ISLAMABAD, Dec 19: The Asian Development Bank has approved $200 million loan for Pakistan’s road sector. With this amount, the country’s road sector at national and provincial level will undergo some major reforms.

According to a press release, the Road Sector Development Programme consists of a US$50 million loan to reform national policy and a US$150 million loan for a Provincial Sector Development Project.

The policy loan will help the national road agency deliver services more effectively. It will rationalize staffing, develop standard operating procedures and enhance staff accountability in project management, the release said.

It will also encourage investment based on economic principles, self-financing maintenance, and an approach to road safety that includes raising public awareness.

ADB Resident Representative, Mr M. Ali Shah commented that policy reforms “are critically needed to increase the efficiency of the road and transport sector at the national and provincial levels.”

The programmatic approach adopted will sequence activities in various provinces, starting with the Sindh province.

The Provincial Sector Development Project component comprises sector reforms and an investment programme. At the provincial level, the reform programme will help the Sindh Communication and Works Department become an efficient institution that can provide safe, cost-effective, and well-maintained roads.

The project includes investments to improve 164km of provincial highways and 1,200km of rural access roads. Poverty reduction will be a key theme for the identification of rural roads located in districts with high incidence of poverty.

As the Project takes a sectoral approach, core rural access sections have been selected from three disadvantaged districts, namely (i) Kamber-Drigh Road via Village Bhunda Khamiso, (ii) Awidh-Jamrao Head via Khudadino Gahu, and (iii) Tangwani-Bugti via Shahi Wah.

ADB’s policy loan will come from its ordinary capital resources under its LIBOR-based facility. The amortization period is 15 years, including a grace period of three years.

Half of ADB’s project loan will come from its concessional Asian Development Fund and half from ordinary capital resources under the LIBOR-based facility. The total cost of the project is US$236 million. Apart from the ADB, the government will provide US$71 million and the OPEC Fund will inject US$15 million. The Project is due for completion in 2007.