ADB approves $197m loan

To be used for highways, bridges damaged in floods

ISLAMABAD: The Asian Development Bank on Thursday approved a loan of $197 million to rebuild highways and bridges damaged in Pakistan’s worst-ever floods in 2010 amid trouble in execution of two road projects that are facing delays already.

The funds will also be used to train staff in disaster management units at the National Highway Authority (NHA), giving them the ability to respond more quickly and effectively to natural disasters, which have been growing in frequency and severity in recent years, according to a handout issued by the local office of the ADB.

The loan proceeds will be used to repair and rehabilitate a number of sections of road over 200 kilometers of the national highway network, as well as 33 bridges. The project, which includes counterpart assistance of $21.9 million from the Government of Pakistan, will run for about four years with an estimated completion date of September 2020.

As of 31 December 2015, the ADB-funded transport portfolio includes six active projects amounting to $1.3 billion and two of them worth $594.4 million are declared problematic. Currently, one out of every four ongoing projects financed by the ADB has been declared problematic due to hitches in implementation.

“Along with the terrible loss of lives and property, the 2010 floods destroyed or damaged the road network in 80 of 110 districts across the country, leaving communities isolated from markets and vital services, with severe consequences for peoples’ livelihoods and well-being, said Zaigham Naqvi, the ADB’s regional project officer for transport sector.

He said the ADB was helping Pakistan rebuild its infrastructure destroyed by the floods, and this assistance will complete work on highways earmarked for rehabilitation, supporting the economic and social recovery of communities in affected areas.

The road sector makes up about 10% of the economy and provides about 2.3 million jobs.

The ADB has supported road improvements in Pakistan for several decades, with a strong focus since 2005 on economic corridor routes, which aim to boost trade, investment and tourism flows both internally, and with neighboring countries.

However, two of its six road and transport sector projects are facing problems. The lending agency has declared National Highway Network Development in Balochistan Project a potential problem, which was approved in June 2014. The ADB is providing $267.4 million assistance including $72.4 million grant offered by Department for International Development of United Kingdom. The loan was signed in May 2015 and declared effective on 10 August 2015. The DFID grant is yet be declared effective. Currently, the contract signing is pending due to a court case.

The scheme is aimed at rehabilitating 79 km of the existing two-lane road from Zhob to Mughal Kot (N50) and 128 km of the two-lane road from Qila Saifullah to Waghum (N70) in Balochistan.

The ADB has also declared tranche II and III of National Trade Corridor Highway Investment Programme as an actual problematic scheme. The tranches were approved in April and November 2014 respectively. The NTCHIP Tranche II worth $200 million including $82.4 million DFID grant was declared effective in November 2014. Under this tranche, two contracts for Hassanabdal Havelian Expressway (E35) were awarded in January 2015 and the work has commenced.

The NTCHIP Tranche III of $127 million that also includes $39.2 million DFID grant was declared effective in October 2015. The only civil works contract under this tranche was awarded in December 2015.

Published in The Express Tribune, April 1^st,  2016.

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