Project Signing: World Bank Continues Support for Mizoram State Roads to Boost Local Economies

October 22, 2010

NEW DELHI, October 22, 2010: A Credit Agreement of US $13 million equivalent in additional financing, to continue revitalizing and modernizing the state’s highway system for the India Mizoram State Roads Project was signed today by the representatives from the Government of India, Government of Mizoram and the World Bank. The signatories to the Agreement were Mr Govind Mohan, Joint Secretary (Infrastructure and Investment), on behalf of the Government of India, Mr K. Lalsawmvela, Project Director, Mizoram State Roads Project, PWD, Government of Mizoram and Ms Giovanna Prennushi, World Bank’s Acting Country Director in India.

The project will help improve the management and carrying capacity of the core state road network in order to lower transportation bottlenecks and costs, and stimulate economic activity. It will help widen and improve 180 km of state highways, and rehabilitate and maintain another 300 km.  It will also finance improvements in equipment and training for the state Public Works Department.

The project has already, over the last eight years, helped reduce travel time by over 40 percent on 472 km of completed roads in the state.

“Improvements in basic infrastructure including highways are critical to stimulate economic development,” said Roberto Zagha, World Bank Country Director for India. “With growth there has been an increase in demand for better infrastructure. Continued investments in improving Mizoram’s road infrastructure will support the region’s growth and service delivery goals.”

The Mizoram State Roads Project was initially approved in 2002 and has demonstrated transformative results. The road improvements under the project have reduced the cost of passenger travel between different towns.  For example, new roads built under the Bank-financed Project have reduced the distance between the state capital Aizawl and the second largest town, Lunglei, by about 70 km.  Not only has this brought down travel time by about three hours, but taxi fares between the two towns have fallen from Rs.300 (US$6.72) to Rs.270 (US$6.05) despite significant increase in fuel costs. These costs are expected to further decrease once all the sections of the road are complete.

“The project has also demonstrated many economic benefits to local residents through increased land values, agricultural incomes, growth in the local handicraft market, and new businesses opening up along roads,” said Ashok Kumar, World Bank project team leader.
The World Bank has a long history of partnership and collaboration with India and has continued its support for a variety of road infrastructure projects. The Bank is supporting many highways and rural roads projects in states including Andhra Pradesh, Assam, Gujarat, Kerala, Himachal Pradesh, Jharkhand, Punjab, Rajasthan, Orissa, Tamil Nadu, and Uttar Pradesh.

The credits from the International Development Association (IDA), the World Bank’s concessionary arm, have 35 years to maturity with a 10-year grace period; they carry a service charge of 0.75 percent.

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