World Bank to Support NHAI to Better Manage Its Road Development Program

December 22, 2010

New Delhi, December 22, 2010: The Government of India and the World Bank today signed a $45 million technical assistance loan to finance actions aimed at strengthening the institutional capacity of the National Highways Authority of India (NHAI) to efficiently manage and operate its growing program.

The agreement was signed by Mr. Venu Rajamony, Joint Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India; Mr. Atul Kumar, Chief General Manager (Planning and Information System) on behalf of NHAI; and Mr. Roberto Zagha, Country Director India, on behalf of the World Bank.
Forty percent of the total road traffic in India plies on the National Highway (NH) network, and this share is likely to increase with vehicle growth touching 10 percent per annum in recent years. However, about 30 percent of the total NH network is still single-laned, 53 percent  double-laned, and only 17 percent is four, six, or eight-laned. Recognizing that the condition of the NH network could pose a key constraint to sustaining high levels of growth, the Government of India had launched the National Highway Development Project (NHDP) in year 2000, which is being implemented by the NHAI. It has been estimated that the road sector in India will require investments in the range of $75-90 billion over the next five years.
“The Government of India is committed to removing any constraints in road infrastructure that may hamper economic growth and has entrusted the responsibility of improving the capacity of India’s core highways to NHAI,” said Mr. Rajamony. “This technical assistance loan from the World Bank will help NHAI adopt global practices that would enhance its operational efficiency as it implements this critical infrastructure program,” he added.
This project will also help NHAI implement the recommendations of an Inter-Ministerial Committee set up in 2008 on the restructuring of NHAI.
“Recognizing the need for improving road infrastructure in the country, the government plans to add 20 km of new or improved roads each day as against the recent rate of 3 km per day,” said Mr. Zagha. “The World Bank is happy to work with NHAI as it ramps up the pace and quality of implementation of this national program,” he added.

NHAI is faced with the challenge of enhancing its program standards – on governance, accountability, asset management, and safety – on an ongoing basis, as well as preparing to deliver the manifold increase in output as recently desired by the government.

The project will support training to enable NHAI to improve its project management, research and capacity building, asset management and resources planning, Public-Private Partnerships, socio-economic and environment impact evaluation, safety, HIV/AIDS prevention, and governance through adopting appropriate approaches and practices.

“As more roads are completed at a rapid rate, we envision the changing role of the NHAI from merely building infrastructure to better managing these vital assets,” says Rajesh Rohatgi, Project Team Leader. “We are looking forward to supporting NHAI in managing their current implementation constraints as well as preparing for the future and come up with solutions for improved asset management and resource planning.”
The loan, from the International Bank for Reconstruction and Development (IBRD), has a 5-year grace period, and a maturity of 18.5 years.

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