India to get $190 mn loan from ADB to upgrade Rajasthan roads

asain development bank
Asain Development Bank

New Delhi: India will get a loan of $190 million from Asian Development Bank to upgrade 754 kilometres of state highways and major district roads (MDRs) to two-lane or intermediate-lane standards that will benefit about 26 million people in 14 districts of Rajasthan.

Government signed the Tranche 2 loan agreement recently for the Rajasthan State Highway Investment Programme, which will benefit commuters and pedestrians, particularly women and children, with construction of more than 200 bus stops, 70 km of hard shoulder, and 2 km of raised sidewalk on the roads. The Tranche 1 loan of $220 million under the Programme, signed in July 2017, upgraded about 1,000 km of state roads.

The agreement was signed by Sameer Kumar Khare, Additional  Secretary (Fund Bank and ADB), Department of Economic Affairs in the Ministry of Finance, on behalf of the Government of India and by Kenichi Yokoyama, Country Director of ADB’s India Resident Mission, on behalf of ADB. 

Khare said after signing the loan agreement that the Tranche 2 roads pass through mostly rural areas of Rajasthan that lack reliable connectivity and will help improve access to health, education facilities and markets leading to increased job opportunities.

“Project will encourage participation of private sector through Hybrid Annuity Mode and engineering procurement construction (EPC) contracts”, Yokoyama emphasised.

The ADB value-addition will consist financing part of the construction costs for the annuity-based public private partnership (PPP) concessions and EPC contracts. It will ensure good governance during project implementation, particularly on procurement and safeguards. 

The annuity-based PPP model attracts private sector financing to address capital investment requirements, where a proportion of initial capital expenditure is paid during construction while the balance is serviced by annuity payments during the operation and maintenance phase. The toll collection rights will remain with the state public works department to bring sustainability in operation and maintenance of the project.

-sb

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