December 13, 2001

KATHMANDU: The Mahendra Highway, feeder and district roads will be upgraded and maintained, thus improving access to impoverished rural areas, with the help of a US $46 million loan approved Thursday by the Asian Development Bank (ADB), an announcement from Manila said.

The road network development project will boost domestic trade, stimulate growth and create jobs, leading to poverty reduction. The United Kingdom’s Department for International Development (DFID) will provide co-financing of 7million pounds sterling.

The project will maintain 140 km of the East-West Highway between Belbari and Chuharwa, backbone of the national road network and the main access to India. It will improve 165 km of roads to an all-weather paved surface, construct an access road of nearly 100 km to the currently isolated district headquarters of Khandbari, and upgrade 10 km of a cross-border access road at Kakarbhitta.

The improvement of feeder and district roads will link agricultural production centers and community facilities. Villagers will have better access to market and income opportunities as well as education and health facilities.

Some 350,000 people in nine districts with high levels of poverty are expected to benefit, the Bank said..

“The project will also improve road maintenance capability in both the public sector and private sector and will provide community facilities through a participatory approach,” says Sri Widowati, ADB Project Engineer.

The total cost of the project is US $69.5 million equivalent. Apart from ADB and DFID financing, the Government will fund the balance of US$13.9 million. The ADB loan will come from its concessional Asian Development Fund. It will be repayable in 32 years, including a grace period of 8 years. The interest charge will be one percent per year during the grace period and 1.5 percent per year thereafter.