The Financial, Georgia
July 16 2010
World Bank Supports Further Improvement of Armenia’s Rural Roads Network
16/07/2010 11:09 (19:38 minutes ago)
The FINANCIAL — The World Bank Board of Executive Directors on July
15 approved a US$ 40 million loan for the second Additional Financing
for the Lifeline Road Improvement Project (LRIP-AF2) for Armenia.
According to World Bank , this project will assist the Government of
Armenia in its on-going efforts to improve accessibility of the
country’s main road network for the rural population and to create
employment. It will also help Armenia to further mitigate the impacts
of the global economic crisis on the country’s economy and the
well-being of its population.
The second additional financing will further scale-up activities under
the on-going project to improve the condition of 190 km of roads. Over
the years, insufficient investment in the rehabilitation and
maintenance of lifeline roads has made the road quality poor, and left
some roads difficult to use and others completely impassable. The poor
conditions and inadequacy of the lifeline roads connecting rural
communities to the main highways affect many aspects of rural life: it
means that business opportunities are lost, children find it hard to
get to school, and it is difficult for people to get urgent medical
attention when they need it.
For example, the inability to bring crops to market in time has
resulted in 40 percent or more of harvest loss; in some communities –
up to 80 percent of loss. The rehabilitation of the roads network will
therefore help farmers and small businesses in rural areas to bring
their products to market more easily and at a lower cost.
`As in the case of the original project, rehabilitation of additional
lifeline roads would create temporary jobs in rural areas, which have
been hit by the crisis, and improve access to basic social services,’
said Asad Alam, World Bank Regional Director for the South Caucasus
Countries. `While this immediate impact is critical, the project will
also improve market connectivity for rural areas and build upon the
ongoing efforts to strengthen the basis for growth and
competitiveness.’
`The direct and indirect job creation impact of the project is
estimated at about 19,000 person-months of employment,’ added Olivier
Le Ber, Head of the World Bank team designing the project. `The
implementation of the civil works will commence in late July. It is
expected that up to 50 km will be rehabilitated by the end of this
year, providing economic stimulus to rural communities.’
About 153 km of rural roads, including 35 km under the ongoing
LRIP-AF1, were rehabilitated, allowing the Government to swiftly
mitigate the negative impact of the financial crisis. The original
project outperformed the target by rehabilitating additional 18 km of
roads thanks to the significant cost savings generated from the
reduction in the cost of construction and the adoption of more cost
effective design standards during the implementation. About 12,000
person-months of jobs have been created so far. By hiring region-based
contractors local construction industries remain on business. Basic
accesses to social services have been improved by connecting the rural
poor to the main road network. Travel time was reduced on average by
about 40 percent.
The LRIP-AF has two main components. First, it will support
rehabilitation of approximately 190 km of the lifeline roads, located
in nine regions. In addition, a technical assistance component will
help the Armenian Government to modernize and increase the efficiency
of designing the roads. The LRIP-AF2 will also continue supporting the
`safe village program’ through small road safety civil works combined
with awareness campaigns at the community level.
The IBRD Flexible loan has a maturity of 25 years and a grace period
of 10 years included.
Since joining the World Bank in 1992 and IDA in 1993, the commitments
to Armenia total approximately US$ 1, 358, 7 million.
From: A. Papazian