Asian Development Bank and GoI have signed an agreement to upgrade roads in Rajasthan

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The Asian Development Bank (ADB) and the Government of India have signed a $190 million loan agreement to upgrade 754 km 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.

The signatories to the Tranche 2 agreement for the Rajasthan State Highway Investment Programme were 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 Kenichi Yokoyama, Country Director of ADB’s India Resident Mission, who signed for ADB. The Tranche 1 loan of $ 220 million under the programme, signed in July 2017, upgraded about 1,000 km of state roads. 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. Laying emphasis on promoting operational efficiencies and innovations, Yokohama said, “The project will encourage the participation of the private sector through the hybrid annuity model (HAM) and EPC contracts.”

The ADB value-addition will finance part of the construction costs for annuity-based PPP concessions and EPC contracts, and ensure good governance during project implementation, particularly with regard to 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. Toll collection rights will remain with the state public works department to bring sustainability in the operation and maintenance of the project. The project also includes the construction of over 200 bus stops, 70 km of hard shoulder, and 2 km of raised sidewalk on project roads for pedestrians and daily commuters.

 

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