core sector communique

WORLD BANK SUPPORTS BETTER AND SAFER ROADS IN ANDRHRA PRADESH, INDIA

WASHINGTON, October 15, 2009 ─ The World Bank today approved a US$320 million loan to India, designed to improve quality, capacity and safety of roads in the state of Andhra Pradesh.

Road transport is vital to Andhra Pradesh’s economy, accounting for more than 80 percent of freight and passenger traffic. Recognizing that an efficient transport system is critical for agricultural and industrial growth, the State Government has invested heavily to improve its transport infrastructure. For example, double lane roads on state highways have increased from 52 percent to 68 percent over the past six years. However, lack of roads maintenance and deteriorating road safety require urgent actions.

The Andhra Pradesh Road Sector Project is designed to upgrade about 429 km of priority state highways and finance long-term maintenance of over 6,000 km of the state’s core road network.

“Improvements in road transport is vital to catalyze agricultural and industrial development and improve access to markets, jobs, and services to the people of Andhra Pradesh, especially its poor people,” said Roberto Zagha, World Bank Country Director for India. “This project will help to remove the infrastructure bottlenecks in the state, which is considered a major constraint to sustain the state’s impressive economic growth in recent years.”

The project will help strengthen the State Government’s ability to leverage its own resources with private sector financing for road infrastructure. This will help the state attract private sector participation in financing, development, and management of selected high traffic density corridors.

It will also support measures to reduce road accidents, including ‘demonstration projects’ on selected corridors.

“Road safety remains a huge problem in Andhra Pradesh. In 2007, an average of 36 people were killed on the state’s roads every day,” said, Binyam Reja, World Bank project team leader. “Hence, road safety is a very important component of this project. Key to this is to improve coordination between the multiple agencies that are developing and enforcing road safety regulations.”

The loan is from the International Bank for Reconstruction and Development (IBRD) and has a maturity of 30 years, including a grace period of 5.5 years.