Creating the capacity for and establishing sustainable planning, construction, monitoring, and maintenance of rural road networks by communities, VDCs, and DDCs are central to the project design. The Project will provide a variety of training courses to strengthen local rural road planning, construction, and maintenance management capacity, and a movement to sustainable financing. Each district will be required to set up a district road maintenance fund with limited financial support from loan funds before construction works start on the first subprojects. This critical initiative will be supported by intensive district capacity-building activities for subproject selection, survey, design, site supervision, and maintenance. Skills will also be provided to VDC, DTO, and other staff in accounting, financial management, and environmental evaluation. A key project output is to create district capacity to contract out services to the private and NGO sectors.

Similarly, at the national level the Project will reinforce the technical and management capacities of DoLIDAR by providing TA, transport and office equipment, training, and resources to draw upon specialised services from domestic consultants and national NGOs. The Project will also develop DoLIDAR’s capability to manage increased contracting-out of services to the private and NGO sectors as the most effective strategy to strengthen DoLIDAR’s capacity as a modern public sector institution. An institutional development Technical Assistance (TA) that supports broad, sector-wide improvements in DoLIDAR’s activities will supplement TA provided under the loan. Improved accountability and transparency are intended to be among the district and central outcomes.

• Construction of new, and rehabilitation of existing, district roads and village roads, including provision of small cross-drainage structures and all protection structures;
• Rehabilitation and upgrading of existing main trails; and
• Construction of new trail bridges on existing main trails. These outputs will be augmented by supplementary investment in minor village and community infrastructure within the influence area of the main subprojects.

Infrastructure will be built through a series of subprojects. Each participating district will be allocated a proportion of the project investment funds, and the subprojects will be selected and approved in four stages; identification, prioritisation, feasibility study, and approval by DDCs. Underpinned by the initial social mobilisation and capacity-building activities, the targeted communities in VDC areas and other stakeholders in each district will participate in identifying possible subprojects, following dissemination of information on eligibility and prioritisation criteria.

Project implementation will start with a preconstruction phase of more than 1 year, during which essential preparatory activities will be carried out. During this time, DDCs will select possible first-phase subprojects following agreed-on eligibility criteria such as size, improved access and livelihoods, connectivity from existing passable rural transport infrastructure network, and priority as defined by the DTMP. Subprojects are envisaged to consist mostly of sections of rural district roads, to be built or upgraded by local unskilled workers to environmentally sound standards and to provide a high-priority access link. The PCU will approve all subprojects and seek ADB’s concurrence.

Identified possible subprojects will be reviewed at the district level to confirm their eligibility and assess their priority in terms of (i) the overall justification, and (ii) specific cost-effectiveness criteria that compare the number of beneficiaries and of poor beneficiaries with the indicative cost and the change in level of access that will result. Subprojects will be built to DoLIDAR standards using labour-based, environmentally friendly, and participatory (LEP) techniques. This entails maximum use of unskilled local labourers, supplemented with skilled craftsmen employed by the Project as necessary. For more complex structures, small contractors may be required to provide adequate skills, but would be regulated by clauses requiring most of the workforce to be local. Road designs will be based on surveyed longitudinal alignments and cross-sections rather than the traditional but costly office-based full design. While this approach maximises direct benefits to the rural poor in project areas, it requires a high level of site supervision to ensure quality of work, incorporation of safety standards into road designs, and sustainability of infrastructure built. Project implementation arrangements provide for this.

While participating DDCs will need to satisfy certain conditions to qualify for an initial subproject, funds for second-phase subprojects will be allocated on a performance basis. To qualify for funding for a second-phase subproject, DDCs must have implemented the first-phase subproject, demonstrated a commitment to reduce poverty, and established and successfully operated a district road maintenance fund.