Nepal : Rural Connectivity Improvement Project - Additional Financing

Agriculture, natural resources and rural development / Rural market infrastructure

The overall project is estimated to cost $255.72 million, including additional financing of $120.00 million, of which ADB is providing a concessional loan of $100.00 million from ADB's ordinary capital resources. The government will finance $20.00 million of the proposed additional financing project. The attached TA is estimated to cost $1.00 million, which will be financed on a grant basis by ADB's Technical Assistance Special Fund.

The impact and outcome of the overall project will remain unchanged from those of the ongoing project. The proposed additional financing will scale up the current output 1 by an additional 324 km of rural roads and output 2 by increasing capacity support to fulfill the roles and responsibilities in a federal system.

The additional financing will increase the project's scope by upgrading an additional 324 km of rural roads across five provinces. The implementation arrangements will evolve from the ongoing project to better align and support federalism. The overall project scope is aligned with the government's priorities under the Fifteenth Plan (fiscal year 2020-FY2024), ADB's country partnership strategy for Nepal, 2020-2024 and ADB's Strategy 2030.

The roads will improve connection of rural and agricultural areas with administrative and socio-economic centers. The roads will be improved to all-weather standards, with safety features, and will be maintained for 3 years under performance-based maintenance contracts. The additional financing will also integrate climate adaptation and disaster resilience measures into the technical designs of the infrastructure. Compared to the ongoing project, the additional financing will also include upgrading bridges that are essential for all-weather connectivity and include more intermediate lanes necessary for higher volume areas and steeper slopes.

Connectivity between rural communities, productive agricultural areas, and socioeconomic centers in Nepal improved

Transport efficiency on project roads increased

- All planned civil works packages (NCB-01, NCB-02, NCB-03, NCB-04, NCB-05, NCB-06, NCB-07, NCB-08, NCB-09, NCB-10, and NCB-11) have been awarded. Contract of NCB-04 was terminated due to poor performance of contractor which has been re-awarded in September 2020. Additional 2 packages for construction of 4 additional roads ( packages 12 and 14) from the saving amount have also been identified and awarded on May 2021.

- Capacity Development Consultant, Poject Management Consultants recruited.

- Recruitment of 5 consulting firms for DPR preparation has been completed. Field work of feasibility study of 2,937.69 km has been completed. Field work of detail engineering survey of about 1,897.63 km has been completed. Field work of CPP of 1,013 km and draft report of 290 Km has been completed. Survey completed of 37 and draft design of 7 bridges has also been completed.

- Contract awarded for livelihood related skill training.

Rural road conditions between the selected rural communities, productive agricultural areas, and socioeconomic centers improved

Capacity of rural infrastructure agencies and road users in project areas enhanced.

Procurement of goods, and works shall follow the ADB Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers (2017, as amended from time to time).