Azerbaijan: Road Network Development Program - Project 2

Sovereign Project | 39176-033

Summary

The Project will rehabilitate about 37.5 kilometers (km) of the two-lane paved road bypassing Ganja, Azerbaijan's second largest city. The project road is part of the country's primary east-west highway linking the capital, Baku, to the Georgian border. It will conform to Azerbaijan's standards for a category II road, with a 7.5-meter (m)-wide pavement and 3.75 m shoulders. The Project will contribute to socioeconomic development in Azerbaijan and its cooperation with Georgia through improved road network, increased traffic, and expanded trade through building an efficient, safe, and sustainable road network, linking Azerbaijan domestically and internationally.

Latest Project Documents

Project Results

 

168,188

average daily vehicle-kilometers using roads built or upgraded in the first full year of operation

 

38

kilometers of road that have been built or upgraded

 

25,170,000

cross-border cargo volume facilitated

The results data reported above are limited to ADB's core sectors, as defined under Strategy 2020 and tracked through indicators in the ADB Results Framework. For definitions of results indicators, please see the ADB Results Framework Indicators Definition.


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Project Name Road Network Development Program - Project 2
Project Number 39176-033
Country Azerbaijan
Project Status Closed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2433-AZE: Road Network Development Program - Project 2
Ordinary capital resources US$ 54.55 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change
Sector / Subsector Transport - Road transport (non-urban)
Gender Equity and Mainstreaming
Description The Project will rehabilitate about 37.5 kilometers (km) of the two-lane paved road bypassing Ganja, Azerbaijan's second largest city. The project road is part of the country's primary east-west highway linking the capital, Baku, to the Georgian border. It will conform to Azerbaijan's standards for a category II road, with a 7.5-meter (m)-wide pavement and 3.75 m shoulders. The Project will contribute to socioeconomic development in Azerbaijan and its cooperation with Georgia through improved road network, increased traffic, and expanded trade through building an efficient, safe, and sustainable road network, linking Azerbaijan domestically and internationally.
Project Rationale and Linkage to Country/Regional Strategy

The Government of Azerbaijan (the Government) developed a Road Network Development Program for 2006 2015 in July 2006. The Program, which includes an investment component and a non-investment component, aims to develop an adequate, efficient, safe, and sustainable road network. In support of the Program, the Government and the Asian Development Bank (ADB) entered into a Framework Financing Agreement (FFA) for the Multitranche Financing Facility (MFF) in an aggregate principal amount not exceeding $500 million equivalent on 8 August 2007. ADB approved the MFF on 28 September 2007. Project 1 of the MFF aimed to develop the Masalli Astara section of the North-South highway. ADB approved two loans in a total amount of $200 million consisting an Ordinary Capital Resources (OCR) loan of $190 million and a loan in various currencies equivalent to Special Drawing Rights 6,535,000 under tranche 1 to help finance Project 1 on 4 October 2007.

On 1 July 2008, ADB received the second Periodic Financing Request (PFR) dated 30 June 2008 from the Government in the amount of $55.4 million to finance improvement of the Ganja bypass road. It was initially intended to finance the Ganja bypass road (the project road) under the ADB loan for the East-West Highway Improvement Project (Loan No. 2205) approved in December 2005. The East-West Highway Improvement Project, however, experienced severe cost overruns because of sharp increases in prices of fuel, utility and major road construction materials, and was found inadequate to finance the project road. The Government and ADB agreed to change the scope of the East-West Highway Improvement project and dropped the Ganja bypass road from its scope. The Government has then requested ADB to finance the project road from tranche 2 of the MFF.

The project road is a high priority of the Government and is included in the Road Network Development Program for 2006 2015 under the Transport Sector Development Strategy. It bypasses Ganja, Azerbaijan's second largest city and forms part of the country's primary east west highway linking the capital, Baku, to the Georgian border. However, it is in poor condition, resulting in high transport costs, long delivery times, and traffic accidents. This constitutes impediments to non-oil sector growth and poverty reduction in Azerbaijan, as well as regional trade development. The improvement of the project road will promote domestic and regional trade and traffic, thus contributing to the achievement of the objectives of the State Program on Poverty Reduction and Economic Development.

Impact Accelerated socioeconomic development in the 6 administrative districts (rayons) of Azerbaijan's Ganja-Gazakh economic region.
Project Outcome
Description of Outcome An efficient, safe, and sustainable Ganja bypass road as an integral part of the East-West Highway.
Progress Toward Outcome About 90% of the civil works for Ganja bypass road were completed as of loan closing date of 31 December 2012, and fully completed by April 2013. PCR mission was fielded in July 2013 and the report is being compiled.
Implementation Progress
Description of Project Outputs A two-lane paved Ganja bypass road improved.
Status of Implementation Progress (Outputs, Activities, and Issues)

Environmental management plan was prepared by the Contractor, and is strictly followed in the course of civil works

Due to significant implementation delay, 90% of works completed under the loan by the loan closing date. Through govt's funding the remaining works will be completed by April 2013.

Geographical Location Ganja City,Goranboy, Goy-Gol, Shamkir rayons (administrative districts)
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

The Project is classified as Category B. An initial environmental examination concludes that the potential environmental impacts are likely to occur due to construction activities and much of these impacts are temporary in nature. Temporary use of land adjacent to the project road, removal of roadside vegetation, temporary land-take for the site of the contractor's yard, as well as the extraction and transport of construction material from borrow sites will have temporary impacts on the environment during project implementation. No protected or environmentally sensitive areas such as designated wetlands, forests, nature conservation areas, and places of archaeological importance are within or near the project area.

An environmental management and monitoring plan was prepared to mitigate the

potential environmental impacts of the Project. During construction, environmental monitoring

will ensure the protection of embankments from potential soil erosion, borrow pits restoration,

quarry activities, location of work sites and material storages, location of asphalt plants,

preservation of religiously sensitive locations, community relations, and safety provisions.

During operation, air, noise, and surface water quality monitoring and greening and landscaping

of project roads will be important parameters of the monitoring program. In cooperation with the

project implementation unit, the supervision consultant during project implementation will be required to (i) develop an environmental auditing protocol for the construction period and formulate a detailed monitoring and management plan; and (ii) supervise the civil works for road improvement and submit quarterly reports based on the monitoring data and laboratory analysis report.

Involuntary Resettlement

Measures will be taken to minimize impacts and keep construction activities within the road

reserve. The civil works contracts will require contractors to be responsible for the temporary acquisition and reinstatement of all land required outside the road reserve for construction camps, offices, borrow pits, materials storage sites, materials

processing sites, and haul roads.

Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design During project preparation, ADB held extensive consultations with various stakeholders including representatives of central and local governments, civil society, local communities, the private sector, road users, and external aid agencies. More than 500 people participated in these consultations. The consultations covered major issues such as project alternatives, potential benefits, and social and environmental impacts. The results showed a high degree of public support for the Project. The project design has incorporated the views of stakeholders.
During Project Implementation The Project Grievance committee has been set up to conduct regular stakeholder consultations in the project area. At the onset of the construction works, the Grievance Committee met with the representatives and residents of the villages along the project area. Communication lines have been established between the Committee and the village heads through mobile phones. The village representatives are expected to call the attention of the Committee on various complaints and issues raised by the community residents. Thereafter, the Committee schedules public consultancy meetings with the village residents to discuss their issues and complaints. Such issues and requests of the local residents are being discussed during the weekly or emergency meetings with the Project Supervision Consultant's Team, whereby solutions are being identified. The proposed solutions, especially those that involve technical changes in the road design are being discussed with the Executing Agency and the Contractor. When proven acceptable and approved, the solutions to the problems are being implemented. The Grievance Committee continually consults the local residents every month, or during their regular site inspections, to inquire about their problems and issues arising from the road construction activities in their areas.
Business Opportunities
Consulting Services Construction Supervision. A contract with KOCKS CONSULT GMBH was amended for additinal value of US$ 914,194.13 on 14 Dec 2011.
Procurement ICB for civil works. A US$ 51,907,444.14 contact (net of tax) awarded to IMPRESA S.P.A. on 26 Dec 2008. A contract amendment (variation order No.1) was made in Sep 2011 increasing the contract value by AZN 3,908,492.11 (about $5 million, net of tax) to cover additional utility shifting works.
Responsible ADB Officer Faraj Huseynbeyov
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Azerbaijan Resident Mission
Executing Agencies
Ministry of TransportPANAHOV@MINTRANS.AZ1054, Tbilisi Avenue
Baku, AZ1122
Republic of Azerbaijan
Timetable
Concept Clearance -
Fact Finding -
MRM 05 Mar 2008
Approval 22 Aug 2008
Last Review Mission -
PDS Creation Date 28 Jan 2009
Last PDS Update 30 Sep 2013

Loan 2433-AZE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 Aug 2008 15 Dec 2008 03 Mar 2009 30 Apr 2012 31 Dec 2012 24 Apr 2013
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 73.05 Cumulative Contract Awards
ADB 54.55 22 Aug 2008 54.55 0.00 100%
Counterpart 18.50 Cumulative Disbursements
Cofinancing 0.00 22 Aug 2008 54.55 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory - - Satisfactory
Title Document Type Document Date
Road Network Development Program - Projects 1 and 2: Project Procurement-Related Review Project Procurement-Related Reviews Dec 2014
Road Network Development Program (Project 2) Project/Program Completion Reports Sep 2013
Loan Agreement for Road Network Development Program Loan Agreement (Ordinary Resources) Dec 2008

Safeguard Documents

See also: Safeguards

No documents found.

Evaluation Documents

See also: Independent Evaluation
Title Document Type Document Date
Azerbaijan: Road Network Development Program (Project 2) Validations of Project Completion Reports Oct 2014

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