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MANILA, PHILIPPINES (24 June 2004) - ADB has approved a technical assistance (TA) grant of US$1 million to help the People's Republic of China (PRC) improve the planning and operation of its road network projects.

The grant comes from the Poverty Reduction Cooperation Fund, financed by the Government of the United Kingdom.

The TA will assist the Government in preparing a road network strategy that promotes the integration of local roads with expressways, to meet local community needs and support economic growth. It will also provide road agencies with the cross-disciplinary skills and tools to incorporate poverty and stakeholder related issues in various stages of road project planning, implementation, and operations.

"The currently inadequate and insufficient road networks are core constraints on achieving key economic and social development objectives, particularly for the poor," says Kim Jraiw, an ADB Transport Specialist.

"The poor have limited mobility beyond their immediate communities because of their relative isolation and the high costs of transport. They view roads as the key infrastructure needed to accelerate development, market their goods, shift to cash crops, improve their quality of life and access to services, create jobs, and increase their incomes."

The road sector is the largest sector in ADB's PRC operations. The link between road development and poverty reduction is supported by evidence from several completed ADB-financed transport projects. An ADB study in the western region of the PRC concluded that, among 28 surveyed mountain villages, the annual per capita income is as low as CNY875 for villages served only with footpaths. The corresponding figures are CNY1,425 for villages with gravel road access and about CNY1,600 for villages with some paved road access.

Poor infrastructure was also cited as a major reason that foreign companies do not expand their operations into the poor interior provinces.

"While ADB's approach includes improving local roads to provide better access for poor communities, there are various factors impeding the linkage of better roads to poverty reduction," Mr. Jraiw adds.

These include

• Insufficient attention is paid to linking expressways with local roads to meet the needs of the poor.
• Different agencies are responsible for expressways and local roads. This institutional issue creates problems in planning and coordination.
• Allocation of the scarce resources toward expressways may be diverting funds from local roads.
• Lack of fiscal resources for local roads, which, unlike expressways, are not tolled.
• Inadequate sustainable transport planning, through which expressways and local roads can be integrated with community transport systems.
• Absence of databases, analysis resources, monitoring system, and guidelines for addressing social and stakeholder dimensions in addition to traditional road engineering factors.

The TA will help to address these constraints by developing an integrated and sustainable road network development strategy, recommending a central Government mechanism to fund local road investments, and improving the Government's feasibility study methodology and guidelines to facilitate the planning and selection of road network projects.

It will also develop a computerized information and modeling system that will provide uniform social, economic, engineering, transport, and area-specific data to fill current gap; and conduct a pilot project to test the strategy, feasibility study methodology, and system.

In addition, the TA will create a transport planning unit that will serve as an expert body to improve road investment programs and strengthen interagency cooperation and coordination.

The country's motorized vehicle fleet is growing at 15-30% a year, creating a huge demand for more road space. In response, the Government has increased investment in the road sector and the road network expanded from 1.16 million km in 1995 to 1.81 million km in 2003.

In 2003, the vehicle fleet totaled more than 24 million trucks, cars, and buses; and 72 million other motorized vehicles. Between 1985 and 2003, the number of privately owned motor vehicles increased from 300,000 to 12 million.

Given the PRC's rapid economic growth, the still low vehicle ownership rates, falling car prices and increasing access to loans, the vehicle fleet will continue growing rapidly.

This growth and fragile road network system have created various problems such as increased congestion and a rising road accident toll. In 2003, there were more than 104,372 road deaths reported, or one every five minutes - the highest rate in the world.

Economic losses arising from road accidents amount to 1-3% of gross domestic product per year. A disproportionate number of the deaths are from among the poor, usually pedestrians, public bus users, or those on nonmotorized transport.

The total cost of the TA is about $1.4 million, of which the Government will finance $400,000 equivalent. The Ministry of Communications is the executing agency for the TA.

Read the full TA report.

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