The terrain of Uttarakhand in the northern part of India is 90% hilly and minimally connected by rail and air links. Its roads are therefore a lifeline for the state. To improve the state’s 16,800-kilometer (km) road network to national standards and maintain them in good condition, the government of Uttarakhand prepared a road development plan, which it proposed to be financed in part by international development financing institutions such as the Asian Development Bank (ADB). At the request of the government of India, ADB approved a multitranche financing facility (MFF) of $550 million in 2006 to help implement a significant portion of the development plan through the Uttarakhand State-Road Investment Program.
The investment program was to consist of 7 discrete projects over 10 years. Its aggregate expected outcomes were (i) improvement and subsequent 3-year maintenance of 10,800 km of state roads, comprising almost two-thirds of the Public Works Department (PWD) network; and (ii) enhancement of the PWD’s accountability and transparency. Project 1 was approved in January 2007 for a loan of $50 million and closed in May 2013. Project 2, the focus of this report, was approved in October 2008 for a $140 million loan and closed in March 2015.
At appraisal, project 2 comprised (i) an infrastructure improvement component covering 966 km of state roads and (ii) an infrastructure management component to adopt improved policies and operational procedures and enhance staff skills. Roads that offered opportunities to improve intra-state road network connectivity and connect less traveled roads with the national highway network were targeted for inclusion. Of the 58 roads that were initially selected for coverage, 3 were dropped before the bidding stage. Infrastructure improvements, consisting of road strengthening and widening, resurfacing, installing road safety features, and strengthening culverts and bridges, were completed on 881 km of the 55 roads that remained.
The civil works contracts, comprising 20 packages, included post-construction maintenance over 3 years, using a performance-based approach. Compared with project 1, project 2’s overall performance in post-construction maintenance improved, mainly because of capacity building of project staff and contractors, more effective supervision of maintenance works, and better price quotations from contractors. Modification of contract provisions, which extended the release of 50% of both the performance guarantee and retention money to the end of the maintenance period, also helped strengthen post-construction maintenance. The modification was built into the bidding documents of the three contracts that needed to be re-awarded following the termination of previous ones due to poor contractor performance.
As with project 1, many roads under project 2 were damaged by recurrent natural disasters such as cloudbursts, floods, and prolonged rains, which caused landslides and the caving of roads. Furthermore, a few sections of the project roads experienced premature pavement distress. The additional restoration works required by these situations combined with contractor performance issues to delay the completion of most works. As a result, the project completion period was extended by 2 years, at which time, the project fully delivered its revised output targets and achieved its expected outcomes of increasing the efficiency of inter- and intrastate transport services and enhancing the sustainability of the state’s road network.
Because of the project, there had been significant increases in the issuance of good vehicle permits and bus utilization rate. Routine maintenance costs declined, and the average service life of periodic maintenance work was extended from 3 years to 5 years or longer. Significant reductions in the operating cost of all vehicle types were realized because of better road conditions. At completion review time, there were also strong indications that the project significantly helped reduce poverty, made more jobs and economic opportunities available in the project area, and improved the accessibility of markets, schools, hospitals, and other public services, especially among the poor.
The project had the PWD as executing agency. A project management unit, within the PWD, took charge of day-to-day implementation.
