MANILA, PHILIPPINES - A US$200 million ADB loan will help improve a key highway in the northeastern part of the People's Republic of China (PRC).
The project will develop an integrated road network by upgrading 428 km of the Jixi-Nehe provincial highway in Heilongjiang province, along with 170 km of rural roads feeding the highway.
This project is ADB's first loan for local roads and non-expressways in the country. "Not only does the project dovetail into the PRC's infrastructure thrust, but it diversifies ADB's operations in the country's road sector as well," says Eunkyung Kwon, an ADB Principal Transport Specialist.
The provincial highway is one of the Government's priority investments as it will support the revitalization of the northeast region as an industrial hub, a key strategy for the 11th Five-year Plan.
Cutting across the province's middle, the 775 km Jixi-Nehe corridor connects the eastern and western parts of the northeast region. Despite its critical role, more than a half of the corridor consists of low quality highways, or gravel roads, all in poor condition.
Some sections have no drainage and are impassable during winter or wet seasons. Traffic congestion due to the poor conditions often causes transport costs to spiral. Likewise, the growth of economic activities is severely hampered by the poor transport links.
"The project will improve transport efficiency and safety, expand the transport network in Heilongjiang, and improve access to income-generating opportunities and social services," says Ms. Kwon.
"The project will promote economic growth in the area and integrate poor, isolated regions with the centers of economic growth. Once linked to the major road network, the improved rural roads will help spread the project highway's benefits to the rural economy."
ADB had, up to the end of last year, approved $6.37 billion in loans to develop road infrastructure in the PRC, to help reduce the inequalities between the country's coastal and interior provinces and bridge the income gap between urban and rural populations.
ADB's loan, which covers about 38% of the project's total estimated cost of $524.55 million, comes from its ordinary capital resources. It carries a 25-year term, including a grace period of 5 years, with interest to be determined in accordance with ADB's LIBOR-based loan facility.
The China Development Bank will provide a $148.8 million loan for the project, while the Ministry of Communications and the Heilongjiang Provincial Government will shoulder the balance.
The Heilongjiang Provincial Communications Department is the executing agency for the project, which is due for completion around September 2010.
