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Rural Transport Operations in ECA

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Much of the emphasis in the road sector in the Europe and Central Asia (ECA) countries in recent years has been on rehabilitation, upgrading, and new construction on the primary road network to provide a network suitable for the needs of a market economy, to address years of neglect, and to try and ensure that those roads that carry the majority of traffic are in reasonable conditions. However, the level of expenditure necessary for the construction of new primary roads, sometimes to motorway standard, and the rehabilitation and upgrading of primary roads, means that the secondary and tertiary roads networks have generally received little attention, and been allocated limited resources. A recent study found that the majority of secondary and tertiary roads in the South East Europe countries were in poor or very poor condition. The situation was the most serious in Albania and Kosovo, where over 90% of secondary and local roads were found to be in a poor or very poor condition. Another study found Georgia with a similar proportion of local roads in poor to bad condition.

The reason for this neglect, partly money, but also institutional, managerial and structural reasons. The same report noted that whilst local roads have received inadequate funds for maintenance, it was not just a question of the amount of money:

  • The decentralization to local governments of the responsibility for managing secondary (regional) roads, and tertiary (local and municipal) roads has compounded the problems of inadequate maintenance.
  • Local revenue sources, such as vehicle registration charges, have proved insufficient, administrative costs are too high, and managerial capacity is weak.

These problems are endemic to the sector to a greater or lesser extent in all ECA countries. The unfortunate consequence of this neglect is that increasingly in many ECA countries, poverty in its broadest sense of access to employment, health and educational facilities, as well as inadequate income, is a rural phenomenon, becoming concentrated in poorly served rural areas.

One of the key drivers in the rural economy is the agricultural sector, yet high transport and transaction costs hamper the ability of the rural farmers to reach markets and forces them to settle on subsistence agriculture. In Albania, only 20% of farmers sell some of their produce in the local market, and only 9% of what they produce is sold. In Armenia, the poor condition of rural roads resulted in losses of 40% of the value of crops for some rural communities due to their inability to get the crops to market. The loss reached as high as 80% of the value of the harvest for the worst served communities. An improved rural road results in better farm-gate prices for farmers (particularly for perishable produce), and better competitiveness.

The ECA Transport team has supported the aims of a number of different clients to improve the road network in rural areas, with the objectives of stimulating economic development in rural areas and alleviating poverty in its broadest sense for the rural population, via a number of different projects.

CountryProjectTotal LengthLoan
Credit
 
ArmeniaLifeline Roads Improvement Project430 kmUS$101.60 million
AlbaniaImproving Secondary and Local Roads Program1,700 kmUS$530 million
GeorgiaSecondary and Local Roads Project850 kmUS$90 million
MacedoniaRegional and Local Roads Program Support Project420 kmEuro 34 million
BulgariaRoad Infrastructure Rehabilitation Project60 kmEuro 12 million

 

 

 

 

 

 

 

 

The projects collectively will reconstruct/rehabilitate a total of 3,460 km of rural roads in these countries, reconnecting rural communities to the main road networks, and marking a significant improvement in the quality of life of rural inhabitants, through improved access to health and educational facilities, employment opportunities, and regional markets. In addition, these projects create employment in the rural areas, both during the construction phase and during the subsequent operation of the road, via the need for ongoing maintenance. The Armenia LRIP and Georgia SLRP have created an estimated 36,650 and 24,000 person-months of jobs respectively in the construction stage of the road, whilst the Albanian SLRP has trained over 250 people to undertake simple routine maintenance activities after the roads have been completed. In addition, these projects can also be high performers in the sector, in the case of the Armenia LRIP, the original Credit was fully disbursed within eight months of effectiveness, and over half of the first additional financing was disbursed within four months from effectiveness.




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