Project Signing: Government of India and World Bank sign $61.7 Million Additional Financing for Himachal Pradesh State Roads Project

January 21, 2013

Most Districts across the State to Benefit

So far the project has improved and maintained 1,200 km of roads. About 220 km have been upgraded and travel time has reduced by more than 25 percent

NEW DELHI, January 21 2013 –The government of India, the government of Himachal Pradesh and the World Bank today signed a $61.7 million loan agreement for the ongoing Himachal Pradesh State Roads Project to support the government of Himachal Pradesh, a mountain state richly endowed with natural resources, strengthen its road network.

The original $220 million Himachal Pradesh State Roads Project, which became effective on October 5, 2007, was aimed at reducing transport costs and improving traffic flows on priority segments of the Core Road Network of Himachal Pradesh. The project includes widening and strengthening of about 447 km of existing state highways to two lane roads, undertaking periodic maintenance of about 2000 km of Core Road Network, and strengthening institutions to help manage the road network.

The additional funding of $61.7 million, signed today, will help the Himachal State Roads Project fulfill its original objective. The project is also experiencing cost overruns. The additional financing will support the state meet increased costs of upgrading roads including bio-engineering works, resettlement and rehabilitation work, and additional institutional strengthening measures.

“For the government, improving infrastructure, including road transport, is key to sustaining growth and bridging regional disparities. This additional loan from the World Bank, we hope, will help the Government of Himachal Pradesh fulfill its objective of reducing transport costs and improving traffic flows on the priority segments of the core road network of Himachal Pradesh,” said Prabodh Saxena, Joint Secretary in the Department of Economic Affairs, Ministry of Finance, Government of India.

The agreements for the Himachal Pradesh Roads Project were signed by Prabodh Saxena, Joint Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the government of India; Narinder Chauhan, Principal Secretary, Public Works Department (PWD), on behalf of the government of Himachal Pradesh; and Onno Ruhl, Country Director, World Bank (India) on behalf of the World Bank.

So far the project has improved and maintained 1,200 km of roads. About 220 km of the 447 km of state highways have been upgraded to two-lane roads. Travel time on these improved roads has reduced by more than 25 percent. According to a recent user satisfaction survey, done by the project, the level of road user satisfaction today stands at 3.9 (in a scale of 5) as opposed to 1.5 when the project started.

However, the state’s total road network of about 32,247 km comprising 1,458 km of National Highways and 720 km of border roads, 1,626 km of State Highways and 1,969 km of Major District Roads is not enough to meet the social and economic needs of the state.  Half of all roads are unsurfaced, 90 percent of the highway network is single lane and less than 50 percent of villages are connected.

“Having made impressive economic progress, Himachal Pradesh must improve its road infrastructure for inclusive growth. This, along with attention to road safety, can spur investments, create new jobs and boost agriculture, while improving citizens’ access to markets, healthcare and education,”  said Onno Rûhl, World Bank Country Director for India.

The additional financing has two new components – road safety system and a project management system. Recognizing that road safety is a critical issue in the country today, the additional financing will specifically support the development and operationalization of a Road Accident Database Management System (RADMS) along the lines of a similar system developed in Tamil Nadu. This will enhance the state’s ability to systematically identify, analyze, develop and prioritize critical road safety measures on all state roads, which will benefit all road users. To ensure proper maintenance of constructed roads, the project will pilot Performance-based Maintenance Contracts (PBMC) on about 300 km of roads. This is expected to enhance the management capabilities of the Public Works Department (PWD) of the state.

An e-based Project Management System to be implemented under this project will also facilitate efficient exchange of project information, track processes and report on contract execution.

“This project will have the same approach and strategy of the on-going project. The additional financing will not only help the project complete all civil works but also enhance the state’s capacity to manage maintenance work as well as prioritize road safety measures,” said Pratap Tvgssshrk, World Bank’s Senior Transport Specialist and the Project’s Task Team Leader. “We shall draw lessons from other World Bank road projects implemented in India over the years,” he added.

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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