RIA Oreanda, Russia
Aug 28 2009

WB Supports Improvement of Rural Road Network in Armenia

Washington. OREANDA-NEWS . On August 27, 2009 The World Banks Board of
Executive Directors approved a credit of US 36.6 million equivalent of
additional financing for the Lifeline Road Improvement Project
(LRIP-AF) for Armenia. This project will assist the Government of
Armenia in its on-going efforts to drastically improve accessibility
of the countrys main road network for the rural population and to
create employment. It will also help Armenia mitigate the impacts of
the global economic crisis on the countrys economy and the well-being
of its population, reported the press-centre of WB. The additional
financing will further scale-up activities under the on-going original
project to improve the condition of 140 km of roads. Over the years,
insufficient investment in the rehabilitation and maintenance of
lifeline roads has made the overall 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 affects many aspects of rural life
and means that business opportunities are lost, its harder for kids to
get to school, and more 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 losses of 40 percent or more, and in some communities up
to 80 percent. The rehabilitation of the road network will therefore
help farmers and small businesses in rural areas bring their products
to market more easily and at a lower cost, reducing the external shock
of the crisis.

Rehabilitation of additional lifeline roads would also create
temporary jobs in rural areas which have been hard hit by the crisis,
and improve access to basic social services, said Asad Alam, World
Bank Regional Director for South Caucasus Countries.

While this immediate impact is critical, the project will also improve
market connectivity for rural areas and build upon ongoing efforts to
strengthen the basis for growth and competitiveness.

The direct and indirect job creation impact of the project is
estimated at about 10,000 person months of employment, added Satoshi
Ishihara, Head of the World Bank team designing the project. The
implementation of the civil works will commence in late September and
be completed by the end of the next construction season. This will
provide an economic stimulus to rural communities, and ensure benefits
from improved roads.

The LRIP-AF has two main components. First, it will support
rehabilitation of approximately 140 km of the lifeline roads, located
in seven regions. In addition, a technical assistance component will
help the Armenian Government to modernize and increase the efficiency
of how they design their roads, and to support a road safety audit
manual as well as a safe village pilot that could be scaled up to
improve safety standards in other areas. This project is part of the
overall World Bank Group Country Partnership Strategy (CPS) for
2009-2012 which was approved in early June. The IBRD Flexible Loan has
25 years of maturity with 10 years grace period. Since joining the
World Bank in 1992 and IDA in 1993, commitments to Armenia total
approximately US1, 313, 6 million.