Guwahati, Oct. 22: The World Bank will provide additional funds of $13 million to improve the management and carrying capacity of the road network in Mizoram.

The bank has also been assisting the road sector in the state with funds for the past eight years.

The second additional financing, which was approved by the World Bank’s board of executive directors in Washington yesterday, will finance the cost overruns associated with major civil work in the ongoing project.

The credit agreement was signed in New Delhi today by joint secretary (infrastructure and investment) Govind Mohan, on behalf of the Centre, K. Lalsawmvela, project director, Mizoram State Roads Project and Giovanna Prennushi, World Bank’s acting country director in India.

The World Bank, in its project report, said the unavailability of diesel in the state for some time in 2008-09 had affected the working capacity of the contractors, leading to further delays in the execution of contracts.

This delay has resulted in additional price escalation and extra cost of engineering supervision by two international consultants.

The incr-ease in the costs of bitu-men, steel and cement was al-so much higher than anticipated.

“The cost overrun that has occurred is mostly beyond the control of the Mizoram government and it is essential to complete the ongoing activities as planned to achieve the development objective. Without additional finance, sustainable achievement of the project objective may be compromised. The expected travel time and cost benefits associated with major road improvement work under the project will only be partially completed. Mizoram is categorised as a financially weak state in the relatively underdeveloped northeastern region and it will be difficult for the state to finance the cost overruns on its own,” the report said.

The project has already, over the past eight years, helped reduce travel time by over 40 per cent on 472km of completed roads in the state.

The Mizoram State Roads Project was approved in 2002 and has demonstrated good results.

The road improvements under the project have redu-ced the cost of passenger travel between different towns.

New roads built under the bank-financed project have reduced the distance between the state capital Aizawl and the second largest town, Lunglei, by nearly 70km.

Not only has this brought down travel time by three hours, but taxi fares between the two towns have fallen from Rs 300 to Rs 270 despite a significant increase in fuel costs.

These costs are expected to fall further once all the sections of the road are complete.

“At a broader level, project roads have made significant contributions to the improvement of lives in the affected areas. Such roads have boosted the economy of the regional area in terms of increased land values, agricultural incomes, growth in the local handicraft industry sector, and in new businesses springing up along the new roads,” the report said.