World Bank Helps China Build Key Highway

The World Bank approved Tuesday a loan of 200 million U.S. dollars to China for the construction of the 238-kilometer inter-provincial highway to connect Nanning, the provincial capital of Guangxi, to Shuiren in the north, creating a key section of China's national trunk highway system.

Construction of the Shuiren-Nanning Highway is the main component of the Guangxi highway project. This new highway will connect the relatively poor, land-locked interior provinces of Guizhou, Yunnan, Sichuan, and the city of Chongqing to the southern seaports of Beihai and Fangcheng in Guangxi and Zhanjiang in Guangdong province, bringing a shorter and faster route to the sea.

The new highway will give an economic boost to one of China's poorest areas by promoting commerce, trade, and tourism in the region, serving approximately 4 million people in its wider area of influence, 80 percent of whom are ethnic minorities, according to the World Bank.

"This project is designed to help reduce infrastructure bottlenecks, address highway maintenance and safety issues and channel the country's scarce resources to a relatively poor province which has a per capita income of about two-thirds the national average," said Supee Teravaninthorn, a senior transport economist at the World Bank.

The national trunk highway system as a whole connects inland provinces with coastal provinces and China's borders. This system, with which the World Bank is substantially involved in financing and constructing, involves five north-south and seven east-west corridors. The Shuiren-Nanning Highway section of the system is expected to be completed by December 31, 2005.

The total cost of the project is 566.8 million dollars. The World Bank's loan is being made at the bank's standard interest rate for LIBOR-based U.S. dollar single currency loans with a maturity of 20 years, including a 5-year grace period.

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