Armenia: North-South Road Corridor Investment Program

Sovereign Project | 42145-013

Summary

The Asian Development Bank (ADB) approved the multitranche financing facility (MFF) in an aggregate amount not exceeding $500 million for the North-South Road Corridor Investment Program (the investment program) on 29 September 2009. The investment program will contribute to economic development and regional trade. Its outcome will be a more efficient, safe, and sustainable transport network. Expected outputs are: (i) 550-km of improved road sections in the corridor, (ii) modernized border and customs infrastructure and related facilities, and (iii) more efficient and effective road corridor management.

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Project Name North-South Road Corridor Investment Program
Project Number 42145-013
Country Armenia
Project Status Approved
Project Type / Modality of Assistance Loan
ND
Source of Funding / Amount
MFF Facility Concept: North-South Road Corridor Investment Program
Neighborhood Investment Facility US$ 7.90 million
MFF Facility Concept 0035-ARM: North-South Road Corridor Investment Program
Ordinary capital resources US$ 440.00 million
Asian Development Fund US$ 60.00 million
MFF Facility Concept: North-South Road Corridor Investment Program
European Investment Bank US$ 79.20 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector Transport - Road transport (non-urban)
Gender Equity and Mainstreaming Some gender elements
Description The Asian Development Bank (ADB) approved the multitranche financing facility (MFF) in an aggregate amount not exceeding $500 million for the North-South Road Corridor Investment Program (the investment program) on 29 September 2009. The investment program will contribute to economic development and regional trade. Its outcome will be a more efficient, safe, and sustainable transport network. Expected outputs are: (i) 550-km of improved road sections in the corridor, (ii) modernized border and customs infrastructure and related facilities, and (iii) more efficient and effective road corridor management.
Project Rationale and Linkage to Country/Regional Strategy

The Agarak-Kapan-Yerevan-Bavra route (M1 and 2 roads) crossing Armenia from south to north is further connected to Georgia's east-west highway that leads to Poti and Batumi at the Black Sea. This route provides Armenia with the shortest access to the seaports linked to Europe, the Russian Federation, and Turkey. Meanwhile, the government of Georgia is improving the east-west highway and plans to improve the Bavra-Zhdanov-Akhaltskha-Batumi road as an alternative connectivity to Black Sea ports from Tbilisi. This will enable the Armenia cargoes to be transported to Black Sea ports easily through a shorter route. On the basis of this potential, the Government has developed a North-South Road Corridor Development Program as a priority and ADB will support it through an MFF.

The investment program will promote regional cooperation and trade by improving the north-south road corridor and related border crossings in Armenia. It is the Government's top priority to stimulate the national economy and gain shorter and more efficient access to nearest sea ports of the Black Sea. It will be complemented by the ADB-assisted regional road corridor development programs in Azerbaijan and Georgia to link the subregion to international markets more closely. It is thus in line with ADB's regional cooperation and integration theme under the Strategy 2020, country operations business plan for Armenia, and the regional cooperation strategy in Central Asia and Caucasus.

Impact Increased subregional trade and accelerated economic development in Armenia
Project Outcome
Description of Outcome Efficient, safe, and sustainable transport on the north south road corridor
Progress Toward Outcome Three tranches have been approved and are under implementation. Improvement of approximately 150 km of road financed from the MFF is likely to completed by December 2019, after which the outcomes will be measured.
Implementation Progress
Description of Project Outputs

The outputs of the Investment Program will be (i) a 550-km improved road corridor; (ii) modernized border and customs infrastructure and facilities; and (iii) efficient and effective road corridor management.

550 km north south road corridor improved

Border and customs facilities modernized and a cross-border agreement with Georgia in place

Road subsector plan implemented

Road subsector management and institutional capacities improved

Road safety improved

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

All works and major consulting contracts under Tranches 1 and 2 have been awarded. Civil works have been progressing, but started later than expected. Procurement of works, land acquisition, and unforeseen archaeological sites in the right-of-way contributed to the delay. Procurement of civil works and goods and recruitment of consultants under Tranche 3 are underway.

Three crossings points on the Georgian border have been or will be improved by 2017.

Consultant selection for the road subsector plan and capacity building will be completed by 2016.

Safety improvements are part of the civil works to be completed in 2016.

Geographical Location Bavra, Yerevan, Ashtarak, Talin, Gyumri, Mekhri, Armenia
Summary of Environmental and Social Aspects
Environmental Aspects

An environmental assessment and review framework (EARF) covering environment safeguard tasks for the Investment Program in compliance with national laws and ADB's Environment Policy (2002) has been prepared and was approved by the Government.

Project 1 is classified as environmental category B and thus an initial environmental examination (IEE) was prepared. Project 2 is classified as environmental category A due to the widening of the Ashtarak-Talin road section to 4 lanes and several significant impacts to archaeological sites. An environmental impact assessment (EIA) was prepared. All recommendations of the EIA, including the environment management plan (EMP), were incorporated in the bidding documents and consultants' contracts. Project 3 is classified as environmental category A. An updated EIA was prepared and posted on the ADB website on 26 July 2012. The EIA concludes that the impact on archaeological, historical, and cultural sites and monuments is widespread and requires special consideration. The EIA identifies 10 previously unknown archaeological sites. To safeguard the most important sites, the EMP contains mitigation measures. The EIA also determines that there is a potential impact on some rare flora and fauna. To mitigate those impacts, the EMP outlines a flora and fauna plan. All recommendations in the EMP are incorporated in the detailed design and bidding documents for the civil works contract to ensure proper mitigation and protection measures are taken.

Involuntary Resettlement

A land acquisition and resettlement framework (LARF) regulating land acquisition and resettlement activities for the Investment Program in compliance with national laws and ADB's Involuntary Resettlement Policy (1995) has been prepared and was approved by the Government.

Project 1 is classified as involuntary resettlement category C. Although no land acquisition is expected, impacts like loss of access for businesses have been identified. Consultations with community leaders were carried out and mitigation measures were developed to address such impacts. Project 2 is classified as involuntary resettlement category A due to significant land acquisition impact from the construction and widening of the Ashtarak Talin road section. Project 3 is classified as category A for involuntary resettlement. The existing right-of-way will be widened to approximately 30 meters, which will cause significant land acquisition and resettlement impacts. MOTC prepared a draft LARP based on the substantially completed detailed engineering design.

Indigenous Peoples Projects 1, 2, and 3 are classified as category C for indigenous peoples due to the absence from the project area of social groups qualifying as indigenous peoples.
Stakeholder Communication, Participation, and Consultation
During Project Design

The concerned stakeholders are grouped into (i) project sponsors - a central government represented by the ministries of economy (MOE), finance (MOF), and transport and communications (MOTC); (ii) regional administrations of the five marzpetaran (regional subdivision) where the road corridor lies, (iii) community leaders and councils of Avagani (council of elderly), (iv) community members, land owners and road users, (v) international organizations working in the project areas, (vi) local and international NGOs, and other donor/funding organizations.

These groups were consulted through interviews, group discussions, questionnaires and surveys to identify and incorporate their individual concerns in the project and overall program design and subsequent implementation with regard to detailed engineering designs, social development, resettlement and environment related issues.

During Project Implementation The MFF includes social and environment frameworks that outline principles for engaging affected people and communities and addressing social and environment related issues during the project implementation. In addition, bidding documents for civil works will include specific measures to ensure that the Program is implemented with gender, ethnic minority and environment concern in mind and creates equal opportunities for all social groups for employment and benefits.
Business Opportunities
Consulting Services Services of consulting firms and/or individuals working jointly with national firms and/or individuals will be required to (i) prepare detailed designs and supervise civil works; (ii) monitor project performance, benefits and social and environment safeguards; (iii) help implement individual tranche components; (iv) prepare subsequent tranches; and (v) conduct technical and financial audits. EA/IA will select firms in accordance to ADB's Guidelines on the Use of Consultants, using the quality- and cost-based selection (QCBS), quality-based selection (QBS), or consultant qualification selection (CQS) method depending on individual needs of project components and procurement plan. ADB and MOTC will perform due diligence before any of the methods and identify suitable weighting system for evaluating the firm's proposals.
Procurement Procurement of works and goods to be financed under the ADB loan will be conducted in accordance with ADB's Procurement Guidelines.
Responsible ADB Officer Prianka Seneviratne
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Transport and Communications Division, CWRD
Executing Agencies
Ministry of Transport & CommunicationGagik Beglaryan, MinisterMinister@mtc.amNalbandyan Str. PO Box 69, 0010 Yerevan, Armenia
Timetable
Concept Clearance 14 Jul 2009
Fact Finding 18 Jul 2009 to 30 Jul 2009
MRM 19 Aug 2009
Approval 29 Sep 2009
Last Review Mission -
PDS Creation Date 31 Jul 2009
Last PDS Update 30 Apr 2015

MFF Facility Concept

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 87.10 Cumulative Contract Awards
ADB 0.00 - 0.00 0.00 %
Counterpart 0.00 Cumulative Disbursements
Cofinancing 87.10 - 0.00 0.00 %

MFF Facility Concept 0035-ARM

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 892.00 Cumulative Contract Awards
ADB 500.00 - 0.00 0.00 %
Counterpart 392.00 Cumulative Disbursements
Cofinancing 0.00 - 0.00 0.00 %

Safeguard Documents

See also: Safeguards
Title Document Type Document Date
North-South Road Corridor Investment Program Resettlement Frameworks Sep 2009
North-South Road Corridor Investment Program Environmental Assessment and Review Framework Aug 2009

Evaluation Documents

See also: Independent Evaluation

No documents found.


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