|Contacts: In Delhi: Geetanjali Chopra (91 11) 461-7241
In Washington: Karina Manasseh (202) 473-1729
WASHINGTON, June 17, 2003—The World Bank today approved a US$348 million loan to help improve the quality, capacity and safety of the road network in the south Indian state of Tamil Nadu. The Tamil Nadu Road Sector Project will benefit the state’s 62 million people by improving the state’s infrastructure and investment climate.
“Road transport is the dominant mode of transport in the state, and plays a big role in trade and tourism,” says A. K. Swaminathan, World Bank task leader for the project. “While demand for road transport has increased rapidly, infrastructure has not kept pace leading to serious network deficiencies. In addition, inadequate attention to road safety has resulted in an increasing number of deaths and injuries especially of vulnerable road users like pedestrians, bicyclists and motorcyclists.”
The project will enhance the quality of about 750 km of roads in the core Tamil Nadu network with proper management of social and environmental impacts. In addition, the project will deliver major maintenance on about 2,000 km, improve accident-prone locations and improve the management of the network through institutional strengthening, public-private partnerships, and enhanced funding and improved allocation procedures for the road sector.
In keeping with the World Bank’s Country Assistance Strategy (CAS) for India, the project addresses the needs of a key infrastructure sector. As envisaged by the CAS, adequate infrastructure and more effective governance will help strengthen the enabling environment for investment and sustainable growth, and thereby contribute to poverty reduction in the State. The sector issues to be addressed by the project are based on the Bank’s report India's Transport Sector: The Challenges Ahead, published in May 2002.
The project will have the following components:
- Capacity and quality improvement of the core network: This component supports investment for widening and strengthening existing state highways and major district roads and constructing bypasses around congested towns.
- Alleviating maintenance backlog and developing sustainable maintenance practices: Given the estimated backlog of about US$156 million, the project design proposes financial support to rationalize the backlog over several years to a steady state that can subsequently be realistically managed by Government resources alone.
- Institutional strengthening: The project will support the Government of Tamil Nadu in implementing its Institutional Strengthening Action Plan, a strategy designed to incrementally overhaul all aspects of the sector to better meet today’s changed environment and to bring the state closer to international best practice in road management and financing.
The project will be implemented by the Highways Department of the state of Tamil Nadu. The loan, from the Bank’s regular lending arm, the International Bank for Reconstruction and Development, is payable in 20 years and has a five-year grace period. The money is borrowed by the Government of India and on-lent to the state on domestic terms.
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