The World Bank Board of Executive Directors approved today a US$140 million equivalent financing for the Fifth East-West Highway Corridor Improvement Project for Georgia.
The project development objectives are to reduce road user costs along the Corridor section upgraded under the project, and strengthen the capacity of the Roads Department under the Ministry of Regional Development and Infrastructure and the Ministry of Economy and Sustainable Development. The project will also help manage the road network and provide an enabling environment to improve logistics services.
The primary project beneficiaries are the road users. They are expected to benefit from the upgrading and planned road safety improvements from: (i) better road quality and level of service; (ii) avoiding or deferring costly congestion expected on the basis of mid-term traffic projections; (iii) better road safety through new alignments and Khashuri bypass, which allow users to avoid hazardous crossing of urban areas by heavy transit traffic; and (iv) savings derived from reduced transport cost
“The completion of the East-West Highway corridor is a central piece in the Government’s strategy of transforming Georgia into a regional transport and logistics hub. The Project will directly contribute to economic development by reducing transportation costs and linking rural communities and their agricultural products to urban centers such as Tbilisi,” said Mercy Tembon, World Bank Regional Director for the South Caucasus.
“Road safety improvements will also reduce the huge annual economic losses associated with road accidents. Once completed, the East-West Highway from Tbilisi to Batumi via Poti will provide direct access to 2.2 million people or more than half of the total population of Georgia”.
“This project will contribute to the completion of the most important transport infrastructure backbone in Georgia. It will bring the East-West Highway into European design standards and improve the level of service through the provision of key Intelligent Transport System (ITS) activities,” said Mustapha Benmaamar, World Bank Senior Transport Specialist and the Task Team Leader for the project.
The project will strengthen the capacity of the Roads Department’s Intelligent Transport System Unit that will monitor traffic and road conditions and provide real-time information to road users to travel safely and smoothly along the East West Highway corridor.
This project is in line with the strategic directions identified in the current 2014-2017 Country Partnership Strategy (CPS). The CPS identifies two strategic pillars: (i) strengthening public service delivery to promote inclusive growth; and (ii) enabling private sector led job creation through improved competitiveness. The project will contribute to both strategic pillars through (i) strengthening the capacity and accountability of the Roads Department and the Ministry of the Regional Development and Infrastructure in road infrastructure management and maintenance, and (ii) providing infrastructure to facilitate transit and growth.
The completion of the East-West highway project will contribute to improving Georgia’s Logistic Performance Index and therefore help Georgia in its aspiration to become a regional transport hub. The East West Highway Corridor has wider development impacts on Georgia’s economy. Its completion is estimated to contribute to an increase of real GDP by around 3 percent. This will also positively affect incomes of all types of households, including the incomes of the two lowest quintiles.