Nepal: Subregional Transport Enhancement Project

Sovereign Project | 44143-013

Summary

The proposed loan and grant (the Project) will improve the country's road network totaling about 217.3 km, (i) providing north-south link of the country's north eastern region to the east-west highway (EWH); and (ii) improving major international trade corridors in the country in conjunction with customs systems enhancement. The capacity of the road sector and customs institutions will also be strengthened. The project will expand connectivity with remote areas and enhance the capacity of major international trade corridors to develop the economy of project areas as well as integrate those more effectively with their primary markets in India, and further to third countries, by enhancing the capacity of roads and customs clearance.

Latest Project Documents

Consulting Notices

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Procurement Notices

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Procurement Documents

Title Document Date
Subregional Transport Enhancement Project Apr 2014

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Project Name Subregional Transport Enhancement Project
Project Number 44143-013
Country Nepal
Project Status Approved
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant 0225-NEP: Subregional Transport Enhancement Project
Asian Development Fund US$ 24.50 million
Loan 2685-NEP: Subregional Transport Enhancement Project
Asian Development Fund US$ 24.50 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change
Sector / Subsector Transport - Road transport (non-urban)
Gender Equity and Mainstreaming Some gender elements
Description The proposed loan and grant (the Project) will improve the country's road network totaling about 217.3 km, (i) providing north-south link of the country's north eastern region to the east-west highway (EWH); and (ii) improving major international trade corridors in the country in conjunction with customs systems enhancement. The capacity of the road sector and customs institutions will also be strengthened. The project will expand connectivity with remote areas and enhance the capacity of major international trade corridors to develop the economy of project areas as well as integrate those more effectively with their primary markets in India, and further to third countries, by enhancing the capacity of roads and customs clearance.
Project Rationale and Linkage to Country/Regional Strategy

Poor connectivity is a major development constraint for Nepal. Inadequate feeder roads worsen the isolation of remote rural areas, mostly in northern hilly regions. These areas with high poverty incidence are required to be linked to markets in the country and further extended to those in neighboring countries. The north-south link could also be a potential transit route connecting India and the PRC. In addition to the connectivity issue of remote hilly areas, there is also growing congestion at major international trade corridors, especially EWH and road sections around the borders due to rapid increase of vehicles in Terai areas. This congestion is due to the roads' low capacity and poor condition, as well as the limited capability of customs clearance. The Government is required to expand connectivity of remote areas and, at the same time, enhance capacity of major international trade corridors including EWH and border roads, and customs systems. To address these constraints, the Government developed and has been implementing the Priority Investment Plan (PIP 2007-2016) and the customs modernization plan. Nepal has major international and subregional trade corridors as identified in SAARC Regional Multimodal Transport Study (SRMTS) and the Asian Highways network.

The road sector development strategy under Nepal's Three Year Interim Plan (TYIP, 2007/08-2009/10) includes (i) improving roads for the development of the dense and border area settlements and for the increased accessibility to hitherto unserved remote areas with economic potential, and (ii) developing the east-west highway as the Asian Highway and the regional trade route in accordance with the concept of developing road networks for promoting South Asian regional development. The strategy provides adoption of the planned road asset management system for sustainable, reliable and safe road transport operations through prioritized repair, maintenance, rehabilitation and reconstruction of roads and bridges.

Project roads include: (i) the Salleri-Okhaldhunga and (ii) Okhaldhunga -Harkapur roads (100 km), which provide the remote north-eastern hilly areas with a north-south connection to EWH and further south to the Siraha border; (iii) the Khandbari-Chainpur road (44 km), which provides one of the unconnected district headquarters with a motorable road, and will make a planned north-south transit route connecting India at the Bitranagar border point and the PRC at the KImathanka border; (iv) the Bhairahawa bypass (3.5 km), part of SAARC Road Corridor 10, connecting Kathmandu with Lucknow in India, which also complements India's ongoing Integrated Customs Posts Program; and (v) the Belbari-Chauharwa road (47 km), which is along EWH around border areas and part of the SAARC Road Corridor 4, facilitating subregional traffic through its Kakarvitta border post and India, to Bangladesh. These roads have been selected based on environment, resettlement, social and economic impacts; and project readiness. The capacity enhancement of trade facilitation will also help reduce congestion of border areas by further speeding up clearance through information technology and streamlining customs documentation and procedures. A minor change in scope was approved on 17 August 2013 to include additional road section - Nepalgunj-Kohalpur (22.3 km).

The Project will support the government in addressing two development issues: expand connectivity with remote areas and enhance the capacity of major international trade corridors. The Project is relevant to achieving results of the Country Partnership Strategy (CPS 2010-2014) of enhancing global-local connectivity to facilitate regionally balanced economic growth; as well as the Regional Cooperation Strategy and Programs (2006-2008) in improving subregional connectivity and facilitating intraregional trade in South Asia. The Project is included in the CPS 2010-2014 and the Regional Cooperation Operations Business Plan (2009-2010) as a national project with regional implications. This is an approach in accelerating regional cooperation, supported in the Second High Level Forum on Emerging Vision for Shared Prosperity: South Asia and Beyond, held in Manila in August 2010.

The project has been designed in coordination with development partners to ensure wide geographic coverage and avoid overlaps, and continues ADB's consistent engagement to improve road connectivity and capacity, and facilitate cross-border traffic, in parallel with capacity development such as road safety, social aspects, overload control, and road asset management. The project has substantially enhanced project readiness, e.g., ADB project appraisal on all project roads is based on detailed design prepared by consultants engaged by the government

Impact Promoted economic development of Nepal's border areas and the remote northeastern hills by increasing domestic and regional trades through expansion of the national and subregional transport systems
Project Outcome
Description of Outcome Improved connectivity of remote areas and expanded the capacity of major international trade corrdors in conjunction with the modernization of customs systems, thereby enabling efficient and safe transport within the country and with India and, through India, with Bangladesh and Bhutan.
Progress Toward Outcome The project is being implemented and it would be too early to assess the progress towards the outcome
Implementation Progress
Description of Project Outputs

1. Road investment component

1.1 Road improvement

1.2 Gender, child labor, HIV/AIDS and anti-trafficking awareness

2. Trade facilitation component

3. Capacity development component

Status of Implementation Progress (Outputs, Activities, and Issues)

Road Improvement:

2 ICB and 12 NCB contract packges awarded in 2011. Contractors for all packages have been mobilized in the project sites.

A minor change in scope has been approved for inclusion of a new road section- Nepalgunj-Kohalpur (22.3 km) under the Project, and two ICB contracts were awarded on 29 March 2013. ADB canceled the savings of $9.5 million ($2.5 million grant and $7.0 million loan ) on October 2013.

A total of 217 km road will be upgraded under the Project.

1. Belbari- Chaurahawa road (48 km)

2. Harkapur-Okhaldhunga road (41 km)

3. Okhaldhunga-Salleri road (58 km)

4. Chainpur-Khandari road (44 km)

5. Bhairahawa Bypass road (4 km)

6. Nepalgunj-Kohalpur road (22.3 km)

The overall physical progress of 16 packages ranges from 55% to 100%. Out of 16 civil works contracts, 7 contracts (3 ICB and 4 NCB) have been completed.

Gender, HIV/AIDs and anti-trafficking:

Project has completed implementation of activities on anti-trafficiking, and prevenntion and control of HIv and child labor. The activities included (i) awareness raising to different stakeholders through workshop consultations, (ii) preparation of training and IEC materials and their distribution and dissemination in coordination with locally based government institutions and NGOs, and (iii) finalization of HIV/AIDs and anti-trafficking guideline for DOR. The activities benefited large number of community peoplde both women and men, labors, contractors, CBOs including staff of related agencies in the project areas.

Trade Facilitation:

Two individual consultant (i) an international consultant Business Processing Reengineering/E-customs Masterplan Expert; and (ii) a national consultant Nepal Customs Specialist were selected on 4 Jan 2013 to support in the preparation of e-custom master plan.

A stakeholder meeting to review the draft report (e-custom master plan) was held on 22 October 2013. The Department of Customs held a workshop (organized by UNCTAD) from 4 to 7 March 2014.

DOC signed contract with UNCTAD on 29 December 2014 for implementation of ASYCUDA World.

Capacity Development:

Three experts (i) Road Engineer; (ii) Asset Management/Maintenance Specialist; and (iii) Project Management Specialist provided training to DOR staff in 2012. The consultants have also prepared manuals for capacity development of road sector institutions.

Geographical Location Salleri-Okhaldunga-Harkapur' Khadbari-Chainpur, Bhairahawa, Nepalgunji-Kohalpur, Belbari-Chauharwa
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples B
Summary of Environmental and Social Aspects
Environmental Aspects

The project is classified "B" in accordance with ADB's Safeguard Policy Statement (2009) and therefore initial environmental examinations (IEEs) were prepared for the six subprojects. DOR has submitted all IEEs for ADB approval, and they are now available to interested stakeholders upon request. Findings of the IEEs indicate that the project is not likely to cause significant adverse environmental impact since no forest areas, wildlife sanctuaries, national parks, biodiversity-critical habitats, or similar eco-sensitive areas will be traversed or lie within the corridors of impact as defined in the environmental assessment. Five subprojects have upgraded existing roads with no additional right of way requirements, and minor alignment changes will be made in conformance with road safety standards. Only the Bhairahawa bypass required a new alignment and conversion of predominantly agricultural lands but given the limited length of less than 3.5 km, this subprojet is not foreseen to generate significant adverse impacts.

Most impacts are likely to occur during construction stage, associated with earth movement, embankment shaping, paving, heavy equipment operation and unpaved-road travel. These impacts are temporary in nature, and mitigating measures have been prepared and regularly monitored by DOR and supervision consultants.

No irreversible, diverse or unprecedented environmental impacts are expected to occur and a further environmental impact assessment is not needed.

Involuntary Resettlement The project is classified "B" in accordance with ADB's Safeguard Policy Statement. It has been developed with a view to minimize land acquisition and involuntary resettlement. Where possible, construction activities will take place within the existing right of way. A census was conducted based on the detailed design. Out of six subprojects, three will have minor land acquisition impacts and no resettlement is envisaged. Resettlement plan was revised for Harkpur - Okhaldhunga and Okhaldhunga - Salleri road sections and implemented accordingly. Semi annual Social Safeguard report is available in web site.
Indigenous Peoples The project is classified "B" in accordance with ADB's Safeguard Policy Statement. Social impact assessments confirmed that indigenous people will not be affected more than the rest of the population and will benefit equally from the socioeconomic opportunities created by the project. A combined indigenous peoples plan and resettlement plan was prepared for three subprojects. Adequate compensation provisions have been made in the combined plan to mitigate the impacts on indigenous peoples.
Stakeholder Communication, Participation, and Consultation
During Project Design Meaningful consultations, held in an atmosphere free of coercion, were conducted to ensure a comprehensive perspective on the project and its impacts, and to ascertain community response to the Project, their needs and demands from the project, an estimate of losses that they would suffer, and steps to mitigate those losses. Social impact assessments confirmed that indigenous people will not be affected more than the rest of the population and will benefit equally from the socioeconomic opportunities created by the Project.
During Project Implementation Consultations will be conducted, if and when necessary.
Business Opportunities
Consulting Services A consulting firm has been recruited using ADB's quality- and cost-based selection procedure in accordance with Guidelines on the Use of Consultants by the Asian Development Bank. It was envisaged that about 60 person-months of international consultants and 1,003 person-months of national consultants will be required for the Project. Consultants will carry out (i) construction supervision of six road sections; and (ii) support the Government in improving the road sector management performance through capacity building of road sector institutions.
Procurement 2 ICB and 12 NCB packages awarded for upgrading of 195 km road. 2 ICB packages for Nepalgunj-Kohalpur road (22.3 km) awarded on 29 March 2013.
Responsible ADB Officer Bhupendra Bhatt
Responsible ADB Department South Asia Department
Responsible ADB Division Nepal Resident Mission
Executing Agencies
Ministry of Physical Infrastructure and TransportHPSHARMA@MELAMCHIWATER.ORGSingha Durbar
Kathmandu
Nepal
Timetable
Concept Clearance 14 May 2010
Fact Finding 11 Jul 2010 to 22 Jul 2010
MRM 20 Aug 2010
Approval 27 Oct 2010
Last Review Mission -
PDS Creation Date 03 Jun 2010
Last PDS Update 18 Feb 2015

Grant 0225-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Oct 2010 04 Mar 2011 26 Apr 2011 30 Jun 2015 30 Jun 2017 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 51.40 Cumulative Contract Awards
ADB 24.50 27 Oct 2010 18.26 0.00 83%
Counterpart 26.90 Cumulative Disbursements
Cofinancing 0.00 27 Oct 2010 14.84 0.00 67%

Loan 2685-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Oct 2010 04 Mar 2011 26 Apr 2011 30 Jun 2015 30 Jun 2017 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 24.50 Cumulative Contract Awards
ADB 24.50 27 Oct 2010 14.49 0.00 91%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 27 Oct 2010 13.09 0.00 82%
Title Document Type Document Date
Subregional Transport Enhancement Project: Project Procurement-Related Review Project Procurement-Related Reviews Oct 2014
Subregional Transport Enhancement Project Procurement Plans Apr 2014
Financing Agreement for Subregional Transport Enhancement Project between Nepal and Asian Development Bank dated 4 March 2011 Financing Agreement Mar 2011
Subregional Transport Enhancement Project Reports and Recommendations of the President Oct 2010
Subregional Transport Enhancement Project Summary Poverty Reduction and Social Strategies Oct 2010
Subregional Transport Enhancement Project Project/Program Administration Manual Sep 2010

Safeguard Documents

See also: Safeguards
Title Document Type Document Date
Subregional Transport Enhancement Project: Social Safeguard Monitoring Semiannual Report (July-December 2014) Social Monitoring Reports Dec 2014
Subregional Transport Enhancement Project: Environmental Monitoring Report (July-December 2014) Environmental Monitoring Reports Dec 2014
Subregional Transport Enhancement Project: Social Safeguard Monitoring Semiannual Report (April - June 2014) Social Monitoring Reports Jul 2014
Subregional Transport Enhancement Project: Environmental Monitoring Report (November 2013 - April 2014) Environmental Monitoring Reports Apr 2014
Subregional Transport Enhancement Project: Okhaldhunga-Salleri Road Resettlement Plan Resettlement Plans Mar 2014
Subregional Transport Enhancement Project: Harkapur-Okhaldhunga Road Resettlement Plan Resettlement Plans Mar 2014
Subregional Transport Enhancement Project: Social Safeguard Monitoring Semiannual Report (September 2013 - February 2014) Social Monitoring Reports Mar 2014
Subregional Transport Enhancement Project: Nepalgunj-Kohalpur Road Resettlement Plans Nov 2012
Subregional Transport Enhancement Project: Upgrading of Nepalgunj - Kohalpur Road Initial Environmental Examination Dec 2011
Subregional Transport Enhancement Project: Bhairawaha Bypass Road Resettlement Plans Aug 2010
Subregional Transport Enhancement Project: Bhairawaha Bypass Road Initial Environmental Examination Aug 2010
Subregional Transport Enhancement Project: Okhaldhunga-Salleri Road Resettlement Plans Aug 2010
Subregional Transport Enhancement Project: Okhaldhunga-Salleri Road Initial Environmental Examination Aug 2010
Subregional Transport Enhancement Project: Harkapur-Okhaldhunga Road Resettlement Plans Aug 2010
Subregional Transport Enhancement Project: Harkapur-Okhaldhunga Road Initial Environmental Examination Aug 2010
Subregional Transport Enhancement Project: Chainpur-Khandbari Road Initial Environmental Examination Aug 2010

Evaluation Documents

See also: Independent Evaluation

No documents found.


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