India’s North Eastern Region to see better Road Connectivity through ADB Loan.

Press Information Bureau

Government of India

Ministry of Finance

10-July-2012 15:15 IST

India’s North Eastern Region to see better Road Connectivity through ADB Loan

Asian Development Bank (ADB) and the Government of India have signed a $74.8 million loan to improve connectivity with the north eastern region of the country.

The loan constitutes the first tranche of the North Eastern State Roads Investment Program, a $200 million multi-tranche finance facility (MFF), expected to be executed in two tranches. Under the facility, a total of 433.7 km roads would be improved/upgraded/ constructed in six states- Assam, Manipur, Meghalaya, Mizoram, Sikkim and Tripura.

This will be ADB’s first Transport sector project in NE region to develop and implement road investments that follow widely-recognized best practices in engineering design, pre-construction activities and project management. The program envisages enhanced and Information Technology based capacity development of the state implementing agencies / PWDs for improved road asset management, planning and project management. A road safety programme has also been incorporated with coordinated engineering, enforcement and education components.

The 1st tranche, which was signed, will improve around 200 kilometers of road in the isolated states of Assam, Meghalaya and Sikkim. Improvements will include widening of existing sections of roads, strengthening pavements, raising embankments, and providing permanent structures at river crossings.

The signatories to the loan were Mr. Venu Rajamony, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India; and Mr. Hun Kim, Country Director for India, on behalf of ADB. The project agreements were signed by Mr. P.R. Meshram, Director in the Ministry of Development of the North Eastern Region and Commissioners and Secretaries of the states of Assam, Meghalaya and Sikkim.

Speaking on the occasion, Shri Rajamony said that building better roads will reduce isolation of northeast India and open up growth and development opportunities in some of the country’s poorest states. He said that the improved surface-transport connectivity in the region is expected to contribute to economic growth and poverty reduction and will facilitate delivery of various development schemes in other sectors within the region.

Mr. Kim said that better roads in the region will also significantly improve the investment climate for the private sector, both domestic and foreign.

The 1st tranche loan of US$ 74.8 million from ADB makes up to 68% of the total 1st tranche project cost of US$ 109.8 million, with the central and state governments providing counterpart finance of $35 million. The project is expected to be completed by December, 2016. Ministry of Development of North Eastern Region (MDONER) is the National Executing Agency for the program.

This loan from the ordinary capital resources of ADB has a 25-year term, including a grace period of 5 years, commitment charges of 0.15% and interest rate in accordance with ADB’s LIBOR-based lending facility.

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