Institutional Development Consultancy (IDC) under Tranche 2, ADB LOAN No 2834 – North Eastern Region Capital Cities Development Investment Programme (NERCCDIP) – Aizawl concerned area of urban institutional, financial, legal, and economic reforms, reforms in water utility services, e-Governance reforms, and initiations in Private Sector Participations in public utility services. The Government of Mizoram (GoMz) envisaged implementation of these reforms in Aizawl Municipal Council (AMC) and in utility service providers like Public Health and Engineering Department (PHED), Aizawl Development Authority (ADA), Urban Development and Poverty Alleviation Department (UD&PAD), and other line departments of the Government of Mizoram. GoMz assigned Urban Development and Poverty Alleviation Department (UD&PAD) as the State level Executing Agency/Nodal Department (SEA) for the Investment Program. It created the State Investment Program Management and Implementation Unit (SIPMIU). UD&PAD, GoMz in order to implement reform activities under the NERCCDIP, assigned SIPMIU to design the component IDC and contracted the work. The UD&PA signed the contract with PSP Financial Consultants Pvt. Ltd on 16 March 2011 and the consulting team members mobilized at Aizawl on 18 April 2011. Experts and specialists under the IDC team commenced the assignment and the IDC component closes on 17 October 2015 after tenure of 54 months.

 

The major activities under the IDC Component were:

  • ULB Reforms [Achieving agreed ULB reforms for furthering the decentralized urban governance]: 
    • Municipalisation and Institutional Reforms – Assisting the GoMz and AMC complete the process of institutional restructuring following the agenda set under 74th CAA and JNNURM
    • Financial Reforms: Migration to Double Entry Accrual-Based Accounting System and computerizing the entire accounting function; Implementing municipal finance reforms as agreed by the Aizawl Municipal Council (AMC) and Government of Mizoram under JNNURM and 13 FC
    • Fiscal Reforms: Property Tax reforms with GIS mapping and creation of GIS database of 100% properties; computerization of the entire property tax management system
  • Utility Reforms [Implementing utility reforms for sustainable and accountable water supply and sanitation service delivery, including (a) reforms required to improve the performance of the utilities and (b) reforms required to introduce fair and accountable regulation] 
    • Institutional Reforms in Service Delivery: Assisting the GoMz and AMC complete the process of institutional restructuring and establishing the Service Regulator for Water and Sewerage Service delivery following the agenda set under 74th CAA and JNNURM
    • Managerial and Financial Reforms in Service Delivery: Institutionalizing the water utility reforms and Migration to Double Entry Accrual-Based Accounting System and computerizing the entire accounting function
    • Fiscal Reforms in Service Delivery: Rationalization of User Charges and tariff structures for water and sewerage services, and SWM Charges
  • PPP Reforms [Evaluating the role and potential of Private Sector Participation (PSP) in urban infrastructure and service provision] 
    • Evaluating potential for application of PSP
    • Assessing various dimensions of proposed PSP sub-projects
    • Assessing the institutional framework for management of PPP projects
  • Training and Capacity Building: Providing training to elected representatives, officials and staff of AMC, PHED, ADA, and other line departments on all aspects including e-governance;

 

The major achievements of SIPMIU and UD&PA, Government of Mizoram under the IDC Component are:

  • Municipalisation and Institutional Reforms 
    • The Mizoram Municipalities Act 2007, was amended vide the Mizoram Gazette Notification No H.12018/120/2013-LJD dated 16 April 2015 as the Mizoram Municipalities (Second Amendment) Act, 2015 (Act No. 5 of 2015) has been published that provides the 18 functions as listed under 74 CAA 1992 are now the obligatory functions of the municipality;
    • Out of 18 functions as mentioned in the twelfth schedule and as per the Mizoram Municipalities Act, (amended till date), 7 functions have been transferred to Aizawl Municipal Council (AMC) in full, three functions have been transferred partly and 8 functions are yet to be transferred to AMC until the closure of IDC Component;
    • The AMC is now functioning with full time CEO, administrative, engineering, accounting, town planning/building regulation, property tax, parking, streetlights, and SWM wings;
    • Organisation and Institutional structures for Municipalities of Mizoram prepared is under consideration of the GoMz
  • Financial Reforms 
    • Aizawl Municipal Council with assistance under the IDC Component commenced accounting since its inception under the accrual-based double entry accounting principles. Financial statements for the financial years 2008-2009 to 2014-15 has been finalised under IDC Component. The Board of Councillors of AMC adopted financial statements until FY 2013-14.
    • A fully computerized accounting system following accrual-based DEAS is operational, which can accept accounting entries from multiple terminals and database saved in centralized servers housed in the AMC premises.
  • Fiscal Reforms 
    • The government vide notification dated 19 May 2014, No. F.13017/51/2013-UD&PA adopted the Mizoram Municipalities (Property Tax Management) Rules, 2014 and vide the Mizoram Gazette Notification No H.12018/120/2013-LJD dated 16 April 2015, the Mizoram Municipalities (Second Amendment) Act, 2015 (Act No. 5 of 2015) has been published that considered all necessary legislative changes to adopt Unit Area Method of property taxation.
    • Aizawl Municipal Council has introduced Property Tax and implemented the UAM, self-assessment based system of Property Taxation, since 16 June 2015.
    • An operational online property tax management system is in place. SIPMIU under IDC provided all technical facilitation and financed all required server hardware and software for maintaining a centralized database within AMC premises; however, Aizawl Municipal Council decided to use the shared servers of Mizoram State Data Centre for managing the property tax database.
    • Collection of property tax by AMC under self-assessment UAM until close of business hours of 21 September 2015 was Rs. 5,821,900/- (Rupees five million and eight twenty-one thousands)
  • Institutional Reforms in Service Delivery 
    • Solid waste management function concerning household waste is now the responsibility of AMC. However, the market waste is still the responsibility of Trade & Commerce Department;
    • The recommendations for transfer of functions from PHED or creation of a separate entity are for water supply and sewerage function is under consideration of the GoMz.
  • Managerial and Financial Reforms in Service Delivery 
    • Achievement is only for solid waste management function;
    • PHED still follows the conventional government accounting system. Within the existing legal and accounting framework of PHED, it was not possible to institutionalize accounting reforms in a part of PHED for the Aizawl division only. AMC is following accrual-based Double Entry Accounting System. If Government accepts the transfer options provided under IDC, ring-fenced DEAS would be achievable.
  • Fiscal Reforms in Service Delivery 
    • NRW reduction program prepared and being implemented;
    • Presently the Public Health Engineering Department (Aizawl Circle) carries out water supply function for AMC area Under the provision of Mizoram Water Supplies (Control) Act, 2004, and The Mizoram Water Supplies (Control) Rules, 2006 PHED installed water meters and levies volumetric water charge following Increasing Block Tariffs (IBT). Wherever household meters are not installed or damaged, PHED levies a flat charge on the households.
    • Report on Rationalisation of Tariff and User Charges submitted, which is under the consideration of the GoMz;
  • PPP Reforms 
    • The document on PPP Policy and the report identifying the suitable PPP modalities for the Government of Mizoram has been prepared and is under the consideration of the GoMz.
    • Various PPP options discussed with AMC and PHED;
  • Training and Capacity Building 
    • Various training programs were conducted. However, training would be a continuous task. AMC and GoMZ must ensure to provide regular training to its elected representatives, officers, and staff.