The Asian Development Bank (ADB) has signed a $180 million loan agreement with Pakistan for improving National Highway Network to enhance its efficiency and increase private sector participation in the road sector.
Under the National Highway Development Sector Project (formerly Sub-Regional Connectivity and Trade Facilitation project), the government in October last year held negotiations in Manila for the first tranche of $180 million, which is part of a Multi-tranche Financing Facilities (MFF) of $773 million, official sources told Business Recorder on Saturday.
The Multi-tranche Financing Facilities, a new ADB financing arrangement, will support the government's national highway development plan intended to overcome critical bottlenecks in the country's road network, they added.
Sources said the Asian Bank would provide this amount from its Ordinary Capital Resources (OCR), whereas the communication ministry would be the implementing agency of the project.
They said the ADB approved this project on December 13, 2005, and about its break-up, the Bank would provide $770 million from its Ordinary Capital Resources (OCR) and $3 million from its concessional Asian Development Fund (ADF).
The project has been designed to achieve two specific objectives ie improvement in road sector and transport efficiency by facilitating the adoption of national transport policy, strengthening performance of NHA in its management of national highway network, improving road safety and road maintenance and funding, they said.
The second objective of the project is to increase the private sector participation in the road sector by increasing outsourcing of road works and exploring opportunities for private operation of NHA assets.
Sources said under the project, different locations on which improvement and rehabilitation work would be executed are National Highway; N-25, Hub-Uthal, Balochistan; N-70, Multan-Muzaffargarh, Punjab; N-50, Khanozai-Mughal Kot, Balochistan-NWFP; N-35, Hasan Abdal- Manshera, NWFP; N-65, Sukkur-Jacobabad, Sindh; N-80, Tarnol-Jand, Punjab; N-70, Qila Saifullah-Wiagum Rud, Balochistan. Besides, sources said, the proposed project also included institutional strengthening of NHA.
As country's ports and roads offer the most economical route to the landlocked Afghanistan, Central Asia and parts of Russia, the project will help Pakistan to a bridge between east and west Asia.
By alleviating physical, institutional and other constraints through this project, the country would take full advantage of its location and potential for increased trade through improved trade facilitation, rehabilitation of transport link, efficient cross-border movements and increased efficacy at ports.
Once the Gwadar Port is completed, the efficient and improved national highway system would contribute adequately to economy of the country by lowering transportation costs, the sources said.