Uzbekistan: MFF - Central Asia Regional Economic Cooperation Corridor 2 Road Investment Program

Sovereign Project | 42107-013

Summary

The Central Asia Regional Economic Cooperation (CAREC) Corridor 2 Road Investment Program (investment program) will cover about 222 km of A380 highway in the Republic of Karakalpakstan, and the Khorezm and Bukhara provinces of Uzbekistan. The investment program comprises three components: (a) the road development component, (b) the transport logistics component, and (c) the road sector sustainability component.

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Project Name MFF - Central Asia Regional Economic Cooperation Corridor 2 Road Investment Program
Project Number 42107-013
Country Uzbekistan
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
MFF Facility Concept 0042-UZB: MFF - Central Asia Regional Economic Cooperation Corridor 2 Road Investment Program
Ordinary capital resources US$ 240.00 million
Asian Development Fund US$ 360.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change
Sector / Subsector Transport - Road transport (non-urban)
Gender Equity and Mainstreaming Some gender elements
Description The Central Asia Regional Economic Cooperation (CAREC) Corridor 2 Road Investment Program (investment program) will cover about 222 km of A380 highway in the Republic of Karakalpakstan, and the Khorezm and Bukhara provinces of Uzbekistan. The investment program comprises three components: (a) the road development component, (b) the transport logistics component, and (c) the road sector sustainability component.
Project Rationale and Linkage to Country/Regional Strategy The investment program targets the Uzbekistan section of CAREC Corridor 2--the A380 highway, which connects Uzbekistan to Afghanistan, Kazakhstan, the Kyrgyz Republic, Tajikistan, and Turkmenistan. Another highway investment in Kazakhstan (supported by the Asian Development Bank [ADB]) will connect Beyneu (a town on the border with Uzbekistan) with Uzbekistan's A380 highway and the port of Aktau in the Caspian Sea. The two highways, when completed, will provide Uzbekistan and other Central Asian countries direct access to the Caspian Sea, and thereafter to South Asia and the Black Sea (via road corridors being built in Armenia, Azerbaijan, and Georgia). The investment program has strong links to CAREC Corridor 6, which reaches the so-called Ring Road in Afghanistan and thereafter the main ports in Pakistan and Iran.
Impact Sustainable economic development
Project Outcome
Description of Outcome Better connectivity and an efficient transport system along the Uzbekistan section of CAREC Corridor 2 Road
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

1. Uzbekistan section of CAREC Corridor 2 road constructed

2. Cross-border facility operational

3. Road sector sustainability strategy and plans adopted by the Road Fund

Status of Implementation Progress (Outputs, Activities, and Issues) Three tranches have been approved under the MFF. Tranche 1 (Loan 2635-UZB) was closed in December 2014 while Tranches 2 (L2746-UZB) and 3 (Loan 2868-UZB) are still under implementation. Overall implementation is slow owing to extreme weather conditions in the desert area, financial difficulties faced by contractors, delays in obtaining materials, and procedural delays within the government. All the issues have been resolved now and construction work is progressing now.
Geographical Location Bukhara, Khorezm, and Karakalpakstan Republic
Summary of Environmental and Social Aspects
Environmental Aspects

Project 1 is classified as category B for environment as it does not have major environmental impacts. In line with ADB''s Safeguard Policy Statement (SPS) 2009, the Republican Road Fund prepared an environment assessment and review framework (EARF) for the investment program and an initial environmental examination (IEE) for Project 1. Detailed design of civil works was carried out in accordance with the SPS 2009 and applicable laws and regulations in Uzbekistan. Contract agreement with civil works contractor specifically includes the environmental requirements.

Project 2 is classified as category B for environment as no major negative environmental impacts are expected. IEE and the Environmental Management Plan (EMP) were prepared as per SPS 2009. The bidding documents include details of the environmental management and monitoring requirements.

Project 3 is classified as environmental category B. The Republican Road Fund prepared the IEE, which is found to be in compliance with the requirements of the SPS 2009. Public consultations including two public hearings in two locations along the project road were held in August 2010. Further consultations were carried out in December 2011. The English version of the IEE was posted on ADB's website on 1 March 2012, and the Russian version of the IEE has been available on the Road Fund's website. No major negative impacts are expected, and the effective implementation of the EMP will minimize and mitigate any adverse impacts during implementation. The tender and the contract documents contain details of the environmental management and monitoring requirements. The contractors will have primary responsibility for implementing the EMP. With assistance of supervision consultants, the Republican Road Fund will monitor the effectiveness of the contractor in complying with the requirements.

Involuntary Resettlement

Civil works under Project 1 do not involve land acquisition or involuntary resettlement. Project 1 is classified as category C for involuntary resettlement.

Project 2 is classified as category B for involuntary resettlement with a total of 0.84 hectare of land acquired affecting 16 people. The land acquisition and resettlement framework (LARF) for the investment program and land acquisition and resettlement plan (LARP) for Project 2 were developed as per SPS 2009 and disclosed on the ADB website. Compensation has been paid to all affected persons and the LARP compliance report disclosed on 30 September 2014.

Project 3 is classified as category B for involuntary resettlement. The project will mainly follow the existing right-of-way and land acquisition and resettlement are minimal. A total of 0.61 ha of land will be acquired permanently (including abandoned and non-operating entities) and a total of 4 affected households have been identified, out of which 1 is operating and 3 are nonoperating. These entities are located in the desert areas along the project road. The total estimated cost of land acquisition and resettlement ($0.1 million) has been included in the project cost. A LARP compliance report is currently being prepared.

Indigenous Peoples Projects 1, 2, and 3 are classified category C for impact on indigenous peoples as defined under SPS 2009.
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation Stakeholder participation and consultation during project implementation will be conducted as a follow-up to stakeholder participation and consultation during project processing.
Business Opportunities
Consulting Services All consulting services to be financed under the Facility will be procured in accordance with the Guidelines on the Use of Consultants by Asian Development Bank and Its Borrowers (2010, as amended from time to time).
Procurement All goods and services to be financed under the Facility will be procured in accordance with ADB's Procurement Guidelines (2010, as amended from time to time).
Responsible ADB Officer Khuong Luu
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Transport and Communications Division, CWRD
Executing Agencies
Republican Road FundShukhrat Tagaev, Deputy DirectorMinistry of Finance 29 Istiklol Street Tashkent, 100017,Republic of Uzbekistan
Timetable
Concept Clearance 18 Jan 2010
Fact Finding 25 Jan 2010 to 08 Feb 2010
MRM 03 Mar 2010
Approval 20 Apr 2010
Last Review Mission -
PDS Creation Date 12 Feb 2010
Last PDS Update 24 Mar 2015

MFF Facility Concept 0042-UZB

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 738.00 Cumulative Contract Awards
ADB 600.00 - 0.00 0.00 %
Counterpart 138.00 Cumulative Disbursements
Cofinancing 0.00 - 0.00 0.00 %

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