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- ii. Avoid using central stores for purchase of materials, and tailor a specialized procurement system to the needs of this project.

- iii. Create bundled contracts with competitively set rates for works that will be repeated with many variations across many different slums. This will permit financially strong and competent large contractors to bid for the works and complete the works quickly to good quality standards.

- iv. Allow contract costing at market rather than PWD rates, which do not always capture price escalations and therefore discourage strong contractors from bidding. Creating a system only attractive to smaller, weaker contractors slows down progress of works due to poor contractor performance and financial problems. Our estimated costs reflect market rates, and they are still quite affordable.

- v. Permit outside contracting of specialized skills required only for the limited period of the project. This can reduce reliance on AMC engineers whose workload will not permit rapid execution and approval of a large number of small projects.

- b. Start work quickly in priority neighborhoods (criteria to be set) to demonstrate ability to achieve results for communities willing to work with the AMC. This work should start before completing comprehensive and detailed surveys of needs in the city. Such exercises can work in parallel. Based on this initial survey and the many other initiatives undertaken to pilot slum upgrading under RAY, AMC should be able to estimate the costs accurately enough to produce project documentation and obtain funding for a city-wide program.

- c. Adapt financial requirements for participating households so that they can meet their financial obligations over time, thus ensuring accountability of contractors and participating NGOs.

- i. Rely less on micro finance for household contributions. Requiring beneficiaries to qualify for a micro loan for their contribution to the project (Here estimated at Rs. 5000 per household based on consultations with community groups) slows down project implementation by 3-6 months. If households are allowed to pay in their contribution based on the progress of works, as would any household hiring their own contractor, the need for micro-finance is much less and micro-loans can be optional.

- ii. Allow works to commence once 20 percent of the required contribution is paid.

- iii. Allow local MLA’s to pay up to 50 percent of the household contribution, provided this is paid for all households in the slum pocket/challi to be upgraded.

- d. **Increase the payment to civil society organizations (CSOs) including NGOs for organizing neighborhood community based organizations (CBOs), supervising the works, and facilitating implementation to cover their costs fully** . In the SNP, the rates were set well below the costs to the participating CSO, and were not always paid on time. When actual costs exceeded set rates, the CSO contribution became substantial. If CSOs are to be expected to organize over 4 lakh households into CBOs for hundreds of slum pockets, they cannot be expected to subsidize such a large operation. Indeed, community organization at this scale will require the hiring of large numbers of additional staff or contractors at market rates. The estimated costs of the community mobilization program are