Kazakhstan: CAREC Transport Corridor 1 (Zhambyl Oblast Section) Investment Program - Tranche 1

Sovereign Project | 41121-023

Summary

The Project will reconstruct 125 km of highway sections between Taraz and Korday in Zhambyl Oblast; and improve road operation and maintenance system. This will contribute in sustaining economic development and increasing domestic and international trade growth within Kazakhstan and between Kazakhstan and its trading partners.

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Project Name CAREC Transport Corridor 1 (Zhambyl Oblast Section) Investment Program - Tranche 1
Project Number 41121-023
Country Kazakhstan
Project Status Closed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2503-KAZ: MFF CAREC Transport Corridor I (Zhambyl Oblast Section) [Western Europe-Western People's Republic of China International Transit Corridor] Investment Program - Project 1
Ordinary capital resources US$ 224.95 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change
Sector / Subsector Transport - Road transport (non-urban)
Gender Equity and Mainstreaming Some gender elements
Description The Project will reconstruct 125 km of highway sections between Taraz and Korday in Zhambyl Oblast; and improve road operation and maintenance system. This will contribute in sustaining economic development and increasing domestic and international trade growth within Kazakhstan and between Kazakhstan and its trading partners.
Project Rationale and Linkage to Country/Regional Strategy

Roads are a key element of Kazakhstan's transport system. They play an important role in providing access to rural areas, and facilitating transit traffic and in-country transport movement. However, much of the road network is in poor condition-about 60% of the national roads require major rehabilitation and proper maintenance. Moreover, the feeder road network serving the rural population is not fully developed; and is characterized by poor conditions and a low service level, especially during wintertime. This results in high transport costs.

The road sector has experienced long-standing bottlenecks: (i) the network is incomplete, and in some sections in bad condition; (ii) truck overloading is frequent, cutting into the economic life of road assets; (iii) revenues from transit are low, affecting cost recovery and reinvestment capabilities; (iv) inefficient cross-border procedures increase the burden on trade and traders, and raise the cost of doing business; (v) weak road sector planning affects sound investment sequencing; and (vi) project development and project management shortcomings create inefficiencies, high costs, and bad governance. These gaps translate into higher-than-average transport costs. They also hamper regional cooperation and integration opportunities, and ultimately the country's competitiveness.

The Government of Kazakhstan's Western Europe-Western PRC Corridor (the Corridor) Development Program intends to remove these constraints to improve the road sections in the Kazakhstan territory of CAREC Transport Corridor I, totaling 2,715 km running from Khorgos through Almaty and Shymkent to the Russian Federation's western border. The Corridor Development Program is expected to improve the existing road and construct bypasses and new alignments to make the Corridor suitable for international traffic.

Teaming up with IDB and JICA, ADB committed to improve around 470 km in the Zhambyl Oblast through the multitranche financing facility (MFF). ADB approved the MFF on 12 November 2008, and subsequently approved the first tranche for $340 million on 30 December 2008. The project 1 had two components: (i) a road development component of 79km of the Taraz-Kulan section and 46km of the Blagoveschenka-Korday section, and (ii) a road operation and maintenance component of (a) road maintenance system development and (b) intelligent transport system improvement. On 13 January 2009, the government and ADB entered into a framework financing agreement for the MFF, with an aggregate principal amount not exceeding the equivalent of $700 million.

Impact Efficient transport network in Zhambyl Oblast connecting Almaty and Shymkent
Project Outcome
Description of Outcome Efficient transport network in Taraz-Kulan and Blagoveschenka-Korday road sections
Progress Toward Outcome All works in road sections Km 214-260 and Km 404 - 483 were completed and open to traffic in 2013. The project was closed on 31 December 2013, and the project account was also closed in March 2014. The project completion report was circulated to the ADB's board and disclosed to ADB website accordingly.
Implementation Progress
Description of Project Outputs

Taraz-Kulan and Blagoveschenka-Korday road sections improved and open to traffic

Reports on road O&M system improvement and intelligent transport system development accepted

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

46-km Blagoveschenka-Korday road reconstruction was completed in June 2013, and now open to traffic.

79-km Taraz-Kulan road reconstruction completed in November 2012, and now open to traffic.

Final report was submitted in December 2012 and accepted by MOTC. ADB endorsed it on 6 March 2013.

Final Report was completed and accepted by MOTC. ADB endorsed it on 22 November 2012.

Geographical Location Zhambyl Oblast
Safeguard Categories
Environment B
Involuntary Resettlement A
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects All construction works were completed in the three sections. MOTC confirmed the restoration of the temporarily acquired land by the contractors after completing the works. As of 24 June 2014, no outstanding issue has been reported.
Involuntary Resettlement A remaining case is under resolution in close coordination with the executing agency.
Indigenous Peoples The project did not involve any impact on indigenous peoples.
Stakeholder Communication, Participation, and Consultation
During Project Design LARPs were prepared in consultation with, and disclosed to, the affected persons, following provisions stated in the investment program's land acquisition and resettlement framework. Consultations with akimats of raion (district's heads) and the project's affected persons were conducted by the Committee for Roads since 2007 till end of the project.
During Project Implementation Public consultations with the affected persons (APs) and local stakeholders were conducted during preparation of the LARP to explain the following: APs' eligibilities and entitlements; valuation procedure of their losses; and grievance redress mechanisms during implementation. APs were also informed on who they could contact or approach at the raion and at the Zhambyl Roads Department in case they have complaints or queries. Under the investment program, a common grievance redress mechanism was initiated in 2011 and formed in 2012, namely Community Liaison Group (CLG), and a CLG Coordinator was engaged in 2012 to monitor and report complaints and facilitate their resolution. The CLG mechanism is well recognized.
Business Opportunities
Consulting Services Recruitment of all consultants followed ADB's Guidelines on the Use Consultants (2007, as amended from time to time). Consulting firms were selected and engaged using ADB's quality- and cost based selection procedure. Full technical proposals were required for the consultancy service packages of (i) project management and (ii) construction supervision consultants, and simplified technical proposals for the packages of (i) intelligent transport system development and (ii) road maintenance system improvement consultants.
Procurement Procurement of civil works was conducted in accordance with ADB's Procurement Guidelines (2007, as amended from time to time). International competitive bidding (ICB) was adopted for all the civil works packages, with using pre-qualified procedures. ADB's prior review procedure was followed during bid evaluation. All relevant sections of ADB's Anticorruption Policy were included in all bidding and contractual documents.
Responsible ADB Officer Rika Idei
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Transport and Communications Division, CWRD
Executing Agencies
Ministry of Investments and DevelopmentMr. Dulat KuterbekovTransport Tower, Astana 473000, KazakhstanVice Minister
Timetable
Concept Clearance 19 Feb 2008
Fact Finding 10 Jun 2008 to 24 Jun 2008
MRM 20 Aug 2008
Approval 30 Dec 2008
Last Review Mission -
PDS Creation Date 14 May 2008
Last PDS Update 25 Jun 2014

Loan 2503-KAZ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
30 Dec 2008 30 Mar 2009 31 Jul 2009 31 Dec 2013 - 20 Mar 2014
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 284.95 Cumulative Contract Awards
ADB 224.95 30 Dec 2008 224.10 0.00 100%
Counterpart 60.00 Cumulative Disbursements
Cofinancing 0.00 30 Dec 2008 224.10 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory - - Satisfactory

Safeguard Documents

See also: Safeguards
Title Document Type Document Date
CAREC Transport Corridor 1 (Zhambyl Oblast Section) [Western Europe-Western PRC International Transit Corridor] Investment Program - Tranche 1 (Taraz-Korday Section in Zhambyl Oblast) Social Monitoring Reports Oct 2013
CAREC Transport Corridor 1 (Zhambyl Oblast Section) [Western Europe-Western PRC International Transit Corridor] Investment Program - Tranche 1 (Taraz-Korday Section in Zhambyl Oblast) Social Monitoring Reports May 2013
MFF CAREC Transport Corridor 1 (Zhambyl Oblast Section) [Western Europe-Western People’s Republic of China International Transit Corridor] Investment Program – Project 1: Environmental Monitoring Report and Final Project Report (July-December 2012) Environmental Monitoring Reports Mar 2013
MFF CAREC Transport Corridor 1 (Zhambyl Oblast Section) [Western Europe-Western People’s Republic of China International Transit Corridor] Investment Program – Project 1: Environmental Monitoring Report (January-June 2012) Environmental Monitoring Reports Aug 2012
CAREC Transport Corridor 1 (Zhambyl Oblast Section) [Western Europe-Western People's Republic of China International Transit Corridor] Investment Program - Tranche 1: External Resettlement Monitoring Report (March 2012) Social Monitoring Reports Mar 2012
MFF CAREC Transport Corridor I (Zhambyl Oblast Section) [Western Europe-Western People's Republic of China International Transit Corridor] Investment Program - Project 1: Biannual Report (January-June 2010) Environmental Monitoring Reports Mar 2012
CAREC Transport Corridor 1 (Zhambyl Oblast Sections) [Western Europe-Western PRC International Transit Corridor] Investment Program, Tranche 1 (Taraz-Korday Section Zhambyl Oblast): LARP Internal Monitoring Report No. 3 Social Monitoring Reports Jan 2012
MFF CAREC Transport Corridor I (Zhambyl Oblast Section) [Western Europe-Western People's Republic of China International Transit Corridor] Investment Program - Project 1: Biannual Environmental Monitoring Report (July-December 2011) Environmental Monitoring Reports Jan 2012
MFF CAREC Transport Corridor I (Zhambyl Oblast Section) [Western Europe-Western People's Republic of China International Transit Corridor] Investment Program - Project 1: Biannual Environmental Monitoring Report (July-December 2011) (Русский) Environmental Monitoring Reports Jan 2012
CAREC Corridor 1 (Zhambyl Oblast Section) Investment Program, Project 1 (Taraz–Korday Section in Zhambyl Oblast): Environmental Monitoring Report (October 2011) Environmental Monitoring Reports Oct 2011
ММФ ЦАРЭС Транспортный коридор 1 (участок Жамбылская область) Программа инвестирования [Западная Европа – Западный Китай Международный транзитный коридор]: Отчет по Внешнему Мониторингу Переселения на Транше 1, Жамбылская область Social Monitoring Reports Aug 2011
MFF CAREC Transport Corridor I (Zhambyl Oblast Section) [Western Europe-Western People's Republic of China International Transit Corridor] Investment Program - Project 1: (Km 439) Resettlement Plans Aug 2011
CAREC Transport Corridor 1 (Zhambyl Oblast Section) [Western Europe-Western People's Republic of China International Transit Corridor] Investment Program—Project 1: Km 210–Km 260; Km 404–Km 483) Social Monitoring Reports Aug 2011
CAREC Transport Corridor 1 (Zhambyl Oblast Section) Investment Program - Tranche 1 (Taraz-Korday Section in Zhambyl Oblast): Land Acquisition and Resettlement Plan Internal Monitoring Report Social Monitoring Reports Jul 2011
CAREC Corridor 1 (Zhambyl Oblast Section) Investment Program, Project 1 (Taraz–Korday Section in Zhambyl Oblast): First Annual Environmental Report 2010 Environmental Monitoring Reports Feb 2011
CAREC Transport Corridor I (Zhambyl Oblast Section) [Western Europe-Western People's Republic of China International Transit Corridor] Investment Program - Project 1 Social Monitoring Reports Jan 2011
MFF CAREC Transport Corridor I (Zhambyl Oblast Section) [Western Europe-Western People's Republic of China International Transit Corridor] Investment Program - Project 1: Land Acquisition and Resettlement Plan for Km 404-Km 483 Road Section of Project 1 Resettlement Plans Nov 2009
MFF CAREC Transport Corridor I (Zhambyl Oblast Section) [Western Europe-Western People's Republic of China International Transit Corridor] Investment Program - Project 1 Initial Environmental Examination Aug 2008
MFF CAREC Transport Corridor I (Zhambyl Oblast Section) [Western Europe-Western People's Republic of China International Transit Corridor] Investment Program - Project 1: Summary Initial Environmental Examination Initial Environmental Examination Aug 2008

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