The Asian Development Bank (ADB) today announced that it will extend $315 million to Karnataka for a major overhaul of its overburdened state highway system to help spur the next level of economic growth and also to create livelihood opportunities.
ADB’s board of directors approved a loan for the Karnataka State Highway Improvement Project (KSHIP). It will upgrade over 600 km of its state highways and support improved road planning, programming, operation, maintenance and safety, an official statement said.
“The long-term impact of the initiative will be an accelerated economic growth in Karnataka, with road upgrades, improving access to essential services while providing employment opportunities to the rural poor,” said Oleg Tonkonojenkov, Senior Transport Specialist in ADB’s South Asia Department.
ADB’s loan from its ordinary capital resources makes up over 68 per cent of the total project cost of nearly $463 million. The loan has a 25-year term with a grace period of five years and at an annual rate determined in accordance with ADB’s LIBOR-based lending facility. An additional technical assistance grant of $1.5 million from ADB’s concessional Technical Assistance Special Fund will be used to help the Public Works Department (PWD) build capacities for strengthening its road assets and safety management capabilities.
The technical assistance will also help the Karnataka government build capacities for implementing projects with private sector participation. The PWD is the executing agency for the project which is due for completion by December 2014.
The physical work will include expanding the present roads into two lanes, constructing bypasses, strengthening existing culverts and bridges, and building new road bridges, rail overbridges and cross-drainage structures. The project puts a strong focus on beefing up capacity of the state’s PWD to plan, develop, operate and maintain the road network effectively, and includes support for establishing a Planning and Road Asset Management Centre.
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“The project will help the department put in place an objective, data-driven planning and programming for network development and maintenance, as well as ensuring that safety measures and, environmental and social safeguards are incorporated into the project cycle,” said Tonkonojenkov.
India’s booming economy has led to a sharp rise in the passenger and freight traffic on its roads. State highways, which are secondary routes linking to the National Hghways, carry about 40 per cent of all traffic and are especially overburdened with increasing congestion, deteriorating surfaces and growing safety issues.