asian development bank president calls on thiru t.r. baalu

adb participation in nhdp phase iii discussed

Wednesday, August 31, 2005

A high level Asian Development Bank team led by its President, Mr. Haruhiko Kuroda called on the Union Minister of Shipping, Road Transport and Highways, Thiru T. R. Baalu here today to discuss various issues relating to the participation of the Asian Development Bank in the National Highways Development Programmes (NHDP).

Thiru Baalu highlighted the recent initiatives of the United Progressive Alliance (UPA) Government in the road and shipping sectors duly emphasizing the flagship schemes of NHDP Phase III and the need for declaration of three new National Waterways. Thiru Baalu explained that the NHDP Phase-III project envisages improvement of 10,000 kms of National Highways to 4-lanes at a projected cost of Rs.55,000 crores. He also highlighted the paradigm shift of the Government policy in the road sector projects pertaining to EPC based project funding to Build-Operate-Transfer (BOT) basis. The Union Minister said that in this changed scenario, private investment to the extent of Rs.30,000 crores is expected and the remaining amount would have to be made available by way of viability gap funding. In this regard, Thiru Baalu invited ADB’s participation in viability gap funding for the project to the extent possible duly adopting programme-based lending approach as against the existing project-based funding approach. The President ADB welcomed this suggestion and agreed to review the same within their framework of policies.

Thiru Baalu also discussed the Rehabilitation and Re-settlement (R&R) issues pertaining to Road Sector NHAI projects being funded by ADB wherein the ADB is currently adopting a different approach vis-à-vis the ongoing national approach adopted by NHAI in domestic funding projects. The Union Minister suggested that ADB should consider adopting the national R&R policy for ADB funded road sector projects in India.

The other issues like prequalification of contractors and approvals of ADB also came up for discussion. As per ADB procedure prequalification of contractors is done mainly on the basis of experience of the lead partners, which are often foreign companies and it has been noticed that these companies generally do not actively participate in the project and leave the work to the not-so-experienced joint venture partners. It was suggested to the ADB team that this situation could be improved if provisions are incorporated to provide for commensurate experience of minor partners also.

It was also brought to the notice of the ADB President that, of late, a need is being felt for streamlining their project approval procedures in ADB, and delegation of adequate authority to their resident office in India with a view to avoid frequent references to the ADB Headquarters for approval at various stages. On the issue of further development of Inland Water Transport and Government’s initiative on development of three more National Waterways, the Union Minister expressed his desire to get meaningful cooperation of ADB in this regard as well.

The meeting was also attended by Mr. Masao Uno, Chief Adviser to the President, ADB, Mr. Ashok Saikia, Executive Director, India, Mr. Kunio Senga, Director General and South Asia Department besides high level officials of the Ministry of Shipping, Road Transport and Highways and Ministry of Finance.

VBA/BS