Local Governance Performance Incentives for Municipal Service Delivery Punjab, Pakistan Punjab Municipal Services Improvement Project Pakistan Urban Forum, Karachi 10 January, 2014 Shahnaz Arshad

Pre-Project Context Stagnating urban service delivery at TMA level Local Government a provincial subject Constitution Local Government a provincial subject Constitution In a drift away from history In a drift away from history Rural-Urban divide abolished; principle of subsidiarity introducedRural-Urban divide abolished; principle of subsidiarity introduced TMAs created as body corporate - new sub-district level of LGsTMAs created as body corporate - new sub-district level of LGs Tasked with providing a range of municipal services; but largely under-resourced and sub-optimally managed Tasked with providing a range of municipal services; but largely under-resourced and sub-optimally managed Reliant mainly on provincial grants for financial resources Reliant mainly on provincial grants for financial resources Most with little capacity or systems to utilize larger funds, even if available Most with little capacity or systems to utilize larger funds, even if available No mechanisms for effective provincial regulation or oversight No mechanisms for effective provincial regulation or oversight

… Pre-Project Context Management posted from central services - controlled by them Management posted from central services - controlled by them Annual Confidential Report a tool of performance appraisal – not linked to their performance on delivering LG mandates Annual Confidential Report a tool of performance appraisal – not linked to their performance on delivering LG mandates Provision of awarding bonuses (PLGO 2001) not operationalized Provision of awarding bonuses (PLGO 2001) not operationalized Absence of even baseline data on coverage or quality of services- unable to set achievable targets Absence of even baseline data on coverage or quality of services- unable to set achievable targets Lack of O&M culture - focus on new investments Lack of O&M culture - focus on new investments Result - most TMAs unable to: Result - most TMAs unable to: Provide efficient & effective municipal servicesProvide efficient & effective municipal services Invest in much-needed infrastructure expansion or service improvementsInvest in much-needed infrastructure expansion or service improvements

Objective Improve viability & effectiveness of urban services provided by Tehsil Municipal Administrations (TMAs) Make improvements sustainable & replicable through TMA & provincial performance-based management framework Component1 Capacity Grants (to TMAs) for improving performance through urban & investment planning, financial management, improved O&M, M&E, complaint tracking etc. Component 2 Development Grants (to TMAs) for financing priority infrastructure investments Component3 Capacity building of provincial LG Department – for monitoring LG performance Project Snapshot

Demand Driven Participation PMDFC a Corporate Implementing Agency TMA Capacity Building Package Investment Grants as an Incentive Follow up & SIP Grants Reward Progress Infrastructur e & Service Baselines Performance Management System with Targets & Indicators Decentralized Implementati on by TMAs Key Features

Innovations in Design Integrated Systems Approach for Institutional Development Hands-on Capacity Building Support with Continuous Follow-up Contemporary Contract Management Data-based Performance Management Computerized Financial Management Strategic & Demand- based Planning Efficient & Transparent Complaint Tracking & Resolution Enhanced Use of Information Technology in Routine Operations

Key Project Results

Institutional Development Province-wide data available - integrated, real-time - centrally tracked by provincial LG Department Province-wide data available - integrated, real-time - centrally tracked by provincial LG Department Performance Management System measuring, managing, and reporting on TMA performance Performance Management System measuring, managing, and reporting on TMA performance Computerized Accounting & Financial Management Computerized Accounting & Financial Management GIS-based municipal service maps; Structure Plans; and prioritized investments GIS-based municipal service maps; Structure Plans; and prioritized investments Citizen’s Complaints efficiently tracked and resolved Citizen’s Complaints efficiently tracked and resolved TMA Websites facilitating Public Disclosure and Access to Information TMA Websites facilitating Public Disclosure and Access to Information TMA staff (3,137) trained in areas such as IT (basic and intermediate), Planning (including the use of GIS for land-use planning), and operation & maintenance of infrastructure assets TMA staff (3,137) trained in areas such as IT (basic and intermediate), Planning (including the use of GIS for land-use planning), and operation & maintenance of infrastructure assets

Infrastructure Development Improved & systematic Project Planning & DesignImproved & systematic Project Planning & Design TMAs capacitated in administration of FIDIC-based contract documentsTMAs capacitated in administration of FIDIC-based contract documents Streamlined Project Management – CPM-based project scheduling by contractors & supervision consultantsStreamlined Project Management – CPM-based project scheduling by contractors & supervision consultants Implementation of Operations & Maintenance (O&M) manualsImplementation of Operations & Maintenance (O&M) manuals 53% of households connected to water supply systems on average in 11 TMAs with PMSIP-funded subprojects - up from 40% in mid-2006; 74% of solid waste generated disposed at landfill sites on average in 6 TMAs – up from 0 in 2006

Infrastructure Development Portfolio

Central Oversight for Municipal Service Delivery Now Transitioned to Local Government Department Initially Housed in PMDFC Robust Performance M&E System Province-wide At TMA level Centrally Tracked Used for Oversight

PMSIP TMAs in Punjab

Web based Integrated Performance Management System

Performance Management System – Water Supply

Performance Management System – Solid Waste

Web Based Performance Dashboards for Complaint Tracking System

Complaint Tracking System – TMA Monthly Dashboards (1)

Financial Management System Water Supply Billing Module

Water Consumer Search List

Water Bill Generation Form

CFMS Generated Water Bill

Analyzing Financial Data for Performance

Financial Analysis – Solid Waste

Financial Analysis – Street Lights

Financial Analysis – Water Supply

GIS Maps

Outcomes Achieved Robust LG Capacity Building Vehicle established in the Punjab A culture of Performance Oversight setting in at provincial level Culture of Performance Management setting in at municipal level

Emerging Context New Punjab LG Act: Rural-urban divide re-introduced New Punjab LG Act: Rural-urban divide re-introduced Urban Local Bodies will now govern towns and cities Urban Local Bodies will now govern towns and cities Performance of officials & service delivery organizations defined and monitored by Mayors Performance of officials & service delivery organizations defined and monitored by Mayors Performance Review of officials to be in light of given targets Performance Review of officials to be in light of given targets LG&CDD currently developing rules of business of urban LGs; reflecting business processes developed under PMSIP LG&CDD currently developing rules of business of urban LGs; reflecting business processes developed under PMSIP

Lessons Learnt  Starting small, learning, & scaling-up paid dividends in quality  Sustainability requires enabling environment & oversight from higher levels  Decentralized implementation, while slowing progress, ensures sustainable capacity building & ownership  LGs take strong ownership if interventions assist in responding to their mandates  Incentives & rewards are vital in maintaining LG interest & sustainability of results  Adequacy of staffing & requisite skill sets is essential to maintain systems introduced  Viable improvements in service delivery require robust O&M systems