World Bank Supports National Highway Systems Improvements In Uttar Pradesh And Bihar

World Bank Supports National Highway Systems Improvements In Uttar Pradesh And Bihar
Project will help deliver India’s National Highway Development Project

Press Release No:2005/251/SAR

Contacts:

In Delhi:

Geetanjali Chopra

(91 11) 2461-7241

Email: gchopra@worldbank.org

In Washington:

Karina Manasseh

(202) 473-1729

Email: kmanasseh@worldbank.org

Washington, D.C., December 21, 2004—The World Bank today approved a loan of US$620 million to upgrade the stretch of National Highway No. 28 between Lucknow in the State of Uttar Pradesh and Muzaffarpur in the State of Bihar on the East-West National Highway Corridor. The project is the fourth World Bank loan to support the Government of India’s National Highway Development Project and will help reduce transport costs which are hampering national economic activity in the country as well as contribute to opening up access to the more remote and poor North East of the country.

Road transport plays a significant role in India’s economy, carrying 80 percent of the land transport demand. The total length of the national highway network is about 65,000 km. This accounts for less than 2 percent of the total road network, but carries over 40 percent of the road traffic. As a result of steady economic growth over the last decade, traffic on the national highways has grown by 6 to 7.5 percent per year.

“This project has a simple objective: for road users to benefit from a better journey between Lucknow and Muzaffarpur,” says Piers Vickers, Senior Transport Specialist for the World Bank and task leader for the project. “This will be accomplished by reducing travel time and operating costs as well as making road conditions safer. We anticipate that as a result, overall user satisfaction with India’s national highways in the region will be improved.”

The Lucknow-Muzaffarpur National Highway Project has only one component: highway upgrading. The primary beneficiaries are road users, of whom about 65 percent are commercial. An improved highway system will reduce the cost and time of moving goods and people between major population centers. A secondary target group is people living adjacent to the road. A recent study shows that living close to the highway decreases a household’s chance of being poor by 17 percent and increases its access to work by 32 percent. School enrollment is also increased by 40 percent with proximity to the highway.



The project is part of the Government of India’s overall National Highway Development Project (NHDP), initiated in 1998. The purpose of the NHDP is to strengthen and widen the core national highway network of about 14,300 km to a four-lane standard in a phased manner by 2008. When this is accomplished, India will be connected throughout by an arterial network of high quality four-lane highways. The project will also finance the delivery of entitlements to people expected to be affected by the project, afforestation, monitoring and evaluation, and programs aimed at road safety and HIV/AIDS awareness.



“This section of the East-West corridor runs through some of the poorest areas of the country,” says Michael Carter, World Bank Country Director for India. “These areas are expected to benefit directly from the improved physical access as well as indirectly from the spur to growth. The road will also help better connect more remote regions. The Government of India and the World Bank have a well developed partnership in the sector, and this fourth loan to the NHDP is a sign of our commitment to support key government programs in a systematic manner.”

The project is expected to contribute to achieving broader India Country Strategy objectives which identifies highway bottlenecks as one of the major constraints to poverty reduction and private sector-led growth. The project will be implemented over six years by the National Highways Authority of India. The loan, from the International Bank for Reconstruction and Development (IBRD), has a 20-year maturity with a five-year grace period, and is made at the standard financial terms for India.