Infrastructure

National and Regional Resource Corridors Program


Background

National and Regional Resource Corridors Program (NRRCP), a USD 3 billion program, is currently being promoted in Afghanistan and comes at a critical juncture in Afghanistan’s transition to a  sovereign state that can manage its own development resources. It lays the foundation for a spatial development program leading to significant returns in economic growth, revenue mobilization and medium to longer‐term employment generation across large parts of Afghanistan, especially rural areas. The Initiative builds on the principle of Development Corridors (DC), which has been successfully employed in some of African countries, to link landlocked countries to ports and to world markets.  DCs use natural resources as “anchors” for infrastructure development along infrastructure routes (see Maps 1, road infrastructure, 2  rail infrastructure, 3 civil aviation.

The overall goal of the NRRCP is ‘progressing Afghanistan’s financial independence through strategic and prioritized infrastructure development that enables private sector investment.’ The purpose of NRRCP is to ‘connect Afghanistan to the region and the rest of the world through the promotion of inter‐state resource corridors as a means to realizing Afghanistan’s natural resources, growth, revenue and employment potential’.

The realization of the Development Corridor concept by definition is a long‐term objective. The implementation plan set out within the program covers the period from August 2010 – July 2013 and focuses on:

  • Establishment and operationalisation of NRRCP planning and coordination mechanisms; and
  • The development of critical (prioritised) road, rail and civil aviation infrastructure needed at this stage to realise Afghanistan’s inherent mineral resources potential along and adjacent to development corridors, and to reap benefits from increased trade flows and labour mobility.


The investment program of NRRCP has four key components:

  • Component 1 envisages the formation and operationalisation of a Resource Corridor Secretariat;
  • Component 2 focuses on highways and provincial road projects;
  • Component 3 proposes rail development projects; and
  • Component 4 recommends key civil aviation projects.

 

Key Outcomes

Major NRRCP outputs by July 2013 include:

  • Establishment and operationalisation of an NRRCP Secretariat;
  • Rehabilitation and construction of circa 1400 km of roads, incl. highways, provincial and urban roads;
  • Construction of circa 800 km of railway;
  • Three completely functional (Kabul, Kandhar, Mazar-i-Sharif) and one nearly functional (Herat) international airports;
  • Jalalabad regional airport fully functional; Kunduz and Khost under construction (fully functional by 2015)
  • 5 fully functional domestic airports (Bamyan, Cheghcheran, Faizabad, Maimana and Qali‐e‐Now);
  • 2 additional domestic airports under construction.
  • Ghazni and Daikundi Access Airfields fully functional. 10 more Access Airfields under construction.
  • Routine maintenance of roads, railways and airports.
  • Generation of approximately 7 million labor‐days through labour intensive programs(construction and routine maintenance).
  • Competent ministries (MoPW and MoTCA);
  • Development of sustainable models for maintenance and construction of roads, railway and civil aviation projects.

 

Other Expected Impacts:

Key expected impacts from NRRCP include:

  • Growth effects, which are likely to include (a) annual economic rates of return of 15‐20 per cent over a 20 year period based on international averages; (b) price convergence (the price of a given good would not differ significantly depending on the geographic location of the good, beyond what can be expected due to transport costs, tax differences and any other factors); (c) wage dispersion; (d) improved inter‐regional trade flows; (e) expansion of commodity exports (competitiveness gains to be achieved by reducing production and distribution costs and improved physical access to markets); (f) development of service industry hubs; (g) indirect and direct forward linkages; and (h) increased employment, output and income. Given the wide fluctuation in GDP growth figures (year on year since 2004) accelerating growth in non‐agricultural production will stabilize GDP returns and provide long‐term market stability. Moreover, based on preliminary estimates, by 2025 the GDP contribution of the transport, communications and storage sector to which this program contributes would be around 15% of GDP (US$ 11 billion).
  • Revenue effects would move GoIRA from covering only 59% of all recurrent costs to actually contributing towards capital spending. Effects include (a) trade and transit facilitation fees; (b) trade formalization benefits; (c) returns from improved trade corridor governance of imports and exports, customs; (d) extractive industry growth; and (e) transport user fees and charges (circa US$ 45m in 1‐3 years).
  • Employment effects include long‐term structural employment in the railway service industry and terminals, civil aviation industry and terminals, and road maintenance.
  • New employment opportunities will reduce migration.
  • Travel time to local markets and to basic services reduced.
  • Successful delivery of the NRRCP will also stimulate foreign direct investment (FDI) in the mining sector and beyond, leading to competitiveness gains from transfer of management know‐how, technology and business practices, increased access to foreign markets and employment opportunities, as well as enhanced social and environmental standards.
  • Improved road infrastructure will have a positive impact on Afghanistan’s poor road safety record (number of fatalities and serious injuries).

Download detailed National and Regional Corridors Program

For more information on NRRCP or on prioritized projects within NRRCP please contact us at: miningenquiries@mom.gov.af