Nepal : South Asia Subregional Economic Cooperation Highway Enhancement Project (Kakarbhitta-Laukahi)

Project Name

South Asia Subregional Economic Cooperation Highway Enhancement Project (Kakarbhitta-Laukahi)

Project Number

52097-003

Country / Economy

• Nepal

Project Status

Active

Project Type / Modality of Assistance

• Loan
• Technical Assistance

Source of Funding / Amount

Loan 4316-NEP: SASEC Highway Enhancement Project (Laukahi"Kakarbhitta)

Source	Amount
Concessional ordinary capital resources lending	US$ 300.00 million

TA 10107-NEP: Institutional Strengthening of Project Implementation, Climate Change, and Disaster Risk Resilience in the Road Sector

Source	Amount
Technical Assistance Special Fund	US$ 750,000.00

Operational Priorities

• OP1: Addressing remaining poverty and reducing inequalities
• OP2: Accelerating progress in gender equality
• OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
• OP5: Promoting rural development and food security
• OP6: Strengthening governance and institutional capacity
• OP7: Fostering regional cooperation and integration

Sector / Subsector

• Transport / Road transport (non-urban)

Gender

Effective gender mainstreaming

Description

The project road is a two-lane carriageway and carries about 14,000 vehicles per day. Traffic is forecast to reach 48,800 vehicles per day by 2041. The road will be median-divided and provides service lanes, footpath, and cycle lane in urban areas. Through the project, the road will be upgraded to a two-lane dual carriageway to accommodate the increasing traffic demand, with improved geometry, pavement, drainage, road safety, and climate- and disaster-resilient features. Grade separation or traffic signal will be adopted at junctions to improve safety for vulnerable road users including women and children who are more likely to walk, cycle or use public transport. River training and bank protection works will minimize the risk of erosion. The project design incorporates lessons from previous projects, including readiness, procurement, asset management and sustainability.

The project will be aligned with the following impact: balanced and diversified international trade route promoted and economic interconnectivity improved. The project will have the following outcome: connectivity, capacity, efficiency, and safety of the road transport system along the EWH improved.

Project Rationale and Linkage to Country/Regional Strategy

The project road forms part of SASEC Corridor 4 linking Kathmandu via Kakarbhitta to Chattogram and Mongla ports in Bangladesh. The project will also (i) boost border trade and logistics by reducing transport costs; and (ii) improve standards of living of rural communities, including for women and disadvantaged groups, by developing better infrastructure assets with safety and climate- and disaster risk-resilient features. This intervention is part of a series of SASEC road projects along the EWH funded by the Asian Development Bank (ADB).

The project is consistent with the following operational priorities of ADB's Strategy 2030: (i) addressing remaining poverty and reducing inequalities; (ii) accelerating progress in gender equality; (iii) tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability; (iv) promoting rural development; (v) strengthening governance and institutional capacity; and (vi) fostering regional cooperation and integration. The project is also consistent with the SASEC operational plan 2016-2025 update and the objectives set out in ADB's country partnership strategy for Nepal, 2020-2024 to improve infrastructure for private sector-led growth by (i) strengthening road and trade facilitation for domestic, regional, and international connectivity; (ii) reducing the costs of production and trade for businesses; and (iii) attracting private investment.

Impact

Balanced and diversified international trade route promoted and economic interconnectivity improved

Project Outcome

Description of Outcome

Connectivity, capacity, efficiency, and safety of the road transport system along the East-West Highway improved

Progress Toward Outcome

5 civil work packages have been awarded as of 28 November 2023.

Implementation Progress

Description of Project Outputs

National highway network upgraded and maintained

Capacity on procurement, gender equality and social inclusion, and climate resilience for roads strengthened

Status of Implementation Progress (Outputs, Activities, and Issues)

1. All five civil works contracts were awarded.

2. Under preparation.

Geographical Location

Laukahi

Safeguard Categories

Environment

A

Involuntary Resettlement

B

Indigenous Peoples

C

Summary of Environmental and Social Aspects

Environmental Aspects

The project is an existing road and a brownfield site.

Considering that the road has significant wildlife movement and intermittent patches of forest areas, detailed biodiversity studies have been conducted.

Involuntary Resettlement

Initial assessment indicates that 597 households (3,015 persons) will be affected by the project. Aside from this, 609 private structures (residential, commercial, sheds, cattle shed and others) will be affected. Also, 269 public structures like resting places, temples, toilets, tube-wells, police beats, and statue sites will also affected along the alignment.

Indigenous Peoples

There are no indigenous people in the project area.

Stakeholder Communication, Participation, and Consultation

During Project Design

Consultations were held with affected persons and other concerned stakeholders during the preparation of the poverty and social analysis and resettlement plan.

During Project Implementation

Consultation, as required, will be carried out during project implementation.

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.

Contact

Responsible ADB Officer

Chong, Sin Wai

Responsible ADB Department

Sectors Group

Responsible ADB Division

Transport Sector Office (SG-TRA)

Executing Agencies

Ministry of Physical Infrastructure and Transport

Timetable

Concept Clearance

30 May 2022

Fact Finding

13 Jun 2022 to 23 Jun 2022

MRM

20 Oct 2022

Approval

17 May 2023

Last Review Mission

-

Last PDS Update

28 Nov 2023

Funding

Loan 4316-NEP

TA 10107-NEP