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: Proposed

The Government of Nepal requested the assistance of the Asian Development Bank (ADB) to support the improvement of the east -west highway (EWH). The proposed project aims to improve the efficiency and adequacy of the transport system by addressing the deterioration of road asset conditions, the poor safety of the transport network, and the limited cross-border connectivity. The project will (i) rehabilitate and upgrade about 85 kilometers (km) of national highway between the Kanchanpur and Kamala section of the EWH in the southeastern part of Nepal, (ii) improve road safety and road maintenance on the EWH, and (iii) strengthen the capacity of the Department of Roads (DOR) under the Ministry of Physical Infrastructure and Transport (MOPIT) in road safety and road maintenance.

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 Proposed
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan: South Asia Subregional Economic Cooperation Highway Improvement Project
concessional ordinary capital resources lending / Asian Development Fund US$ 180.00 million
TA: South Asia Subregional Economic Cooperation Highway Improvement Project
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 Government of Nepal requested the assistance of the Asian Development Bank (ADB) to support the improvement of the east -west highway (EWH). The proposed project aims to improve the efficiency and adequacy of the transport system by addressing the deterioration of road asset conditions, the poor safety of the transport network, and the limited cross-border connectivity. The project will (i) rehabilitate and upgrade about 85 kilometers (km) of national highway between the Kanchanpur and Kamala section of the EWH in the southeastern part of Nepal, (ii) improve road safety and road maintenance on the EWH, and (iii) strengthen the capacity of the Department of Roads (DOR) under the Ministry of Physical Infrastructure and Transport (MOPIT) in road safety and road maintenance.
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. The country is geographically divided into three distinct areas with the Himalayas in the north, an intermediate mid-hill region, and the lowland plains of the Terai in the south. Consequently, Nepal relies heavily on its direct neighbors for international trade, particularly India with which it shares 19 official trading posts, while the port of Kolkata is the primary transit point for seaborne freight. As of fiscal year (FY) 2017, India accounts for 65% of Nepal''s imports and 57% of its exports, and the PRC for 13% of imports and 2.3% of exports. Hampered by a deficient cross-border infrastructure network, Nepal also suffers from low regional integration and connectivity. Excluding India, trade with all other countries of the South Asia Subregional Economic Cooperation (SASEC) and South Asian Association for Regional Cooperation (SAARC) account for only 0.8% of Nepal''s total trade.

Economic rationale. The gross domestic product (GDP) grew at an average annual rate of 4.5% between FY2007 and FY2017 and is forecast to grow at 4.1% annually between FY2017 and FY2022.The economy of Nepal suffers from a lack of competitiveness, with the agricultural sector employing 69.4% of the labor force, while exports have decreased at an average annual rate of 6.1%, in real terms, during FY2007- FY2017. Driven by foreign remittances, which amounted to 2.0% of the GDP in FY2000 and 31.3% in FY2015, imports increased by 21.3% annually during FY2007 -FY2017. The inadequacy of the transport and logistics network results in high transport costs and poor national and regional connectivity, and hinders the growth of the economy by limiting the development of competitive industries, impeding trade, and reducing the potential of Nepal to benefit from the strong growth of neighboring countries.

Transport sector context. Road transport remains the predominant mode of travel and carries over 90% of passengers and goods. The strategic road network (SRN) is under the responsibility of MOPIT and is about 12,494 km, out of which 51% is paved. The SRN provides vital linkages to major economic centers and neighboring countries, and features eight north -south and two east -west corridors. This includes the 1,024 km-long EWH which extends from the eastern to the western borders with India, is the main domestic and international trade corridor, and carries the highest traffic volumes. The local road network is managed by municipalities and other local agencies and consists of about 57,600 km of road, out of which 3.5% is paved. Road density remains low with 47 km of road per 100 square km and 2.5 km of road per 1,000 people.

Project design. The project road carries an average annual daily traffic of 12,100 units, which is expected to increase to 23,600 units by 2033, and includes about 31% of freight vehicles. The pavement is in fair to poor condition and the road will be rehabilitated with improved pavement, drainages, structures, safety features, and maintenance plan, and widened to four lanes to cater to the projected increase in traffic demand. The project road is part of a major trade corridor, and part of SAARC and SASEC corridors 4 linking Kathmandu to Dhaka and Chittagong through India. The project is designed to improve domestic connectivity between provincial capitals in the eastern part of Nepal, enhance regional connectivity with Bangladesh and India, ease growing traffic congestion, and improve road safety and maintenance.

Impact

Transport connectivity within Nepal and with neighboring countries improved

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

Outcome Efficiency and safety of the road transport system improved
Outputs

Road network upgraded and maintained

Planning and management for road safety improved

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 A firm will be recruited using the quality- and cost-based selection method with a 90:10 quality -cost ratio. The Government and ADB will engage consultants and carry out procurement following ADB's Procurement Policy (2017, as amended from time to time) and its associated project administration instructions and/or staff instructions. Consulting services include, but are not limited to, construction supervision consultancy services for the project road, and technical assistance consultancy services for road safety.
Procurement All procurement under the TA will be carried out in accordance with ADB's Procurement Policy (2017, as amended from time to time) and relevant project administration instructions.
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
Singha Durbar
Kathmandu
Nepal
Timetable
Concept Clearance 05 Apr 2018
Fact Finding 21 May 2018 to 01 Jun 2018
MRM 13 Jul 2018
Approval -
Last Review Mission -
Last PDS Update 06 Apr 2018

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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