New Delhi: The Asian Development Bank (ADB) and the Government of India have signed a $220 million loan for improving connectivity as well as transport efficiency and safety on State Highways of Rajasthan. The ADB loan is the first tranche of the $500 million Rajasthan State Highways Investment Programme, approved by the ADB Board in May this year, which will upgrade about 2,000 km of state highways and major district roads to 2-lane or intermediate-lane standards to meet road safety requirements.
The first tranche loan will improve about 1,000 km of State Highways and major district roads. It will have a 25-year term, including a grace period of 8 years, and carry an annual interest rate determined in accordance with ADB’s London interbank offered rate-based (LIBOR) lending facility. The total cost of the project is $1.415 billion, with the government contributing $465 million and $450 million coming from the private sector and other concessionaires.
Speaking on the occasion, Raj Kumar, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, said that the project would help improve State Highways and major district roads in Rajasthan. He further said that it would also enhance the capacity of the State public works department in the areas of road asset management, road safety and project management.
The signatories to the loan agreement were Raj Kumar, who signed on behalf of India, and Kenichi Yokoyama, Country Director of ADB’s India Resident Mission, who signed for ADB. The project agreement was signed by SL Sharma, Chief Engineer and Additional Secretary, Public Works Department, the Government of Rajasthan.
After signing the ADB loan agreement, Yokoyama said that one of the focus areas of the program was to attract private sector financing through government capacity building on public-private partnership (PPP) development. He said that the ADB would finance part of the construction costs for the annuity-based PPP concessions and engineering procurement construction (EPC) contracts, enhance the stability of contract regime and ensure good governance during project implementation.