UTLITY OF MULTI CRITERIA ANALYSIS IN LARGE URBAN INFRASTRUCTURAL DEVELOPMENT

(A CASE STUDY OF URBAN AND ENVIRONMENT IMPROVEMENT PROJECT)

SUBMITTED BY:

MANOJ KUMAR SIGDEL

M.Sc. URBAN PLANNING 2062 BATCH

TRIBUHVAN UNIVERSITY

INSTITUTE OF ENGINEERING

DEPARTMENT OF ARCHITECTURE
URBAN PLANNING PROGRAMME
PULCHOWK CAMPUS, LALITPUR.

NEPAL
February, 2008

CERTIFICATE

This is to certify that this entitled UTILITY OF MULTI CRITERIA ANALYSIS IN LARGE URBAN INFRASTRUCTURAL PROJECT: A CASE STUDY OF URBAN and ENVIRONMENT IMPROVEMENT PROJECT submitted by Manoj Kumar Sigdel has been examined and it has been declared successful for the fulfillment of the academic requirement towards the completion of the Master of Science Course in Urban Planning.

Dr. Sagar Prasai. (Thesis Supervisor) Date:

DECLARATION

I declare that this dissertation has not been previously accepted in substance for any degree and is not being concurrently submitted in candidature for any degree. I state that this dissertation is the result of my own independent work/investigation, except where otherwise stated. I hereby give consent for my dissertation, if accepted, to be available for photocopying and understand that any reference to or quotation from my thesis will receive an acknowledgement.

Manoj Kumar Sigdel February, 2008

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ACKNOWLEDGMENT

This work of thesis is a result and encouragement of many people to whom I express my sincere acknowledgement. Foremost, I express my sincere gratitude to Dr. Sagar Prasai, my thesis advisor for professional guidance and continuous encouragement in every stage of work delivering in depth knowledge, and critical suggestions moreover, for sharing profound knowledge. The credit for any good about this thesis is attributed to his guidance. I am highly indebted to Prof. Dr. Sudarshan Raj Tiwari, Prof. Dr. Jib Raj Pokharel and Asst. Prof. Sanjay Upreti; program coordinator of MSc urban planning for their regular suggestions and comments. The way they have guided and the inputs they have during the thesis preparation are the most valuable achievements. My profound gratitude goes to Mr. Shashi Bhattarai, for his suggestion, constructive discussions and providing necessary software and reference documents. His encouragement and continuous support through out this period is life time memorable. I express my gratitude to Dr. Mahendra Subbha, Mr. Shiva Hari Sharma; Project Director of Urban and Environmental Project & Mr. Grija Prashad Gorkhali, for their support in providing references, project related documents and data which were very useful in thesis preparation. I am very grateful to Integrated Consultants Nepal (P.) Ltd. for their continuous support during this period. Also the generosity goes to all the respondents for providing valuable informations that are very useful in the building the research to this stage. I owe a special debt of thanks to all the friends especially to Mr. Dhiraj Pokhrel and Rabindra Shrestha for their suggestions, support, and necessary arrangements.

Thanking You, Manoj Kumar Sigdel

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ABSTRACT

This thesis attempts to analyze the utility of MCA in large urban infrastructural investment as it is not effectively applied for such projects in Nepal. The paper, in its attempt to show that multi-criteria analysis might be a reliable tool in the context of Nepalese planning processes, tries to point out the repercussions of decision making process at different level which directly undermined the projected goals of such projects in the past. During the process of research, the WT and AHP methods was applied on different criteria used in selection process of UEIP towns. It attempts to analyze the ranking of towns by the change of weights in criteria and sub-criteria in sensitivity analysis. In the process of defending this thesis, this research showed that intervention from several external criteria, which directly affected the entire implementation of projects, led to a reduction in the utility of multi criteria analysis. Also the research found that the actual decision making process rested on the decision makers hierarchy. Finally this research draws the conclusion that multi criteria analysis is an appropriate decision support tool for rational judgments in decision making but the wide spectrum of criteria should be selected to avoid distortions in the decision process. Moreover, the research also calls in for the application of AHP in MCA since the results obtained through this method quite tally with the one drawn by WT method. AHP, which focuses on qualitative data and subjective judgment, is more suitable for a country like Nepal where there is a substantial dearth of quantitative data. Key words: Decision, Multi - Criteria Analysis, Analytical Hierarchy Process, Urban, Infrastructure Development.

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ABBREVIATIONS/ ACRONYMS

ADB AHP BC CBO CBS CoTL DDC DoP DTLR DUDBC DWSS EP GoN H HMG/N IC INGO KUDP KVMP LSGA LwK M MAUT MAVT MCA MCDA MCDM MIT MLD MoF MOPE MPPW MuAN NGO

Asian Development Bank Analytic Hierarchy Process Before Christ Community Based Organization Centre Bureau of Statistics Commitment of Town Leaders District Development Committee Degree of Participation Department for Transport, Local Government and the Region Department of Urban Development and Building Construction Department of Water Supply and Sewerage Economic Potential Government of Nepal High His Majestys Government of Nepal Institutional Capacity International Non Governmental Organization Kathmandu Urban Development Project Kathmandu Valley Mapping Project Local Self Governance Act Linkage with Kathmandu Moderate Multi Attribute Utility Theory Multi Attribute Value Theory Multi Criteria Analysis Multi Criteria Decision Analysis Multi Criteria Decision Making Massacheutte Institute of Technology Ministry of Local Development Ministry of Finance Ministry of Population and Environment Ministry of Physical Planning and Works Municipal Association of Nepal Non Governmental Organization

NM NPC NWSC Ok OPP PA PCO PIU PPP PPPUE PtoK S SC SEU TDC TDF TOR UDLE UEIP UEVP UGR VDC VH VS W WofP WT PSC

Not Much National Planning Commission Nepal Water Supply Corporation Okay Opportunities to Physical Planning Project Advisor Project Coordination Office Project Implementation Unit Public-Private Partnership Public Private Partnership for Urban Environment Proximity to Kathmandu Strong Steering Committee Subjectively Expected Utility Town Development Committees Town Development Fund Terms of Reference Urban Development through Local Effort Urban and Environmental Improvement Project Urban and environmental Infrastructural View Point Urban Growth Rate Village Development Committee Very High Very Strong Weak Willingness of People Weighted Table Project Steering Committee

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Table of Contents
CERTIFICATE .......................................................................................................................i DECLARATION ...................................................................................................................ii ACKNOWLEDGMENT.......................................................................................................iii ABSTRACT..........................................................................................................................iv ABBREVIATIONS/ ACRONYMS....................................................................................... v 1. Inroduction......................................................................................................................... 1 1.1 1.2 1.3 1.4 2. 3. General Background................................................................................................. 1 Problem Statement.................................................................................................... 2 Scope and Limitations of the Study.......................................................................... 4 Research Questions .................................................................................................. 4

Research Methodology ...................................................................................................... 5 Literature Review .............................................................................................................. 8 3.1 3.2 3.2.1 3.2.2 3.3 3.3.1 3.3.2 3.4 3.4.1 3.4.2 3.5 3.6 3.6.1 3.6.2 History of Decision Making ..................................................................................... 8 Decision Theory ..................................................................................................... 12 Normative Theory of Planning........................................................................... 13 Synoptic and Incremental Planning Theory ....................................................... 13 Theory of Decision Making.................................................................................... 14 Subjectively Expected Utility (SEU) ................................................................. 14 Differentiation and Consolidation (Diff Con Theory) ....................................... 15 Decision Making Problematics............................................................................... 21 The Classification Problem ................................................................................ 21 Uncertainities in Decision Making..................................................................... 22 Role of Government, Planning and Legislation ..................................................... 23 Multi Criteria analysis ............................................................................................ 24 Brief History of Multi Criteria Analysis ............................................................ 24 Basic Concept..................................................................................................... 24 Overall Goals and Objectives ................................................................................. 31 Selection of UEIP Towns ....................................................................................... 33

4. 5.

Brief Introduction of UEIP .............................................................................................. 30 4.1 5.1 Analysis ........................................................................................................................... 33

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5.1.1 5.1.2 5.2 5.2.1 5.2.2 5.2.3 5.3 5.4 6. 6.1 6.1.1 6.1.2 7. 7.1 7.2

Frame Work Assessment.................................................................................... 34 Preparation of Survey Tools............................................................................... 35 Result...................................................................................................................... 36 Weighted Table .................................................................................................. 36 Analytical Hierarchy Process ............................................................................. 39 Sensitivity Analysis............................................................................................ 39 Comparision on ranking of Towns ......................................................................... 40 Decision Assessment:............................................................................................. 44 Utility of Multi Criteria Analysis ........................................................................... 49 Weighted Table .................................................................................................. 49 Analytical Hierarchy Process ............................................................................. 50 Recommendation.................................................................................................... 57 Recommendation for further research .................................................................... 58

Findings ........................................................................................................................... 49

Conclusion and Recommendation ................................................................................... 56

BiblioGraphy ..........................................................................................................................i Annexure

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List of Tables Table 1: Overview of Diff Con Theory16 Table 2: Uses of AHP at different sectors of planning.....28 Table 3: Selected Towns for UEIP .33 Table 4: Criteria for selection of UEIP Towns.34 Table 5: Details of Criteria and Weight Distribution under Normal Condition...35 Table 6: Multi Criteria Analysis by Simple Weighted Mean Method.37 Table 7: Multi Criteria Analysis by AHP Method...38 Table 8: Criteria and sub-criteria distribution for sensitivity analysis.40 Table 9: Score obtained by towns under three conditions41 Table 10: Sensitivity Analysis type 1through AHP method42 Table 11: Sensitivity Analysis type 2through AHP method....43 Table no 12: Ranking of UEIP towns based on WT method...49 Table 13: Ranking of UEIP towns based on AHP method......50 Table 14: Ranking of UEIP towns through sensitivity analysis 1 based on AHP method.51 Table 15: Ranking of UEIP towns through sensitivity analysis 2 based on AHP method..52 Table 16: Comparision of rank obtained from different methods53

List of Figures Figure 1: Framework Development of the Research Work...5 Figure 2: Analytical Hierarchy Process (AHP) for UEIP towns..29

List of Charts Chart 1: Details of Criteria and Weight Distribution under Normal condition36 Chart 2: Comparison of UEIP towns in three different cases..41 List of Maps Map 1: Strategic Location UEIP Project..31

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1. INRODUCTION
1.1 GENERAL BACKGROUND

Nepal is predominantly an agricultural country, but agricultural land has been changing rapidly due to unchecked urbanization in the areas near its cities. At the same time, land for non-agricultural use increased by 45,200 hectares to 95,700 hectares and then to 119,160 hectares from 1961-62 to 1991-92 and then to 2001-02 respectively (Centre Bureau of Statistics (CBS), 2002). In 1961, the government, for the first time, defined urban as settlements having 5,000 or more population, with urban facilities such as markets, industrial establishments, school, offices, etc. In that year, there were 16 towns with a population of 5,000 and more. This figure increased to 23, covering 6.4 per cent of the total population in 1981. In 1991, the number increased to 58 urban areas with a population of 10,000 and more, covering 9.2 per cent of the total population, which rose to 13.9 per cent in 2001 (Ministry of Population and Environment (MOPE), 2003). Urbanization is now changing the face of the Nepal dramatically. The rapid rate of urbanization during the past two decades has created unprecedented pressure on Kathmandu and a number of cities in the Terai. Apart from the obvious health issues, population growth, rapid urbanization and industrialization brought in its wake a new dimension to the inadequate infrastructure and services in Nepal. Urban areas are undergoing considerable growth in employment, infrastructure and basic services, which is likely to have pervasive impact on the quality of urban life and, of course, the environment. As the country now develops towards a more urban economy, the economic growth and sustainable development of its existing and newly emerging urban settlements is becoming increasingly important in enhancing the economic well being of the nation. Local governments are thus faced with new and far more complex urban challenges. Rapid population growth from various reasons have resulted in serious deficiencies of basic urban services such as water supply, drainage, sewerage, solid waste management, urban road system etc. This situation has led to the degradation of urban environment causing serious health problem and thereby deteriorating the quality of

the urban life. There has been a growing concern over the uncontrolled growth of major cities including Kathmandu and the simultaneous inadequacy in the provisions of physical and social infrastructure affecting the entire urban milieu. Serious deficiencies of infrastructure and services like sewage management are the commonest issues in the urban area of Nepal causing environmental problems in terms of public health and sanitation. Apart from meeting the current deficits, the future infrastructure and services requirement for the growing urban population provides the major policy challenges for both the national and local governments. To address the above problems and in a bid to devolve power to local government, the Ninth plan (1997-2002) brought up some policies on urban development and environmental amelioration and to support decentralization and strengthen local governance through local development. In order to meet the goals as envisaged in the ninth plan and to overcome urban infrastructure deficits, the Ministry of Physical Planning and Works (MPPW) (the then Ministry of Housing and Physical Planning) and the Asian Development Bank (ADB) signed a Memorandum of Understanding on November 5, 1999 to launch the "Urban and Environmental Improvement Project (UEIP) Technical Assistance. The project, in a strategic move, was launched in 2000 for improving the urban environment, facilitating towards sustainable urban development through infrastructural development of 9 municipalities (Banepa, Dhulikhel, Panauti, Bharatpur, Ratnanagar, Hetauda, Bidur, Kamalamai, and towns of Dhading Besi) located in vicinity of the Kathmandu valley. Its objective was to improve urban environment and prevent the inevitable new problems looming over the Kathmandu valley.
1.2 PROBLEM STATEMENT

The background is sufficient to show that it is exigent for the government of Nepal to take strong and immediate steps for the management of haphazard growth and the burgeoning population pressure within Kathmandu. This requires systematic planning intervention, policies and large projects. In past decades, several efforts were made to improve the urban sector of Nepal especially in Kathmandu but the present haphazard urban environment by itself is a testimony to the failure of such endeavors. Urban

sector problems are of diversified in nature. This means it has to incorporate different criteria (like social, technical, institutional, political, financialetc) for driving towards sustainability. Functional failure of one criterion, as a natural corollary, leaves serious repercussions on the entire urban environment. Notable examples of failure precipitated by the inability of a coherent addressing of the aforementioned criteria include the projects Kathmandu Urban Development Project (KUDP) and Kathmandu Valley Mapping Project (KVMP), which were funded by World Bank and European Union respectively. In the case of these projects, the donor agencies executed the project through Project Implementation Unit (PIU) where only technical assistance was provided by expertise with relatively minimum input of municipality. Though the project ensured the timely implementation of project during that period but in long run, this has to be handled by local permanent staff. At this point the project was failed because of lack of technical expertise and low sense of obligation about that project putting a big question mark over the sustainability of large donor funded projects. (Urban and Environmental Improvement Project (UEIP), 2001). From the past experience it should be realized that analysis of several criteria should be meticulously done while deciding the implementation of large donor funded projects. Another major factor that influence the haphazard urban development is mainly through uncoordinated decisions between the concerned institutions and of course individuals (like donor agencies, central government, local government and line agencies). The influence of different forces like (political, donors, personal interestetc) derails the project due to the contradictory impulses of prioritization and implementation. Trend of carrying a decision process within short period of time without studying infrastructural projects from different criteria and unawareness of the possible outcomes and risk lies behind its implementation causes the failure of project. Thus, planners are confronted with the necessity of taking into account the impacts typically analyzed by other disciplines. Though it is felt and several plans and policies are brought up for infrastructural development, but this effort are done individually by the institutions creating doubts over long term sustainability of such endeavors. Meanwhile there is lagging of coordination among the institutions working in

infrastructural development sector. Conflict of perspectives among the varied actors is an unvarnished truism. In this situation, the necessity of Multi Criteria Analysis (MCA) is felt for decision making purposes solely to draw the concern of different actors within an umbrella, and to come up with single objectives and goals. Objectives of the Research
Main Objectives

To analyze utility of multi criteria analysis in large urban infrastructure investment.

Secondary Objectives

To analyze the process of decision making at different levels for urban infrastructural development. To suggest ways of integrating multi criteria, multi actor decision making process in urban infrastructure investment.

1.3 SCOPE AND LIMITATIONS OF THE STUDY

This study will analyze the utility of multi criteria analysis and present decision making process in urban infrastructure investment project. The study will suggest the appropriate method/ software for the multi criteria analysis for decision making in urban infrastructure investment project. A typical case of MCA application will be demonstrated on Urban Environment Improvement Project utilizing best available resources and time of research. The depth of the study will be limited through low information regarding the topics and availability of data. The study and outcome thus obtained will be from an individual effort hence resource management and mobilization may limit rigorous study.

1.4 RESEARCH QUESTIONS How rational or pragmatic is the use of Multi Criteria Analysis in large

infrastructure investment project?

What does an integrated model of multi criteria/ multi actors decision process

contain in the context of Nepal?

2. RESEARCH METHODOLOGY The study has followed a descriptive method and interpretive type and the structure of the study mainly depends following factors: 1. Desk Study This was the preliminary state where all the available data, documents, maps and reports related to project (UEIP) were studied and its main objective was to extract and compile as much possible information before hand so as to streamline the future course of action. 2. Framework development

Figure 1: Framework Development of the Research Work

3. Literature Review Various journals, literatures, books and other available sources of information concern with decision theory, urban infrastructure and literature regarding multi sectoral project with application of MCA are thoroughly studied. 4. Data Collection Data were collected through primary survey and secondary sources as well. Only key informant interviews were conducted thus only the qualitative data were collected and data were extracted from secondary sources.

At the preliminary stage, data were collected through concerned institutions and also experts involved during selection of UEIP towns were requested to fill up the matrixes of selection criteria against short listed towns for multi criteria analysis (MCA) of UEIP towns.

At the final phase, the sets of questionnaire were prepared discussing with thesis

coordinator then key informant surveys were done with the experts involved in selection of UEIP towns, relevant organizations and steering committee to determine what factors and which actor plays the key role in decision making process during selection of nine UEIP towns.
Institutions visits and discussion were done accordingly.

5. Data presentation and Analysis

Subjective criteria setting was conducted for multi criteria analysis, to avoid the

deviation of results, the criteria adopted were taken same as it was considered by the professionals for towns selection.
MCA Software

For the analysis, formulation of hierarchy model was first prepared and the ranking of towns were done through weighted mean table method and by multi criteria software; expert choice based on theory of Analytical Hierarchy Process (AHP). The weighted table method is the simplest form of MCA and easy to understand. Here the alternatives were scored for each comparison criteria and the summation were

matrix based. The criteria were weighted because as they were not equally valued by individuals. The Analytical Hierarchy Process (AHP) based multiple criteria analysis starts from building tree like structure with criteria at higher level and sub criteria were at the lower level. Objective of evaluation lies at the top and the options or alternatives to be evaluated are placed at the lowest level of the hierarchy. The importance or weight to the factors can either be directly applied or could be generated by making pair-wise judgment between the various factors. The sensitivity analysis was also done through this method changing the weight of criteria and sub criteria.
The result thus obtained from MCA was reviewed on the basis of respondent

survey. The purpose was to find out the involvement of multi actor/ hierarchical decision making process in the UEIP towns. 6. Draft final research
Draft report on the research incorporating all the study data analysis and result

were prepared and submitted for comments. 7. Final research report preparation
Based upon the comments received modifications on the draft research is made to

final thesis.

3. LITERATURE REVIEW
3.1 HISTORY OF DECISION MAKING

The history of decision making is long, rich and diverse The following timeline represents only a small sample of the people, events, research and thinking that contributed to the subject and any dates are approximate. A sypnotic version of the history of decision making as put forward by Buchanan and Cornell (2006) can be handy in this regard:
Prehistory

For millennia, human decisions guided by interpretations of entrails, smoke, dreams and the like; hundreds of generations of Chinese rely on the poetic wisdom and divinations instructions. The Greeks consult the Oracle of Delphi. Prophets and seers of kinds peer into the future.
6th Century BC

Principle of non willful action: letting events take their natural course Confucius says decisions should be informed by benevolence, ritual, reciprocity, and filial piety.
5th Century BC

Male citizens in Athens, in the early form of democratic self-government, make decisions by voting.
4th Century BC

Plato asserts that all perceivable things are derived from eternal archetypes and are better discovered through the soul than through senses. Aristotle takes an empirical view of knowledge that values information gained through the senses and deductive reasoning.
399 BC

In early jury-trial decisions, 500 Athenian citizens agree to send Socrates to his death.
333 BC

Alexander the Great slices through the Gordian knot with his sword, demonstrating how difficult problems can be solved with both strokes.

49 BC

Julius Caesar makes the irreversible decision to cross the Rubicon, and a potent metaphor in decision making is born.
9th Century

The Hindu-Arabic number including the zero, circulates throughout the Arab empire, stimulating the growth of mathematics.
11th Century

Omar Khayyam uses the Hindu-Arabic number system to create a language of calculation, paving the way for the development of agenda.
14th Century

An English friar proposes what became known as Occams razor, a rule of thumb for scientists and others trying to analyze data: the best theory is the simplest one that accounts for all evidence.
17th Century

Stable keeper Thomas Hobson presents his customers with an eponymous choice: the horse nearest the door or none.
1654

Prompted by a gamblers question about the problem of points, Blaise Pascal and Pierre de Fermat develop the concept of calculating probabilities for chance events.
1660

Pascals wager on the existence of God shows that for a decision maker the consequences, rather than the likelihood, of being wrong can be paramount.
1738

Daniel Bernoulli lays the foundation of risk science by examining random events from the standpoint of how much an individual desires or fears each possible outcome.
19th Century

Carl Friedrich Gauss studies the bell curve, described earlier by Abraham de Moivre, and develops a structure for understanding the occurrence of random events.
1907

Introduces the net present value as a decision making tool, proposing that expected cash flow be discounted at the rate that reflects an investments risk.

1921

Frank Knight distinguishes between risk, in which an outcomes probability can be known (and consequently insured against), and uncertainty, in which an outcomes probability is unknowable.
1938

Chester Barnard separates personal from organizational decision making to explain why some employees act in the firms interest rather than their own.
1944

John von Neumann and Oskar Morgenstern in Game Theory describe a mathematical basis for economic decision making like most theorists before them, they take the view that decision makers are rational and consistent.
1947

Herbert Simon argues that because of the costs of acquiring information, executives make decisions with only bounded rationality they make do with good enough decisions Rejects the notion that decision makers behave with perfect rationality.
1950s

Research at the Carnegie Institute of Technology and MIT led to the development of early computer-based decision support tools.
1951

Kenneth Arrow introduced the Impossibility Theorem which holds that there can be no set of rules for social decision making that fulfils all the requirements of society.
1952

Harry Markowitz demonstrates mathematically how to choose diversified stock portfolios so that the returns are consistent.
1960s

Edmund Learned, C. Roland Christensen, Kenneth Andrews and others develop the SWOT (strengths, weaknesses, opportunities and threats) model of analysis, useful for decision when time is short and circumstances complex.
1961

Joseph Hellers term catch-22 becomes popular shorthand for circular, bureaucratic illogic that thwarts good decision making.

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1965

Corporations use IBMs System/360 computers in stat implementing management information systems. Roger Wolcott Sperry begins publishing research on the functional specialization of the brains two hemispheres.
1968

By the end of the 1960s, MCDA attracted the interest of European operations researchers. Roy (1968), one of the pioneers in this field, introduced the outranking relation approach; he is considered as the founder of the European school of MCDA.
1970

John D.C. Little develops the underlying theory and advances the capability of decision-support systems
1972

Irving Janis coins the term groupthink for flawed decision making that values consensus over the best result Michael Cohen, James March and Johan Olsen publish A Garbage Can Model of Organizational Choice which advices organizations to search for their information trash bins for solutions thrown out earlier for lack of a problem
1973

Fischer Black, Myron Scholes and Robert Merton show how to accurately value stock options, beginning a revolution in risk management Henry Mintzberg describes several kinds of decision makers and positions decision making within the context of managerial work.
1973

Victor Vroom and Philip Yetton develop the Vroom- Yetton model which explains how different leadership styles can be harnessed to solve different types of problems.
1979

Amos Tversky and Daniel Kaheman publish their Prospect Theory that demonstrates that the rational model of economics fail to describe how people arrive at decisions when facing the uncertainties of real life.

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1980s

Saaty (1980) first proposed the AHP method (Analytic Hierarchy Process) for addressing complex decision making problem involving multiple criteria. The method is particularly well suited for problems where the evaluation criteria can be organized in a hierarchical way into sub-criteria.
1992

Max Bazerman and Margaret Neale connect behavioural decision research to negotiations in Negotiating Rationally.
1996

Web users start making buying decisions based on the buying decisions of people like themselves.
2005

In Blink Malcolm Gladwell explores the notion that our instantaneous decisions are sometimes better than those based on lengthy rational analysis.
3.2 DECISION THEORY

Decision implies the end of deliberation and the beginning of action. (William cited in Buchanan & Connell 2006). Decision making is an every day human function. Decisions usually concern people (human resources); money (budgeting); buying and selling (marketing); how to do things (operations); or what to do in the future (strategy and planning) (Crainer 1999). A combination of economic, social and technological developments has produced a situation where people have to make important decisions about their relationships and family life, their health, and their education and careers. Decisions are also essential at a societal level. Business and financial institutions are faced daily with decisions about investment, research and development, and deployment of resources in a complex and uncertain environment (Ranyard and Crozier 1997). It is perhaps the social and economic significance of decisions that has resulted in the considerable influence upon psychological approaches to the study of decision making of concepts from other disciplines. Theories of planning are broadly speaking theories of how decisions concerning the community or the society at large are prepared or should be prepared.
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3.2.1

Normative Theory of Planning

Most of decision theory is normative or prescriptive, because it is concerned with identifying the best decision to take, assuming an ideal decision maker who is fully informed, able to compute with perfect accuracy, and fully rational. Normative theory enables planners in appropriate way of thinking the ethical issues and dealing with them. Normative literature suggest a wide diversity of approaches to the questions of what principles should be central and how reasoning about and justification of ethical choices should takes place (Howe n.d.). The normative ethical theory can be classified into two groups based on the relation between right action and intrinsic actions.
3.2.1.1 Deontological Normative Theory:

The word deontological was first derived from Greek word ought and is concerned with moral rules or the right of process. The theory of ethics is not concerned with the consequences of action but with the rightness of the act itself. It means that it has no concern with the out comes of the result.
3.2.1.2 Teleological Normative Theory

On the contrary to deontological theory, teleological ethics is concerned with the goodness of result. That means this theory has concerned only with the goals of action or the goodness created from planners decision. In greek teleos means purpose hence it is also called as consequentiality ethics. Though teleological theories focus on the consequences but they can vary in other ways concerning whose consequences count what motivates ethical behaviour and what criteria are made for moral judgments.
3.2.2 Synoptic and Incremental Planning Theory

Synoptic planning is normative which tells method for tackling the problems rationally. Synoptic planning is thought to have perfect knowledge of possibilities; i.e., the consequences of all the alternatives. Synoptic and incremental planning are opposites when it comes to the assumptions concerning information and communication. In synoptic planning, the data base for acquiring perfect information exists at the outset, thus it require little need for external communication during the planning process also little learning with bearing on decisions already made, thus in consequences intermittent feed back are required.
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Incremental planning has incomplete initial data base and required external communication during the process to improve information, understanding and agreement; also learning and feed back loop are essential. The ambition of synoptic planners to be instrumentally rational encourages the application of technology, analytical techniques ensure that the knowledge is systematized and put to use efficiently. Perfect information means lot of information, which would simply cause a mess without suitable techniques for handling the data. Due to the perfect information the synoptic planners hold the ambition of embarking on the grand optimization right form the start(Sager 1994). The synoptic approach to planning is weak on participation but strong on technical issues.
3.3 THEORY OF DECISION MAKING 3.3.1 Subjectively Expected Utility (SEU)

SEU theory is a model of rational behaviour, originating in economics and mathematics. This assumes that decisions should be reached by summing over the set of alternatives where the utility of each alternative weighted by the subjective probability of its occurrence. Its elegance and authoritative status provide an incentive for decision makers to apply it to their own situation. Nevertheless, the value of utility maximization as a normative choice principle was criticized, for example, Simon (1957) argued that people can productively adapt to their environment by identifying actions that are merely suitable for their goals (Ranyard & Crozier 1997). He proposed the alternative normative principle of satisfying: take the first course of action that is satisfactory on all important aspects. This principle, he further argued, could be applied without sophisticated powers of discrimination and evaluation, powers that humans do not possess. Based on this. he developed his novel concept of bounded rationality, which encompasses the basic assumption that rationality is relative to the information processing capacities of the decision maker. SEU as a model describes how people actually make decisions did not receive unambiguous support from empirical studies. Edwards and Tversky 1967 summarized the early research as follows: these studies generally show consistent, orderly, rational performance; the SEU model is clearly wrong in detail; certain invariances, that should exist if it were right, do not exist (Ranyard & Crozier 1997). One approach to

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reducing discrepancies between behavior and the SEU theory has been to develop fresh theories that provide a better account of some of these findings.
3.3.2 Differentiation and Consolidation (Diff Con Theory)

In this theory the decision making process is modeled as one in which a choice option is gradually differentiated from other alternatives, until it is judged sufficiently superior in attractiveness to be chosen. The theory not only focuses on this pre-choice differentiation path, but also considers post-decision consolidation processes. The basic assumption revovles around the concept that the decision makers intended goal is not only to choose the best option, but to pick the option that will remain the best option in the post decision future. An option that is not well enough differentiated from its competitors may result in, for instance, a reversal of preference, or negative feelings such as uncertainty, regret, or envy. The following table presents an overview of the theory.
Table 1: Overview of Diff Con Theory

Phase

Stage

Process

Recognition decision problem

of

Identification of Alternatives Goal Decision

Perceptual cognitive identification

and

Involve elicitation Goal adaptation Holistic differentiation

Differentiation

Screening Editing Selection of reference and for preliminary alternative

Process and structural differentiation

Problem restructuring

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Phase

Stage

Process

Differentiation Post decision consolidation Implementation of decision Post implementation Out come Post outcome consolidation

Decision consolidation

Process and structural differentiation Problem restructuring

(Ranyard & Crozier 1997) According to Differentiation and Consolidation Theory, a decision process starts with identifying decision alternatives, attributes and goals. Once the decision problem is defined, various types of differentiation processes may take place. Table above presents phases in Differentiation and Consolidation Theory Decision makers start with screening the available options, and attempt to eliminate options that do not qualify for further consideration.
3.3.2.1 Holistic differentiation

A quick holistic process may select a initial choice of alternatives as it comprises of a quick classification, which occurs automatically, naturally, and thus beyond the decision makers awareness. Differentiation criteria may stem from, for instance, experience with similar decisions, intuitive use of schemas, comparison with an exemplar or prototype, or explicit demands or restrictions in the decision context. (Beach 1990). Holistic differentiation may thus be enough for making a decision, lead to a set of options that deserve further deliberation , endowing alternative for preliminary choice that is further put under a scanner or an option that serves as a reference in the process that ensues. At low levels of any type of involvement, decision makers are liable to engage in holistic differentiation, which provides a differentiated representation of the decision problem at relatively low cognitive costs. Low involvement information processing

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typically comprises the use of readily available category-based judgments simple heuristics, or habit-based responses. Such processing results in quick categorizations of choice options, or leads to an immediate choice (Ranyard & Crozier 1997). It can be argued that holistic differentiation is not restricted to low involvement contexts. In high value-relevant involvement decisions, the use of holistic differentiation can also be taken into account . Activated values may provide cues that allow for quick categorization processes, which characterize holistic differentiation, by evoking schemas. The occurrence of holistic differentiation under conditions of high impression and relevant involvement depends on the type of evaluation context that is expected. When the decision maker expects to face an audience with unknown standpoints, taking a moderate, defensible decision is the optimal strategy. In that case holistic differentiation is less likely. On the other hand, when the decision maker knows how he or she will be evaluated, this criterion can be used in a holistic differentiation process, leading to the categorization of alternatives, and a (preliminary) choice.
3.3.2.2 Process Differentiation

The second type of differentiation is process differentiation. Given that a decision maker has a set of options, further differentiation may be accomplished by processing information about the alternatives. Such information may be drawn from memory, or acquired extrinsically. In this phase one alternative is gradually differentiated so as to become the chosen one. Various processing strategies may be used, which is referred to as decision rule differentiation. Application of decision rules creates information about the degree of superiority of one alternative over another. A large variety of decision rules have been described in the decision making literature. Some rules result in elimination of alternatives early in the selection process.
3.3.2.3 Conjunctive and disjunctive rule of differentiation

According to the conjunctive rule, all alternatives that do not meet a given criterion level on an attribute are eliminated from the choice set. Some rules require criteria to

17

be set by the decision makers, for example criteria of rejection in the conjunctive rule, or criteria of acceptance in the disjunctive rule. In the disjunctive rule an alternative is chosen that exceeds a certain criterion level of attractiveness on an attribute. Such criteria may be varied during the process of applying a rule, and may thus be used as a tool in accomplishing sufficient differentiation, which is known as criterion differentiation.
3.3.2.4 Weighted Additive Rule

In weighted additive rule, pros and cons of alternatives are weighted by the importance of the attributes, and the option is chosen that has the most favourable weighted score. In general, rules that allow decision makers to make trade-offs between attribute values (compensatory strategies) are cognitively more effortful than rules that do not allow compensation, such as the conjunctive rule. Decision strategies typically comprise combinations of rules, which are often utilized in a bottom-up, constructive and adaptive fashion (Payne et al. 1992). Generally, when involvement in a decision is relatively low, there is a greater probability of simple decision rules. These rules are non compensatory, requiring little mental gymnastics, and may yet result in a satisfactory decision, given that accuracy motives are not strongly present (ibid). In high value-relevant involvement decisions, effort is expended on mapping the decision makers values and goals on the problem. As long as this mapping is not clear, acceptance criteria (e.g., in a conjunctive rule) may be relaxed, in order not to drop potentially valuable alternatives. As soon as a satisfactory mapping is accomplished, values may determine the strictness of the cutoff criteria, which are used to maintain or reject alternatives. There are other aspects of process differentiation that might be influenced by involvement. Process differentiation comprises consideration of information about choice options. This information may be available in memory, or may have to be acquired. In either case, value-relevant involvement in particular may affect the search for information.

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3.3.2.5 Structural Rule of Differentiation

In contrast to most decision-theoretic approaches, the interpretation of decision rules in Differentiation and Consolidation theory not only acknowledges the rules power to select one alternative as superior, it views decision rules as tools to establish the degree of superiority of one alternative over others. For instance, the conjunctive rule provides information about how far from the pass-fail criterion alternatives are. Decision rules and criterion differentiation are processes that ultimately differentiate one option sufficiently from its competitors. In conjunction with the application of decision rules, changes in the representation of the decision problem also take place. This is known as structural differentiation. Structural differentiation refers to changes in ones representation of the choice problem. Structural differentiations are of four types, i.e., restructuring of (1) attractiveness, (2) attribute importance, (3) the interpretations of facts and (4) the decision problem. Attractiveness restructuring comprises revision of attractiveness of attribute values of options. Also, a decision maker may ascribe different degrees of importance to attributes so as to support a preliminary choice and is denoted as importance restructuring. Facts may be differently interpreted, reinterpreted, or misinterpreted during the decision process, i.e., facts restructuring. This may especially occur to the extent that facts are uncertain, or information is ambiguous. Finally, the decision problem as such may be changed into problem restructuring. For instance, in unstructured decision contexts one may look for new alternatives in addition to evaluating present options (Ranyard and Crozier 1997). Structural differentiation mechanisms, and in particular attractiveness and attribute importance restructuring, are related to decision rule and criterion differentiation. Like the latter processes, the goal of structural differentiation is to achieve sufficient differentiation such that one alternative can be chosen. Once a decision is made, Diff Con Theory postulates that differentiation mechanisms continue to operate, which is referred to as consolidation of the decision. After a choice is made, differentiation of the chosen option and its competitors is further increased, so as to minimize the occurrence of regret or cognitive dissonance (Festinger 1957).

19

Consolidation comprises many of the differentiation principles that were described for the pre-decision phase. Thus, once a decision has been made, the decision maker may also engage in holistic, process and structural differentiation processes. For instance, attractiveness restructuring may take place by increasing the attractiveness difference between the chosen and non-chosen alternative on one or more attributes. Structural differentiation refers to changes in representations of decision problems, which may concern attractiveness of aspects, attribute importance, facts, or the problem as such. Because the representations of decision alternatives are contingent on the decision makers goals, representations are likely to be modeled according to goals that are elicited by the three involvement types. Involvement type will be related to aspect attractiveness restructuring. The involvement type-related goals (adhering to a value, accuracy, and eliciting an appropriate impression, respectively) provide the frame of reference for attractiveness judgments, and thus for attractiveness restructuring. The same holds for attribute importance restructuring. The involvement-related goal structures may determine which attributes are used in a process of restructuring, for instance in changing relative importance of an attribute that makes a preliminary chosen alternative more attractive. Facts restructuring is likely at very high levels of involvement, in particular in high value-relevant involvement decisions. Strong valuedriven motives to support an alternative may be backed up by a biased interpretation of reality. Some decision problems bring about problem restructuring resulting in alternative ways of representing the decision problem, for instance by finding new attributes, creating new alternatives, or modifying old ones. This kind of fundamental restructuring may bolster a preliminary choice, which is likely in high value-relevant involvement decisions. It may also lead to a completely new representation, one that produces a new choice candidate. This situation may be expected at very high levels of outcome-relevant involvement decisions, when the decision maker is unable to solve the problem satisfactorily according to the course of action followed so far. In that case a relatively objective and creative fresh look at the problem is needed.

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3.4 DECISION MAKING PROBLEMATICS

Decision science is a very broad and rapidly evolving research field at theoretical and practical levels. The post-war technological advances in combination with the establishment of operations research as a sound approach to decision making problems, created a new context for addressing real-world problems through integrated, flexible and realistic methodological approaches. At the same time, the range of problems that can be addressed efficiently has also been extended. The nature of these problems is widely diversified in terms of their complexity, the type of solutions that should be investigated, as well as the methodological approaches that can be used to address them. Providing a full categorization of the decision making problems on the basis of the above issues is a difficult task depending upon the scope of the categorization. A rather straight forward approach is to define the two following categories of decision making problems. Discrete problems involving the examination of a discrete set of alternatives on which each alternative is described along some attributes. Within the decision making context these attributes have the form of evaluation criteria..
3.4.1 The Classification Problem

As already mentioned classification refers to the assignment of a finite set of alternatives into predefined groups; this is a general description. There are several more specific terms often used to refer to this form of decision making problem. The most common ones are the following three:
Discrimination Classification Sorting

The first two terms are commonly used by statisticians as well as by scientists of the artificial intelligence field (neural networks, machine learning, etc.). The term sorting has been established by MCDA researchers. Although all three terms refer to the assignment of a set of alternatives into predefined groups, there is notable difference to the kinds of problems that they describe.

21

In particular, from the methodological point of view the above three terms describe two different kinds of problems. The terms discrimination and classification refer to problems where the groups are defined in a nominal way. In this case the alternatives belonging into different groups have different characteristics, without being possible to establish any kind of preference relation between them (i.e., the groups provide a description of the alternatives without any further information).
3.4.2 Uncertainities in Decision Making

Planning is enmeshed with complexity and uncertainty and risk. It begins with the dilemmas inherent in planning and depicts the complex intergovernmental system as the medium of planning. (Christensen 1999). Planning is a type of public decision making and is the process of devising set of actions towards better future for some public purpose. But how can we know the future so that a good decision could be made? Thus the dilemmas in planning public projects still exist. Not much research has so far been done on uncertainty and risk in planning of development projects which could help to guide studies in this field and assert validity of findings (Samset 1998). In the absence of relevant research to guide uncertainty of development project, the possibilities of actual finding of uncertainty factors affecting the projects are also minimal. But the general uncertainty factors characterized in different ways: to what extent they were contextual or operational, to what extent they could have been predicted or not, and to which professional fields they were associated, the financial/ economic, environmental, institutional, political, socio cultural or technological fields. Uncertainty, as currently defined, is situations where negative or adverse outcomes, like losses, accidents, health injuries, or deaths cannot be ruled out. We dont know that they will happen, but neither can we guarantee that they will not. Inspired by risk analysts and formal decision making models, we often hope to go a step further and estimate the probabilities of the adverse outcome. In fact, some decision theorists distinguish between risky prospects, where the probabilities associated with the possible outcomes are assumed to be known and uncertain prospects, where the probabilities are not established (Tversky and Fox 1995 cited in Samset 1998).

22

Risky decision making is full of so-called biases, that is, deviations of actual behavior from normative models. One of the most influential biases in decision making is the preference reversal phenomenon, which refers to the finding that preferences are not invariant with regard to either the procedures that are used to elicit them or to alternative problem descriptions. The framing effect is one such bias. In framing experiments, the description of formally identical problems is varied, thus highlighting different aspects of them. Typically, valued objects are used and are presented so as to highlight either their gains or losses.
3.5 ROLE OF GOVERNMENT, PLANNING AND LEGISLATION Local Self Governance Act, 1999

LSGA 2055 (1999) provides the administrative structure for the devolution of responsibility and empowerment of local community through enhanced local government democracy, and accountability. The arrangements made are listed as; 1. Decentralized municipal planning process should based on the bottom up approach starting from community level and basically ending at municipal council level. 2. All key development actors- municipalities, local people/communities, NGOs, user groups, line agencies, DDC, etc., are to be involved in the municipal planning process. 3. Provision has been made to utilize the expert views/ideas through an advisory committee consisting of local intellectuals, experts, etc. 4. Arrangement has also been made for maintaining close coordination between and among municipalities, government agencies, NGOs and INGOs / donors at local level in the process of plan formulation mainly to remove duplication of effort. Town Development Committees (TDCs) have to formulate their plans in consultation with municipalities. 5. the municipality members are to be accountable to the municipal council - the highest policy making municipal body - and the actions undertaken and decisions made by the municipality members (including mayors and deputy mayors) can be closely scrutinized in its meetings. 6. the local communities, NGOs, user groups etc., as stated earlier, are to be deeply involved in the planning process;

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3.6 MULTI CRITERIA ANALYSIS

MCDA is an advanced field of operations research providing several advantages from the research and practical points of view. At the research level, it provides excess of methodological approaches for addressing a variety of decision making situations. Many of these approaches are well-suited to the nature of the classification problem. The major characteristic shared by all MCDA classification approaches is their focus on the modeling and addressing of sorting problems. This form of classification problems is of major interest within a decision making context, given that the concept of preference lies in the core of every real-world decision. Except for the MCDA approach, the research made in other fields on considering the special features of the sorting problems is still quite limited. This characteristic of MCDA can be considered as a significant advantage within a decision making context. (Doumpous 2002).
3.6.1 Brief History of Multi Criteria Analysis

Even from the early years of mankind, decision making has been a multidimensional process. Traditionally, this process has been based on empirical approaches rather than on sound quantitative analysis techniques. (Pareto 1896 cited in Doumpous 2002) first set the basis for addressing decision-problems in the presence of multiple criteria. One of the most important results of Pareto research was the introduction of the efficiency concept. During the 1940s and the 1950s Von Neumann and Mor genstern (1947) introduced the utility theory, one of the major methodological streams of modern MCDA and decision science in general. These were all studies from US operations researchers. By the end of the 1960s, MCDA attracted the interest of European operations researchers too. (Roy 1968 cited in Doumpous 2002), one of the pioneers in this field, introduced the outranking relation approach; he is considered as the founder of the European school of MCDA. During the next two decades (1970; 1990) MCDA evolved both at the theoretical and practical levels.
3.6.2 Basic Concept

Multi Criteria Analysis (MCA) has been developed to introduce multiple interdisciplinary aspects to the planning process in this complex decision environment that are characterized by any mixture of monetary and non-monetary objectives. Multicriteria analysis is a tool for decision aid and a mathematical tool to compare different

24

alternatives or scenarios against several often conflicting criteria in order to guide the decision-maker(s) to a rational judgment. (Roy 1985 cited in Department of Transport, Local Government and the Regions (DTLR) 2001). Its technique is to a single most preferred option, to rank options and to shortlist a limited number of options for subsequent detailed appraisal, or simply to distinguish acceptable from unacceptable possibilities ( DTLR 2001). The logic of decision making, on which the theoretic approach of MCA is based, lies in the comparison of the alternative solutions performance in relation with a consistent set of decision criteria. The evaluation is based on the specification of particular goals, a structured description of the possible alternative solutions, via cardinal characteristics, and the comparison of these alternatives. The final result consists in the visualization of the one optimal solution or a ranking of possible alternative solutions in relation to their fulfillment of the pre-set goals. The important component in any decision making is risk and uncertainty. There are many ways in which risk can be handled in MCA so MCA approach would be broadly applicable across the range of government and concerned institutions to make policy recommendation for the sustainable infrastructural development. MCA has a different philosophical perspective because in real life, a decision is seldom made on the basis of one criterion, but MCA could be useful for several criteria at the same time. Therefore decision makers would remain more in control of the decision environment reducing uncertainty and risk in complex projects. The oldest field in MCA is so called Multi Criteria Decision Making (MCDM) and it involves in searching for an alternative that is the most attractive over all the criteria. MCDA methodology synthesizes the matrix information and ranks the alternatives by different means. Different methods require diverse types of value information and follow various optimization algorithms. Some techniques rank options, some identify a single optimal alternative, some provide an incomplete ranking, and others differentiate between acceptable and unacceptable alternatives. There are number of MCDA methods.

Multiattribute Utility Theory (MAUT),

25

Analytical Hierarchy Process (AHP) Weighted Table Method (WT)

MAUT relies on the assumptions that the decision maker is rational (preferring more utility to less utility, for example), that the decision maker has perfect knowledge, and that the decision maker is consistent in his or her judgments. The goal of decision makers in this process is to maximize utility or value. Because poor scores on criteria can be compensated for by high scores on other criteria, MAUT is part of a group of MCDA techniques known as compensatory methods. This evaluation method is suitable for complex decision with multiple criteria and many alternatives. But it is typically used when quantitative information is known of each of the alternative. ( Doumpous 2002).
3.6.2.1 Analytical Hierarchy Process

Similar to MAUT, AHP aggregates various facets of the decision problem using a single optimization function known as the objective function. The goal of AHP is to select the alternative that results in the greatest value of the objective function. Like MAUT, AHP is a compensatory optimization approach. However, rather than utility and weighting functions, AHP uses pair-wise comparisons of decision criteria to elicit decision makers values. All individual criteria are paired against all others, and the results are compiled in matrix form. Saaty (1980) first proposed the AHP method (Analytic Hierarchy Process) for addressing complex decision making problem involving multiple criteria. The method is particularly well suited for problems where the evaluation criteria can be organized in a hierarchical way into sub-criteria. During the last two decades the method has become very popular, among operations researchers and decision scientists, mainly in USA. At the same time, ever, it has been heavily criticized for some major theoretical shortcomings involving its operation. The decision maker uses a numerical scale to compare the choices, and AHP moves systematically through all pair-wise comparisons of criteria and alternatives. AHP thus relies on the supposition that humans are more capable of making relative judgments than absolute judgments. Consequently, the rationality assumption in AHP

26

is more relaxed than in MAUT and methodological weaknesses of these methods have been subject to multiple reviews. AHP models a decision making problem through a process involving four stages:
Stage 1: Hierarchical structuring of the problem. Stage 2: Data input. Stage 3: Estimation of the relative weights of the evaluation criteria. Stage 4: Combination of the relative weights to perform an overall evaluation of

the alternatives (aggregation of criteria). In the first stage the decision maker defines a hierarchical structure representing the problem at hand. The top level of the hierarchy considers the general objective of the problem. The second level includes all the evaluation criteria. Each criterion is analyzed in the subsequent levels into sub-criteria. Finally, the last level of the hierarchy involves the objects to be evaluated. Within the context of a classification problem the elements of the final level of the hierarchy represent the choices (groups) available to the decision maker regarding the classification of the alternatives. Once the hierarchy of the problem is defined, in the second stage of the method the decision maker performs pair wise comparisons of all elements at each level of the hierarchy. Each of these comparisons is performed on the basis of the elements of the proceeding level of the hierarchy. In the second level, all elements (evaluation criteria) are compared in a pair wise way on the basis of the objective of the problem (first level of the hierarchy). Then, the sub-criteria of the third level are compared each time from a different point of view considering each criterion of the second level of the hierarchy. For instance, the sub-criteria and are initially compared on the basis of the criterion then on the basis of criterion etc. The same process is continued until all elements of the hierarchy are compared. The objective of all these comparisons is to assess the relative significance of all elements of the hierarchy in making the final decision according to the initial objective. For a classification problem the global evaluation for the elements in the last level of the hierarchy are used to decide upon the classification of an alternative. Since the

27

elements of the last level correspond to the pre specified groups, an alternative is assigned to the group for which the evaluation of the corresponding element is higher. The application of AHP in different sectors of planning and their corresponding dates were listed as:
Table 2: Uses of AHP at different sectors of planning S R.
NO.

YEAR

AUTHOR/S

APPLICATION
AREAS

OTHER TOOL/S USED

1990

Arbel A, Orger Y E Benjamin C O, Ehie I C,

Banking

Linear goal

2 3

1992 2003

Omurtag Y Chen S J, Lin L,

Education Industry

programming Mixed integer

4 5

2002 1990

Crary M et al. Ehie I C et al.

Government Banking

programming Linear goal

6 7

1993 1998

Ehie I C Benjamin C O Kim J Ko S K, Fontane D G,

Social Engineering

programming Linear programming,

1994

Margeta J Korpela J, Lehmusvaara A,

Social

andepsivj;

9 10 11 12 13 14

2001 1999 1999 1999 1998 2003

Tuominen M Lee M et al Lee C W, Kwak N K Momoh J A, Zhu J Radasch D K, Kwak N K Su J C Y et al Weistroffer H R, Wooldridge

Engineering Industry Social Engineering Engineering Engineering

constraint method Goal programming Goal programming

15 16 17 18

1999 1991 2003 1997

B E, Singh R Wu J A, Wu N L Yang T, Kuo C Zulch G et al.

Government Personal Industry Engineering

Source: Vaidhya, O.S., 2004

28

Figure 2: Analytical Hierarchy Process (AHP) for UEIP towns

3.6.2.2 Weighted Table

Multi criteria Weighted table or weighted summation is a form of MCA and is often referred to as additive weighting. Weighted summation is matrix-based and is considered as the simplest MCA technique to understand and traditional. Alternatives are scored for each comparison criteria and then an importance weight is applied to each criterion. Criteria are weighted because they are not equally valued by individuals; what is important to one person is not always to another. Therefore, a range of weights for criteria could also be produced based upon different interest group concerns (Buselich, 2002 cited in WAN 2005).

29

4. BRIEF INTRODUCTION OF UEIP The conception of UEIP was initiated to address the critical urban environmental issues of towns in Nepal. For this a memorandum of understanding was signed in between the Ministry of Physical Planning and Works (MPPW) and the Asian Development Bank (ADB) on November 5, 1999. The project includes nine towns comprising eight Municipalities (Banepa, Dhulikhel, Panauti, Bharatpur, Ratnanagar, Hetauda, Bidur and Kamalamai) and the town of Dhadingbesi (Nilkantha Village Development Committee, VDC) and nearby areas. It is intended to facilitate sustainable urban development in selected towns by giving priorities in: 1. The provision of environmental infrastructure improvements to secondary urban centers; 2. Poverty alleviation; 3. Decentralization of authority; and 4. Strengthening local municipal institutional capabilities, especially as they relate to the recently passed Local Self-Governance Act (LSGA). 5. Generation of productive employment opportunities and increased incomes resulting from faster, broad-based economic growth; 6. Equitable improvements in basic social services to enhance human development, resulting in reduction of population growth; and 7. Protection and improvement of the environment to sustain gains.

30

Map 1: Strategic Location UEIP Project

Pokhara Dhading Besi Butwa Bharatp Ratnanag

Central Bidhur Ktm. valley Bhimeshwor Dhulikhel Panauti Kamalam

Banepa Hetau

Birgunj

Excluded Towns Selected Towns

Janakpur

4.1 OVERALL GOALS AND OBJECTIVES

The project is designed to achieve the goals which were committed by HMGs (Now Nepal Government) in ninth plan (1997-2002), the local self governance act, 1999, and subsequent legislation listed as:
reducing levels of poverty as defined by the number of persons living at or below

the official poverty line;

to aim for greater devolution of responsibility and ownership by urban

municipalities, and community involvement and participation in the planning, implementation and maintenance of urban infrastructure;
to take action to redress gender imbalances within selected municipalities; to improve the environmental situation and awareness levels within the

municipalities;
to improve levels of urban infrastructure and facilities, and levels of service within

these municipalities; and

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 to mitigate the increasing trend of migration to the city of Kathmandu by

stimulating growth in secondary towns having linkage to Kathmandu. Specifically, the Project's main objectives are to:
Support

the Government's policies on decentralization through specific

institutional strengthening and capacity building components targeted at central and town levels.
Provide support to the UEIP Towns in improving municipal and financial

management, participatory town planning, revenue mobilization and provision of municipal services.
Improve the environmental conditions and access to municipal services in the

UEIP Towns by means of environmental infrastructure improvements, which benefit all sectors of the community including the urban poor.
Alleviate urban poverty through specific targeted interventions, such as promoting

improved representation of disadvantaged groups at ward and municipal levels, skills training and health education programmes, sanitation assistance and microcredit enterprise programmes, combined with capacity building of local NGOs and CBOs to enable them to assist with implementation of the programmes.
Promote improved urban planning and land development practices in the UEIP

Towns and, through land pooling or guided land development solutions, restrain urban sprawl, congestion and ribbon development, promote public open spaces, and preserve cultural heritage.
Promote private sector participation in the UEIP Towns by providing institutional

and financial support for the development of public-private partnerships for municipal services and other revenue generating enterprises.
Improve community health and environmental awareness by providing, through

local NGOs and CBOs, campaigns which are integrated with the actual infrastructure improvements, to educate the general public on the proper use of project facilities, the health aspects of proper sanitation and waste disposal and the need to impose user fees. Special programmes will be targeted at primary schools.
Make the UEIP Towns better places for people to live and work in. The Project

should therefore contribute to reducing the trend of migration to the Kathmandu Valley.

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5. ANALYSIS
5.1 SELECTION OF UEIP TOWNS

The counterpart professionals selected the project towns accordingly as the strategy to develop small towns outside Kathmandu valley to help reduce migration within the valley (UEIP, 2001). During that period, the professionals sought guidance from Director General of DUDBC regarding the inclusion of more strategic towns on the east west corridor and border access routes. Initially, the counter part professionals were suggested to select towns as towns on the "inner" circle (former names in parentheses) included Kirtipur, Madhyapur (Thimi), Banepa, Dhulikhel, Panauti, Bhimeshwor (Dolkha - Charikot), Bidur, Dhadingbesi, Byas (Damauli), Prithivinarayan (Ghorkha), Bharatpur, Ratnanagar (Tadi), Hetauda and Kamalamai (Sindhulimadi). Towns on the "outer" circle included Pokhara, Butwal, Birganj and Janakpur for reconnaissance survey. Out of these 18 selected towns ADB advised the counterpart professionals to exclude the valley towns. Kirtipur and Madhyapur and the towns Vyas and Prithivi Narayan were excluded from the professional on the ground of low strategic significance (UEIP, 2000). The selected towns were listed as:
Table 3: Selected Towns for UEIP

S.NO 1 2 3 4 5 6 7 8 9 Bharatpur Hetauda

NAME OF TOWNS

REMARKS

Ratnanagar (Tadi) Kamalamai (Sindhuli Madi) Dhulikhel Banepa Panauti Bidhur *Dhading Besi * Dhading Besi is not a municipality

Source : UEIP 2000

33

Note: the recent decision was made for the exclusion of the Dhading Besi from the project list for not being a municipality. Thus the fund allocated for this project is transferred to the up Grading of Bishnumati link road.
5.1.1 Frame Work Assessment

Since the objective of the project was to grant loan on nine towns, and the project was intended to support the decentralization policy through urban improvement, the framework assessment was based on the developing the criteria for the best selection of towns. The criteria adopted for analysis were considered from UEIP, Inception Report 2000 because the selction of UEIP towns were based on these criteria as reported by counterpart professionals. The MCA and generation of score were done basically by two methods, with weighted table (WT) and the Analytical Hierarchy Process (AHP) method. The frameworks consist of three criteria and ten sub-criteria for selection of alternatives. The generated information in isolation was integrated with the scoring system making comparatively easier to judge, looking at the composite indicator value on alternatives whether the ranking under consideration according to MCA or not. Further on the score were distributed in four situations very high (VH), high (H), okay (Ok) and not much (NM) except for institutional capacity. The distribution system used for institutional system were taken as Very Strong (VS), Strong (S), Moderate (M) and Weak (W) because for institutional capacity the weakest one is given highest priority.
Table 4: Criteria for selection of UEIP Towns.
A. Institutional / technical (30) 1. Institutional Capacity (10) 2. Opportunities of Physical Planning (10) 3. Degree of Participation (10) 4. Urban Growth Rate (10) B. Economical (40) 5. Economic Potential (10) 6. Linkage with Kathmandu (10) ALTERNATIVES 7. Proximity to Kathmandu (10) 8. Commitment of Town leaders (10) C. Social (30) GOAL 9. Urban Environment View Point (10) 10. Willingness of People (10)

34

5.1.2

Preparation of Survey Tools

Based on the criteria identified, a matrix chart was developed against short listed towns and the criteria built therein. The counterpart professionals were requested to fill up the matrix (See annexure for the sample of the matrix). Also these professional were requested to mark the relative importance of the criteria to each other. Analysis of the information was conducted using spreadsheet template in MS excel. The spreadsheet template was basically weighted table (WT) ranking of towns based on the score. A value added analysis also conducted using Analytic Hierarchy Process (AHP) framework and utilizing AHP processing software.
Table 5: Details of Criteria and Weight Distribution under Normal Condition
GOAL CRITERIA SUB CRITERIA SCORE DISTRIBUTION FACTOR Institutional Capacity Institutional / Technical VS: (0.1-0.25); S: (0.25-0.50); M: (0.50-0.75); W (0.75-1.0) Opportunities of Physical Planning Urban and Envn. Infrastructure View Point Urban Growth Rate Selection of UEIP Towns VH: (0.75-1.0); H: (0.5-0.75); Ok: (0.25-0.50); NM: (0.1-0.25) Economic Potential Economical VH: (0.75-1.0); H: (0.5-0.75); Ok: (0.25-0.50); NM: (0.1-0.25) Linkage with Kathmandu VH: (0.75-1.0); H: (0.5-0.75); Ok: (0.25-0.50); NM: (0.1-0.25) 10 10 10 10 40 VH: (0.75-1.0); H: (0.5-0.75); Ok: (0.25-0.50); NM: (0.1-0.25) VH: (0.75-1.0); H: (0.5-0.75); Ok: (0.25-0.50); NM: (0.1-0.25) 10 10 SUB SCORE 10 30 SCORE

Proximity to Kathmandu VH: (0.75-1.0); H: (0.5-0.75); Ok: (0.25-0.50); NM: (0.1-0.25) Commitment of Town leaders Social Degree of Participation VH: (0.75-1.0); H: (0.5-0.75); Ok: (0.25-0.50); NM: (0.1-0.25) VH: (0.75-1.0); H: (0.5-0.75); Ok: (0.25-0.50); NM: (0.1-0.25) Willingness of People VH: (0.75-1.0); H: (0.5-0.75); Ok: (0.25-0.50); NM: (0.1-0.25)

10

30

10

10

35

5.2 RESULT

The result was based on the outcome of analysis of score generated by subjective assessment of the criteria and sub- criteria. The analysis was done on normal situation where priorities for each sub- criteria were given equal value and sensitivity analysis was done where the value of criteria and sub criteria were also changed to find out the possible alternatives even for the worst conditions.
5.2.1 Weighted Table

Based on the analysis from WT method the highest ranking town was Bharatpur scoring 85.98 % and the lowest ranking town was Bhimeshwor scoring 50.96%. The following chart shows the ranking of towns based on criteria where the weightage given for them was highest to 40% , 30% and 30% with reference to economical, institutional/ technical and social respectively. The chart also reflects the weight assigned to each criteria. The scored values on each sub-criteria that effect on the exclusion of these towns were shown in table. Write table of no weighted table). The towns that were not selected for UEIP project were Janakpur, Kamalamai(Sindhulimadi), Bidur, Dhading Besi (Dhading Besi is not municipality) and Bhimeshwor (Dolkha).
Chart 1: Details of Criteria and Weight Distribution under Normal Condition
CRIT ERIA CONT RIBUT ION FOR RANKING OF T OWNS
Ins titutional/ Technical 90 80 70 Econom ical Social

SCORED VALUE

60 50 40 30 20 10 0
a Dh uli kh el Pa na Bh uti im es hw or * B Dh idu ad r ing Be si Bh ara tpu Ra r t na na ga r He t au d Ka a ma l am ai Po kh ara Bu tw al Bir ga nj Ja na kp ur Ba ne p

UEIP TOW NS FOR SELECTION

36

Table 6: Multi Criteria Analysis by Simple Weighted Mean Method.

37

Table 7: Multi Criteria Analysis by AHP Method

38

5.2.2 5.2.3

Analytical Hierarchy Process Sensitivity Analysis

The sensitivity analyses were done to find out the changes in rankings of UEIP towns with the change in the importance of sub criteria and criteria. In the initial analysis, the rankings were done based on equal weight to each criterion, but the change in weighing score of criteria and sub criteria enabled the expert to visualize the sensitivity or the importance indicator that affects on the ranking of alternatives. The sensitivity analyzes was done through the AHP method only. The sensitivity analysis or what if situation analysis in AHP may vary on the requirement to observe the criticality on the selection of towns with respect to specific criteria and sub criteria. The sensitivity analysis has more value on selection of alternatives which are in cut off range of projects. The insights of a project that could be obtained from sensitivity analysis among could generate meaningful knowledge for future implementation of project and management for projects. The SA was done for two cases only. In first case of sensitivity analysis, at first the criteria were placed same as in normal case where as the weight of sub criteria were changed as listed in the table. And then the analysis was performed. In the second case the both the weight of criteria and sub criteria were changed and the analysis was performed. The following chart shows the distribution scores to each criteria and sub criteria for the sensitivity analysis of type 1 and type 2 respectively.

39

Table 8: Criteria and sub-criteria distribution for sensitivity analysis. SEN. ANALYSIS 1 GOAL CRITERIA SUB CRITERIA SUB SCORE 1. Institutional Capacity 2. Opportunities of A. Institutional / Technical Physical Planning 3. Urban and Env. Infrastructure View Point Selection of UEIP Towns 4. Urban Growth Rate 5. Economic Potential B. Economical 6. Linkage with Kathmandu 7. Proximity to Kathmandu 8. Commitment of Town C. Social leaders 9. Degree of Participation 10. Willingness of People 15 7.5 7.5 30 5 2.5 2.5 10 15 15 5 5 15 5 40 7.5 15 10 10 50 5 30 7.5 40 20 SCORE SEN. ANALYSIS 2 SUB SCORE 25 SCORE

5.3 COMPARISION ON RANKING OF TOWNS

The following table and chart shows the comparison on ranking alternatives based on the normal weight distribution and the two cases on sensitivity analysis. It is already mentioned that the SA works on the alternative or ranking of towns that lies on the cutoff range of the projects. From the sensitivity analysis it was observed that the excluded towns were same as in the normal case except for sensitivity analysis type two but the ranking were different. Also in the second case of SA the Banepa and Panauti were excluded where as the Bidhur and Kamalamai were included. The following table and chart shows the ranking of towns at different cases

40

Table 9: Score obtained by towns under three conditions

S. NO

NAME OF UEIP TOWNS Bharatpur Ratnanagar Butwal Birganj Hetauda Pokhara Dhulikhel Panauti Banepa Bidhur Dhading Besi Kamalamai Janakpur Bhimeshwor

NORMAL 0.925 0.875 0.825 0.8 0.8 0.8 0.775 0.75 0.725 0.7 0.675 0.625 0.6 0.575

SENSITIVITY 1 SENSITIVITY 2 0.913 0.875 0.837 0.762 0.775 0.756 0.8 0.756 0.731 0.7 0.675 0.7 0.581 0.6 0.837 0.794 0.738 0.806 0.731 0.75 0.713 0.688 0.7 0.731 0.712 0.719 0.613 0.587

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Note: highlighted numeric value indicate the excluded towns through ranking. Chart 2: Comparison of UEIP towns in three different cases
Normal
1 0.9 0.8 0.7

Sensitivity 1

Sensitivity 2

Score

0.6 0.5 0.4 0.3 0.2 0.1 0

tpur Bidh ur Bu tw al j Jana kpur a ti Dhu li khel Heta uda ra Pokh a ondit ion ing B esi sh wo r Birga n mai Bane p Pana u Rat n anag Bhar a Kam ala ar

Best C

Bhim e

Name of UEIP towns

Dhad

41

Table 10: Sensitivity Analysis type 1through AHP method

42

Table 11: Sensitivity Analysis type 2through AHP method

43

5.4 DECISION ASSESSMENT:

From the above analysis it was observed that three towns Butwal, Birganj and Pokhara should be enlisted even from the sensitivity analysis of the project. But in reality these towns were not included for implementation. To determine the fact of not inclusion of these towns, respondent survey was carried out based on the experts (donor agencies, steering committee, counter part professionals, and relevant organization) response. The assessment was to glean information from the experts about the intervention on the decision process during the selection of UEIP towns. Qualitative surveys were done with regard to extract the multi-actor decision hierarchy.
Role of Steering Committee

The Steering Committee (SC) comprises senior staff (of at least gazetted class I rank) of government agencies and other representatives of:
The joint secretary of the Ministry of Local Development (MLD) The joint secretary of the Ministry of Physical Planning and Works. (MPPW). The joint secretary of Ministry of Finance (MoF) The President of Municipal Association of Nepal (MuAN) The Joint Secretary of National Planning Commission (NPC) The Director General of the Department of Urban Development and Building

Construction (DUDBC) (Member Secretary). Steering committee objective was to make the policy, coordinate and guide the counterpart professional during selection of UEIP towns. The SC provided logistics and human resources for the project team. It also did regular follow-ups about the objectives of TOR and financial constraints as well. However, this committee did not enjoy right to take decisions about the town selection but suggestions were given to the project team for necessary action. The members of the steering committee included a chairperson (the Secretary of MPPW), a Member Secretary (Project Director), ad-hoc members (guest representatives from concerned NGOs of project owns) and observers (ADB/Consultant staff).

44

The objectives of the PSC were to provide policy coordination and overall guidance and make necessary decisions for the effective implementation of the project. The specific functions were to:
ensure effective coordination among the involved institutions; provide strategic guidance to the project; monitor the output and give directives as necessary; and Resolve any disputes/conflicts between project stakeholders at the central level. Policy for Selection (Strategies)

Based on the LSGA, 1999, the main strategies were to develop small municipalities through urban and infrastructural environment, capacity building and to increase the independence of the municipalities. It was assumed that the developed municipalities would retain the migration from high remote areas directly to very high urban area. That directly meant that towns would interconnect the very high remote areas to very high urban areas thus filling the gaps of difference of skills, economy etc between sending city and receiving city.
Roles of Nations Five Year Plan, and Local Self Governance act, 1999

The policy formulations were formulated to give full support to the aims and ideals of the government as detailed in ninth plan and LSGA 1999. The ninth plan envisages a decentralization policy through the empowerment of local bodies. The objectives of ninth plan were;
To enhance peoples participation in resource mobilization To institutionalize local autonomous government by enabling them to be more

accountable to the people.

To increase the participation of local people in local government. From the counterpart professionals; Were received insight for fundamental ideological reference on which each and every aspect were to be based. Thus the project team did consult with the institutional, environmental, social, administrative and community, and users group. The list and the key dates of the meeting and minutes were documented in the inception report, 2000.

45

Though the project teams did consult with the users groups, in most of the cases, these groups were dominated by peoples having vested interest and the real beneficiaries and minors were suppressed as related by one of the high- ranking government official. Time Allocation

The time given was enough for the study of different parameters of towns even the selection of project was not completed in time because of the prevailing political situations. Several nationwide closures and demonstrations affected the scheduled time frame. Also due to the dearth of serious involvement of the professionals led them to make a quick survey of the parameter. The towns were reduced from eighteen to fourteen numbers from one round visits and consequently the number reduced to nine after second round visit. This duration of visit was about a day to each town.
Participation of Relevant Organization

Several meeting with the relevant organization were conducted and their goals and objectives were determined. The meetings conducted with relevant organization were:
Urban Development through local efforts (UDLE)

Project personnel met with UDLE Program Coordinator on Sept 29, 2000 and they reviewed the progress review mission workshop on Nov 9, 2000 of UDLE. Meetings were focused on the mobilization of UEIP resources on objective of UEIP project particularly in institutional strengthening aspects on more focused areas. Also the suggestions were incorporated in selection of UEIP towns.
Rural Urban Partnership Program (RUPP)

The objective were to support the municipalities and VDCs in developing links with their hinterlands and thereby promoting opportunities for economic activities, micro enterprise and public private partnerships, especially targeting the poor and disadvantaged sections of the communities. Project professional met with the chief Technical Advisor/ on October 3, 2000 and discussion were held to support the program and commitments were appreciated for supporting the project particularly in terms of management and control at municipal level through mobilization of community participation via municipal authorities. From the survey it was found that though these relevant organizations were invited for necessary suggestions, the effort was not so fruitful because of

46

 The Lack of obligation (low involvement) towards the project as it was going to be implemented by other organizations. Also they assumed; whatever be the result of analysis, it would be overruled by vested interest so only general participation was made. Availability of Data (Incomplete initial data base)

Database system in Nepal is very weak so it wields negative repercussions in the implementation of any new project that required rigorous analysis of the past data base. The same thing happened in the case of selection of UEIP towns as the project was decided to implement at 1999. During that period no updated data of population were found and the population census was a decade old. Moreover, the prevailing political context furthered the migration trends towards urban centres rapidly. Under such circumstances, the exact prediction of the population became quite a hurdle for the counterpart professionals. Also there was problem in the consistency of other data obtained from different sources and hence there was a big problem in the prediction of future trend for number of years following the past trends. The counterpart professional shared that a whopping 43 per cent error was observed on data projection of Hetauda. Further on, the weak database system became a problem for quantifying the data. Hence the subjective analysis was necessary in most of the criteria where the rationality of subjective judgments depended on individual capacity. Several high distortions were obtained which had to be resolved on table discussions.
Rationality of Criteria Selection and Weightage Assigned

Criteria selections were done through communication between the experts based on the goals and objectives of the project and by not researching external circumstances that would affect the validity of criteria. It was observed that the weightage assigned for each criterion were equal and regarding this issue, the respondent said that the assigned weightage were given equal value for the simplicity in multi criteria analysis. And the counterpart professional agreed that the assigned criteria should have different weightage.
Freedom of Work

It was said that the freedom was given to the professionals still there was some interventions during the selection of towns. The line organizations did only suggest for the

47

necessary study and the selection procedure. ADB and Steering committee had great role during project selection though these organizations had right to suggest only but some vested interest were observed during project selection. The counterpart professional appreciated the analysis and accepted that the Birgunj, Butwal and Pokhara should be included but in Pokhara PEIP, funded by ADB, was already in function. Regarding the exclusion of Butwal and Birgunj, these towns were doing good and had no necessary of ADB grant. This was further discussed and the counter part professional argued that these towns were strategically suitable to attain the project objectives and also argued for the inclusion of these towns to set up model town for other municipalities and for this the steering committee suggested the counterpart professionals for the exclusion of towns not belonging to central region.

48

6. FINDINGS
6.1 UTILITY OF MULTI CRITERIA ANALYSIS

In Nepal, location selection for large urban infrastructure projects is often done without performing multi criteria analysis. The implementation of projects like KVMP and KUDP were mostly done without multi criteria analysis. Failure of several large projects as mentioned above forced the planners for the assessment of MCA in large projects. Thus in case of UEIP multi criteria analysis was done. Since the study analyzes the utility of MCA in large infrastructural project, the process of town selection through MCA is reviewed from weighted table method and the AHP method.
6.1.1 Weighted Table

The WT method is the traditional and simplest form of multi criteria analysis. It can be done through simple programs like MS-excel. This method, however, does not offer flexibility in modification of weight and criteria and sub criteria, hence it is difficult for performing sensitivity analysis and is both time and effort consuming. Simple geometric mean was used instead to prevent the distortion of data. The result is listed in the following table:
Table no 12: Ranking of UEIP towns based on WT method
RANKING 1 2 3 4 5 6 7 8 9 10 11 12 Bharatpur Ratnanagar (Tadi) Butwal Pokhara Hetauda Birganj Dhulikhel Banepa Panauti Janakpur Kamalamai Bidhur UEIP TOWNS 85.98 83.23 76.98 76.26 75.98 74.11 73.44 69.78 64.41 62.70 61.91 61.49 SCORE

49

RANKING 13 14 Dhading Besi Bhimeshwor

UEIP TOWNS 59.15 50.96

SCORE

The result shows that Bharatpur ranked in the first position scoring 85.98 where the Panauti ranked the ninth position scoring 64.41 and towns Janakpur, Kamalamai, Dhading Besi, Bidur and Bhimeshwor ranked in the last position. This list produces a different result than the locations selected by UEIP.
6.1.2 Analytical Hierarchy Process

Multi criteria analysis was again done by using AHP software. The goal of AHP is to select the alternative that results in the greatest value of the objective function. AHP uses pair-wise comparisons of decision criteria to elicit decision makers values. All individual criteria were paired against all others, and the results were compiled in matrix form. AHP relies on the supposition that humans are more capable of making relative judgments than absolute judgments. Once the hierarchy of the problem is defined, in the second stage of the method the decision maker performs pair wise comparisons of all elements at each level of the hierarchy.
Table 13: Ranking of UEIP towns based on AHP method
RANKING 1 2 3 4 5 6 7 8 9 10 11 12 13 Bharatpur Ratnanagar (Tadi) Butwal Pokhara Hetauda Birganj Dhulikhel Panauti Banepa Bidhur Dhading Besi Kamalamai Janakpur UEIP TOWNS 92.5 87.5 82.5 80 80 80 77.5 75 72.5 70 67.5 62.5 60 SCORE

50

RANKING 14 Bhimeshwor

UEIP TOWNS 57.5

SCORE

Using AHP at first the analysis were carried out using same weightage in criteria used in WT method and the result showed that Bharatpur was listed in rank one scoring 92.5 and Banepa was listed in rank nine scoring 72.50. In both methods the excluded towns from ranking were Dhading besi, Kamalamai, Janakpur, Bidhur and Bhimeshwor. The changes in ranking of Panauti to eight and Banepa to nine and also the changes in scores were due to the pair wise comparison capacity of AHP such that the judgments were made to each criterion on basis of relative importance. Since the result of MCA did not match with towns selected for implementation of UEIP towns, hence to find out which criteria were given high importance in selection of towns, sensitivity analysis were performed in two cases. Sensitivity analyzes were most effective case analysis of towns which were on the cut-off line. For the first case the weight of criteria were kept equal and weightage were made different in sub criteria where the high preferences were given to IC, UGR and CofTL, the numeric weightage of score were given in table and the analysis were done through AHP. Here the result showed that Bharatpur was ranked first and Banepa the ninth. The performed sensitivity analysis excluded towns from ranking were Kamalamai, Bidhur, Dhading besi, Bhimeshwor and Janakpur.
Table 14: Ranking of UEIP towns through sensitivity analysis 1 based on AHP method
RANKING 1 2 3 4 5 6 7 8 9 Bharatpur Ratnanagar (Tadi) Butwal Dhulikhel Hetauda Birganj Panauti Pokhara Banepa UEIP TOWNS 91.3 87.5 83.7 80 77.5 76.2 75.6 75.6 73.1 SCORE

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RANKING 10 11 12 13 14 Kamalamai Bidhur Dhading Besi Bhimeshwor Janakpur

UEIP TOWNS 70 70 67.5 60 58.1

SCORE

In the second case the weightage of criteria and sub criteria were both changed and analysis, where high preference were given to Economic criteria and in sub criteria, the preferences were given to IC, UGR, Proximity, CofTL. This analysis shows different result at bottom i.e, it excluded the towns Banepa and Panauti from the short list and the new town included were Bidhur and Kamalamai. In this case also, the Bharatpur secured the first position.
Table 15: Ranking of UEIP towns through sensitivity analysis 2 based on AHP method RANKING 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Bharatpur Birganj Ratnanagar (Tadi) Pokhara Butwal Bidhur Hetauda Kamalamai Dhulikhel Dhading Besi Banepa Panauti Janakpur Bhimeshwor UEIP TOWNS 83.7 80.6 79.4 75 73.8 73.1 73.1 71.9 71.3 71.2 70 68.8 61.3 58.7 SCORE

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The four aspects of analysis showed that Birgunj, Pokhara and Butwal should be included but it was not happened in implementation. It was observed that there were biases in the selection of UEIP towns. The recent exclusion of the town Dhading Besi also showed the result was intervened reducing the utility of MCA. Dhading Besi was excluded because of not being a municipality, which is an overt negligence to be reckoned with.
Table 16: Comparision of rank obtained from different methods.

RANK *UEIP SEL. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Bharatpur Ratnanagar Hetauda Dhulikhel Banepa Panauti Dhading Besi Kamalamai Bidhur Janakpur Bhimeshwor Butwal Pokhara Birganj WT METHOD Bharatpur Ratnanagar Butwal Pokhara Hetauda Birganj Dhulikhel Banepa Panauti Janakpur Kamalamai Bidhur Dhading Besi Bhimeshwor

UEIP TOWNS NOR. AHP Bharatpur Ratnanagar Butwal Pokhara Hetauda Birganj Dhulikhel Panauti Banepa Bidhur Dhading Besi Kamalamai Janakpur Bhimeshwor SENS1 AHP Bharatpur Ratnanagar Butwal Dhulikhel Hetauda Birganj Panauti Pokhara Banepa Kamalamai Bidhur Dhading Besi Bhimeshwor Janakpur SENS 2 AHP Bharatpur Birganj Ratnanagar Pokhara Butwal Bidhur Hetauda Kamalamai Dhulikhel Dhading Besi Banepa Panauti Janakpur Bhimeshwor

* UEIP selected towns are not ordered in ranked position From the result interpreted from the MCA tools it is clear that some discrepancies were there while selecting of UEIP towns. Interviews were taken with the key actors decision makers involved in decision making process to find out why this distortion occurred and the analysis of qualitative data from interviews shows that:

53

1. Result of Technical analysis can be summarily dismissed by those in decision making hierarchy for instance;
Both the method of MCA shows Butwal should have been included for UEIP

implementation which never happened in reality. During the process of research, it came to be known that professional involved from ADB in this project wanted to exclude Butwal because their argument was not to include the towns which were doing well where the counter part professionals wanted to follow the result of analysis. A better doing city even should be improved so as to set examples for other cities was the argument of counter part professionals. This resulted in conflict of interests between donor agencies and counter part professionals which was swiftly dismissed from a government high rank official saying that only the central region towns must be included for UEIP projects.
Similar case was happened in the case of Birganj; it was excluded because border

towns should not be included for the UEIP implementation because they felt that Birganj would not function well for retaining the urban migration towards Kathmandu.
Pokhara was excluded on advice of donor agency as there was already a project run by

ADB. 2. No matter what criteria are used some pre determined criteria, very often, particularly when it comes from decision makers higher up in actually trumps the MCA. For instance I came to learn in sense of my research that secretariat of DUDBC wanted to implement this project round the outer circle of KTM valley and result has been in spite of been all criteria and analysis used the final list of urban areas includes only urban areas in the inner rings. 3. Entirely new criteria that were not included in MCA often got introduced in decision making process for instance the criteria did not aware with possible intervention from the interest of donor agencies and multi actor decision makers hierarchy. 4. There is deficiency of rational decision making culture in Nepalese planning context. For instance many of participants in decision making process felt there is not any need of MCA because no matter how rigorous the criteria making process and the selection of towns, the analysis would be overruled by some vested interest.

54

5. MCA is a very time consuming process and required rigorous process and input. In this case for instance the decision makers themselves felt that their professional input as well as time remained insufficient to meet the rigorous analysis through MCA which could be one of the reasons why distortion occurs in the selection process. 6. Because there is insufficient data, quantifying weightage as well as assigning quantitative measurements for the various criteria is always very subjective. For instance it is difficult to quantify the measurement of Opportunities to Physical Planning, Economic Potential, etc hence these should have the qualitative data that causes distortion while judgments were to be carried out from individuals. Also there are deficiencies in database system in our context maximum possibilities of distortion in analysis were obtained. For instance in case of Hetauda 43 % of the error was found in data projection. In the Nepalese context, the decision-making procedure for the implementation of large urban infrastructural projects is tangled in the web of rationality and practicality. The dominance of rational attitude to tackle the problem seemed to have cast blight over the entire project in the long-run. Since there was a considerable dearth of initial database, the decision makers deliberately downplayed the significance of this and other relevant criteria by focusing them on external communication. The pros and cons were not discerned properly and an undue emphasis was laid on rationality and external communication. This view is outlined in Incremental planning theory which points out that weak database system lead the planning process to take the route of external communication. Similarly, Subjectively Utility Theory argues that the rational decision making process is related to the information processing capacities of decision makers which is found quite applicable in this context because the variation in subjective scoring between the individuals and the intervention in the result of analysis support the argument. Likewise, Holistic Differentiation Theory holds that low involvement categorizes the quick decision process which the experts and decision makers rely on at the time of criteria selection being insouciance of the possible consequences. The exclusions of Dhading Besi town during the middle phase of the project period illustrate this.

55

7. CONCLUSION AND RECOMMENDATION The main objective of the research work was to test the utility of MCA in the large urban infrastructural investment project .Likewise, the two secondary objectives, i.e. to analyze the process of decision making at different levels for urban infrastructural development and to suggest ways of integrating multi-criteria, multi-actor decision making process in urban infrastructure investment, have also been fulfilled. For the purpose of research, MCA tools were used employing the WT and AHP method for analyzing the rationality of towns selection for UEIP implementation. In this study the same criteria used by the experts in the analysis were applied for the selection of towns. No new criteria were introduced during analysis so as to identify the reality of their analysis in selection and involvement of multi actor decision makers in short listing the UEIP towns for implementation. Both the method showed the partial biases (occurred in three towns Butwal, Birgunj and Pokhara). The research also showed that the utility of MCA reduced in Butwal, Birgunj and Pokhara because of the intervention from individuals in the decision-making hierarchy. Research also found that decision making processes get influenced by actions and limitations external to the MCA framework. . For instance, lack of availability of data, tlow involvement of relevant organizations, available time, lack of continuous input from technical professionals distorts the results of MCA. Also the rationality of decision making process relies on two essential elements: a correct identification of the relevant criteria, and a correct measurement of these criteria. Hence a pragmatic combination of these elements influences the rest of the process. Finally the MCA software is only a tool for decision support, it is not an automated alternative for decision making. It enhances the perspectives of decision makers through integration of various t criteria and presenting the options in numerical or graphical interface.. The utility of the MCA also depends on the information processing capacities of the decision makers and in the context of Nepal the key role in actual decision making stay with hierarchy in decision makers.

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7.1 RECOMMENDATION

1. Rationality is a key approach to decision making however rational processes often get undermined by individual decision makers in the planning hierarchy. tendency is curbed, the utility of MCA will remain limited. 2. Large infrastructural projects may have many conflicting problem. Thus in selection of those criteria, rigorous study is necessary and the criteria adopted for analysis should be communicated with the concerned stakeholders properly. 3. Decision making depends on information processing capacities of the decision makers, and the planning in large projects is of complex in nature especially in countries like Nepal where data availability is limited. In such cases decision making is mostly dominated by subjective judgments rather than rational processes. Hence to avoid the possible distortion in the analysis high level of technical input is required. 4. Role of relevant organizations/ interest groups should be increased by making decision process transparent through better communication about the methodology of selection criteria and t alternatives solutions. 5. Though MCA tools, in general, have significant usage in decision support, the utility is reduced very often by the external criteria. Hence a wide spectrum of criteria must be included in analysis in anticipation of emergent perspectives in the decision making hierarchy.. 6. From the analysis the result tabulated from AHP method matched with simple WT method and the information generated from the different professional. The ranking of the towns were similar but the score obtained are different to WT method. This happened because of the pair-wise comparison capacity of AHP based on this research the AHP software would be recommended to use as MCA software for decision making in selection of large urban infrastructural project. Until this

57

7.2 RECOMMENDATION FOR FURTHER RESEARCH This research is limited only on the criteria adopted by the counterpart professionals

and hence the result is entirely focused on the selection criteria of the UEIP towns. Further research could be conducted on the appropriateness of the criteria used for the ranking of UEIP towns. Also new criteria could be included with in the research.
The comparison of AHP method could be done with other decision making software in

large infrastructural investment projects. Further research could be conducted to find out the possibility of evaluation in two aspects of value related factors and numerical factors.
This research did not include perception of real beneficiaries groups hence the further

research could done through the involvement of real beneficiaries group in decision making process to find out the need of acute intervention. This will also outline rationality of criteria selection in forehand.
Further research could be done on the decision making process at the level of

implementation of the project in UEIP towns. Then the complete hierarchy of decision making process from the conceptual level to selection and finally the implementation would be transparent.

58

BIBLIOGRAPHY

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University Library, 2007. Harvard System of Referencing. Angilia Ruskin University. Available at http://libweb.anglia.ac.uk [ accessed 4 September 2007]. Vaidya, O.S, and Kumar, S., (in press) Analytic hierarchy process: an overview of applications. European journal of operational research. (accepted for publication April 2004). Von Neumann, J., & Morgenstern, O., 1947. Theory of Games and Economics Behaviour, Princeton University Press, Princeton.

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Criteria Municipalities

Oppertunities Degree of Willingness Urban Urban Economic Commitme Linkage Proximity Institutional Capacity Environment of Physical Participation of people to Ktm with nt of Growth Potential Planning View Point Towns Kathmandu (km) Rate leader

1 Banepa 2 Dhulikhel 3 Panauti 4 Bhimeshwor 5 *Bidur 6 Dhading Besi 7 Bharatpur 8 Ratnanagar 9 Hetauda 10 Kamalamai 11 Pokhara 12 Butwal 13 Birganj 14 Janakpur Note: * Bidur till to date is VDC Value Judgements: Very High High Okay Not Much ii

Institute of Engineering Dept. of Architecture and Urban Planning

Pulchowk, Lalitpur

Tribhuwan University

Selection of UEIP Towns:

1. What were the instructions received from higher authority for selection of UEIP towns? 2. What were the strategies developed from the professional for the selection of UEIP towns? 3. What were the roles of ADB during the selection of UEIP towns? 4. What were the roles of steering committee during the selection of UEIP towns? 5. Did the project team consult with the different organizations (Like MUAN, UDLE, and other line agencies) who had been contributing since a long time for the urban infrastructural development? 6. How did the roles of nations five year plan, local self governance act, 1999 and other related legislation influence the project selection? 7. Was the time allocation for the selection of UEIP towns enough to study all possible parameters? If not how much would required performing detail task? 8. Was the criteria developed were enough for selection or it should had incorporated others criteria for judgments, and 9. What was the degree of validity of data thus collected on these criteria for selection of towns?

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10. How many times the counterpart professional visit the UEIP towns and how long the duration was?

11. It was found that multi criteria analysis was done for the selection of UEIP towns from short listed towns, where the importance for each criterion was given equal weightage, why? If importance of each Criteria/ Sub criteria should no be equal, then what would be the appropriate weightage, please check the following box.

Column I

Extreme Very Strong Moderate Equal Moderate Strong Very Extreme Column II Strong Strong Strong Strong Institutional/ Economical Technical Institutional/ Social Technical Economical Social

Column I

Extreme Very Strong Moderate Equal Moderate Strong Very Extreme Column Strong Strong Strong Strong II Institutional Opp. to Capacity Phy. Planning Institutional Degree Capacity of Freedom Opp. to Degree Phy. of Planning Freedom

Column I Extreme Very Strong Moderate Equal Moderate Strong Very Extreme Column II Strong Strong Strong Strong Urban Economic Growth Potential Rate Urban Linkage Growth with Rate Kathmandu Urban Proximity Growth to Rate Kathmandu Economic Linkage Potential with Kathmandu Economic Proximity

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Column I Extreme Very Strong Moderate Equal Moderate Strong Very Extreme Column II Strong Strong Strong Strong Potential to Kathmandu Linkage Proximity with to Kathmandu Kathmandu

Column Extreme Very Strong Moderate Equal Moderate Strong Very Extreme Column II I Strong Strong Strong Strong Commit. Urban envn. of town View point leader Commit. Willingness of town of leader Participation Urban Willingness envn. of View Participation point

12. Did the project team felt any pressure from external forces (Donor agencies, central government, political leaders, etc) who vested their interest during period of town selection? 13. 5 towns and 2 towns were excluded from donor agencies and experts, on what basis these towns were excluded, why these towns didnt performed for multi criteria analysis?

14. When multi criteria analysis was carried out based on equal importance of criteria/ sub-criteria, filled up from experts, Pokhara Butwal & Birganj should be included but in real it was not happened why?

15. What were the challenges did the consultant team encountered during the selection of UEIP towns?