ADB $350 Million Loan 1st to Upgrade District Roads in India | Asian Development Bank

ADB $350 Million Loan 1st to Upgrade District Roads in India

News Release | 19 November 2014

MANILA, PHILIPPINES — The Asian Development Bank (ADB) has approved a $350 million loan to upgrade district roads in India’s Madhya Pradesh state in a project which will tackle an important link in road improvements.

“Madhya Pradesh, India’s second largest state, has widely scattered industrial and growth centers and agricultural production areas, so an efficient and safe road network is essential for the economy and well-being of citizens,” said Ravi Peri, Principal Transport Specialist, Transport and Communications Division, South Asia Department. “The loan, which is ADB’s first in the district roads sector in India, will address a neglected part of ongoing road network upgrades, with these secondary roads providing a key link between rural roads and state highways.”

The project will upgrade about 1,600 kilometers of major district roads in the state through lane widening, surface improvements, and strengthening of culverts and bridges. This will help to cut travel times, improve traffic flow and road safety, and provide better access to markets and social services for poor and remote communities. Five-year performance-based maintenance contracts will be included as an adjunct to the construction contracts, to ensure road assets are constructed to higher standards and well maintained after initial work is completed.

The project roads will also be covered under an accident response system being developed in the state, with assistance from ADB’s prior loans. The state is pioneering this initiative to create insurance links that will finance the immediate hospital treatment costs for road accident victims.

ADB’s loan will cover 70% of the total project cost of $500 million, with the state government of Madhya Pradesh providing the balance of $150 million. The project is expected to be completed in April 2018.

Madhya Pradesh has a road network of about 127,000 kilometers, including 4,700 kilometers of national highways, 11,000 kilometers of state highways, and 20,000 kilometers of major district roads. Rural roads make up the balance. Vehicle use has soared about 10% per year over the past decade and the Madhya Pradesh Road Development Corporation estimates that more than $1.2 billion in investment will be needed in the state road sector from 2013-2023.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members–48 from the region. In 2013, ADB assistance totaled $21.0 billion, including cofinancing of $6.6 billion.