North Karnataka Urban Sector Investment Programme[NKUSIP]

North Karnataka Urban Sector Investment Programme

Project Objective

NKUSIP has been conceived as one of the outcomes of the report of the High Power Committee for Redressal of Regional Imbalances, in a bid to boost economic growth in the region that has traditionally lagged behind

  • Improve the environmental conditions of the towns/cities in North Karnataka.
  • Reduce poverty in low-income areas through access to basic urban services
  • Improve the service delivery capacities of North Karnataka ULBs through institutional development by undertaking program on sustainability principles.

Project Scope

The Program covers 25 towns spread over an area of 1044 sq. km and covering a population of 5 million.

Program towns
  • Hubballi-Dharwad,Belagavi,Kalaburagi,Ballari,Davangere and Vijayapura City Corporations.
  • Bidar, Raichur, Gangawati, Gadag-Betageri, Haveri, Vijayapura, Hospet, Chamrajnagar, Gokak, Koppal, Ranebennur, Rabkavi-Banhatti, Nippani, Yadgir, Basavakalyan, Jamkhandi, Sindhanur, Ilkal and Shahabad City Municipal Councils
  • Badami Town Municipal Council

Project Components

Part A

Environmental Sanitation Infrastructure includes Sewerage and sanitation and urban drainage.

Part B

Water Supply Infrastructure includes all the items under water supply system right from bulk improvement from source to 24 X 7 water supply to the consumers.

Part C

Urban Roads Infrastructure comprises improvements to roads, roadside drains.

Part D

Poverty Alleviation includes the slum improvement works and community development activities.

Part E

On-Municipal Infrastructure includes Fire and emergency services, tourism & information, lake development.

Part F

Institutional Development comprises capacity building of project ULBs, urban mapping.

Project Funding Arrangement

This program is being funded by Asian Development Bank (ADB) on sector loan basis. The Project has availed ADB’s new Multitranche Financing Facility (MFF) with a view to providing longer-term support and flexibility for the Government, minimizing the commitment fees on undisbursed loan amounts. Four loans have been signed and the first loan period is completed in December 2013. Loan 2, 3 and 4 are in progress.

Project Cost
Project-US ($ Mn)
Asian Development Bank 270.00 1,215.00
Government of Karnataka & Implementing Agencies 170.00 765.00
Total 440.00 1980.00

* The $ exchange rate considered in this table is Rs.45/- 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 financing pattern for infrastructure investment as detailed in Table.

Financing Pattern
Infrastructure Type
Implementing Agency Contribution(%)
Interest Rate(%)
Environmental Sanitation - 90 10 -
Water Supply 40 50 10 8.5
Urban Roads - 90 10 -
Slum Improvement - 90 10 -
Non-Muncipal Infrastructure - 90 10 -
Further reduction in rate of interest would be given as an incentive to ULBs achieving the following performance targets.
  • Implementation of Property Tax as amended in the Karnataka Municipal Act-1964 with 75% coverage - 1 %
  • Introduction of Funld 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.

Component-wise allocation of funds

Project Implementation

KUIDFC is the executing agency (EA) responsible for implementing NKUSIP. KUIDFC has established a Regional Office at Hubballi and following four Divisional Offices for effective monitoring and implementation of the programme.

Huballi Division

Covering Hubballi-Dharwad, Davangere, Gadag-Betegeri, Ranebennur, Haveri & Vijayapura ULBs

Belagavi Division

Covering Belagavi, Rabkavi-Banahatti, Gokak, Jamkhandi, Badami, Nippani and Ilkal ULBs

Kalburagi Division

Covering Kalaburagi, Bidar, Yadgir, Basavakalyan and Shahabad tos

Ballari Division

Covering Raichur, Ballari, Hospet, Gangavathi, Koppal, Sindhanur and Chamarajnagar ULBs

From the decentralized perspective, and in order to inculcate a sense of ownership, all major sub-projects are implemented through Programme ULBs and other departments or Line Departments of the State Govt.

The programme ULBs will be implementing the municipal works viz. water supply, sewerage, drainage and roads, whereas other components are implemented by the respective Line Departments. Implementing Agencies will be responsible for tendering, awarding and executing the works including the day to day supervision. NKUSIP Cell is formed in all Programme ULBs for implementation of the project.

During the implementation the Consultants are supporting the Programme Management Unit (PMU) in planning and implementation of the projects. They are providing support through the Divisional offices (DOs) and Implementing Agencies (IAs).

Empowered Committee

An Empowered Committee (EC) 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 programme. The EC enjoys the authority to take decisions pertaining to the programme implementation

District Level Project Steering Committee

The programme towns fall under 14 districts in the state. For co-ordination and effective implementation, GoK has constituted District-level Project Steering Committees (DLPSC) with Deputy Commissioner of the District as Chairman and members comprising of Deputy Project Director (from the concerned DO), Project Director, DLPSC, Municipal Commissioners/Chief Officers of the ULB, and Presidents/Chairpersons of Project ULBs. DLPSC will monitor the implementation of the projects and will also coordinate between various agencies regarding approvals and clearances.

Technical Committee

A Technical Committee consisting of outside experts have been formed which approves the use of new technology, materials and other reviews other technical aspects arising during execution of the project..


North Karnataka Urban Sector Investment Programme
Sl. No ULB No. of Contracts Value of contracts - revised (in Rs. Cr) Financial Progress (in Rs. Cr) No of Completed contracts
1 Hubballi-Dharwad 7 163.04 158.88 4
2 Davangere 3 90.93 64.98 1
3 Gadag-Betageri 3 200.98 143.11 0
4 Haveri 5 92.14 40.86 2
5 Ranebennur 4 95.96 54.77
6 Vijayapura 4 134.38 40.94
7 Belgavi
8 Gokak 4 53.22 42.89 1
9 Nippani 3 39.626 24.18
10 Jamakandi 4 20.89 20.27 4
11 Rabakavi-Banhatti 2 43.55 6.29 0
12 Ilkal 4 74.68 44.57 2
13 Badami 3 9.32 8.42 3
14 Kalaburagi 5 81.19 54.21 3
15 Yadgir 5 53.89 22.37 3
16 Shahabad 2 39.4 32.57 1
17 Bidar 8 169.35 111.82 4
18 Basavakalyan 4 97.24 61.4 3
19 Bellari 8 202.19 138.9 4
20 Hosapete 4 118.18 75.95 1
21 Koppal 2 40.27 23.62 1
22 Gangavathi 4 14.25 13.86 4
23 Raichur 5 187.36 83.93 1
24 Sindhanur 3 138.14 49.09 1
25 Chamarajangar 6 50.56 35.01 2
F & ES equipments 12 22.73 22.73 12
SUID works 3 3.67 3.67 3
Mapping 3 5.3 5.30 3
Nagarabivruddi Bhavan 11 26.12 25.41 11
Total 130 2266.32 1404.00 76
Note: Wherever slum and F & ES packages have more than one town, the status of the same is indicated in one the town


The following reforms are envisaged under the programme:
  • Introduction of Volumetric Tariff for water supply and sewerage user fee for UGD facilities for ensuring better service provision by the ULBs.
  • Setting of O & M cell to ensure Operation & Maintenance of the facilities developed under the programme.
  • Improvement in collection of property tax, trade license fee, advertisement fee, etc.
  • Implementation of Fund Based Accounting System.
  • Computerization of basic municipal functions.
  • Building instutional capacity