The Asian Development Bank (ADB) will reallocate $60 million from an urban development project loan to Rajasthan, India, for improving water supply in Jaipur, a tourism hub, according to an Indo-Asian News Service report.
ADB released a statement explaining that the reallocation will help construct a new $220-million water supply system for Jaipur, from the existing Bisalpur dam and reservoir, located 120 km away.
The $362-million Rajasthan Urban Infrastructure Development Project, which also includes a $250-million ADB loan component, was approved in December 1998 and is currently 60 percent complete, according to the report.
The target of the project is to improve the urban infrastructure of the state's six major cities.
According to ADB's statement, "The ADB loan has covenants requiring Rajasthan to rationalize water tariffs and improve revenues in each of the six project cities to ensure sustainability."
Jaipur's water supply system is almost fully dependent on groundwater sources, which are shrinking and losing quality due to over extraction and droughts. A detailed study financed by France had indicated that at the current extraction rate, the aquifers in Jaipur would be severely depleted before 2010, the Indo-Asian News Service reported.
ADB said that the state has consequently decided to construct the long planned Bisalpur water supply system and sought the ADB's assistance to reallocate loan savings.
"The $120-million phase-one works include a new intake, water treatment plant, pump station, 100-km pipeline and storage reservoir aimed at providing Jaipur with a secure water source through 2021 and beyond," said Alex Jorgensen, head, Urban Development, at the ADB's India Resident Mission.
The phase two costing $104 million that is supported by a $85-million loan from the Japanese Bank for International Cooperation (JBIC) will help the state rehabilitate and expand the water distribution system in Jaipur, , according to the report.
As part of negotiations to add the Bisalpur system under the project, the government has provided the ADB and the JBIC with an updated water tariff plan to be implemented over the next couple of years.