Contacts: In Delhi Sudip Mozumder (91 11) 2461-7241 In Washington: Erik Nora (202) 458 4735 enora@worldbank.org WASHINGTON, September 30, 2008─ The World Bank today approved a US$362 million assistance package to the Indian state of Orissa designed to improve the state’s road network and its agricultural tank systems. Orissa has made a strong fiscal turnaround. Its economic growth has accelerated, especially in the mining, agriculture, and service sectors. Yet Orissa remains one of India’s poorest states with nearly half of its 38 million people living under the official poverty line, most of them in rural areas. The quality of Orissa’s road network is considerably lower than comparator states in India. Only 22 percent of the state’s roads are paved, and most village and district roads remain unconnected to the national highway system. The Orissa State Road Project (US$250 million loan) aims to remove transport bottlenecks in transport corridors through better performance, safety, and capacity of priority roads. It will increase the role of the private sector in road infrastructure, and assist the state government to establish an institutional and governance framework in the sector. “An efficient road transport system is critical for improving the state’s investment climate and promoting a private-sector-led economic growth,”said Binyam Reja, World Bank Senior Transport Economist and Task Leader for this project. “This project will lead to a significant reduction in transport costs for businesses and households in project areas, and ultimately boost growth through a better investment climate that will help the state exploit its mining, industrial and tourism potential.” Agriculture remains hugely important for Orissa. It accounts for about 30 percent of the state’s GDP and providesemployment to over 75 percent of workers in the state. While the sector has improved in recent years, average productivity levels are still low.Tank irrigation plays an important role, but most tanks are performing below capacity. The Orissa Community Tanks Management Project (US$112 million credit and loan) will rehabilitate some 900 tanks covering a cultivable area of about 120,000 hectares spread across 29 districts of the state. The project will support improvements in production technologies and management practices, and promote better market linkages. It will also strengthen community-based institutions, enabling them to assume greater responsibility for tank management. This is expected to increase productivity in agriculture, livestock and fisheries, and promote more effective and sustainable management of tank systems. “The decline of tanks poses a serious threat to the agricultural economy of rainfed areas dependent on tank irrigation in Orissa, said Deepak Ahluwalia, World Bank Senior Economist and Task Leader for this project. “Poorer farmers, often found at the tail-end of dilapidated tank systems,are particularly affected. By improving and expanding tank irrigation, this project will improve water availability for these farmers.” The US$250 million loan for the Orissa State Road Project, from the International Bank for Reconstruction and Development (IBRD), has a 30 year maturity which includes a 5-year grace period. The US$56 million credit for the Orissa Community Tanks Management Project, from the International Development Association, the World Bank’s concessionary lending arm, carries a 0.75 percent service fee, a 10-year grace period, and a maturity of 35 years. The US$56 million loan for the Orissa Community Tanks Management Project, from the International Bank for Reconstruction and Development (IBRD), has a 30 year maturity which includes a 5-year grace period. For more information on the Bank’s work in India, please visit http://www.worldbank.org.in For more project information, please visit http://go.worldbank.org/LLFQ5OGOW0 (roads project) and http://go.worldbank.org/BYASNWOWC0(tank project) |
RSS