RAWALPINDI, Dec 3: The Asian Development Bank approved on Wednesday a $300 million loan to help the Sindh government improve its water and sanitation infrastructure in secondary cities.

The loan will support comprehensive urban planning, institutional reforms, including introduction of professionally-managed urban services providers, and complementary infrastructure investments in water supply and waste water and solid waste management.

The programme will adopt a phased approach -- financing priority investments where these are more likely to succeed and support improved cost recovery with further investment subsequently rolled out to new town clusters. The long-term partnership with the Sindh government will provide an opportunity for more substantive engagement on policy, regulatory, management and financial aspects of urban service delivery, a prerequisite for sustainable infrastructure services.

The first tranche of $38 million for 2009-2012 will target institutional change and priority infrastructure projects in Sukkur, New Sukkur, Rohri, Khairpur, Shikarpur and Larkana.

The loan in the form of a multi-tranche financing facility will support urban sector reforms and capacity development and priority investment in water supply, waste-water and solid waste management infrastructure for secondary cities.

Urban services in smaller cities fall far short of targets for quality, continuity and coverage. Only about half the urban population of Sindh, outside of Karachi, has piped water and the water quality is poor and often flows for only two to four hours a day. Sanitary drainage is extremely limited and sewer lines are often blocked. There are no sanitary landfills and, therefore, solid waste is disposed of by burning or illegal dumping in open spaces or drainage channels, causing blockage and pollution.

The ADB loan will also assist the Sindh government in establishing local government-owned urban services corporations. These corporations will be professionally managed and guided by service agreements with the local governments for more efficient operations and financial management, sound corporate governance, improved cost recovery, enhanced accountability and greater customer focus.