S service delivery being a provincial

responsibility


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Major Impediments Overlap of jurisdictional assignment

More than one technical department responsible

for W&S Public Health Engineering Department, and Local

Government and Rural Development Department in ruralareas

W&S authorities and/or municipalities in urban areas

Centrally planned system of service delivery

Absence of accountability between theproviders and the client


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Major Impediments (Cont) Lack of capacity and appropriate institutional

framework for sectoral planning; preparation

of financially viable sector investments; andmanagement of demand responsiveinvestments

Absence of strategic vision in particular theimplications of urban and rural transformationfor the W&S sector.


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W&S Service Delivery Situation W&S systems investments without

consideration of O&M arrangements

Centrally financed, operated and managed In the last decade, move towards community

ownership, and operation and maintenance, butold systems still a major liability

Both in rural and urban, public sector water utilities

heavily subsidized by the government In rural areas, cost recovery less than 10 percent

In urban areas, cost recovery between 10 to 40percent


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Local Government Ordinance (LGO)

2001 Creation of approximately 100 district

governments and district councils (average

population of a district is one million) Creation of approximately 350 tehsil

municipal administrations and tehsil councils(average population of a tehsil is 500,000)

Creation of approximately 7,500 unionadministrations and union councils(population ranges from 18,000 to 28,000)


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LGO 2001 (Cont ) Direct elections have been held only at the

Union level The Deputy Mayor of the Union Council is a

member of the Tehsil Council The Mayor of the Union Council is a member

of the District Council All the union councilors in a tehsil and district

elect the Deputy Mayor and Mayor for therespective tehsil and district The Mayor and Deputy Mayor have to contest on

a Joint Ticket (one vote for both)


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Salient Features of the LGO 2K1 Complete fiscal authority to each level

However during transition, the province is maintaining somedecision making with regards to appointment of staff, setting

of tariffs and tax structures, etc. Rural Urban divide has been removed

Mega cities (million plus) have become City Districtsand the remaining districts are referred to asCommon Districts comprising urban and rural areas

District, Tehsil, and Union are not subordinate to oneanother

Principle of Subdiarity is the main theme

Tax base for each level


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Salient Features (Cont ) The new law has:

Decentralized service delivery providers

and assets (approximately 30 provincialdepartments ranging from social servicessuch as health and education to agricultureand soil conservation)

Removed jurisdictional and functionaloverlap of institutions


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Salient Features (Cont ) Introduced a new system of transparency and

accountability

Empowered local governments to enter into arange of institutional arrangements fromcommunity owned systems to contracting out andcontracting in of services

In order to ensure flexibility districtgovernments can transfer functions to thelower levels


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Salient Features (Cont ) The lower levels can assume functions

provided they finance them themselves and

get appropriate clearances To strengthen participation two institutions

have been created:

Village/Neighbourhood Councils, which will be

elected

Citizen Community Boards, which will have to beregistered with the district government


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COMMON DISTRICT ZILA COUNCIL-

DISTRICT

GOVERNMENT TEHSIL COUNCIL-

TEHSIL MUNIPAL

ADMINISTRATION

UNION COUNCIL-UNION

ADMINISTRATION

VILLAGECOUNCIL/NEIGHBOURHOOD COUNCIL

CITY DISTRICT ZILA COUNCIL-CITY

DISTRICT

GOVERNMENT TOWN COUNCIL-TOWN

MUNICIPAL

ADMINISTRATION

UNION COUNCIL-UNION

ADMINISTRATION

VILLAGECOUNCIL/NEIGHBOURHOOD COUNCIL

Different Tiers


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Key Outcomes (Cont ) Introduction of efficiencies through

encouragement of institutional and

organizational robustness, in particular theintroduction of: Subsidiarity

Co-Production

Public-Private Partnership Regional management of services including

regional utilities, management of multi-villageW&S systems, etc.


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Key Outcomes (Cont ) Focusing on direct lines of accountability with

a focus on information transparency and

localized decision making

Participation of citizens in decision making

and service delivery through the Citizen

Community Boards (CCBs), through which25 % of the development budget has to be

spent


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Key Outcomes (Cont ) Provincial Finance Commissions have

been established for intergovernmental

transfers Criteria includes:

Population

Poverty

Backwardness Resources

Incentive (Punjab only)


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Extension of Local Government Village Councils/Neighbourhood Coucils

An elected body representing the interests

of a particular village or neighbourhood

Citizen Community Boards (CCBs)

Non-profit organizations or stakeholder

associations working on developmentrelated and social welfare activities


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Tehsil Municipal Administration

(TMA) Responsible for Municipal Services in rural

and urban areas

Other levels of local government have noresponsibility and/or role for municipal servicesexcept in City Districts, where the District (Metro)level is responsible for macro municipal services

mainly (bulk water supply, etc.). Distribution andsolid waste is still the responsibility of TMA and/orUnion Administration

Average population of a tehsil is 500,000


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TMA (Cont ) TMA has the flexibility to balance

decentralized service delivery against

economies of scale Can have multi-village management

Single village management

TMA is responsible for three key components

of municipal management: Sectoral planning

Capital works

O&M


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TEHSIL MUNICIPAL OFFICER

Tehsil Council Secretariat

Audit

General Estab./Admin.

Finance

Accounts

BudgetAnnual

3 year rolling

Cost accounting

RevenueVigilance(Detection and prevention

of revenue leakages andlosses)

Survey(Revenue base current

and potential)

Regulation

Facilities, Markets

and Enterprises

Licenses

Regularisation of

Tenure of Katchi

Abadis

Land including Rights

of Way, Drains(Temporary tehbazari andencroachments)

Infrastructure andServices

Water Supply,

Sewerage/Drainage

Sanitation

(Solid Waste)

Roads, Streets and

Street Lighting

Fire Fighting

Parks and OpenSpaces

Traffic Engineering

Planning andCoordination

Spatial (PhysicalPlanning)

Land Use Planning

(Land sub-division,

zoning, land use)

Development

Facilitation/Control

Building

Facilitation/Control

Housing, Site

Development, Katchi

Abadi Amelioration

PlansCoordination and liaison

with neighbouring tehsils

and unions/VC

CO atTMA HQ

CO atnon-TMA

HQ

CO at non-

TMA HQ CO at non-TMA HQ

CO at non-

TMA HQ CO at non-TMA HQ

O&M Centres Working Under Chief Officer

TEHSIL MUNICIPAL ADMINISTRATION

ORGANIZATION


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Nature of the TMA

Body Corporate Consist of a Tehsil Nazim, Tehsil Municipal

Officer, Tehsil Officers, Chief Officers fromthe offices entrusted to the TMA

No distinction between a rural and an urbanarea in the law

Can further transfer responsibility to the lower

tiers along with transfer of resources Entire Tehsil space is a Rated Area for

Property Tax purpose


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Nature of the TMA (Cont ) Can contract out and contract in

services

Upper tiers can transfer responsibility tothe tehsil along with transfer ofresources TMA continues to be responsible for

regulating and monitoring service delivery Cannot borrow from the capital market

However, upper levels can extendadvances or give loans


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Functions of the TMA

The TMA is exclusively responsible, in theCommon District, for planning, capitalinvestments and operation and

maintenance of: Spatial Planning (land use and zoning)

Development Facilitation and Control (sitedevelopment and building control)

Municipal Services (water, sanitation, solidwaste, roads, streets, street lights,graveyards, fire fighting, traffic engineering,abattoirs, parks and open spaces)


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Composition

All present Town Committees, MunicipalCommittees and Municipal Corporations

Provincial Government Departmentswhich will be decentralised to the TMA:

Local Govt. and Rural DevelopmentDepartment

Public Health Engineering Department Housing and Physical Planning (apart from

the nucleus for the District)


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Subsidiarity Provision has been made in the law for

management of service delivery at the

lowest appropriate level Based on mutual consent, a function can

be transferred by the TMA to Union

Administration and/or Village Councils,along with transfer of correspondingresources


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Private Sector Participation Provision has been made in the law for

TMA to enter into contracts with the

private sector as long as the formerretains the responsibility of regulationand monitoring


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Authority to Restructure TMA has the authority to restructure the

sub-offices to meet the requirements of

a particular tehsil If a TMA transfers O&M responsibility to

Village Councils and Union Councils, it will

focus on regulatory and monitoring aspects A primarily urban TMA might want to

strengthen its urban centers


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Multi-Jurisdictional Management The law allows for Multi-Jurisdictional

management of services by Joint

Committees of Councils to achieveeconomies of scale and scope.

Bodies such as Joint TMA Committees

Intra TMA bodies such as Joint UnionCommittees (across more than one tehsil)


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Accountability The Tehsil Council and the Monitoring

Committees formed by the Council are

responsible for oversight over the TMA The Union Council can also form

committees to monitor the TMAs work

Village/Neighbourhood Councils andCCBs can also monitor TMAs work


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Defining the Resource Envelope There is a complete assignment of fiscal

authority TMAs main tax base (Own Source Envelope)

includes: Property Tax Transfer of Property Tax Licence Fee Rental of Municipal Property, etc.

Intergovernmental transfers from the

provincial divisible pool are made as a singleline transfer Property Tax is collected by the district on

behalf of the TMA


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Cont Complete fiscal authority allows the

TMA to plan both for the long and short

term, and to ensure that a hard budgetconstraint creates the pressure forlinking service coverage targets with

appropriate service levels


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Financial Management The law procedures and bye-laws

require the TMAs to establish cost

centers. The costing of services, bysectors and areas, will ensure that theTMA knows the nature and amount of

subsidy for each service and will bebetter able to make choices regardingthe level and extent of services


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Demand Responsiveness Co-production requirements (CCBs to

contribute at least 20 % cash towards

the capital cost) will ensure cost andmanagement sharing of services


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Situation After 2 Years Major capacity constraints

Some local governments moving ahead

Innovating new procedures and systems

Increasing OSR many-folds

Improving service delivery

Most local governments are still trying tofind their way around


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Situation After 2 Years (Cont ) Provincial governments are not allowing

local governments to hire/fire

City Districts are feeling the pressuremore as there is still some baggage ofthe old system which they are having to

carry, e.g., Water and SanitationAuthorities, etc.


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Challenges How to develop appropriate capacity at the

Local Government levels? What incentivedoes the upper level have to build capacity ofthe local governments?

How to align external assistedprojects/programs to the new decentralizedframework?

How to minimize recentralization?

How to discourage parallel financingmechanisms and formula


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Challenges (Cont ) Does the market respond to the lack of

capacity challenge by creating private sector

capacity? Does the new institutional structure allow for

cross-sectoral linkages between health,education and W&S?

Does decentralization bring about increasedpublic private partnership? What are thefactors that need to be considered?


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W t d S it ti

Challenges (Cont ) How can key sector reforms be facilitated like

corporatization of utilities, introduction of

regional utilities, interface between localgovernments and communities/SSIPs?

What incentive does the upper level have toregulate service delivery?

How far will political pressures interfere withdemand based service provision in adecentralized framework?

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Decentralization Pakistan