Bhutan: Road Network Project II

Sovereign Project | 39225-022 Status: Approved


ADB is helping Bhutan improve the road network in its southern region. The project will upgrade or construct critical sections (about 180 kilometers) of the southern East-West Highway. This is expected to improve transport efficiency and safety in the region.

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Procurement Documents

Title Date
Road Network Project II Mar 2014

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Project Name Road Network Project II
Project Number 39225-022
Country Bhutan
Project Status Approved
Project Type / Modality of Assistance Grant
Technical Assistance
Source of Funding / Amount
Grant 0174-BHU: Road Network Project II
Asian Development Fund US$ 38.76 million
TA 7374-BHU: Capacity Building of the Department of Roads (Piggybacked to Grant 39225-02)
Technical Assistance Special Fund US$ 400,000.00
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Sector / Subsector

Transport - Road transport (non-urban) - Transport policies and institutional development

Gender Equity and Mainstreaming Some gender elements

The Project will upgrade or construct five critical sections (about 180 kilometers [km]) of the southern east-west highway, including (i) Manitar-Raidak, (ii) Raidak-Lhamoizingkha, (iii) Pangbang-Amshingwoong (Nganglam), (iv) Tsebar-Mikuri-Durung Ri, and (v) Samdrupcholing-Samrang. Consulting services will be provided to prepare detailed design and support implementation of the civil works. These proposed road sections provide access to the border crossings and have significant regional implications. Road improvement and construction works under the Project include construction of roadways, including longitudinal drainage structures, installation of culverts and bridges, construction of new bridges and cross-drainage structures, and structures for resettlement and rehabilitation.

The Project will also enhance overall sector management capacity by providing (i) equipment necessary for the Royal Government of Bhutan to enhance sector capacity in areas such as (a) quality survey, design, and construction, (b) road safety, and (c) control of overloading and vehicle emissions; (ii) on-the-job training for social and environmental requirements through detailed design and construction supervision consultants; and (iii) technical assistance (TA) to support the capacity building of the Department of Roads (DoR), including (a) enhancing knowledge of and skills in modern road technologies, especially with environmental considerations; and (b) enhancing and optimizing the road asset management systems.

Project Rationale and Linkage to Country/Regional Strategy

Accessibility is Bhutan's key development issue-the trunk road network is dependent on a single east-west national highway running through the northern part of the country. The absence of a similar east-west highway running through the south has constrained travel in the southern part and hence development opportunities, including potential trade with India. Limited provision of feeder roads adds to the isolation of remote southern rural areas. The proposed Project will construct critical sections of the southern east-west highway, which will facilitate industrial development in the southern areas and integrate them more effectively with their primary markets in India.

The DoR, which is in charge of road development and management, is limited by traditional road-building technologies, which often lead to cost and time overruns in project delivery. For efficient and effective road asset development and management, the DoR needs to be equipped with knowledge skills, and tools for the use of modern technologies in planning, survey, design, and construction, especially with regard to environmental considerations. Improved road safety and control of overloading and vehicle emissions are also required for the safe and efficient use of road assets with minimal adverse environmental impacts.

Impact Industrial development promoted in the southern economic hubs and increased regional trade through increased passenger and freight transport on the country's road network and regional transport and distribution system
Project Outcome
Description of Outcome Expanded road transport capacity in the southern region, facilitating efficient and safe transport in the southern region of the country and with India and through India to Bangladesh and Nepal
Progress Toward Outcome Detailed Design and Construction Supervision Consultants recruited. All civil works packages awarded and works started in Q4 2011. Physical works have been completed for all 5 national highways and 2 feeder roads.
Implementation Progress
Description of Project Outputs

1. Critical sections connected along the southern east-west corridor

2. Strengthened capacity of road engineering technologies and road asset management


Status of Implementation Progress (Outputs, Activities, and Issues) Physical works have been completed for all 5 national highways and 2 feeder roads.
Geographical Location Southern areas of Bhutan
Safeguard Categories
Environment A
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The Project has been classified as category A under ADB's Environment Policy (2002) as some of the road segments fall inside environmentally sensitive areas. Most of the impacts are short term, reversible and confined to the construction stage of the Project. Most of the impacts can be minimized and addressed through mitigation measures that have been included in the engineering design and the EMP, which follows the principles of environmentally friendly road construction advocated by the Dept. of Roads. Hence, all neessary mitigation costs have already been included in the engineering works. Both the EMP and the engineering costs were further updated after the detailed design studies were carried out and the updated EMPs were approved by ADB in July 2011. Environmental Clearances for all contract packages have been received by ADB. The first annal external monitoring was carried out in October 2012.
Involuntary Resettlement The updated resettlement plans have been uploaded to the ADB website in May 2011. Proof of compensation for some of the contracts have been approved by ADB before civil works commencement of relevant sections.
Indigenous Peoples No impact on indigenous people is envisaged.
Stakeholder Communication, Participation, and Consultation
During Project Design Group discussions were undertaken with different stakeholders.
During Project Implementation Continuous consultation with different stakeholders.
Business Opportunities
Consulting Services Two international consulting firms were recruited for (i) detailed design and procurement assistance and (ii) construction supervision of civil works under the Project.
Procurement The civil works contracts are being undertaken in 10 contract packages ranging between $2.4 million - $8.5 million. All these contracts have been procured through international competitive bidding procedures with domestic margin of preference. ADB standard bidding documents with postqualification under the two-envelope system were adopted. The NCB Annex drafted by COSO has been agreed.
Responsible ADB Officer Guenter Hoelscher
Responsible ADB Department South Asia Department
Responsible ADB Division Transport and Communications Division, SARD
Executing Agencies
Department of Roads
Mr. Tenzin Jamstho
Department of Roads, Thimphu Bhutan
Concept Clearance 03 Jun 2009
Fact Finding 22 Jun 2009 to 03 Aug 2011
MRM 18 May 2005
Approval 10 Nov 2009
Last Review Mission -
PDS Creation Date 18 Jan 2010
Last PDS Update 27 Oct 2015

Grant 0174-BHU

Approval Signing Date Effectivity Date Closing
Original Revised Actual
10 Nov 2009 14 Dec 2009 19 Jan 2010 30 Jun 2015 30 Jun 2016 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 38.76 Cumulative Contract Awards
ADB 38.76 10 Nov 2009 38.14 0.00 98%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 10 Nov 2009 38.52 0.00 99%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

TA 7374-BHU

Approval Signing Date Effectivity Date Closing
Original Revised Actual
10 Nov 2009 27 Jan 2010 27 Jan 2010 31 Jul 2010 30 Dec 2011 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
400,000.00 0.00 100,000.00 0.00 0.00 0.00 500,000.00 10 Nov 2009 388,739.31
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory
Title Document Type Document Date
Road Network Project II Procurement Plans Mar 2014
Road Network Project II Project/Program Administration Manual Jan 2010
Grant Agreement (Special Operations) for Road Network Project II between Kingdom of Bhutan and Asian Development Bank dated 14 December 2009 Grant Agreement Dec 2009
Road Network Project II Reports and Recommendations of the President Oct 2009
Road Network Project II Design and Monitoring Frameworks Aug 2009

Evaluation Documents

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Related Publications

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