Capacity Building and Knowledge Sharing in Municipal Finance

• Country: Philippines
• Summary: Capacity Building and Knowledge Sharing in Municipal Finance
• PHT Ref No: 53930594
• Deadline: 28 Jun 2021
• Financier: Asian Development Bank (ADB)
• Purchaser Ownership: Government
• Tender Value: Refer Document
• Notice Type: Tender
• Document Ref. No.: TA-6574 REG
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• Description:
• Support to the Implementation of Strategy 2030 Operational Plans - Capacity Building and Knowledge Sharing in Municipal Finance for Uzbekistan Approval Date: 09-Oct-2020 Deadline of Submitting EOI: 28-Jun-2021 11:59 PM Manila local time Estimated Short-listing Date: 18-Jun-2021 Estimated Commencement Date: 01-Sep-2021 Estimated Commencement Date: 175,000 USD Engagement Period: 8 MONTH Objective and Purpose of the Assignment Uzbekistan cities require considerable resources to provide facilities and basic services to growing urban populations, address existing infrastructure deficits, and cope with external shocks such as the COVID-19 pandemic. However, municipal governments (hokimiyats) in Uzbekistan often struggle to develop own sources of finance and rely heavily on central transfers, which are unpredictable especially in times of economic uncertainty and fiscal constraints. The Government of the Republic of Uzbekistan requested the Asian Development Bank (ADB) to prepare an investment project, the Integrated Urban Development Project (IUDP), $100 million ADB loan financing (planned for approval in 2022), covering four secondary cities namely Khiva, Djizzak, Havast, and Yangiyer. These cities represent a slice of Uzbekistan-s 119 cities: Khiva, a medium-sized city is a renowned Silk Road tourist city (population: 92,400); Djizzak, a growing large-sized industrial hub (population: 177,000); Havast, a small-sized city (population: 28,437) immediately adjacent to Yangiyer (population: 43,600), both near the border of Tajikistan and with a strong potential to develop as a strategic investment cluster with benefits of economic agglomeration. IUDP takes a holistic approach and will demonstrate integrated development, pilot innovative solutions, and strengthen local government capacity for “building back better.” These measures will (i) enhance quality of life, reduce inequalities, and create jobs targeting women; (ii) strengthen resilience and economic recovery, particularly in the tourism sector; and (iii) increase the coverage, quality, efficiency, and reliability of urban services. The project is aligned with the government-s national development strategy 2017-2021 and Presidential Decree No. 5623, which aim to accelerate growth and reduce poverty through improved urbanization and balanced regional development. Government strategy and reforms. Recognizing the pivotal role that well-planned, efficient cities play in broad-based, inclusive growth, the government enacted sustainable urbanization as a development priority with the goal of increasing urbanization to 60% by 2030. In 2020, the government established the Department of Urbanization Policy Development under the Ministry of Economic Development and Poverty Reduction to oversee its urban agenda. Related reforms include a new urban planning code requiring citizen participation, fiscal decentralization, and new agencies for public-private partnership (PPP), water supply, solid waste, and cadaster. Land privatization is still in its infancy. ADB aims to help the government implement its reform driven fiscal decentralization process and strengthen urban governance, local government capacity, and financial sustainability of cities. Inadequate finances for urban services delivery. Except for the national capital, Tashkent, municipalities are subject to the jurisdiction of Regional Governors in the allocation of mandates and resources. Subnational governments are responsible for 70% of public expenditure (of which only a fraction is devoted to urban systems and quality of life), but collect only 30% of fiscal revenues. Cities have become heavily reliant on central government transfers and subsidies for capital investments. However, such transfers are not formula-based, nor responsive to performance or efficiency. There is also no guaranteed/minimum budget allocation. A limited revenue base and lack of local government funding hamper not just investments in infrastructure but also the sustainable O&M of limited existing infrastructure. Land taxes have remained stagnant since 1992. Government revenues, including that of secondary cities, are heavily impacted by the COVID-19 pandemic. COVID-19 has resulted in a reduced GDP growth from a forecast of 5.8% in 2020 to 1.6% with significant declines in tourism, trade, and remittances. Separate state utilities operate water supply and solid waste outside the municipal budgets. Current Government directives to water utilities insist on full cost-recovery for water services, while low tariff levels do not cover actual costs, which are increasing due to rising power cost and operational inefficiencies. Depreciation of assets is not accurately accounted for in tariff setting which hampers rehabilitation, and replacement of assets. Billing systems are outdated, and customer payments are not suitably encouraged or enforced, leading to poor collection rates, in particular for solid waste (ranging from 42‒54% in 2019). Very few PPPs have been implemented to date. Against this backdrop, ADB approved a small-scale Knowledge Support Technical Assistance (KSTA) in April 2021 to generate knowledge and build capacity in municipal finance of Uzbekistan IUDP project cities. It supports one of the core pillars of ADB-s Strategy 2030 Operational Priority 4: Making Cities More Livable which is to strengthen financial sustainability of cities. It is closely aligned with ADB-s TA work in Creating Investable Cities. The KSTA aims at analyzing issues and constraints that local governments face in municipal finance, provide recommendations, build capacity, and share knowledge on good practices for replication in Uzbekistan and beyond.
• Documents:

 Tender Notice