ENVIRONMENTAL PROBLEMS OF

URBANIZATION AND INDUSTRIALIZATION

THE EXISTING SITUATION AND FUTURE DIRECTION

[Madhab Mathema, S.L. Shrestha & A. R. Joshi]

EXECUTIVE SUMMARY

1. URBANIZATION

1.1 There is a growing realization among decision makers within the Government and
the external agencies alike that urbanization could play an important role in Nepal's social and
economic development. On the other hand, deteriorating urban environment and massive
resources required to correct it is often cited as the reason for not pursuing a policy of deliberate
urbanization.

1.2 Over the past thirty-five years of planned development, the public sector has been
able to establish considerable national physical infrastructure as well as job-creating units such
as in manufacturing, service, agriculture (agro-based industries) and, to an extent, mining sectors
primarily in urban areas. These activities have helped create jobs in our urban centers.

1.3 With the rapid growth in urban economic activities, the urban scene is characterized
by rapidly increasing population and physical expansion. For example, between 1971 and 1981
urban population increased by over 69% to 957,000 in 1981. By 1990 the population is estimated
to have grown to 1,811,000 (about 10% of estimated national population), an increase of over
89% just in 9 years. During the last decade the urban population is estimated to have doubled. By
2002 Nepal's urban population is expected to reach 3.22 million.

1.4 On the other hand the urban expansion process is occurring without corresponding
expansion of basic services, resulting in a rapidly deteriorating urban environment. As of 1987,
82% of urban population had no access to solid waste service, 53% had no human waste disposal
facilities, 30% had no electricity and another 34 % had no access to piped water connection. The
most important feature of the growth is that it is occurring without an effective planning
framework. The problem will be more severe in future as urban areas continue to expand more
rapidly.

1.5 Between now and the year 2002, our towns are estimated to grow at an annual
average of 5.04%. This means that the present urban population will double every 13 years. In
terms of physical expansion, Terai towns will grow by over 100% and urban areas in the
Kathmandu Valley will expand by 25%; overall urban areas are expected to expand by 61%. To
serve the existing and added areas in terms of existing urban infrastructures, 1.8 times as many
kilometers of road will be needed, 9 times as many kilometers of storm-water drains will need to
be installed, and 2.7 times as many water connections will have to be provided as presently exist,
and 17 times as much solid waste will need to be collected as is presently being collected. All
these will cost to the order of about Rs.14 billion. The investment required is staggering but a
much needed one.

2. URBANIZATION AND THE ENVIRONMENT

2.1 Physical expansion of urban areas is occurring in a haphazard manner with little
planning. While there is no land use or zoning regulations to bring about compatibility among
urban activities, complete lack of a service extension programme has left people with no better

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alternative than to first build buildings and then wait for services to be installed. As all building
constructions are planned and carried out by owners themselves acting individually, new areas
suffer from lack of road system, not to talk of drainage or open space and playgrounds for
children. As loose density areas get filled, increase in the land price and additional construction
further diminish the possibility of expanding and improving existing roads or acquiring small
piece of land for children's playgrounds. Thus the existing expansion pattern is such that each
development is preempting possibilities for any substantial improvements in future.

2.2 Moreover in the absence of zoning regulations, which would ensure that
irreconcilable uses are not being permitted in the same locality, even pollution-prone industries
are established in the middle of residential areas. Teku on the bank of River Bagmati is a typical
example of the atrocity of the existing pattern of development. Within this area of about 30
hectares are located a national health laboratory, a hospital, an asphalt mixing plant, truck repair
shops, a gas reservoir, tea stalls, retail shops, high-density residential houses, metal shops, junk
yards, a sacred temple complex and a solid waste compost plant.

2.3 Even existing built-up areas like older parts of the towns are undergoing rapid
changes in response to the changing structure of the economy and shifting spatial attractiveness.
As in newer areas, such changes are occurring without any planning guidance and improvement
in services. Older parts of the city like the Kathmandu city core are, in fact, becoming denser.
The result is not only a mass destruction, as it were, of the cultural environment but also a form
of development which is highly injurious to public health and safety.

2.4 Low-rise buildings are giving way to high-rises which are normally not designed by
competent engineers nor are serviced adequately against fire and other hazards; traditional court
yards are being bought wholesale and are built upon; fragmentation of parcels is approaching a
limit beyond which families have no alternative other than to divide old houses horizontally.
Commercial pressure on land and building is so intense that even the Guthi Sansthan -an
upholder of religious trusts- finds justification in letting rolling shutter-shops be erected around
holy temples, and the trustee of a town-the municipality of Lalitpur - finds it perfectly sensible to
build its office on premium public green land.

2.5 Not just one activity or lack of a service can be singled out as the one responsible for
the worsening urban environ mental quality. Lack of basic services that sustain the functioning of
a city coupled with a low level of awareness, poor management practices, high concentration of
economic activities in a limited area and utter lack of planning all together have accelerated the
process of deterioration of the urban environment.

2.6 The problems arising out of this lack of planning are further exacerbated by
incapability of planning institutions to respond promptly, effectively, and efficiently to the
dynamics of urban growth. While the technology of plan preparation has advanced considerably
over the last thirty years, such plans suffer from institutional weaknesses which are best
described as (i) inability to take concerted action, (ii) inability to do forward-looking planning,
and (iii) inability to be innovative enough to capture both the imagination and confidence of
people from different walks of life. Of course, these weaknesses are partly caused by (and are
also the reasons for) the multiplicity of conflicting and incomplete rules and regulations,
fragmented authority & responsibility among a multitude of organizations, irregular practices,
utter lack of commitment of planning institutions and the politicians, lack of awareness, and poor
financial management.
2.7 As a result, urban environmental problems such as air, noiseand drinking water
pollution, solid waste accumulation, river pollution, visual blight of age-old cultural
environment, loss of green space and agriculture land, and scarcity of drinking water have
become acute.

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Overall the urban environmental condition is so bad that it is affecting all income groups. While
the affluent have greater resources to deal with the consequences, it is the poor and the middle
class who suffer most. For example the better-off are moving away from the older part of the
towns to the outskirts, whereas the middle class has to be content with a decreasing living space
(because of family subdivisions), vanishing open areas, and deteriorating hygiene of the
surrounding area. The next choice would be to buy land where the price is affordable: either far
away from the city or in unserviceable locations like the flood plain. In the process of change the
poor, who find it more economical to be in city centers, increasingly find themselves displaced
either due to conversion of their shelter space to commercial use or by invasion from the middle
class. Consequently, the only alternative that is left to them is to squat on public and marginal
land, only to be evicted by land grabbers and unscrupulous politicians.

2.8 Examples abound but the conclusion is the same: urban Nepal is undergoing a
tremendous change that it has never experienced before and for which it is so ill-equipped that, if
concerted efforts are not made to correct the situation, consequences from the environmental
point of view could be a tragic one. If the present trend continues, the problem will be serious
enough to jeopardize the urban economy, urban-based industrial production, and health and
welfare of urban population as well as of hinterlands.

2.9 Improvement in the urban environment is possible only if urban management is based
on a forward-looking, broad-based, consensus-seeking process which aims at increasing
efficiency of land use & service delivery to serve as wide a range of population as is possible.
Efficient management will be the key word of the strategy. Largely it will mean ability to
generate and utilize resources to carry out improvement programmes. Cost recovery and
planning standards will determine the outcome of future endeavour.

3. INDUSTRIALIZATION

3.1 Historically urbanization and industrialization are the two complementary

phenomena. In fact often these terms are used interchangeably. This is because a speedy
industrial growth occurs where a range of infrastructural services is available, and the urban
centers are the most convenient and efficient location for this purpose. It is no concidence that
the most developed region (measured in terms of contribution to GDP) of the country - the
Central Region - is also the most urbanized as well as industralized part of the nation.

3.2 Over the last forty years (1951-90) Nepal has made an impressive progress in the
industry sector as measured in terms of number of establishments, fixed investment, and total
value added. The most encouraging trend is that manufacturing output has increased by an
average of 7% for the past decade, and 12% per annum between 1981/82 and 1986/87. During
these periods the agriculture outputs remained stagnant, and per capita food production declined.
While the array of manu- facturing establishments is dominated by small and cottage agro-based
industries, between 1986 and 1990 there has been significant growth of larger units (employing
10 or more) particularily in chemicals, mineral products, and metals. Recently carpet industry
has become the most prominent feature of the industrial growth of urban Nepal.

3.3 With increase in number of industrial establishments there has been corresponding
problem of environmental pollution. In a few cases lack of awareness of impact of pollution on
the health of the workers, and the surrounding habitat has been the principal problem. In many
other cases there has been limited attempts in the part of the management to reconcile
environmental needs with industrial requirement.

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4. INDUSTRIAL POLLUTION

4.1 Environmental pollution is not simply a matter of not having a clean and wide
road or safe drinking water. It is a manifested consequence of a number of shortfalls ranging
from lack of services to poor development and industrial practices. A majority of environmental
problems has arisen due to sheer negligence, ignorance or mismanagement. This is particularily
true in the case of concentrated industrial pollution. It is regrettable that the Balaju Industrial
District, where industrial establishments pay less rent than a squatter living on the bank of River
Vishnumati pay for improvised homes, does not even have an effluent disposal and treatment
plant. The Bansbari Leather Shoe Factory dumps its waste, which contains, among other things,
chromium metal, unto the Khare Khola - a tributary of Dhobikhola. Such discharge combined
with waste from carpet washing and dying industries, raw sewage from the surrounding habitat,
and polluted runoff from agriculture fields has impacted negatively on surrounding vegetation
including crops, as well as aquatic life.

4.2 Experts tend to agree that, although not of a major concern at present, industrial
pollution has the potential to become a serious problem in the future. As compared to the sheer
magnitude of the problems arising out of lack of services and a overall lack of planning and
regulatory framework, industrial pollution is scattered and mysteriously obscure. Study of
industrial pollution has been largely confined to technical aspects of pollution, and its overall
impact has not been well assessed. Our own understanding is that industrial pollution ought to be
a major concern in larger towns like Kathmandu, Lalitpur, Biratnagar and Hetauda. Impacts of
industrial pollution on the habitat and eco-system in these towns are already beginning to be felt.

4.3 The task of pollution control, or rather environmental management, is fraught with
conflicting issues. Increased cost of production due to mitigation measures is often used to argue
against "environmentally clean industry" as this will keep such industries out of the market, so
goes the argument. It is also argued that what Nepal need is more jobs and increased production.
Some consider environmental issues a borrowed concern from the west, or at best secondary to
the need for rapid industrialization.

It will be wrong to think of a good environment as something that should be achieved in place of
economic growth. "Environ ment" in its true sense is a common denominator that affects every
one and all sectors. But it can only be managed through intelligent choices among alternative
forms of development. The process of making such choices is not a simple one.Whether we
should preserve our age-old traditional environment of the Kathmandu city or let the people
build to maximize return on their investment in buildings is a choice that can only be made
through intelligent public debate. Seldom development choices are of "either-or" nature. While
scientific analyses are critical to arrive at an enlightened decision, these are not the substitute for
public debates.

4.4 The need to exercise environment-minded management in the design and operation
of industries is obvious. While future industries can be subjected to more rigorous environmental
guidelines, it is the existing industries where corrective measures are difficult to apply due to
cost reasons.Government will have to evolve and introduce innovative cost-sharing mitigation
measures.

Industrial pollution problems can and should be tackled to a large extent within an appropriate
urban planning framework, although in isolated industries such a framework may not be
available. This is because industries in conjunction with other urban activities generate pollution
problems as the net effect of industrialization is to increase overall urban activities.

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In order to be able to manage the expected urban growth mainly due to industrialization, and
concomitant problems of environ- mental deterioration, great efforts are required in many aspects
of institutional improvement. A planning framework must be in place for which the concept of
public right to control the use of private and public land must be recognized. The first step to
control industrial pollution is to influence location of industries so that the impact on habitat is
minimal. For this, as for other activities, a land use plan and development regulations are
required first. But a land use plan and regulations are not a technical document per se; these are
an expression of our choice of development form, and commitment to direct resources in a
particular fashion. This is precisely the reason why land use plan should only be adopted through
public debates. Currently the land use plans are based on "demand-driven" principle, i.e.,
response to growth trends. A land use plan should be market-friendly but not necessarily market-
driven. This is important to understand because many land use plans prepared so far are trend-
prompted and give inadequate consideration to environmental issues such as impact of the
growth on (i) water resources, (ii) open space, (iii) energy, (iv) natural land uses, and (v)
aesthetic endowments.

5. COMMITMENT

There is a broad consensus that industrialization is essential for Nepal's overall

development. Industries not only create jobs but also produce goods and services that fuels the
economy. Negative impacts of industrialization such as pollution should be addressed without
jeopardizing its growth potential. Little is appreciated that speedy indus-trialization requires an
array of services ranging from housing of the workers to an efficient intra- and inter-urban
transport and communication network to bring in raw material and send out productions, and that
these services together are available only at urban centers.

5.1 Our ability to bring substantive change in the existing urban environmental status will
be determined by our commitment to urbanization. Urban development is dreaded in many
quarters; investment in urban areas is considered inappropriate when the vast majority are living
in rural areas. Towns and cities are seen as the refuge for the privileged whereas villages are
deemed to be the home of the neglected. Many feel that the urban sector is receiving more than
its share of country's meager resources. Many more suspect that urban centers are expensive to
develop and maintain. But urbanization is an inevitable and beneficial process, although
advantages from urbanization are not automatic. Urban centers are not only a repository of
wealth but are also the center of production. However existing urban development policy is not
only inadequate but also lopsided and unequitable. But these deficiencies are not intrinsic to
urbanization.

5.2 Urban development in the broader sense should not be seen as an alternative to
rural development. Experiences of other countries have shown that a sustainable urban
development is not possible without the growth of a rural economy and vice versa. A system of
urban centers is also essential to facilitate this process because it is through such a system that
goods and services flow across the country. The urban economy in itself is important because of
its contribution to the national economy and growth potential. Neglect of urbanization will
diminish Nepal's chance to diversify its stagnant and predominantly agriculture economy and to
create job opportunities for a growing labour force. An important aspect of such a policy would
be a loss in the productive potential of the urban centers which would amount to a loss of
investment that has already gone into the urban infrastructure Nepal can least afford such a loss.

5.3 Given the growth rate of the population and a concomitant increase in the labour
force, the rural sector will not be able to absorb more than half of it, even under the "best"
scenario. At the same time over the past two decades the urban sector has emerged as the most

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dynamic and leading sector of the national economy. Thus the employment generating potential
of the urban sector is one and perhaps the only medium-term hope available to Nepal for
absorbing the growing surplus labour force.

5.4 Thus, both from the point of view of national development strategy and
addressing the problems arising out of a rapidly deteriorating urban environment, urbanization is
a phenomenon that can neither be reversed nor ignored. While industrial pollution poses a
somewhat different problem, it must be seen within the framework of urban environment
improvement, as most polluting industries tend to locate within or in close proximity of the
towns.

6. THE FUTURE

6.1 The array of studies in the area environmental implication of urban development and
industrialization is impressive. The Constitution has declared that environment will be an
important consideration of our development strategy. NPC/IUCN has undertaken important steps
in starting the process of "public debate" by bringing out the National Conservation Strategy and
reportedly starting the preparation of land use plans in two districts. UNDP/CEDA made a
unique contribution in the area of the urban environment by launching a broad-based study of the
environmental situation at three towns of Nepal. Several external agencies are involved in one
way or other in this area. NGOs like the Save The Bagmati Campaign and the DISVI (in
collaboration with national NGOs) have made notable contributions either by advocating a
responsible public response or by conducting pollution-related studies. Externally funded
projects now require that all major investments in infrastructures be preceded by environmental
impact assessments. Many government agencies are moving in the direction of conducting at
least IEE before launching major construction projects. These efforts are laudable but need to be
continued, expanded and strengthened.

6.2 Many environment-related issues in Nepal have become complex in the absence of an
appropriate legislative arrangement. For instance it is easier to determine whether a certain
industry is violating a good environmental behaviour or not when it dumps effluent directly unto
a river, if the standard of industrial effluent is established. Such standards must also be affordable
and within the range of institutional capacity to enforce. There is also a great need to simplify the
existing anomalous relationship between various agencies. A central quasi-judiciary body may
be needed to formulate environment-related guidelines and monitor their enforcement.
Environment should be the concern of all agencies and organization.

6.3 Recommendations have been listed into two parts. The first part deals with issues of
fundamental importance. It is followed by recommendations related to improvement in
operational area. Although Nepal is not in position to launch a grand environment improvement
programme, in immediate future what will count most is a successful implementation of small
but people-related improvement initiatives. Such initiatives will induce a sense of confidence
among people, and help the country to move out of the circle of despondency. We hope,
meanwhile the country will ensue public debates to deal with issues of fundamental importance.
With the advent of the democracy the country is in the right mood to start this process of
consolidating public insights.

6.4 Donors in general, and UNDP in particular, can play an important role in helping
government agencies and national NGOs in implementing some of the recommendations made
by this study. Further studies in a few areas of environmental concerns can very well be
supported by external agencies. The most important strategy to bring in improvement in the
urban environment is to extend support to small, demonstration, people-based projects. That

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demonstration of a few successful projects will send a strong single that all studies should lead to
actions.

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