Rehabilitation of Secondary and Local Roads Program

Overview

During the last 20 years Albania has made impressive progress passing from a centralized, backward system to a market-based economy. According to a joint report by INSTAT, UNDP and World Bank on poverty trend in Albania during 2002-2005-2008, the GDP, the GDP increased by 7.1%, accompanied by a considerable reduction of poverty level in rural areas. However, concerning the highland areas, the level of poverty has not undergone noteworthy changes. The poor population is still concentrated in highland rural regions.Nevertheless, Albania has achieved a sustained economic growth and has undertaken economic reforms which have led to macroeconomic sustainability, governance improvement, investment development in the private sector, provision of public social services.

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Challenge

Albania has inherited from the communist regime a poor infrastructure which has got a negative impact on the transport of goods and people. According to World Bank’s Survey on Poverty Assessment in Albania in 2003, many Albanians after employment consider infrastructure problems to be the main cause of their difficulties and a significant factor in their low standard of living as 57% of population lives in rural areas where the conditions of road transport are poor or very poor. These unsatisfactory road conditions represent the biggest hindrance for the transport of people and goods, for international investments, for the development of tourism, for the access to social services, employment opportunities especially for people in rural areas. Albania has a road network of 12,000 km out of which 4,980 km of rural road network with a communal profile and 4,471 km of regional road network. The contribution of this road network in the development of agriculture and the importance in return of agriculture in the GDP for the overall economic development and reduction of poverty highlights the significance of immediate intervention for the improvement of secondary and local network.

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Approach

Giving due attention to the immediate and efficient improvement of the secondary and local road network, the Albanian Government has drafted “The National Strategy for Development and Integration 2007-2013” and “National Transport Plan”. Moreover, in 2007 the Albanian Government initiated the Project on the Improvement of Secondary and Local Road network. This project received the support of the World Bank which prepared the Project Appraisal Document. The implementation of such an important project was entrusted to the ADF which is an experienced Agency in the implementation of infrastructure projects. “The Improvement of Secondary and Local Roads” Project, which is co-financed by the World Bank and other donors at an estimated amount of $400 million, aims at increasing the concrete efforts for the improvement of infrastructure in the country and for increasing the access to basic services and local markets especially in rural areas via the rehabilitation of about 1500 km of road network.
The Project became effective in September 2008.

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Results

The program started its implementation three years ago. The outputs to-date are as following:

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Towards Future

To this day the project financing has been backed up at an amount of 328 million USD by the Albanian Government, World Bank, Council of Europe Development Bank, European Bank for Reconstruction and Development, European Investment Bank and Islamic Development Bank

During 2011 about 700 km of road network are foreseen to be rehabilitated or under reconstruction. The 2011 Budget is characterized by an impressive increase in investments thus reducing considerably the operational costs for their implementation.

In addition to the inherited funds from 2009-2010, in March 2011, the People’s Assembly of Albania ratified an agreement with the German Development Bank, KfW, in financing “Secondary and Local Roads” Program at the amount of 15 million Euros. This program has received as well the financial commitment of IPA 2009 at the amount of 8.8 million Euros. Part of the donor group who are committed to join this Program are also the Japan Agency for International Cooperation, IPA 2010-2011 etc. The funds allocated by these donors are expected to complete and even outrun the initial overall cost of $400 million US.  

These investments will improve 1500 km of secondary and local road network contributing thus to the improvement of living conditions for the inhabitants in the hinterland of project roads by reducing travel time towards local markets and cultural and health centers. The novelty of the Secondary and Local Roads Program lies in the fact of guaranteeing a sustainable maintenance and functioning of the implemented road sections by contracting maintenance road service in the private sector.

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