At appraisal, the road transport in India accounted for 68% of freight movement and 87% of passenger traffic. The freight traffic on these roads had increased by about 12% per year and passenger traffic by about 8% per year over the previous decade. As the national highways and the state highways that comprised the secondary road system were unable to cope with the rapid traffic growth, congestion, road deterioration, and transport costs spiraled uninterruptedly.
Thrust in a similar situation, the state highway network in Madhya Pradesh in central India was targeted for rehabilitation by the state government. Initially, 7,400 kilometers (km) of the total 10,249 km state highways were successfully upgraded through Asian Development Bank (ADB) assistance, public–private participation (PPP) schemes, and state funds. The Madhya Pradesh government then decided to rehabilitate another 665 km with state resources, 771 km under PPP schemes, and requested ADB to finance 1,080 km of the state highways mostly in the very poor and less developed areas of the state. The Madhya Pradesh State Roads Project III, approved by ADB for a $300 million loan in March 2011, thus came about, with the primary objective to continue to support the development of the state highway network and enhance the road safety capacity of the state government. The project’s long-term impact was accelerated economic growth in Madhya Pradesh. Its intended outcome was more efficient and sustainable operation of the state highway network.
Building on the experience and lessons from the two earlier interventions, the project also aimed to strengthen the climate change resilience of the project roads through proper engineering design and measures toward "green" highway status, address road safety through modern technology, mainstream gender into road safety, and prepare a long-term strategy for private sector participation in road network development and maintenance.
The project was implemented largely as planned. Fifteen sections of state highways, totaling 1,083.1 km, were rehabilitated or reconstructed. This involved widening and strengthening the roads from single or intermediate lane roads to intermediate or two-lane standards with bituminous pavement. Bridges and culverts were rehabilitated, and road signage and furniture provided. Compensatory reforestation of 1:15.7 was achieved against a 1:7 target and the statutory requirement of 1:2. An emergency road accident response system (ARS) was comprehensively developed with the participation of all key stakeholders. Upon becoming operational in June 2015, ARS training courses were conducted in addition to other road safety trainings. To further enhance road safety, the Madhya Pradesh Road Development Corporation (MPDC), with private sector participation, established computer-networked check-posts at all the 24 entry points along the state borders to address overloading.
Because of the improved road condition, average vehicle travel time declined by 45%, compared to the 25% reduction anticipated at appraisal. Traffic on the project roads rose by about 30%–50%. Vehicle speeds increased from an average 30–40 km/hour before the project to 50–80 km/hour after the project. Vehicle operating cost fell by at least 17% in real terms. Fatal accidents decreased by 41% due to the implementation of ARS, which had serviced over 400 accidents annually, by PCR time.
Successful output and outcome deliveries enabled the project to contribute to accelerating economic growth in Madhya Pradesh. The state’s gross domestic product growth rates were higher than the national average in recent years, increasing by 9.5% in 2014, 10.2% in 2015, and 8.6% in 2016, compared to the national averages of 4.7% in 2014, 7.2% in 2015, and 7.6% in 2016. Household income increased by an average of 37.3% and the poverty rate declined from 40.3% to 30.1%. Many new hotels, shops, and garages have opened along the project roads, providing substantial new working opportunities for local people, especially the poor.
Women have likewise benefited substantially from the project. They captured about 10% of the direct employment during construction and operate many of the roadside businesses that have emerged. Furthermore, they have been encouraged by the fast-growing public transport to travel farther distances and participate more in socioeconomic activities. Women empowerment in the project areas has consequently improved, bringing about some changes in their economic and household and community status.
As agreed at appraisal, the Madhya Pradesh government was the executing agency. It acted through the MPRDC, which is wholly owned by the state government and responsible for the development and maintenance of all state roads in Madhya Pradesh. Seven project implementation units were established in the field to take charge of day-to-day implementation.
