Karnataka Municipal Reforms Programme[KMRP]

Karnataka Municipal Reforms Programme


Project Objective

KMRP is envisaged to foster a performance-based municipal investment program across a broad range of urban services and institutional capacity building at both State and local levels.

  • Strengthen institutional and financial frame works in urban services delivery at ULB and state level.
  • Improve the road system in Bangalore and the sanitary conditions in the 8 ULBs surrounding Bangalore city
  • Introduce better accounting and financial management practices.

Project Scope

The Project under the Municipal Investment Component covers 32 towns spread across the State grouped into four packages of 9,5,10 and 8 towns for infrastructure development.

Project Towns
  • Package 1:Tiptur, Madikeri, Sringeri, Chittapur, Doddaballapur, Chikkaballapur, Bhadravathi, Hassan.
  • Package 2:Kolar, Savanur, Robertsonpet, Chitradurga, Chintamani
  • Package 3:Kanakapura, Holenarasipura, Chikkamagalur, Nagamangala, Sira, T. Narasipura, Magadi, Nanjangud, Kollegala, Shimoga.
  • Package 4:Hukkeri, Humnabad, Gurumitkal, Hiriyur, Harihara, Jewargi, Haliyal

Project Components

  • Institutional Development (Urban Reforms)
  • Municipal Investment
  • Greater - Bangalore Development
  • Project Management Support
Urban Infrastructure funding ratio

Project Funding Arrangement

The Overall Funding Pattern of the project between GoK to WB is in the ratio of 70:30.

The lending pattern to the project ULB is as follows
Components Loan Grant ULB Contribution Interest Rate
Water Supply 40% 50% 10% 8.5%
Other components - 90% 10% -

This project is implemented under the financial assistance of World Bank (WB). The project loan was signed on 2nd May 2006. The loan period is completed in March 2015 and the spill over works is in progress.

Project cost and Bank Financing**
Components Cost Including Contingencies in US$ million % of Total Bank Financing in US$ million % of Bank Financing
A. Institutional Development 28.4 9% 22.7 80
B. Municipal Investment Component 90 29% 72.0 80
C. Bangalore Development* 179.8 58% 11.7 62
D. Project Management Support 11.3 4% 9.0 80
Front End Fee - 50% 0.54 -
Total 310.00 100% 216.0 70%

*Includes land purchase for $7.1 million (not Bank financed)

**The $ exchange rate considered in this table is Rs.43.5/- which was the rate at the time of conceiving this project. Actual cost in terms of Rs. will vary.

On-lending arrangements:

GoK will further sub-lend the proceeds of the GoI assistance to the project ULBs as a mix of loan and grant. Given the special status of the project, GoK proposes to adopt a different funding pattern for infrastructure investment as detailed in Table.

ULB Contribution
Interest Rate
Water Supply 40% 50% 10% 8.5%
Other components - 90% 10% -

Further reduction in rate of interest would be given as an incentive to ULBs fulfilling the following performance criteria

Criteria Reduction:
  • Implementation of Property Tax as amended in the Karnataka Municipal Act-1964 with 75% coverage - 1 %
  • Introduction of Fund Based Accounting System & Computerization - 1 %
  • Implementation of revised water tariff - 1 %

Interest on any defaulted amount in repayment would be calculated at 11 % per annum.

Project Implementation

The project ULBs will be implementing the municipal works viz. water supply, sewerage, storm water drains, roads and roadside drains, rain water harvesting structures, construction of low cost sanitation units. Implementing Agencies will be responsible for tendering, awarding and executing the works including the day to day supervision

Implementation Arrangements

Empowered Committee (EC)

An Empowered Committee under the Chairmanship of the Additional Chief Secretary, Government of Karnataka with Additional Chief Secretary, Urban Development Department, Principal Secretary, Planning Department, Secretary (M&UDA), Urban Development, Secretary (Expenditure), Finance Department, Managing Director, KUW&SDB, Managing Director, KUIDFC and Director, Municipal Administration as members has been constituted for the project. The EC has the authority to take decisions pertaining to the project implementation.

District Level Implementation Committee(DLIC)

The project towns fall under 20 districts in the State. For effective implementation and monitoring, GoK has constituted District Level Implementation Committee (DLIC) headed by the Deputy Commissioner (DC) to ensure smooth implementation of the project. Powers have been delegated to the DLIC for approval of DPRs, accord technical sanction up to Rs. 2 cr, approval of tenders with premium above 8% and below 12%, approval of variations up to 10% of the DPRs, DLIC to constitute a technical sub-committee out of DLIC members. DLIC may co-opt any other technical persons if found necessary

  • Deputy Commissioner - Chairman
  • Presidents of the project ULBs - Members
  • Project Director DUDC - Member Secretary
  • SE/EE PWD - Member
  • EE/ KUWS&DB - Member
  • EE/AEE DUDC - Member
  • Commissioner /Chief Officer - Member
  • Senior most Engineer IAs - Member
  • Representative of Nodal Agency- Member
  • MP (Concerned District) - Member
  • MLA (Concerned District) - Member
  • MLC (Concerned District) - Member
Technical Committee Members
  • Chief Engineer, KUIDFC - Chairman
  • Senior Grade Dy. Chief Engineer - Member KUWS&DB
  • Executive Engineer/AEE - Member-DUDC
  • Sr. Engineer in charge of the Project ULB- Member
  • Project ULB - Member
  • Executive Engineer/SE KUIDC- Convener
The above Committee accords Technical sanction for DPRs as per project guidelines
  • Project Implementation Unit created at ULB for day to day monitoring.
  • Project Consultants appointed for assisting/handholding the ULBs


Sl No Name Of Town Name of Work Package No Physical progress Financial progress
1 Bhadravati Providing Underground Drainage System In Bhadravathi /Sewerage Treatment Plant (STP) - Existing, Capacity 5.83 MLD BDVT01 75% 71%
3 Harihara Providing Underground Drainage System HRH01 100% 88%
4 Tiptur Construction of Sewerage Treatment Plant (STP) TPT01 100% 88%
5 Humnabad Expansion of sewerage system HMD01 75% 80%
6 Magadi 24x7 Water Supply MGD01 95% 83%
7 Nanjangud 24x7 Water Supply NJN01 100% 83%
9 Kollegal-CMC 24x7 Water Supply KLG01 0% 0%
9 Tiptur-CMC Phase II Providing Underground Drainage System TPT02 27% 57%


Reforms / Initiatives Under the Project:
  • Apt technology study carried out for identifying appropriate mapping technologies
  • Capacity Enhancement Need Assessment Study for urban functionaries carried out
  • Surveyed 3.2 million urban properties and MIS data base created for PTIS
  • Introduced fund based accounting system in 158 ULBs.
  • Computerization of birth and death records in 164 ULBs for the last 10 years
  • Building institutional capacity.
  • Public Grievance and Redressal cells managed by NGO’s set up in each municipality
  • Implementation of 24X7 Water Supply in 3 towns, covering both bulk and distribution, by way of Performance Based Management Contract
  • Model Bid document prepared for outsourcing of O&M of UGD assets
  • Adopted e-Procurement & e-Contract management of GOK
Urban Infrastructure (Anticipated Outcomes)
  • Continues pressurized water supply to about 22, 000 households in the town of Nanjangud, Haliyal and Magadi
  • Introduction of Volumetric Tariff for water supply and sewerage user fee for UGD facilities for ensuring better service provision by the ULBs.
  • 2,314 km of UGD line benefiting 2.5 Lakh households in Greater Bangalore Area
  • 5,320 LCS units benefiting about 30,000 urban poor
  • Preservation of 70 lakes of Bangalore city