Rajasthan built a corporation instead of a project office to make ADB money stick

Rajasthan is a northwestern Indian state with a harsh desert landscape and cities that had poor, uneven water service — a few hours of supply a few times a week in places. When ADB made its first investment in 1998, the project was designed to create a permanent, corporatized institution devoted to urban development, not a typical project management office tucked into a government building.

The choice worked: the project grew into a nationally renowned urban development corporation and delivered 24/7 water supply, wastewater, drainage and roads, plus hospitals, heritage sites and slum upgrades. Over two decades ADB and the state invested more than US$2 billion across the state's cities.

Operational lessons were captured by project stage and feature, then written into standard operating procedures and the next investment phases: link mobilization advances to progress, use performance-based contracting, standardize tender evaluations, monitor contracts with web-based systems, and use third-party quality auditors.

In 2014 ADB approved its first program combining a policy loan with a project loan, which created RUDSICO, a corporate agency overseeing urban infrastructure in 29 cities, and the Jaipur Water Supply and Sewerage Board, consolidating services previously scattered across four agencies. The US$613 million program had laid 762 km of sewers, 1,368 km of water mains and 63,009 house connections by report time.