The National Highways Authority of India on Wednesday signed USD 45 million loan agreement with the World Bank to improve operational efficiency of the body.

“We have signed a loan assistance agreement with the World Bank. The loan amount is USD 45 million and this loan caters to institutional strengthening in NHAI. It will also be a milestone loan because till now we have been dealing with the loans which were for construction,” NHAI Chief General Manager Planning and Information System Atul Kumar told reporters in New Delhi.

“This is exclusively for the institutional development and transformation of the organisation in terms of enterprise… road safety, procurement issues and public private partnership,” Kumar said.

NHAI said the assistance will finance actions to strengthen the institutional capacity of NHAI to efficiently manage and operate its growing programme.

“We hope through this loan the organisation will benefit. Also, whatever decisions are to be taken regarding the outcomes of the loan they will be taken at the highest level by the board of the organisation and will be implemented on fast track,” he said.

The loan from the International Bank for Reconstruction and Development has a five-year grace period and a maturity of 18.5 years.

Venu Rajamony, Joint Secretary, Department of Economic Affairs, Ministry of Finance, Roberto Zagha, Country DirectorIndia, World Bank and Kumar were present at the occasion.

Forty per cent of the total road traffic in India plies on the National Highway (NH) network and this share is likely to increase with vehicle growth touching 10 per cent per annum in recent years.

According to estimates, the road sector in India will require investments in the range of USD 75-90 billion over the next five years.

The World Bank project will also help NHAI implement recommendations of an Inter-Ministerial panel set up in 2008 on the restructuring of NHAI.

The WB project would support training to enable NHAI to improve its project management, research and capacity building, asset management and resources planning and public-private partnerships.

It would also assist in socio-economic and environment impact evaluation, safety, HIV/AIDS prevention, and governance through adopting appropriate approaches and practices.

Meanwhile, the Bihar government has signed a USD 300 million agreement with Asian Developement Bank for construction and upgradation of Bihar State Highway II Project.