| Project Detail |
Project Development Objective
PDO Statement
22. The Project Development Objective is to improve the efficiency and safety of select transport
infrastructure, improve the efficiency of cross-border trade, and strengthen capacity for Strategic Road
Network management in Nepal.
PDO Level Indicators
23. Achievement of this objective will be measured through the following key indicators: (a) reduction in
travel time, vehicle operating costs and annual fatalities related to road crashes on the roads being improved or
upgraded; (b) reduction in the time taken for goods transit at a major border crossing point; (c) reduction in time
taken for sanitary and phyto-sanitary clearances in export of selected agricultural commodities; (d) increase in the
percentage of Core Road Network (CRN, within the SRN) in “good” condition.
B. Project Components
24. The project will have four components as detailed below.
25. Component 1: Trade Facilitation (Estimated Cost US$42 million; IDA financing of US$ 29.4 million). The
objective of this component is to: (i) reduce the time taken for goods transit at selected border crossing points;
(ii) improve capacity and efficiency for sanitary and phyto-sanitary (SPS) management at selected locations and
for targeted products; and (iii) enhance capacity for managing trade. It comprises three sub-components:
(a) Augmentation of physical infrastructure, equipment, inspection and related border transit
management systems that are required to absorb increasing traffic and trade volumes at key border
crossing points including Birgunj, Bhairahawa and Biratnagar.
(b) Augmentation of equipment and training, and construction and/or renovation of laboratory buildings
at key border locations.
(c) Knowledge and capacity building for: (i) continuous improvement of the trade policy environment; (ii)
monitoring of trade performance; and (iii) development and implementation, and monitoring and
evaluation, of targeted trade promotion measures.
(d) Support for implementation, coordination, monitoring and supervision of this Component 1 of the
Project.
26. Component 2: Regional Road Connectivity (Estimated Cost US$659 million; IDA financing of US$350.1
million). The objective of this component is to improve efficiency, climate resilience and safety of movement of
goods and people across two roads within two transport corridors that are key for Nepal’s connectivity and trade
with India and other countries. The component comprises three sub-components:
(a) Improvement of the existing Nagdhunga-Naubise-Mugling road to two lanes, with one meter paved
shoulders.
(b) Upgrading of the Kamala-Dhalkebar-Pathlaiya road from two lanes to four lanes.
(c) A safe corridor demonstration program (SCDP), with support for road safety improvement initiatives
including enforcement and post-crash response, covering a length of about 250 km.
(d) Support for implementation, coordination, monitoring and supervision of this Component 2 of the
Project.
27. Contracting and costs to be borne by the Government: The works on NNM road will be based on
traditional item-rate contracts, with provision for maintenance for a five year-period after the construction phase.
In the case of KDP road, the project is expected to adopt the modified annuity model (MAM, also, known as Hybrid
Annuity Model (HAM)), subject to the findings of the ongoing due diligence to determine the market appetite for
MAM/HAM and the feasibility of implementing it in Nepal. The MAM/HAM contracts will include: (i) provision for
Operation and Maintenance (O&M) over a 7-8 year period after construction; (ii) government paying 70 percent
of the estimated cost of capital works (using 100 percent IDA financing for the same); and (iii) the selected
developer contributing the balance through equity and/or debt financing and recovering these costs and the costs
of maintenance during the Operation and Maintenance (O&M) phase, through semi-annual payments from the
government. The contract award will be based on the lowest annuity amount bid, that also delivers net Value-forMoney (VfM) for the government. If the MAM/HAM approach is either not feasible or does not deliver VfM, then
KDP road works will also be awarded under traditional item-rate contracts. The costs of the following activities
will be borne entirely by GoN: (i) land acquisition, resettlement and utility shifting prior to/during the construction
phase; (ii) annuity payments (if MAM/HAM contracting is followed) and/or maintenance the related supervision
consultancies, during the O&M phase. Such costs to be borne entirely by the government during the project
period and beyond, are estimated at about US$47 million.
28. Component 3: Institutional Strengthening (Estimated Cost US$100.1 million; IDA financing of US$70.1
million). The objective of this component is to improve the capacity for management of the strategic road network
in Nepal, with a focus on road safety, road asset management, training and periodic maintenance, as well as
support for training of local women in finding skilled employment and livelihoods. This component comprises
three sub-components:
(a) Support for the National Road Safety Council through, inter alia:
(i) establishment of an interim secretariat with seed funding in the form of staffing and equipment;
and
(ii) support for prioritized activities from the National Road Safety Action Plan (RSAP), including
coordinating, monitoring and evaluating measures under the SCDP; monitoring the working of
Management Information Systems and equipment service providers; supporting nation-wide rollout of the web-based Road Accident Information Management System (RAIMS); and supporting
training and peer-exchange programs.
(b) Capacity enhancement of DoR for improved management of SRN through:
(i) development and mainstreaming of the road asset management system;
(ii) support for training facilities and training in selected priority areas, including network-level safety
assessments, quality, procurement, design of advanced structures, and management of
environmental and social risks and impacts; and
(iii) support for training of local women to find skilled employment and livelihood opportunities.
(c) Support for periodic maintenance of the Core Road Network (CRN).
(d) Support for implementation, coordination, monitoring and supervision of this Component 3 of the
Project.
29. Training and placement support for local women is aimed at bridging the skills gap that was identified in
gender assessment as a major limiting factor contributing to the shortage of females in better paying jobs and
livelihoods. It will support the training of 500 women from the project areas, with a target of facilitation suitable
employment or livelihoods opportunities for 50 participants.34 The Periodic maintenance activity is designed to
strengthen the capacity of DoR to plan and undertake works to cover the significant backlog in periodic
maintenance of the SRN, focusing on ‘high traffic’ roads. The project will support periodic maintenance of about
3,400 Lane-km of high-traffic roads within the SRN, that would be notified by the Department of Roads as the
Core Road Network (CRN).35
30. Component 4: Contingency Emergency Response (Estimated Cost US$0 million; IDA financing of US$0
million). This component will provide immediate response to an eligible crisis or emergency, as needed. In the
event of an eligible crisis or emergency, the World Bank to re-allocate project funds to support emergency
response and recovery.
31. Climate related measures. In view of the critical vulnerability context, the project will be implementing a
comprehensive approach – from resilient construction and maintenance, to improved planning and contingency
planning – to increase the efficiency of targeted corridors and reduce negative economic impacts due to climate
related incidents. Other components and activities too will support specific climate related measures. More details
regarding these measures are in the Technical Analysis section. |
