42095-032: Road Network Development Investment Program - Tranche 2 | Asian Development Bank

Afghanistan: Road Network Development Investment Program - Tranche 2

Sovereign (Public) Project | 42095-032 Status: Active

ADB is helping Afghanistan improve its road network, which is the country’s primary transport infrastructure. The program’s second tranche will rehabilitate 90 kilometers of the Qaisar-Bala Murghab section of the Herat-Andkhoy road and construct approximately 143 km of the Bala Murghab-Laman section. The project will also improve communities' access to social services and basic infrastructure.

Project Details

Project Officer
Tawisook, Witoon Central and West Asia Department Request for information
Country
  • Afghanistan
Modality
  • Grant
Sector
  • Transport
 
Project Name Road Network Development Investment Program - Tranche 2
Project Number 42095-032
Country Afghanistan
Project Status Active
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0244-AFG: MFF - Road Network Development Investment Program, Tranche 2
concessional ordinary capital resources lending / Asian Development Fund US$ 310.00 million
Grant 0291-AFG: Road Network Development Investment Program - Tranche 2
Afghanistan Infrastructure Trust Fund US$ 30.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Partnerships
Sector / Subsector

Transport / Road transport (non-urban)

Gender Equity and Mainstreaming No gender elements
Description

The primary objective of the Project is to improve the road network which is the primary medium of transport.

The Project comprises the following:

1. Rehabilitation of the Qaisar-Bala Murghab section (90 km) of the Herat-Andkhoy road, including the related civil works, overall project and contract management, construction supervision and monitoring, security arrangements and related community development works.

2. Construction of the Bala Murghab-Laman section (approximately 143 km), including the related civil works, overall project and contract management, construction supervision and monitoring, security arrangements and related community development works.

Project Rationale and Linkage to Country/Regional Strategy

Being the only missing link in the ring road, Qaisar-Bala Murghab-Laman section is the government's top priority and is ranked first among the investment priorities of the road improvement master plan. The section forms part of the key corridors under the Central Asia Regional Economic Cooperation (CAREC) Program. Without completion of this missing link, the ring road is unable to fully perform its intended role as the backbone of the national transport system and principal conduit for national and international passenger and freight traffic.

The physical investments under this Project have been appraised and found to be complying with the MFF eligibility criteria, as it is (i) programmed under the Afghanistan National Development Strategy (ANDS) and part of a strategic international and regional corridor; (ii) in line with ADB's country partnership strategy; (iii) the goverment's priority; and (iv) socially, environmentally, and economically viable. The improved and expanded road network will increase connectivity, raise intercity travel speeds, create conditions for more regional freight and passengers transport services, cut operating costs, develop safer roads, thereby allowing people and goods to move efficiently from one part of the country to another, and to neighboring countries. The Project will benefit the country as a whole, including investment and job creation conditions in the regions and rural areas. Roads will contribute indirectly to stability and security in the remote parts of the country and will improve communities' access to social services and infrastructure.

Impact Increased national trade in, and transit trade through, Afghanistan.
Project Outcome
Description of Outcome An efficient, safe, reliable, road network developed in western Afghanistan.
Progress Toward Outcome The project experienced serious implementation problems and delays. The civil works contract was terminated in 2014. Achievement of the project's outcome will be evaluated at the completion of the project.
Implementation Progress
Description of Project Outputs

1. The Qaisar-Bala Murghab-Laman section of the ring road constructed and reconstructed with quality and within budget.

2. Provision of basic infrastructure needs for about 100 local communities.

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

In 2010, the government requested ADB for further support of $340 million to fill the financing gap for Project 37075-02: Qaisar-Bala Murghab Road Project and Project 40333-022: Road Network Development Project I (Bala Murghab to Leman) due to cost overrun and hence complete the last missing link of the Ring Road. The requested amount was approved under Project No.42095-032: Road Network Development Investment Program - Tranche 2 (Grant 0244) in November 2010. It was agreed that (i) the financing of the Qaisar to Leman section of the Ring Road would be restructured by bundling together the newly approved $340 million and the remaining funds under the Qaisar-Bala Murghab Road Project and Road Network Development Project I (Bala Murghab to Leman), and (ii) the 233-km Qaisar-Leman would be repackaged and retendered, and the implementation will be carried out as Project No.42095-032 Road Network Development Investment Program - Tranche 2. To accommodate an AITF (Afghanistan Infrastructure Trust Fund) co-financing, $30 million was cancelled from Grant 0244 and the same amount was included as Grant 0291 to finance the project. Grant 0291 was closed right after $30 million was fully disbursed in 2013.

The civil works contract was awarded to ECCI-C Metag JV (EMJV) in December 2012 for approximately $477 million. However, the project encountered serious implementation problems due to (i) security threats and poor quality of the security services, (ii) poor contract execution capacity, and (iii) weak project management and implementation capacity. During the implementation, the contractor only had access to the 82-km section from Leman to Dari Bum. In August 2014, the contract was terminated by the contractor, citing breach of contract by MPW. At the time of contract termination, the overall cumulative physical progress was 14%..

Following the contract termination in 2014, the government made several efforts to resume the project with the support of ADB and the supervision consultant. The government formed a taskforce and a resumption strategy was developed. To improve its implementation capacity, the government in July 2015 restructured the program management office. To address the project security issues, the government revoked the previous government's decree on mandatory use of APPF (Afghan Public Protection Force) for providing project security, thereby allowing alternative forms of security arrangements for project site.

Under the resumption strategy, the civil works on the section from Leman to Dari Bum, which was left unfinished under the terminated contract, would be procured using direct contracting subject to ADB's Procurement Guidelines. This is based on the following justifications: (i) After EMJV left the project site in Jan 2015, the uncompleted Sections 1 and 2 were left without proper maintenance for more than 1 year and had started to deteriorate. Thus, the need to continue the work was extremely urgent. (ii) Retendering of the remaining works of Sections 1 and 2, estimated at $90 million, was unlikely to result in lower bid prices, as the new bidders are expected to add a premium for uncertainties in addition to mobilization costs; and (iii) On the other hand, the ASM JV, a joint venture company formed by 3 former subcontractors of EMJV, namely, Aziz Wali Construction Company (Afghanistan), Shamshed Badin Construction company (Afghanistan), and Mega Yapi (Turkey) will require minimal time and resources for mobilization as some of their equipment and materials are still at the project site. Thus, engaging with the ASM JV was considered to be the most economic approach to complete Sections 1 and 2 (ADB Procurement Guidelines, para. 3.6-e); and (iv) Engagement of former sub-contractors would indirectly help all the former sub-contractors who were not paid by the terminated main contractors and facilitate resumption of work on project site.

The government requested for _a no objection_ for direct contracting to complete remaining civil works on Section 1 and 2 (Qaisar to Dari Bum) to ADB on 17 February 2016. In April 2016, ADB provided no objection to MPW's request for direct contracting on the condition that prior to contract signing, MPW submits an assessment report evidencing that ASM JV has the required financial resources and technical capacity to complete the balance of works on sections 1 and 2, a draft negotiated contract between MPW and ASM JV and a priced bill of quantities for ADB review. The final contract award would still be subject to ADB's final review and confirmation of no objection.

The procurement documents were issued to ASM JV on 25 May 2016 with deadline of submission on 7 June 2016. The proposal was expected to be submitted at the end of June 2016 for ADB's evaluation and approval. No such submission was eventually made.

On 15 August 2016, the government requested ADB's _no objection_ for a technical and financial capacity re-evaluation of interested firms, which included some firms who were not EMJV's former subcontractors under the terminated contract.

Consistent with ADB's Procurement Guidelines, ADB advised that direct contracting with new firms could not be considered as the justifications for direct contracting would not be applicable to them, and the government should evaluate and confirm if the previous request for direct contracting with ASM JV is still justified, or to go for international competitive bidding (ICB).

On 26 September 2016, Government requested the retendering of the Leman-Dari Bum section in two packages through international competitive bidding, which subsequently received ADB's no objection on 21 October 2016.

The invitation for bids (IFBs) for Packages 1 and 2 of Leman-Dari Bum section were advertised on 26 Dec 2016, with submission deadline of 8 and 11 February 2017, respectively. The contracts were finally awarded in September 2017.

The government requested for (i) partial cancellation of G0244 so only Sections 1 and 2 will be financed using the remaining grant funds and (ii) allocation of the cancelled funds and additional funds to finance the remaining road section (151 km from Qaisar to Dari Bum) under a new project. These were approved by ADB management in July 2017. The processing of a new stand-alone project to construct the remaining section from Qaisar to Dari Bum, which will be financed by the $180 million cancelled from Grant 0244 together with the $130 million under 2017 grant for Afghanistan, is ongoing and the project is expected to be approved by the first quarter of 2018.

For more background information, please see the project data sheet of (i) Project 37075-02: Qaisar-Bala Murghab Road Project, and (ii) Project 40333-022: Road Network Development Project I (Bala Murghab to Leman).

Geographical Location Bagrami, Bagrami, Baharak, Bala Murghab, Faizabad, Fayzabad, Jabal Saraj, Jabal Saraj, Laman, Murghab, Nijrab, Nijrab, Qaisar, Qala-i-Naw, Rodat, Sabari, Sabari, Sangalak-i-Kaisar, Surubi, Taluqan
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The Project is classified category B. The initial environmental examination (IEE) prepared according to ADB's Environment Policy (2002) and Environmental Assessment Guidelines (2003) found that there will be no major long-term adverse impact on the environment. Short-term impacts are considered insignificant and temporary and will be mitigated through the implementation of an environmental management plan (EMP).
Involuntary Resettlement The Project is being implemented under a design-build contract as envisgaed. The detailed engineering design will be prepared by the civil works contractor. The land acquisition and resettlement plan (LARP) will be updated based on the detailed engineering design. Civil works in the affected areas will commence only after the Land Acquisition and Resettlement Plan (LARP) approved by ADB has been implemented.
Indigenous Peoples Given the multiethnic or multitribal nature of the state in Afghanistan, the project does not affect indigenous peoples and is classified as category C for indigenous peoples.
Stakeholder Communication, Participation, and Consultation
During Project Design Consultation sessions were conducted with local stakeholders and likely project affects persons through the assistance of provincial governors. The benefits from construction of the road sections to be funded under the project was explained. The consultation sessions were open for all to share and exchange views, ideas and experiences. The main issues discussed were with respect to affected land, prices of land, the process for compensation, and potential employment opportunities for the local people (both skilled and unskilled) resultant of the forthcoming project implementation.
During Project Implementation Consultation will continue throughout implementation of the Project. The EA, through regular field visits and the use of specialists, will implement the Project. Disclosure or relevant information will continue throughout implementation of the Project.
Business Opportunities
Consulting Services The Project will require a total of 1,755 person-months (606 person-months international and 1,149 person-months national) of consulting services. Consultants will be recruited and engaged in accordance with ADB's Guidelines on the Use of Consultants (2010, as amended from time to time). A consulting firm will be selected as PMSC to oversee project implementation, using the quality- and cost-based (90:10 ratios) selection method and full technical proposals. PMSC will carry out the tasks of design review and construction supervision.
Procurement The Project will procure one combined civil works contract for the entire Qaisar-Laman section by selecting a competent contractor with the required resources. The civil works contract will follow international competitive bidding procedures.
Responsible ADB Officer Tawisook, Witoon
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Afghanistan Resident Mission
Executing Agencies
Ministry of Public Works
First Macrorayan
Kabul,
Islamic Republic of Afghanistan
Timetable
Concept Clearance 09 Jun 2008
Fact Finding -
MRM 24 Aug 2010
Approval 21 Dec 2010
Last Review Mission -
PDS Creation Date 03 Sep 2009
Last PDS Update 26 Sep 2017

Grant 0244-AFG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
21 Dec 2010 18 Jan 2011 12 Sep 2011 31 Dec 2016 27 Nov 2018 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 316.64 Cumulative Contract Awards
ADB 310.00 21 Dec 2010 122.51 0.00 94%
Counterpart 6.64 Cumulative Disbursements
Cofinancing 0.00 21 Dec 2010 89.51 0.00 69%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory - - - Satisfactory

Grant 0291-AFG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 May 2012 30 May 2012 31 May 2012 31 Dec 2016 - 25 Sep 2013
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 30.00 Cumulative Contract Awards
ADB 0.00 29 May 2012 0.00 30.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 30.00 29 May 2012 0.00 30.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory - - - Satisfactory

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

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Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Grant No. 0244-AFG: MFF Road Network Development Investment Program - Project 2 Prequalified applicants Archived 28 Feb 2011

Contracts Awarded

Contract Title Approval Number Contract Date Contractor Contractor Address Executing Agency Contract Description Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
REHABILIATION AND CONSTRUCTION OF QAISAR TO LAMAN ROAD SECTION 1(KM 110-144) Grant 0244 16 Sep 2017 M/S IVRCL LIMITED M22/3RT VIJAYNAGAR COLONY HYDERABAD 50 0057 TELANGANA INDIA INDIA Ministry of Public Works 15000000
REHABILIATION AND RECONSTRUCTION OF QAISAR TO LAMA N ROAD SECTION 2 48KM Grant 0244 16 Sep 2017 QINGDAO CONSTRUCTION ENGINEERING GROUP CO. CHINA CHINA PEOPLE'SREP.OF Ministry of Public Works 18000000

Procurement Plan