World Bank okays $1.5 b for rural roads

PTI Washington | Updated on January 06, 2011 Published on December 22, 2010

The World Bank on Tuesday approved a $1.5 billion credit and loan for India’s Pradhan Mantri Gram Sadak Yojana (PMGSY) aimed towards improving rural accessibility of roads.

The new project will concentrate on Himachal Pradesh, Jharkhand, Meghalaya, Punjab, Rajasthan, Uttarakhand, and Uttar Pradesh, the Bank said in a statement.

Over the next five years, the project will aim to provide these states with an average connectivity of around 91 per cent by constructing 24,200 km of all-weather roads to benefit an estimated 6.1 million people.

The project will also develop a system for maintaining these roads in good condition over the long-term.

“A good road network can generate many commercial and social benefits for rural economies through increasing access to goods as well as services such as health and education,” said the World Bank’s Country Director for India, Mr Roberto Zagha.

The credit and loan is from the International Development Association (IDA) — the World Bank’s concessionary lending arm, which provides interest-free loans with 35 years to maturity and a 10-year grace period, and from the International Bank for Reconstruction and Development (IBRD) which has a 5-year grace period, and a maturity of 18 years.

While the PMGSY also called as Prime Minister’s Rural Roads Programme has since added 2,74,000 km of new roads, in vast parts of the country, especially in economically weaker and hilly areas, continue to remain inaccessible.

The project also includes $60 million in technical assistance to build capacity of the rural roads agencies, especially in the ongoing management of assets and the sustainable maintenance of roads.

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Published on December 22, 2010
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