The Subregional Transport Enhancement Project approved by the ADB board will promote economic development in the remote northeastern hills and help increase trade along major international corridor routes, said Hiroaki Yamaguchi, principal transport specialist in ADB´s South Asia Department. [break]
According to a statement, the northeast Nepal has great potential for increased production and exports of herbs, spices, garments and vegetables, but is being held back by poor roads and overburdened border customs posts.
Under the project, ADB will support upgrading of about 195 kilometers of roads, enhance road capacity of major international trade routes and provide rural communities with a north-south link to the East-West Highway.
“This north-south link could eventually become a major transit route connecting India to the People´s Republic of China,” reads the statement.
Likewise, the project will also upgrade and modernize customs clearance systems, easing congestion at border posts. It will also provide capacity building support to sector oversight agencies to improve their capabilities and expertise in road asset management and the use of modern road technologies.
The assistance includes $24.5 million each in loans and grants from ADB´s concessional Asian Development Fund. The loan has a term of 32 years, including a grace period of 8 years carrying an interest charge of 1 percent per annum, which rises to 1.5 percent for the balance of the period.
The government is financing the remaining $26.9 million for a total project investment cost of $75.9 million. The Ministry of Physical Planning and Works is the executing agency for the project, which is expected to be completed by December 2014.
Related story
Nepal Bank Limited signs agreement with ADB to increase trade f...
