The Asian Development Bank (ADB) has approved a $71 million supplementary loan for an urban water supply project in Madhya Pradesh, said an ADB release.
The government of Madhya Pradesh and the municipal corporations will invest an additional $37 million in the project, while UN-Habitat will co-finance a $500,000 grant through its Water for Asian Cities Program.
The project aims to improve the water supply services, sewerage and sanitation services, storm-water drainage, and solid waste management in the major cities of Madhya Pradesh, including Bhopal, Gwalior and Indore. The cities are trade, commerce, and tourism hubs, whose growth potentials are constrained by poor water and sewerage infrastructure systems.
ADB and India signed a $181 million loan agreement in March 2005 to support the project. However, progress was hampered by slow awarding of contracts, which eventually led to a huge cost overrun due to the rupee appreciation and price increases since the project appraisal in 2003.
