Challenge

Rapid urbanization in Punjab outpaced municipal capacity to deliver services, leaving clogged drains, unsafe streets, unreliable water and sanitation, and limited solid waste services. Fragmented mandates, heavy reliance on provincial fiscal transfers, capacity gaps, and weak investment planning meant that local governments lacked the planning tools, financial systems, and incentives to fix backlogs and manage assets sustainably, resulting in uneven services and low citizen trust.

WBG Approach

The Punjab City Program (PCP) combined performance-based financing with hands-on technical support. Cities earned grants by meeting Minimum Access Conditions and scoring well in Annual Performance Assessments that rewarded planning discipline, transparent finances and procurement, stronger environmental and social management, responsive grievance handling, and own‑source revenue growth. In parallel, investment/technical assistance funded systems and skills that last: GIS‑based asset maps; computerized financial management; performance dashboards; complaint tracking; procurement, operations and maintenance procedures; and on‑the‑job coaching. The program also prepared, procured, and supervised priority works—water, sewerage, drainage, roads and streetlighting, solid waste, and parks—piloting innovations like solarized pumps, energy‑efficient lighting, and composite manhole covers. The Local Government & Community Development Department and Punjab Municipal Development Fund Company (PMDFC) anchored delivery and institutionalization, with independent verification ensuring credibility.

Result

• 4.5 million people (49 percent women) benefitted from new/rehabilitated municipal infrastructure by 2025—exceeding the 1 million target.
• All 16 cities prepared (with women’s consultations) and adopted three-year, rolling development plans—grounded in GIS-based asset inventories and life cycle operations—turning investment choices into transparent, data-driven processes to guide annual budgets.
• Own-source revenues nearly tripled—from 6219907 dollars (2017–18) to 17621272 dollars (2023–24)—with all cities achieving more than the 10 percent target of growth.
• 32 km of water lines, 32 tube wells, 84 km new sewers and 40 km of sewers rehabilitated; 21 disposal stations rehabilitated; 8 new stations built; comprehensive drainage upgrades in 8 cities.
• 118 km roads resurfaced and placed efficient streetlights, 14 parks developed/rehabilitated.
• Annual performance scores averaged 90 (target 70) by 2025.
• All infrastructure contracts now include gender‑responsive working conditions.

Contribution to WBG Targets and Jobs

The PCP advanced WBG climate and gender targets by solarizing municipal pumping systems, deploying energy-efficient streetlighting, integrating climate risk into designs, institutionalizing consultations with women in planning and embedding gender‑responsive labor clauses in contracts. PCP subprojects employed over 4,200 workers during implementation, and cities inducted approximately 300 staff for operations and maintenance—building “more and better” jobs in urban services as dedicated water and sanitation units are established

Lessons Learned

• Pair incentives with support: Tying grants to verifiable institutional performance works—if cities also receive fit-for-purpose TA, systems, and coaching.
• Institutions outlast projects: A professional, merit-based implementing agency (PMDFC) and embedded standard operation procedures and e-systems help protect gains through political cycles.
• Leadership stability matters: Frequent turnover weakens momentum; tenure rules, formal handovers, and early engagement with new officials improve continuity.
• Plan for Operations & Management (O&M) from day one: Asset management, O&M budgeting, and revenue reforms are critical to keep new services working.

Next Steps

​The new Punjab Inclusive Cities Program (PICP) was approved in Dec 2025 and will consolidate and scale Punjab City Program (PCP) gains across additional cities—expanding resilient water and sanitation in particular—while deepening revenue administration, budgeting discipline, and asset management. Sustainability hinges on protecting municipal mandates and fiscal flows, stabilizing staff, ring-fencing Operations & Management for core systems, and continuing e-governance and Standard Operation Procedure based routines. Dedicated water and sanitation units and rules-based performance transfers will help cities sustain services and crowd in future finance.