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Having the necessary government support and participation, technical expertise, and information systems can facilitate the implementation of land acquisition and resettlement (LAR) activities.

Delays in implementing the project’s LAR activities were due to the cumbersome requirements of preparing preliminary survey plans and verifying land ownership before the activities can be started.  These requirements also hampered the timely payment of compensation. Improvements came about with the implementation by the Ministry of Highways, the project executing agency of certain key measures, including (i) the intensive involvement of the Road Development Authority’s Environment and Social Division in LAR issues, (ii) the deployment of resettlement officers to project sites to accelerate compensation payments, (iii) recruitment of additional surveyors to accelerate resettlement plans preparation, (iv) establishment of a management information system that tracked compensation payment, relocation progress, and status of land acquisition of each project road, and (v)  the fielding of an external monitor, a mediator, and an income restoration consultant.  Acquiring the land section by section and handing it over progressively to the civil works contractors, the approach adopted under the additional financing, was found to be more efficient than holding off construction work until all LAR activities for the whole contract package had been completed.  This experience has shown the importance of government support, technical expertise, and management information systems in expediting the completion of LAR activities.

Ensuring project implementation readiness can help prevent cost overruns and implementation delays.

Due to increased land acquisition costs and the global escalation in commodity prices, cost overruns were incurred in the original financing project.  Such unexpected cost increases necessitated the reduction in scope of some components to release funds for the priority road upgrading component.  Lessons were learned and necessary measures were taken to minimize cost overruns in the additional financing project. Using the road project preparatory facility to prepare detailed survey plans, LAR plans, and designs well in advance of procurement activities also helped reduce cost overruns and implementation delays. Funded by a technical assistance loan from the Asian Development Bank in 2004, the road project preparatory facility was established by the Sri Lanka government to provide a readily accessible pool of funds to prepare road projects and efficiently develop the road network.

The performance-based maintenance (PBM) approach enhances the sustainability of road investments.

Although the pilot performance-based maintenance component of this project was scaled back considerably in terms of coverage, it provided the RDA, the project implementing agency, a valuable opportunity to be familiar with the new model for road maintenance. Almost all subsequent road projects implemented by the RDA have adopted a 3–5 years PBM period. The approach enhances the quality of rehabilitation work because the contractors are aware of their future responsibility for maintenance.  Piloted in this project, it has made a positive impact on ensuring the sustainability of road investments in the country.


While Sri Lanka’s road density, at project appraisal in 2005, was higher than that of many developing countries, because of poor quality and condition, its road network was incapable of meeting the rapidly growing freight and passenger traffic. Most of the roads in the national highways network were still single- and 2-lane; more than 50% had poor surface, and many portions were severely congested. These constraints limited the roads’ contribution to national development; improvements in the existing road infrastructure thus became imperative.  Institutional arrangements and capacity building to support the strategic management of the road transport subsector, and the planning and management of investments, were also needed.

Against this backdrop, the Asian Development Bank (ADB) approved a $150 million loan for the National Highways Sector Project, in December 2005.  The project’s expected impact was expansion of economic opportunities leading to higher income.  Its intended outcome was improvement of national transport efficiency. Using the sector loan modality for the first time in Sri Lanka, the project had 2 components (i) policy and institutional support and (ii) upgrading and maintenance of national highways.  

Along with the loan, ADB provided a $0.4 million grant to support the establishment of the Environmental and Social Division of the Road Development Authority (RDA), and in August 2011, approved an additional loan of $85 million to help meet cost overruns as well as to expand the project’s geographic coverage, increase the number of beneficiaries, and optimize access to one section of the highways network. In January 2011, the Organization of Petroleum Exporting Countries Fund for International Development also provided $8 million co-financing to improve 14 km of the national highways.

Under component 1, the road sector master plan, transport policies, regulatory frameworks, and road reclassification system, started under the ADB-financed Road Sector Development Project, were completed and subsequently implemented. The RDA was reorganized, and a medium-term investment plan and annual maintenance plan were developed. Expansion of RDA headquarters to accommodate the Ministry of Highways (MOH) was also assisted.

Under component 2, 299.6 kilometers (km) of the national highways were rehabilitated.  243.9 km of this output were completed under the original project; 55.72 km were covered by the additional financing.  However, due to funding constraints, only a 1-year performance-based maintenance (PBM) program was implemented, covering 108 km of the project roads. The original target was to pilot a 4-year PBM for 1,000–2,000 km in 4−6 executive engineer divisions.

Substantial delivery of the planned outputs, while providing the government the leverage to enhance sector management and operations, resulted in an efficient national road network that allowed easy access to provincial and local authority roads and facilitated the rehabilitation of conflict-torn provinces.   By completion, travel time on the project roads declined to 5.9 hours from 10 in 2006. Traffic volume reached a daily average of 2,828,232 vehicle-kilometers during the first full year of operation. Poverty head count in the project−influenced areas subsequently fell to 3.4% in 2016 from 14.7% in 2006.

ADB’s South Asia Department rated the project successful. The Ministry of Highways was theexecuting agency; the RDA was the implementing agency.

Project Information
Project Name: 
National Highways Sector Project
Report Date: 
August, 2018
Main Sector: 
Project Number: 
Sector Loan
Loan Number: 
2217, 2767, 8252
Source of Funding: 

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