ADB to lend $142m for improving rural road network, transport connectivity

The government and the Asian Development Bank (ADB) have signed two agreements for $142 million in concessional loans to be used for improving the rural road network and transport connectivity. 

Fatima Yasmin, secretary of the Economic Relations Division (ERD), and Manmohan Parkash, country director of the regional lending agency, remotely signed the loan agreement on behalf of their respective sides on Tuesday.  

The ongoing rural road network improvement project will get another $100 million for further expansion. 

Manmohan Parkash said the project will contribute to the government's efforts to achieve faster socio-economic recovery after the Covid-19 pandemic ends. 

He said the expanded project will benefit around 92 million inhabitants in 34 districts with access to better health services, education, employment opportunities, markets and other government services.

"In addition to generating 1.73 million person-days of employment through infrastructure spending, the additional financing will also widen opportunities for women and children to get easier and safer access to education, emergency health services, and other essential social services in any weather condition," he added. 

This additional financing will scale up the current road network under the Rural Connectivity Improvement Project from 1,700km to 2,630km of rural roads. It will build upon the $200 million financial package approved in 2018 to upgrade rural roads in 34 districts to all-weather standards with climate resilience and safety features. 

The project supports the government's 7th Five-Year Plan to increase the percentage of the country's rural roads classified as good from 43 percent in 2016 to 80 percent in 2020. 

ADB said the overall project will continue to strengthen governance and institutional capacity in rehabilitating and maintaining rural roads with the use of a geographic information system to optimise monitoring of road conditions.

Inadequate rural transport and poor market infrastructure are critical challenges to Bangladesh's rural development, the ADB said, adding that the situation is further worsened by recurrent flooding and disasters that paralyse agricultural value chains. 

Less than half of the rural population has access to roads made for all weathers, which make up less than a third of the total length of rural roads in the country.

The ADB is also providing $42 million in concessional loans to prepare road and railway sector projects for promoting multimodal transport connectivity in Bangladesh.

Parkash said Bangladesh needs to boost connectivity between different transport modes, strengthen multimodal and arterial transport corridors, as well as construct bypass and connecting roads to promote domestic and international trade.

He added that given the impact of Covid-19, improving transport connectivity is critical for ensuring a robust local and global supply chain.

Highlighting the opportunities that such projects would offer for the private sector, the ADB country director noted that multimodal transport can accelerate economic activities, including international trade. 

"It will also help accelerate economic activities by reducing transportation costs and time, and increasing competitiveness and efficiency," he said. 

This project is supported by a project readiness financing (PRF) loan, which is an innovative financing instrument introduced in 2018. 

"Through this project, we are supporting the government's initiative to prepare the transport sector's complex projects very well so that they are implemented quickly and efficiently," Parkash added. 

The total cost of the facility is $57.2 million, of which the government will provide $15.2 million. The PRF is due for completion at the end of 2024.

The Transport Connectivity Improvement Preparatory Facility project will help with feasibility studies; detailed design; risk assessment for gender, labour, and other social issues; environmental impact assessments; climate risk and vulnerability assessments; environmental management plans; resettlement plans; and risk mitigation plans for ensuing projects. 

The PRF will support project preparation in road and rail connectivity of ports, land ports, and border crossing points. 

It will also support road and rail connectivity of intermodal transhipment facilities, including inland container depots and inland container terminals, and the strengthening of corridors. 

Sector-wide improvements including safety, traffic management and maintenance will also be supported by the PRF.