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LATEST NEWS UPDATES | World Bank warns of road funds cut -Roopak Goswami

World Bank warns of road funds cut -Roopak Goswami

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published Published on Dec 29, 2016   modified Modified on Dec 29, 2016
-The Telegraph

Guwahati: The World Bank has warned the Assam government that the loan amount sanctioned for the Assam State Roads Project may be slashed if the pace of implementation does not improve by March 2017.

In the implementation status and results report of the project, released on December 21, the bank said the Assam State Roads Project is unlikely to achieve the project development objective due to poor progress and the cancellation of a few contracts. The bank has rated the overall implementation progress of the project as "moderately unsatisfactory".

"The project closing date is end-March 2018, and three-fourths of the total project period has already been elapsed. Nonetheless, the project will not be able to spend the allocated amount within the project period, even if it improves its pace of implementation substantially. Discussions are ongoing with the department of economic affairs (DEA) on two options: (i) cancellation of some of the loan amount (this could be nearly $60 million to $70 million out of the total loan amount of $320 million); (ii) extension of the project closing date (upto two years). A decision in this regard is expected early next year, possibly by March 2017," the report said. The department of economic affairs is under the Union finance ministry.

The project was sanctioned in 2012 to enhance road connectivity in Assam by assisting the public works department to improve and effectively manage its road network. There are three components of the project - road improvement, road sector modernisation and performance enhancement, and road safety management. The total project cost is $400 million, of which the bank is providing $320 million.

Only 18 per cent of the project cost has been disbursed till now.

The report said the poor progress of the road improvement component (which constitutes four-fifths of the total project outlay) was mainly responsible for the weak project performance. The progress of some sub-components under the road improvement component - including construction of innovative bridges - is also far from being satisfactory. The project has, so far, only managed to construct just over five per cent of the road widening and strengthening sub-component target (target: 300km; achievement: 17km).

The progress of other two components (road sector modernisation and road safety) has been reasonable. An overwhelming majority of the targets could still be achieved if these components are managed proactively.

However, the progress of road rehabilitation and strengthening works, under the road improvement component, has been good. The project has already exceeded its original road rehabilitation target (target: 200km; achievement so far: 206km). It is to be noted that the rehabilitation subcomponent has now been formally revised to 752km.

Three poorly performing upgrading contracts have been cancelled and two are in the process of cancellation. In fact, the bank said the project management has lately become more proactive in contract management and procurement.

A senior official of the public works department told The Telegraph that it is aware of the report and is trying its best to see that the sanctioned money does not get lapsed. "A meeting was held recently in New Delhi and we have assured that the department will see that money is utilised completely by 2018," he said.

The Telegraph, 28 December, 2016, https://www.telegraphindia.com/1161229/jsp/frontpage/story_127431.jsp#.WGR6gLmdeyB,


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