Washington, DC (BBN) – The World Bank has approved a $107 million credit for the Mizoram State Roads II – Regional Transport Connectivity Project to improve transport connectivity for the landlocked state of Mizoram and to help open up the potential for regional trade among neighboring countries.
The project will enhance Mizoram and other northeastern states’ road links with Bangladesh, as well as with Nepal, Bhutan and Myanmar.
The link to Bangladesh will facilitate greater bilateral trade and access to the Port of Chittagong – the nearest shipping port for the northeastern region of India. The link to the border with Myanmar will facilitate connectivity to Myanmar and the rest of East Asia and beyond. The impacts on trade and employment will be felt at two levels, intra-state and between Mizoram and neighboring states and countries, namely Bangladesh and Myanmar.
Mizoram’s road network is of poor quality and under developed, and has among the lowest density in all of India. It faces severe constraints in its connectivity with larger markets. Travel from Aizawl to the nearest Indian port of Kolkata via the congested, 11 km-wide Siliguri corridor, also known as the “Chicken’s Neck,” is a 1,547 km long journey. Prices for basic staples like rice, sugar, tea and tomatoes can cost as much as three times more in Mizoram and other northeastern states when compared with most Indian cities or neighboring countries like Bangladesh.
According to estimates, annual intra-regional trade in the region can more than double from $16 billion to $38 billion annually, if barriers to trading with neighbors were removed. According to another estimate, investments in transport infrastructure could reduce trade costs by more than 20 percent in India, and12.5 percent in Bangladesh.
The project will fund 91 km of roads that are design-ready. Roads that will be widened or strengthened include: a 22 km section of Lunglei – Tlabung – Kawrpuichhuah road on the border with Bangladesh; the 27.5km Champhai-Zokhawthar road on the border with Myanmar; and the 41.7km Chhumkhum-Chawngte North-South alignment connecting to the border roads with Bangladesh to the west and Myanmar to the south.
The project will be financed by a credit from the International Development Association (IDA) – the World Bank’s concessionary lending arm – which provides interest-free loans with 25 years to maturity and a grace period of five years.
BBN/SSR/AD-14June14-2:44 pm (BST)
