India, AIIB sign $82 mn agreement to improve Himachal Pradesh road network

New Delhi (NVI): The Central Government, along with the Himachal Pradesh government, signed an agreement for USD 82 million with the Asian Infrastructure Investment Bank (AIIB) today to improve the condition, safety, resilience, and engineering standards of the state road network.

The agreement will help in the implementation of Himachal Pradesh State Roads Transformation Project in the state.

The transformation project will finance initiatives to build climate and disaster resilient roads; improve road safety along tourism corridors in Himachal; enhance logistics along fruit belts; and support the government’s initiative to create a corporate entity responsible for ensuring well-performing roads.

Furthermore, a third of the maintenance contracts under the project will be awarded to women-led Self-Help Groups (SHGs).

The loan agreement was signed by Sameer Kumar Khare, on behalf of the Centre and Junaid Kamal Ahmad, Country Director (India) on behalf of the World Bank. Whereas, the project agreement was signed by Jagdish Chander Sharma, Principal Secretary, Public Works Department on behalf of the Government of Himachal Pradesh and Ahmad.

Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance, said, “The economic growth of any region is closely linked to its road infrastructure. The mountainous state of Himachal Pradesh with its rich horticulture and tourism potential requires well-constructed, well connected, climate resilient and safe roads. This project will help the state develop reliable, resilient and safe roads which is crucial for the economic development of the state.”

Junaid Ahmad said, “Himachal Pradesh has the potential to produce high-value horticultural products. However, to leapfrog to the next level of competitiveness in the global value chain, the state needs to focus on improving its roads and logistics services.”

“This project will support the Government of Himachal Pradesh to provide greater opportunity to smallholder farmers access domestic and international agricultural markets, attract private investments to enhance value chains and increase jobs and farmers’ incomes,” Ahmad added.

Himachal Pradesh, a mountain state richly endowed with natural resources, often faces landslides and flash floods that affect its road connectivity. Cloud bursts, more extreme river flows and flooding cause landslides and erosion of embankments and loss of roads or bridges. These events are projected to increase over the next few decades as a result of climate change.

To protect against landslides and floods, the project will implement engineering solutions that are plant and natural-based as well as control vehicular emission to address climate risks.

Tesfamichael Mitiku, Senior Transport Engineer and World Bank’s Task Team Leader for the project, said that a well-performing road infrastructure that helps in creating an efficient logistics system will go a long way in supporting small holder farmers, small and medium enterprises and manufacturing industries deliver products just-in-time to wholesale and terminal markets at a lower cost.

Recognizing that road safety is a critical issue, the project will enhance the state’s ability to systematically identify, analyze, develop and prioritize critical road safety measures that will benefit all road users.

The ‘Safe Systems’ approach will be adopted in selected districts and heavily trafficked corridors. The state highway patrol will be trained and equipped with surveillance gear. An emergency response system will be established to help connect accident sites with dedicated hospitals for post-crash care and data collection.

The USD 82 million loan from the International Bank for Reconstruction and Development (IBRD) has a final maturity of 15 years including a grace period of 5 years.