|Project Rationale and Linkage to Country/Regional Strategy
Under the India country partnership strategy (2009-2012), the Asian Development Bank (ADB) supports all levels of the road sector development as a core infrastructure operation to facilitate sustainable economic growth. The project is consistent with the strategic objective set out in the country partnership strategy, which recognizes limited network capacity, limited operational capacity for management of road assets and road safety as main challenges in the road transport sector in India and recommends expansion of support to the state road sector to ensure an inclusive approach to fill the gap between ADB''s financial support in the rural road sector and the National Highway Development Program. The proposed project is included in the India country operations business plan (2012-2014) and was advanced for approval in 2012.
In India, road transport accounts for 68% of freight movement and 87% of passenger traffic. The national highways and the secondary system are unable to cope with the rapid traffic growth. In the road sector, freight traffic increased at about 12% and passenger traffic at about 8% per year in the past decade. The rapid growth in traffic leads to congestion, deterioration of roads and increase in the cost of transport. State roads, the secondary road system in India, link national highways with district headquarters and important towns. The secondary system comprises about 13% of the road network and carries about 40% of traffic. It is estimated that about half of the roads in the secondary system are of poor riding quality.
Chhattisgarh is one of India's poorest states and was established on 1 November 2000 through bifurcation from Madhya Pradesh state. Chhattisgarh is rich in mineral and coal deposits and located in the east of central India. About 41% of its 21 million population live below the national poverty line. Since about 32% of its population is tribal and scheduled caste, and forests cover about 44% of its area of 135,191 sq.km, it is known as a tribal and forest state.
Roads are the main mode of transportation in Chhattisgarh. National highways provide good east-west connections with neighboring states, and the main north-south connection within the state. However, the remaining roads in Chhattisgarh are mostly in poor conditions, and not usable in the monsoon season. This is especially true for roads in southern and northern Chhattisgarh, where most of the tribal people live. Many roads are only single or intermediate lane roads which lack sufficient capacity to cope with the growing traffic. The total road length in Chhattisgarh is about 36,000 km with the road density less than 30 km per 100 sq.km against the national average of 100 km per 100 sq.km. Moreover, 80% of its existing road network has an International Roughness Index worse than 4. Thus, Chhattisgarh lacks an adequate road network to support the required mobility between areas with natural resources, industrial centers and economic development zones, and provide better access to social amenities.
To improve state roads, CGPWD in 2002-2003, prepared a 10-Year Master Plan for Road Sector Development for the years 2003 to 2012, which aims to (i) promote development of six main road corridors, (ii) remove capacity bottlenecks from the network to better connect rural areas, and (iii) support socioeconomic development by improving road access and connectivity among growth centers. Based on the Master Plan, the Government of Chhattisgarh (GOC) prepared and approved a priority investment program for improvement, rehabilitation, strengthening and widening of about 5,000 km of state roads at an estimated cost of about INR105 billion ($2 billion). The master plan was updated in February 2006 using ADB technical assistance to identify road sector development needs for the period 2005-2016. The master plan recommends development of 8,871 km of state highways and major district roads at a cost of INR 33 billion ($600 million equivalent) in 2004 prices.
In order to support improvement of the road network in Chhattisgarh by implementing the road master plan, ADB provided a loan of $180 million in 2003 that supported improvement of 1,250 km of state roads in Chhattisgarh as well as state roads sector reforms; the project was successfully implemented and completed in July 2011. The project faced delays in the completion of about 2.5 years which were mainly due to (i) initial delays because of a lack of project readiness at the time of loan approval and (ii) limited capacity for project management and project implementation in CGPWD, which was at the time of loan approval in a phase of being established as an independent department for the State of Chhattisgarh, which was bifurcated from Madhya Pradesh only 3 years earlier. ADB therefore provided capacity development for the roads sector management in Chhattisgarh by the TA attached to Loan 2050, which supported (i) updating of the road master plan for the period 2005-2016 and (ii) establishing policies for planning and management in CGPWD, which also helped to prepare this project.
The roads proposed for inclusion under the project have been selected from this updated road master plan. The proposed project will supplement ADB's support in the rural road sector in Chhattisgarh by linking rural roads to the state and national highway network and thus providing access for the rural population to markets, businesses, social services and education.
The proposed project is prepared as a Sector Loan, as (i) the Government of Chhattisgarh has with the road master plan (2005-2016) a sector development plan, (ii) CGPWD has sufficient institutional capacity to implement this sector development plan as demonstrated in the successful completion of the previous loan, and (iii) appropriate policies to implement the sector development plan have been established. The two sample subprojects are the (i) Simra-Kurud road (SH-20, 110 km) and the (ii) Nandghat-Gidhori road (SH-10, 91 km), which represent almost 25% of the project cost. The non-sample roads will be selected and approved in line with the process outlined in the Project Administration Manual.
As the sector assessment identified lack of road maintenance in the past as the key factor leading to the deteriorated status of many project roads, the main focus of institutional strengthening by the capacity development TA attached to the proposed loan will be on improving maintenance management and road asset management. The budget available to CGPWD for road maintenance was found to be sufficient.