ADB grants $350 million loan for road upgradation projects in Madhya Pradesh

The Asian Development Bank (ADB)will provide a $350 million loan for improving about 1,500 km of major district roads in Madhya Pradesh to support the state's road development plan.

ADB and the Government of India signed the loan agreement for the Madhya Pradesh District Connectivity Sector project in New Delhi on Wednesday.

The project will complement the efforts of the government of Madhya Pradesh to bring about seamless road connectivity across the state by linking state highways and rural roads through district roads, Raj Kumar, joint secretary (multilateral institutions), in the Department of Economic Affairs, ministry of finance, said after signing the agreement.

It would provide an easier access to basic services and markets to people, Kumar added.

Speaking on the occasion, L B Sondjaja, deputy country director of ADB's India Resident Mission, said ADB's continued participation in the state's road development, through this project, will help further the state-wide road improvement programme, stabilise and deepen institutional capacity, and improve road safety and accident response initiatives.

He said a key element of the project is the use of concrete pavements to ensure better ride quality and reduce lifecycle maintenance costs.

The project will involve upgrading roads with concrete pavements, strengthening culverts and bridges, and maintaining the improved road assets for a period of five years after construction, on a performance based payment format. The project will also develop and introduce a cashless accident victim treatment facility in the state, and improve the accident response system.

Madhya Pradesh is the second-largest state in the country, with an area of about 308,000 sq km and a population of about 73 million. Agriculture still underpins the state's economy and about 70 per cent of the people live in rural areas.

The state has also been undertaking a number of development initiatives to boost industrial activity, such as the Pithampur - Dhar - Mhow region as a key node on the Delhi-Mumbai Industrial corridor, as well as many industrial areas and industrial growth centers.

Because industrial development and agricultural production are dispersed, the road network is a vital element of the economic infrastructure.

Along with ADB's loan, the government of Madhya Pradesh will provide counterpart support of $150 million. The project will run for almost four years with an expected completion date of March 2021.