ADB Pledges $550 Million to Upgrade Roads of India's Uttaranchal State
MANILA, PHILIPPINES - ADB will help improve the living standards of the rural population of Uttaranchal through a 10-year program of investments amounting to US$550 million to upgrade the Indian state’s roads. More than 90% of the intra- and intercity freight and passenger traffic in Uttaranchal moves by road. Yet nearly one third of the state’s main roads and almost three quarters of the other district and village roads under the jurisdiction of the state Public Works Department (PWD) need to be repaired or upgraded. Poor surface condition, coupled with excessive narrowness over hilly terrain, seasonal blockages at high altitude and ever increasing traffic flow are causing a decline in the speed and reliability of transport services. The resulting delays are limiting the growth of the agriculture sector, which contributes about one third of the state’s net domestic product and employs more than half of the workforce. The tourism industry, which depends heavily on visitors to some of the country’s most revered shrines, is also suffering because of the lack of year-round access. To address these deficiencies and spread the benefits of growth more evenly throughout the state, Uttaranchal has drafted a Road Development Plan that will cost an estimated $1.2 billion to carry out over 10 years. The ADB investment program would finance part of the plan, rehabilitating a total of about 10,800 kilometers of state roads – or about two thirds of PWD’s network. It will also enhance the operation of the PWD itself, improving business processes, accountability, and transparency. “The roads to be improved are spread over all 13 districts of the state and will be accessible to about 3.5 million people living in nearby villages,” says Prianka Seneviratne, ADB team leader for the project. “Over time, they will benefit from a gradual speeding up of travel time, an easing of vehicle operating costs, and creation of hundreds of thousands of hours of labor work.” The funds will be supplied through a multitranche financing facility, from which separate loans can be drawn to a total of $550 million over the 10-year life of the facility. The first loan, for $50 million, will improve 570 km of roads in the state and initiate a reengineering of PWD’s business processes. The ADB loans will come from its ordinary capital resources, with terms to be set separately for each. Interest will be in accordance with ADB’s LIBOR-based lending facility. PWD is the executing agency for the program. About ADB | 
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