Project Signing: Government of India and World Bank sign $320 Million Agreement for State Road Network in Assam — 4.5 Million Small and Marginal Farmers Will Benefit

November 5, 2012

Direct employment of about 20 million person days which is equivalent to 10,000 full-time jobs for the six-year duration of the Project

New Delhi, November 5, 2012 – The Government of India, the Government of Assam and the World Bank today signed a $320 million loan agreement for the Assam State Roads Project to improve and effectively manage its state road network.

Assam is one of the lower income states of India, situated in the North East region. Its per capita income at $604 is about 40 percent below the national average of $1033. The State's high potential in the areas of agriculture, hydropower, tourism, and forestry sectors remains largely untapped due to its inadequate road infrastructure and market access.

Improvements in the state highways and major district roads will ensure good quality roads and lesser transportation costs for road users in the State. It will not only provide the much needed infrastructure for accelerating economic and all round development of the state but also lay the foundation for opening up land and trade routes to bordering countries and South-east Asia, thereby, stimulating trade and cultural exchange in the entire region,” said Tarun Gogoi, Chief Minister, Assam in his message on this occasion.

The focus of this Project is on improving 500 km of priority sections of the state highways; modernizing the Public Works Roads Department (PWRD) and enhancing its performance; and on road safety management. New technologies for promoting cost effective, modern, climate resilient, and environment friendly road construction works will be demonstrated under the Project.

“The Project is designed to enhance the effectiveness of World Bank financing by complementing traditional support for road investment with technical and knowledge support from the Bank,” said Prabodh Saxena, Joint Secretary in the Department of Economic Affairs, Ministry of Finance, Government of India. “The aim is to gradually transform the Public Works Road Department into a modern road agency by introducing good practices, strategic planning, and project and asset management. It will help the Government of Assam (GOA) to sustain its large road network being developed under various programs and reduce the maintenance backlog through additional resources which will start flowing once the Road Maintenance Fund, being set up under this Project, is operationalized,” he added.

The agreements for the Assam State Roads Project were signed by Prabodh Saxena, Joint Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India; M. C. Boro, Commissioner, Public Works Department, on behalf of the Government of Assam; and Onno Ruhl, Country Director, World Bank (India) on behalf of the World Bank.

Due to years of inadequate investment and lack of maintenance, about 60 percent of the state road network is in poor condition. Most roads have poor riding quality, weak pavements, and inadequate capacity. Only about four percent of the secondary road network (state highways and major district roads) is double-laned and 20 percent are still unpaved. Farmers in Assam are unable to access major markets due to the poor condition of secondary roads leading to those markets. Similarly, the road users within the area of influence of the improved National Highway (NH) network, who are first required to travel on secondary roads to access the improved NH network, are also affected.

“The Assam Development Strategy and the North-East Region Vision 2020 underscore the need to improve road infrastructure and connectivity for promoting economic growth and reducing poverty,” said Onno Rϋhl, World Bank Country Director for India. “A good road network for Assam, considered to be the `gateway to the landlocked North East region’, can play a significant strategic role for the integration of this region with the country’s economy,” he added

However, in order to achieve this vision, the road safety situation remains a challenge in Assam, as elsewhere in India.  According to official statistics, Assam has a higher percentage of deaths due to unnatural causes than the rest of the country.  In 2009, about 16 persons were killed per 10,000 vehicles in Assam as compared to the national average of 11. “The Project will assist the Public Works Road Department to address this key issue through support from the World Bank Global Road Safety Facility (GRSF) and other international sources”, said Karla Gonzalez Carvajal, Sector Manager, Transport, South Asia Region, World Bank.

“The Government of Assam has demonstrated a strong commitment to modernize its road sector. It recognizes the need to re-orient the PWRD from a primarily construction focus to a modern road agency with sound policies, planning, engineering practices, business processes, and asset management. These will now be taken up under the Road Sector Modernization Program to be supported under the Project,” said Ashok Kumar, the Project’s Task Team Leader and Senior Highway Engineer, World Bank.

The loan, from the International Bank for Reconstruction and Development (IBRD), has a maturity of 18 years including a grace period of 5 years.

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