The State Highways of Rajasthan will be on an improving mode for a period of 25 years in coming days as the Asian Development Bank (ADB) and the Government of India on 4th of July signed a loan of $220 million to improve connectivity as well as transport efficiency and safety.
The first tranche of $500 million loan is approved by ADB Board in May this year which will upgrade about 2,000 km. of state highways and major district roads to two-lane or intermediate-lane standards to meet road safety requirements. It will improve about 1,000 km. of State Highways and major district roads.
It is going to be a 25-year term, including a grace period of 8 years, and will 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 concessionaries.
The signatories to the loan agreement were Raj Kumar, Joint Secretary (Multilateral Institutions), Department of Economic Affairs in the Ministry of Finance, who signed on behalf of the Government of India, and Kenichi Yokoyama, Country Director of ADB’s India Resident Mission, who signed for ADB. The project agreement was signed by S. L. Sharma, Chief Engineer and Additional Secretary, Public Works Department, the Government of Rajasthan.
After signing the loan Agreement, Kenichi Yokoyama, Country Director of ADB’s India Resident Mission said that one of the focus areas of the program is to attract private sector financing through government capacity building on public private partnership (PPP) development. She said that ADB will 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.
Speaking on the occasion, Shri Raj Kumar, Joint Secretary (MI), DEA, M/o Finance said that it will enhance the capacity of the State public works department in the areas of road asset management, road safety and project management.