Mongolia: Regional Road Development Project

Sovereign Project | 35377-013 Status: Closed

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Project Name Regional Road Development Project
Project Number 35377-013
Country Mongolia
Project Status Closed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2087-MON: Regional Road Development Project
Asian Development Fund US$ 37.13 million
Asian Development Fund US$ 5.38 million
Loan: Regional Road Development Project
South Korea US$ 23.88 million
China, People's Republic of US$ 3.20 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Sector / Subsector

Health - Health sector development and reform

Gender Equity and Mainstreaming Some gender elements
Description The Project aims to promote regional cooperation and sustainable economic growth in Mongolia. The purpose of the Project is to increase the efficiency and safety of domestic and international transit traffic between the PRC and Russia through Mongolia's north-south road transport corridor. The Project comprises five components: (i) construction of 428 km of a two-lane, asphalt concrete road between Choyr and the PRC border in Zamyn-Uud; (ii) implementation of a cross-border road transport facilitation plan; (iii) improvement of road safety; (iv) implementation of an area development program that includes (a) constructing four access roads totaling 34 km to connect Erdene, Orgon, and Saynshand; (b) establishing a pilot roadside station; (c) training local laborers on road construction and maintenance; and (d) enhancing stakeholder participation; and (v) technical assistance for awareness and prevention of HIV/AIDS and human trafficking on the north-south road corridor.
Project Rationale and Linkage to Country/Regional Strategy

The Project has been accorded high priority by the Government, and will establish the first paved road corridor linking Mongolia with the PRC and Russia to promote regional cooperation in northeast Asia. The Project will also facilitate pro-poor economic growth in the aimags (province) of Govisumber and Dornogovi in souther Mongolia by improving local communities' access to markets, job and business opportunities, and social services.

The Project was listed in the Mongolia: Country Strategy and Program Update (2004-2006).

Impact Regional and sustainable economic growth in Mongolia promoted.
Project Outcome
Description of Outcome Efficiency and safety of domestic and international transit traffic between the PRC and the Russian Federation through Mongolia's north-south road transport corridor increased
Progress Toward Outcome The Project is in the final implementation stage. Project completion date is proposed to be extended from 30 July 2014 to 31 December 2014.
Implementation Progress
Description of Project Outputs

1. About 428 km of the asphalt concrete road between Choyr and the PRC border in Zamyn-Uud built

2. Cross-border road transport facilitation plan implemented

3. Road safety improvement component implemented

4. Area development program implemented

5. Program on awareness and prevention of HIV/AIDS and human trafficking on the north-south road corridor implemented

Status of Implementation Progress (Outputs, Activities, and Issues)

1. (i)Construction of AR1 and Package B1 covers a 126.75 km road from 35th railway crossing to 18th Khudag of Choyr Saynshand-Zamyn Uud, and a 6.75 km access road to Saynshand Aimag center construction is completed.

(ii) Package NP1 covering a 62.2 km road from 18th Khudag to Km 62.2 to Choyr-Saynshand

Due to the non performance of the contractor, contract was terminated in June 2011. The balance of work for NP1 has been awarded and construction is ongoing.

(iii) Package AR2 covers an 18.25 km access road to Urgun Soum due to the non performance of the contractor, contract was terminated in May 2011. This road section will now be financed by the government.

(iv) Package NP2 covers 62.2 km to Zamyn-Uud of Choir-Sainshand-Zamyn-Uud Road with 61.796 km this section is covered under the supplementary loan and grant for which rebidding was also done and ADB approved the award of contract, construction ongoing.

(v) The MCC funded Package A1 covering 176.4 km road from Choyr to 35th railway crossing - following the termination of original contractor, MCA-Mongolia signed contracts with Halla Engineering and Construction Company (Korea) and Jiangxi Water and Hydropower Construction Co., Ltd (PRC) on 15 February 2012 for constructing Lot 1 (Km0.000-Km90.000) and 2 (Km90.000-Km176.00), respectively. The construction is almost completed.

(vi) PRC-funded 5.6 km main road section from Zamyn-Uud to state border was completed in October 2005.

2. The consultant selection for implementation of this component has failed. The Government proposes to cancell the services.

4. The component is partly implemented in relation to development of access roads.

5. Completed. The Component was funded through a separate $350,000 technical assistance grant and successfully completed in 2007. The Ministry of Health was the executing agency for this TA Project. Final Report was submitted to the EA on 25 September 2007.

Geographical Location Mongolia
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects ADB classifies the Project in environmental category B sensitive . The environmental impact assessment (EIA) was undertaken through broad-based public consultations, and the summary was circulated to the Board and made public on the ADB web site on 5 March 2004. The EIA approved by the Ministry of Nature and Environment on 12 May 2004 concludes that the Project will have no major adverse impacts on the environment. The project road alignment, which follows the railway line and crosses steppe and semidesert areas, does not impinge on any existing or planned protected areas and is not expected to affect wildlife migration. Operation of a paved road will improve the environment as it provides an alternative to currently driving through multiple unimproved earth tracks, which has contributed to land degradation. Planting of vegetation at specific locations along the project road will help improve the environment by controlling snow and sand drifts. The Government will implement the mitigating measures proposed in the EIA during project implementation.
Involuntary Resettlement The Project requires no resettlement. Land acquired for the Project and temporary use of land for construction will not involve any removal of structures or affect private landowners. The land acquired for the project road and access roads is state-owned, and is either wasteland or communal grazing land. The area of grazing land lost is insignificant compared with the total area required for grazing. There are adequate government regulations and procedures for transferring the right-of-way to Department of Roads.
Indigenous Peoples The Project will not adversely affect the livelihoods of ethnic minority groups, who include Kazakh, Durvud, and Bayad and account for 3.5% of the population in the project area. These groups do not face discrimination and are not considered vulnerable. The Project will have no significant adverse impacts on the livelihoods of nomadic herders in the project area. Instead, it can help spur the development of the local livestock industry with improved access to markets and growing domestic and regional demands for livestock products.
Stakeholder Communication, Participation, and Consultation
During Project Design During project preparation, consultations were held with the Government, civil society, local communities, and other external aid agencies on major issues such as project alternatives, route alignment, social and environmental impacts, and project benefits for local communities. The consultations revealed a high degree of public support for the Project.
During Project Implementation During implementation, stakeholder participation will focus on (i) support for maximum use of local labor during road construction and for good working conditions, (ii) job creation through business advice and skills development, (iii) development of roadside stations, (iv) implementation of the road safety program, (iv) involvement of households in road maintenance, (v) awareness and prevention of HIV/AIDS and human trafficking, and (vi) community-based environmental enhancement and monitoring. A local nongovernment organization (NGO) will be engaged to facilitate stakeholder participation. The amount of $128,800 equivalent will be allocated for the service.
Business Opportunities
Consulting Services The Project will provide 1,158 person-months of consulting services (177.5 international and 980.5 domestic) to assist in implementation. Among these, 161 (international) and 884 (domestic) person-months will be required for detailed design, construction supervision, support for project management, and monitoring and evaluation activities. The services will be provided by consulting firms with experience in detailed design and implementation of road projects of similar nature and size. In addition, 4 (international) and 80 (domestic) person-months will be provided through a local NGO to help implement the area development component. The services required cover (i) continued stakeholder participation process, (ii) monitoring of social safeguards, (iii) training for small enterprise and skills development, and (iv) support for vulnerable groups. For the road safety improvement component, an international consultant and a domestic consultant will be engaged for 2 person-weeks each to jointly audit road safety aspects of the detailed design of the Project. An international consultant will also be engaged for 2 person-months to train traffic police officers on traffic regulations and enforcement. Further, an international consulting firm will provide 10 (international) and 16 (domestic) person-months of consulting services to assist in implementing the cross-border road transport facilitation plan. The Government will finance consulting services for detailed design, while ADB will finance the remaining consulting services. ADB-financed consultants will be recruited according to the Quality- and Cost-based Selection method of ADB's Guidelines on the Use of Consultants and other arrangements satisfactory to ADB for selecting and engaging domestic consultants.
Procurement Procurement of goods and services to be financed out of the proposed ADB loan will be carried according to ADB's Guidelines for Procurement and the Public Procurement Law of Mongolia. Civil works for the project road (including the two access roads to Saynshand and vegetation planting) are the access road from Orgon are divided into four contract packages to be procured through international competitive bidding, or according to relevant bilateral agreements. Civil works for access roads from Erdene and the provision of safety features on the Altanbulag-Ulaanbaatar road section will be procured following local competitive bidding procedures acceptable to ADB. Patrol vehicles equipped with breath analyzers and portable speed monitoring equipment, two-way communication radios, and a vehicle weight mat will be procured following direct purchase or local competitive bidding procedures. Advance procurement action for civil works has been approved. Advance action will be undertaken according to ADB's Guidelines for Procurement up to, but will not include, the signing of contracts. It will cover (i) short listing and selecting a consulting firm for construction supervision, (ii) prequalifying contractors, and (iii) tendering and bid evaluation. The Government was advised that ADB's approval of advance action does not commit ADB to finance the Project.
Responsible ADB Officer Cai Li
Responsible ADB Department East Asia Department
Responsible ADB Division Transport and Communications Division, EARD
Executing Agencies
Department of Roads
Mr. K Gantumur
Ulaanbaatar, Mongolia
Concept Clearance 07 Mar 2004
Fact Finding 26 Jan 2004 to 03 Feb 2004
MRM 14 Apr 2004
Approval 22 Jul 2004
Last Review Mission -
PDS Creation Date 24 Nov 2006
Last PDS Update 06 Oct 2014

Loan 2087-MON

Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 Jul 2004 26 Jan 2005 01 Jul 2005 01 Jan 2010 31 Dec 2014 29 May 2015
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 85.23 Cumulative Contract Awards
ADB 42.51 22 Jul 2004 41.69 0.00 96%
Counterpart 15.64 Cumulative Disbursements
Cofinancing 27.08 22 Jul 2004 43.59 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory - Satisfactory - - Satisfactory
Title Document Type Document Date
Regional Road Development Project: Project Completion Report Project/Program Completion Reports Aug 2015
Regional Road Development Project and Regional Road Development Project - Supplementary Project Procurement-Related Reviews Oct 2013
Regional Road Development Project Procurement Plans Jan 2012
Regional Road Development Project - Using Surplus Loan Proceeds Loan Change in Scope, Amount, and Implementation Arrangements Feb 2007
Regional Road Development Project Reports and Recommendations of the President Jun 2004

Safeguard Documents

See also: Safeguards

Evaluation Documents

See also: Independent Evaluation

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Related Publications

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