ADB Approves Loan Facility to Develop Road Network Proramme in West Asia

The Road Network Development Program 2006-2015, which is estimated to cost $3.4 billion, was developed by Azerbaijan’s Ministry of Transport in July last year. The program, which includes an investment and non-investment component, aims to develop an adequate, efficient, safe, and sustainable road network.

The investment component of the program involves the construction, upgrade and rehabilitation of about 9,500 kilometers of 124 priority roads. The non-investment component focuses on priority reforms, including the development of regulations and operational procedures, encouraging private sector participation in construction and maintenance, and capacity building for planning, monitoring, evaluation, and reporting.

To help finance the program, ADB will provide a $500 million loan facility that will be available in stages. The first tranche, amounting to $200 million, will fund Project 1 under the Road Network Development Program. Project 1 involves the construction of 59 kilometers of a new expressway between Masalli and Astara on the southern corridor, the rehabilitation of local roads in the project area, the installation of a vehicle weighing station along the new expressway, and project support and capacity building for road network management.

“Connectivity, both domestically and internationally, is the key to sustainable development in Azerbaijan. However, about 70% of the country’s road network is in poor condition, resulting in high transport costs, long delivery periods and traffic accidents,” said Hong Wang, principal transport economist of ADB’s Central and West Asia Department.

The road network of Azerbaijan is inadequate to meet the needs of a rapidly expanding economy. Most roads are in poor condition due to inadequate funding and overloading, which has caused rapid pavement deterioration. The country’s entire road network comprises a total of 25,000 kilometers and is considered the dominant mode of passenger transport and the second major mode of freight transport.

“The road network needs to be developed to spur growth of trade, investment and tourism in Azerbaijan,” said Mr. Wang.

Apart from this  ADB has also approved a new $176 million grant for building the last remaining section of Afghanistan’s “Ring Road” highway, which loops the country and connects its cities. Completion of the road network is essential for Afghanistan’s desperately needed economic growth.

The international community has already spent about $2 billion rebuilding roads and the only section of the 3000-kilometer Ring Road’s construction remaining to be funded is a 193 kilometer stretch between the western towns of Bala Murghab and Amalick. While ADB’s grant will finance a 143 kilometer section from Bala Murghab to Leman, the Islamic Development Bank and the Saudi Fund will co-finance the remaining 50 kilometer section from Leman to Amalick.

“The Ring Road is the backbone of Afghanistan’s transport network and its completion will be a major milestone in the international nation-building effort,” said Mr. Juan Miranda, Director General of ADB’s Central and West Asia Department, on a three-day visit to Kabul.

The new all-weather road will link northern Afghanistan with the country’s western region. It will cut travel times between the country’s northeast and southwest by three to five hours. This will lead to significantly lower transport costs, not only domestically but also between Central Asia and the Persian Gulf and Arabian Sea.

Afghanistan lies at a crossroads of ancient trade routes between Europe and eastern and southern Asia. Strands of the so-called Silk Road pass through the country.

Completion of the Ring Road will allow travelers from the capital, Kabul, wishing to reach the western city of Herat, near the Iranian border, to travel via a northern route, rather than through the southern city of Kandahar.

Local communities near the new road will be encouraged to participate in its construction and maintenance to ensure they immediately benefit from the project.

In addition to ADB’s $176 million grant, Afghanistan’s Government is contributing $4 million toward the construction. Part of the total will also be used for the ongoing refurbishment of another part of the Ring Road, between the northwestern towns of Andkhoy and Qaisar, while some of the funds will be used for general road maintenance elsewhere.

With the new grant, ADB will have contributed about $600 million to reconstructing roads in Afghanistan.

“The amount of traffic using the new routes is already much higher than expected, highlighting their urgent need,” Mr. Miranda said.

Progress has also been made in connecting Afghanistan with its neighbors. A month ago, a new bridge across the Pyanj River in northern Afghanistan provided the first road link with neighboring Tajikistan.

Since resuming operations in Afghanistan in 2001, ADB has approved more than $1 billion in assistance, focusing not only on roads but also on building and rehabilitating power transmission lines, irrigation infrastructure, and on governance and capacity building.

ADB has further approved similar network development grants and grants to construct roads in West Asian countries like Kyrgyz Republic and Armenia in order to promote trade and a sustainable economic growth and development process.

Released on: 4 October 2007
Resource: www.adb.org