$300 Million ADB Loan for Major Road Upgrades in India's Chhattisgarh State

News Release | 11 December 2012

MANILA, PHILIPPINES - The Asian Development Bank (ADB) will provide $300 million to overhaul more than 900 kilometers of roads in India's Chhattisgarh state, bringing better access to markets, businesses, social services and education for rural residents.

"More than 40% of Chhattisgarh's 21 million residents live below the poverty line. Low quality roads are undermining the benefits of the state's rich mineral and coal deposits, holding back new economic opportunities and access to social amenities, especially for minority groups," said Juan Miranda, Director General of ADB's South Asia Department.

Road works will include expanding roads to two lanes, building new sections, and constructing and strengthening culverts and bridges. The project supports Chhattisgarh's priority investment program to improve more than 8,800 km of state roads. Once the project is completed in December 2017, ADB will have financed upgrades to nearly 2,200 km of the network.

Chhattisgarh is rich in timber and minerals, including coal, iron ore, tin, limestone and bauxite. Yet it is one of the country's poorest states, with one of the lowest standards of living. About 80% of its residents live outside of cities and rely on agriculture for their livelihood.

Roads account for the vast bulk of passenger and freight transport in India, but a boom in traffic levels over the past decade has left them struggling to cope. Secondary roads carry about 40% of traffic, but around half of them are in poor condition. Chhattisgarh, in central India, has about 36,000 kilometers of roads, but about 80% of the total network is considered rough, with some sections impassable in the monsoon season.

Technical assistance grants of $1 million from ADB and the United Kingdom's Department for International Development (DFID) will help improve Chhattisgarh's road maintenance management capabilities. Along with ADB's loan from its ordinary capital resources, the Government of Chhattisgarh will provide more than $128 million, for a total project investment cost of $428.1 million.