9:46 AM Jun 6, 1996

PUTTING A PRICE TAG ON SUSTAINABLE CITIES -U.N. CONFERENCE

Many think that totting up the cost of providing housing and other urban services, specially in the fast growing poor world's cities, is a futile exercise, specially at a time when the rich nations are suffering donor fatigue.

Habitat II Secretary General Wally N'Dow has said the United Nations will not ask rich nations, who are yet to honour their decades-old promise to put aside 0.7 percent of national income for aid to poor nations, to help pick up the tab.

But not all think that basic urban services are beyond the paying capacity of poor nations.

In Istanbul, the World Bank, is advocating solutions to urban finance needs which are "cheaper than anyone thinks". Says Bank Managing Director Caio Koch-Weser, "We believe that the experience now exists which shows that urban development can be made affordable for all."

The World Bank estimates that the costs of providing essential amenities to the urban poor -- clean water, sanitation, roads -- "are quite affordable" ranging between 0.2 to 0.5 percent of the Gross Domestic Product (GDP) spread over 15 years.

While advising greater reliance on efficient private sector providers, the Bank is for tapping the underestimated entrepreneurial and financial potential of local user communities.

Costs can also be pared sharply if civic authorities in developing nations focus on the poor who need these services the most and end up paying more than the rich for essential needs. Street water vendors in Jakarta, Karachi and Port-au-Prince can charge between 25 to 50 times more than municipal water utilities.

The burden is not only monetary. It also means loss of valuable time, specially for women, which could have been used to earn an income, and disease from contagious water borne ailments. "It is a penalty paid for living where city water pipes do not reach," says a Bank document.

Unsafe drinking water is estimated to saddle the Indonesian capital with an extra and unnecessary 300 million dollars a year in health costs. In Bangkok and Kuala Lumpur, the annual cost of ailments arising from dust and lead pollution is calculated to be five billion dollars, about a tenth of the combined incomes of the two cities.

The absence of affordable urban transport forces two out of every three dwellers in New Delhi's shanty towns walk to work and takes away 14 percent of the earnings of the poor in Manila who spend twice of their income to get to work as do the non-poor. And in Ecuador, it is common for poor parents to pull out daughters from city schools because of a lack of safe transport.

Yet, it is cheaper than many think to provide services to the poor. The Bank has estimated the differences in the cost of providing full services -- metered water for each house, conventional sewerage, curbed and paved roads and lined drains -- and basic amenities -- a water standpipe within 250 metres of a house, simple sanitation, gravel surfaced roads and unlined channels.

Providing full services to African towns will cost 435 dollars per person, while basic services will cost less than a fifth. In Latin America, the cost of urban services to the poor is almost a sixth of that for the rest and in Asia, the poor can be served for less than a sixth of the 204 dollars per capita it costs to ensure full urban services.

Developing nations also need to tap the entrepreneurial and financial capacity of the poor. Bank-supported community-based initiatives in poor nations show that the poor can run and fund urban basic services schemes more efficiently than civic bodies alone.

In Indonesia, more than 15 million low income city dwellers are benefiting from a Bank-funded project which has meshed community initiatives with official urban development schemes to improve the quality of life of the residents with investments of as low as 23 dollars per person.

"Strong partnerships for civic action, with people in communities, with commercial, financial and industrial interests, and with central governments will be a key ingredient in making cities liveable now and in the future," says a Bank briefing paper for consultation Tuesday on Cities and Finance. A report of the day-long exercise was presented to the official conference for consideration of governments.