52097-001: South Asia Subregional Economic Cooperation Highway Improvement Project | Asian Development Bank

Nepal: South Asia Subregional Economic Cooperation Highway Improvement Project

Sovereign (Public) Project | 52097-001 Status: Active

The project will support capacity, quality, and safety improvements of the East -West Highway (EWH), which is the main domestic and international trade corridor of Nepal, and which forms part of the South Asian Association for Regional Cooperation (SAARC) corridor 4 linking Kathmandu to Dhaka and Chittagong through India. The project will (i) rehabilitate and widen about 87 kilometers (km) of the EWH between Kanchanpur and Kamala in southeastern Nepal; (ii) improve road safety, asset management, and gender equality and social inclusion (GESI) on the 1,027 km EWH; and (iii) strengthen the road safety and GESI capacity of road sector agencies. The project will promote economic growth and contribute to improving the competitiveness of Nepal's exporting industries by enhancing the efficiency of the transport system, strengthening national and regional connectivity, and improving the safety of the road network.

Project Details

Project Officer
Georget, Johan South Asia Department Request for information
Country
  • Nepal
Sector
  • Transport
 
Project Name South Asia Subregional Economic Cooperation Highway Improvement Project
Project Number 52097-001
Country Nepal
Project Status Active
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 3722-NEP: South Asia Subregional Economic Cooperation Highway Improvement Project
concessional ordinary capital resources lending / Asian Development Fund US$ 180.00 million
TA 9604-NEP: Institutional Strengthening of Road Safety and Gender Equality
Technical Assistance Special Fund US$ 750,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Partnerships
Sector / Subsector

Transport / Road transport (non-urban)

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The project will support capacity, quality, and safety improvements of the East -West Highway (EWH), which is the main domestic and international trade corridor of Nepal, and which forms part of the South Asian Association for Regional Cooperation (SAARC) corridor 4 linking Kathmandu to Dhaka and Chittagong through India. The project will (i) rehabilitate and widen about 87 kilometers (km) of the EWH between Kanchanpur and Kamala in southeastern Nepal; (ii) improve road safety, asset management, and gender equality and social inclusion (GESI) on the 1,027 km EWH; and (iii) strengthen the road safety and GESI capacity of road sector agencies. The project will promote economic growth and contribute to improving the competitiveness of Nepal's exporting industries by enhancing the efficiency of the transport system, strengthening national and regional connectivity, and improving the safety of the road network.
Project Rationale and Linkage to Country/Regional Strategy

Country context. Nepal is landlocked and bordered to the north by the People''s Republic of China (PRC), and to the south, east, and west by India. Consequently, Nepal relies heavily on its direct neighbors for international trade particularly India, with which it shares 19 official trading posts. In fiscal year (FY) 2017, 65% of Nepal''s imports were from India, and 13% from the PRC; India received 57% of Nepal''s exports, and the PRC 2.3%. Biratnagar, located 68 km east of Kanchanpur, is Nepal''s largest export gateway, handling 29.5% of its exports, while the port of Kolkata is the primary transit point for seaborne freight.

Economic rationale. The gross domestic product of Nepal grew at an average annual rate of 4.5% during FY2007 -FY2017 and is forecast to grow at 5.9% in FY2018 and 5.5% in FY2019. The economy of Nepal suffers from a structural lack of competitiveness; exports have alarmingly decreased at an average annual rate of 6.1% in real terms during FY2007 -FY2017, while the agriculture sector still employs 69.4% of the labor force. The trade deficit is widening, as foreign remittances have sustained import growth, which increased by 21.3% annually during FY2007 -FY2017. The economy is hampered by deficient domestic and cross-border infrastructure networks, which increase transport costs and impede regional integration and trade with indirect neighbors: excluding India, trade with other SASEC and SAARC member countries accounts for just 0.8% of Nepal''s total trade.

Transport sector context. Road transport carries over 90% of passengers and goods in Nepal. The strategic road network (SRN) totals 12,494 km, 51% of which is paved, and is developed and maintained by the Department of Roads (DOR) of the Ministry of Physical Infrastructure and Transport (MOPIT). The SRN provides vital linkages to major economic centers and neighboring countries, and features eight north south and three east west corridors, including the 1,027 km-long EWH which carries the highest traffic volumes. The local road network totals 57,600 km, 3.5% of which is paved. The road density of Nepal, at 2.5 km of road per 1,000 people, is low, and there are few alternatives to road transport. Although projects supported by development partners are expected to increase the capacity and density of airport, railway, and inland waterway networks, road transport will continue to have a major role in the economic development of Nepal.

Road safety. Vehicle ownership remains low, with only 0.08 vehicles per capita, but vehicle sales increased by 17.5% annually during FY2007 -FY2017, and the number of registered vehicles is expected to quadruple in the next decade. Motorcycles account for 79.7% of sales, which further increases road safety risks, particularly on deteriorated or wet pavements conditions. The traffic fatality rate is estimated at 302 fatalities per 100,000 vehicles, one of the highest rates in Asia, and reported traffic accidents increased from 3,800 in FY2002 to 13,580 in FY2013.

Impact

Transport connectivity within Nepal and with neighboring countries improved

Physical connectivity and multimodal linkages for land-based transport along major trade routes enhanced

Project Outcome
Description of Outcome Efficiency and safety of the road transport system improved
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Road network upgraded and maintained

Planning and management for road safety strengthened

Facilities and project readiness of Project Directorate (ADB) improved

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Kamala River, Kanchanpur
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects Environmental impacts will be mainly restricted to the construction stage with no expected irreversible impacts.
Involuntary Resettlement Land acquisition and resettlement impacts are expected to be limited as the project is developed in the current right-of-way of DOR.
Indigenous Peoples There are no indigenous people in the project area.
Stakeholder Communication, Participation, and Consultation
During Project Design Consultations with the local communities, including women, were conducted to ensure that they were involved in the preparation and analysis of the project design. Consultations on poverty and social assessment, resettlement plan, and environmental assessment are currently being carried out, and overall highlight a high level of support for the project.
During Project Implementation Stakeholders will be consulted during project implementation, particularly for the design and conduct of community awareness campaigns to be undertaken under the project.
Business Opportunities
Consulting Services All consultants and nongovernment organizations will be recruited according to ADB''s Procurement Regulations (2017, as amended from time to time). All firms will be recruited using ADB's quality- and-cost-based selection (QCBS) under full technical proposal (FTP) and a standard quality -cost ratio of 90:10.
Procurement All procurement of goods and works will be undertaken in accordance with ADB''s Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers (2017, as amended from time to time). Open competitive bidding (OCB) procedures will be used for all civil works contracts with provision for domestic preference. Requests for quotations will be used for procurement of works and goods estimated to cost less than $100,000.
Responsible ADB Officer Georget, Johan
Responsible ADB Department South Asia Department
Responsible ADB Division Transport and Communications Division, SARD
Executing Agencies
Ministry of Physical Infrastructure and Transport
[email protected]
Singha Durbar
Kathmandu
Nepal
Project Directorate (ADB) - Department of Roads
[email protected]
Bishalnagar, Kathmandu
Nepal
Timetable
Concept Clearance 05 Apr 2018
Fact Finding 21 May 2018 to 01 Jun 2018
MRM 13 Jul 2018
Approval 03 Oct 2018
Last Review Mission -
Last PDS Update 03 Oct 2018

Loan 3722-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
03 Oct 2018 20 Nov 2018 - 30 Jun 2024 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 256.40 Cumulative Contract Awards
ADB 180.00 03 Oct 2018 0.00 0.00 0%
Counterpart 76.40 Cumulative Disbursements
Cofinancing 0.00 03 Oct 2018 0.00 0.00 0%

TA 9604-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
03 Oct 2018 27 Oct 2018 27 Oct 2018 31 Jan 2022 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
750,000.00 0.00 0.00 0.00 0.00 0.00 750,000.00 03 Oct 2018 0.00

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


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Tenders

Tender Title Type Status Posting Date Deadline
Capacity Building Consultant for Road Safety and Gender Equality Firm - Consulting Closed 19 Sep 2018 02 Nov 2018
Loan No. 52097-NEP: South Asia Subregional Economic Cooperation Highway Improvement Project [SHIP/OCB/KK-01 and SHIP/OCB/KK-02] Invitation for Bids Closed 11 Sep 2018 15 Nov 2018
NEP: South Asia Subregional Economic Cooperation Highway Improvement Project Advance Notice Active 10 Sep 2018
Project Preparatory Consultant undet SASEC Highway Improvement Project (SHIP-PPC) Firm - Consulting Closed 30 Jul 2018 28 Aug 2018
Construction Supervision Consultant (SHIP-CSC) Firm - Consulting Closed 18 Jun 2018 17 Jul 2018

Contracts Awarded

No contracts awarded for this project were found