ADB to fund US 350 million for roads in Madhya Pradesh

India signed an agreement with ADB for a US $350 mn loan to upgrade district roads in the state of MP.
ADB to fund US 350 million for roads in Madhya Pradesh

The Government of India and the Asian Development Bank (ADB) signed an agreement for a US $350 million loan to upgrade district roads in the state of Madhya Pradesh (MP).
The Madhya Pradesh (MP) District Connectivity Sector project will improve about 1,600 kilometers of major district roads in Madhya Pradesh through lane widening, surface improvements, strengthening of culverts and bridges.
Tarun Bajaj, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance said that the project will lead to improved road transport connectivity in Madhya Pradesh through reconstruction and rehabilitation of major district roads to all-weather standards. The project will have innovative elements like creation of State Highways Fund on public-private-partnership (PPP) model, border checkposts, also on PPP model to increase the revenue and control overloading and damage to the roads.
Speaking on the occasion, Teresa Kho, Country Director of ADB’s India Resident Mission, said that the loan is ADB’s first in the district roads sector in India, and will address a neglected part of ongoing road network upgrades in the country for these secondary roads, which provide a key link between rural roads and state highways. She further said that 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.
In addition to improving the roads, the project envisages to include five-year performance-based maintenance contracts integrated 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 by the state, with assistance under ADB’s prior loans.
ADB’s loan will cover 70 percent of the total project cost of US $500 million, with the state government of Madhya Pradesh providing the balance of US $150 million. It is expected to be completed by April 2018. Madhya Pradesh has a road network of about 127,000 km, including 4,700 km of national highways, 11,000 km of state highways, and 20,000 km of major district roads. Rural roads make up the balance.
In addition, both the officials have signed another agreement for US$ 50.2 million to continue support for improvements of power transmission and distribution systems in the State of Assam for better electricity service.
The fourth tranche loan under the US$ 200 million multi-tranche financing facility for the Assam Power Sector Enhancement Investment Programme will build on earlier loans which aimed to improve operational efficiency in the sector through better transmission and distribution networks.

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