The ADB Board of Directors have approved a $77.1 million loan to support the Greater Mekong Subregion (GMS) Highway Expansion Project.

The project will upgrade from two lanes to four lanes 178 km of national highways that form part of the GMS economic corridor - a network of roads that link Cambodia, People's Republic of China, Lao PDR, Myanmar, Thailand, and Viet Nam.

GMS countries adopted the economic corridor approach to generate more cross border trade and extend the benefits of improved transport links to remote and landlocked locations in the region.

The road expansion, from Phitsanulok to Lom Sak in Thailand's northern region, and from Phanom Sarkham to Sa Kaeo in the central region, is expected to reduce passenger and freight operating costs by 10% and travel times by 15%, as well as bring significant economic growth to the local area.

'The reduction of travel times and the increase in cross-border trade activity will spur economic activity in the provinces where highways are expanded,' said Yasushi Tanaka, Senior Transport Specialist in ADB's Southeast Asia Department. 'We expect gross domestic product to increase by 20% within three years of project completion.'

Improved road safety will also be a key aim of the project, with traffic accident fatalities expected to fall by 40% once the highway expansion is complete.

ADB's loan, from its ordinary capital resources, covers 43% of the project cost of $179.4 million. It has a 15-year term, including a grace period of five years, with interest determined in accordance with ADB's LIBOR-based lending facility. The executing agency is the Department of Highways.#