ADB to help PRC's Heilongjiang Province improve road network

The Asian Development Bank (ADB) is extending a US$ 200 million loan to help the People's Republic of China's (PRC) Heilongjiang province improve its road transport sector.

The ADB has approved a 25-year loan to help improve road infrastructure, road maintenance, rural village bus services, and strengthen institutional capacity in the landlocked Heilongjiang province. The project will directly benefit about 1.7 million people along the project roads.

The project will construct about 206 km of four-lane expressway between Yichun and Wudalianchi, linking the prominent tourism areas within the province, including those in provincial capital Harbin, closer to each other.

One major component of the project is the improvement of road maintenance management. The improved road maintenance planning and budgeting will play an important role in efficient use of fuel tax revenue that was recently introduced in the PRC, as well as help the province to sustain its road network including the project road.

"Expanding demand for road transport has strained road infrastructure, as manifested by missing links and bottlenecks in the network. The resulting high cost of transporting goods between inland province and ports has been a serious constraint for inland province, including Heilongjiang," said Oyunchimeg Erdene, Transport Specialist at ADB's East Asia Department.

Heilongjiang is the country's sixth largest province in terms of area. It was an industrial base before the 1980s. Since then, the province has fallen behind PRC's more prosperous coastal provinces.

The province's road network is relatively underdeveloped. In 2007, only 7.1% of the network consisted of high standard roads, as compared with the national average of 15.5%.

ADB will source the loan from its ordinary capital resources, with interest rate based on ADB's London interbank offered rate-based lending facility.

ADB has so far financed three road projects in the province.

Aside from ADB, state-owned Agricultural Bank of China will provide US$ 419.7 million, the Ministry of Transport will provide US$ 203.56 million, and the Heilongjiang provincial government will provide US$ 174.89 million to the project.