Indian road project to boost growth

08 December 2009

The Asian Development Bank has approved a US$ 200 million loan to carry out major improvements to a key section of road in one of India's least-developed states, Jharkhand.

The loan will finance a 311 km-long, two-lane road that will connect the state's northern region to the national highway network in an effort to boost growth and reduce poverty.

The project will also build capacity in the state's Road Construction Department, which suffers from an acute lack of engineers with road-building project management skills.

Created in 2000 out of the southern half of Bihar state, Jharkhand has abundant natural and mineral reserves, and prominent industrial cities, but it also has the highest rural poverty incidence in India.

Much of the poverty is concentrated in the state's north, where the neglected road network is one of the key constraints to development.

The improved road will reduce travel time and costs, and contribute to the expansion of economic activities and poverty reduction in the area that the road serves.

The ADB's loan covers 83% of the total project cost of US$ 240 million, with the government covering the additional US$ 40 million.

The Road Construction Department is the executing agency for the project, which is due for completion at the end of June 2014.

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