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.