This is the fourth World Bank loan to support India's national highway development project and will help reduce transport costs, which are hampering national economic activity in the country as well as contribute to opening up access to the North East, a World Bank release said.
Road transport plays a significant role in India's economy, carrying 80 percent of the land transport demand. The total length of the national highway network is about 65,000 km.
This accounts for less than two percent of the total road network, but carries over 40 percent of the road traffic. As a result of steady economic growth over the last
decade, traffic on the national highways has grown by 6 to 7.5 percent per year, the Bank said.
"This project has a simple objective: for road users to benefit from a better journey between Lucknow and Muzaffarpur," says Piers Vickers, senior transport specialist for the World Bank and task leader for the project.
"This will be accomplished by reducing travel time and operating costs as well as making road conditions safer. We anticipate that as a result, overall user satisfaction with India's national highways in the region will be improved."
The Lucknow-Muzaffarpur national highway project has only one component - highway upgrading. The primary beneficiaries are road users, of which about 65 percent are commercial.
This is part of India's national highway development project, initiated in 1998. The purpose of the NHDP is to strengthen and widen the core highway network of about 14,300 km to a four-lane standard in a phased manner by 2008.
"This section of the East-West corridor runs through some of the poorest areas of the country," says Michael Carter, World Bank country director for India.
These areas are expected to benefit directly from the improved physical access as well as indirectly from the spur to growth. The road will also help better connect more remote regions.
"The government of India and the World Bank have a well-developed partnership in the sector, and this fourth loan to the NHDP is a sign of our commitment to support key government programmes in a systematic manner," he added.
The project is expected to contribute to achieving broader India country strategy objectives, which identifies highway bottlenecks as one of the major constraints to poverty reduction and private sector-led growth.
The project will be implemented over six years by the National Highways Authority of India. The loan, from the International Bank for Reconstruction and Development, has a 20-year maturity with a five-year grace period, and is made at the standard financial terms for India.
