Regional: Central Asia Regional Economic Cooperation: Working with the Private Sector in Trade Facilitation

Sovereign Project | 43078-012

Summary

TBD

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Project Name Central Asia Regional Economic Cooperation: Working with the Private Sector in Trade Facilitation
Project Number 43078-012
Country Regional
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7353-REG: Central Asia Regional Economic Cooperation: Working with the Private Sector in Trade Facilitation
Regional Cooperation and Integration Fund US$ 1.50 million
TA 7353-REG: Central Asia Regional Economic Cooperation: Working with the Private Sector in Trade Facilitation
Technical Assistance Special Fund US$ 1.26 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Partnerships
Private sector development
Sector / Subsector Finance - Trade finance
Industry and trade - Trade and services
Gender Equity and Mainstreaming
Description TBD
Project Rationale and Linkage to Country/Regional Strategy

The proposed TA will support the design, implementation and monitoring of key trade facilitation and private sector development activities under the Central Asia Regional Economic Cooperation Program (CAREC). Specifically, it will (i) establish and provide institutional support to the National Joint Transport and Trade Facilitation Committees (NJCs) and the Regional Joint Committee on Transport and Trade Facilitation (RJC), (ii) conduct performance measurement and monitoring of selected CAREC transport and trade facilitation corridors, and (iii) organize private-public sector dialogues to enhance business environment for trade development, and explore opportunities of public and private partnership (PPP) in support of trade logistics development.

The CAREC Transport and Trade Facilitation Strategy (TTFS) was endorsed by the 6th CAREC Ministerial Conference in 2007 and its Implementation Action Plan was approved by the 7th CAREC Ministerial Conference in November 2008. TTFS aims to strengthen the region?s competitiveness and expand trade among CAREC economies and with the global market. The strategy adopts an integrated approach combining transport investments with trade facilitation initiatives. The Action Plan focuses on the development of six CAREC corridors and identifies priority investment and technical assistance requirements to develop infrastructure and facilitate the movement of goods through these corridors and across borders.

Effective trade facilitation involves various agencies, including the private sector, within and outside a country. It will be essential for public and private sector agencies to work in concert to identify the constraints and measures required to improve trade flows, set priorities and timelines to implement those measures. To support this effort, the proposed TA will assist in setting up cooperation mechanisms that will (i) strengthen national and regional capacities to address trade facilitation concerns in an integrated manner; (ii) enhance regional cooperation initiatives in assessing and monitoring performance of selected corridors, identifying bottlenecks to cross border trade and determining courses of action to address such bottlenecks; and (iii) promote PPP and develop innovative financing models to address financing requirements for transport and trade facilitation development in the region.

Impact Trade efficiency in the whole CAREC region improved, contributing to economic development and poverty reduction
Project Outcome
Description of Outcome Management of CAREC corridors strengthened
Progress Toward Outcome Regional institutions for integrated trade facilitation, including NJCs and RJC, have been established. The CAREC Federation of Carrier and Forwarder Associations (CFCFA) has been officially established, with a mandate to advocate private sector interests and promote dialogues between the public sector and the private sector.
Implementation Progress
Description of Project Outputs

1. National joint committees and regional joint committee set up.

2. Corridor performance measurement and monitoring system established

3. Single-window scheme adopted and functioning effectively

4. PPP opportunities developed to promote Integrated trade facilitation

5. CFCFA established and its functions improved.

6. CFCFA membership expanded to include representatives of all CAREC member countries

7. Corridor performance measurement and monitoring database expanded

8. Knowledge Products developed

9. Improved TA Management

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

International and national consultants have been hired to conduct CAREC corridor performance measurement and monitoring (CPMM) of all six CAREC corridors to identify major bottlenecks and recommend remedial actions. The first CPMM report was submitted to the CAREC ministerial conference in November 2010. The 2010 CPMM Annual Report was released and disseminated at the CAREC Senior Officials' Meeting in Baku in June 2011.

Continuous training is provided to CPMM coordinators as the methodology is further refined and enhanced in response to feedback from the associations and users of the reports. The objective of the CPMM Coordinators' Training, conducted in Chongqing in February 2011, was to train the coordinators and partner association staff on revisions to data collection procedures, analysis, report preparation, and administrative arrangements. It was also the start of efforts to train associations' staff to perform national level analysis on data they collect that can be useful to the local associations and national goverment agencies involved in trade facilitation.

The work plan of CFCFA has been developed with support of two national consultants. CFCFA held a first meeting in March 2010 to discuss workplans. The registration of CFCFA is in progress.

A second meeting of CFCFA was held on 27 July 2010 in conjuction with the CAREC Business Development Forum. The CFCFA chairman introduced CFCFA and its work to the Forum.

On 8-9 July 2010, CFCFA co-sponsored a conference in Almaty (Partnership in the sphere of IT for railway transportation) to advance the development of an information exchange system between customs authorities, national railway carriers and participants of Foreign Economic Activities inside every Central Asian country and between Central Asian countries for the effective international rail carriage of goods.

In December 2010, the first CFCFA Logistics Training course was delivered in Tashkent. The Tashkent Automobile and Road Construction Institute (TARCI) (the only transport oriented university in Central Asia, and CFCFA Founding Members), AIRCUZ and ADBL were local partners of this event. The curriculum focused on modern supply chain management, trade logistics, multimodal transportation, and international best practices. Over 50 people participated in the training

In March 2011, a Time Release Study (TRS) Planning Workshop was held to prepare relevant customs officials to conduct the TRS and analyze the data collected. An immediate contribution of the TRS is to support the preparation of the Regional Improvement of Border Services (RIBS) project aimed at improving border crossing points, helping CAREC countries further develop national single window (NSW) facilities, and enhancing interconnectivity and inter-operability of national single windows regionally. The TRS will also complement the CAREC Corridor Performance Measurement and Monitoring project and form an essential part of the overall CAREC results framework.

In June 2011, CFCFA representatives were invited to participate and present at the CAREC Senior Officials' Meeting. This was the first occasion of a private sector organization taking part in a formal CAREC function.

Also in June 2011, CFCFA, in coordination with the Shanghai Maritime University (SMU) organized a transport and logistics training program for Mongolian freight forwarders and road carriers at the SMU Campus in Shanghai, PRC. Aiming to raise the level of professionalism, efficiency, and quality of CAREC road carriers, freight forwarders, and logistics companies through joint capacity building efforts, the Mongolia National Chamber of Commerce and Industry and the China International Federation of Forwarders Association worked together to bring 33 participants representing different freight forwarders and logistics companies, as well as government agencies, from Mongolia to attend the training.

CFCFA also organized various meetings and consultations with the Government officials and local carrier and forwarder associations of Tajikistan on 21-23 June 2011 in Dushanbe, Tajikistan. The objectives of these meetings and consultations were to: (a) discuss the problems and constraints common to the CFCFA member countries including Tajikistan that hinder the full development of their transport sectors; (b) introduce CFCFA and its objectives and explore cooperative ways of addressing these common problems; (c) discuss CFCFA proposed priority projects that may help alleviate the identified problems.

Training related to the development of national single window facilities has been organized. CAREC countries have in principle agreed to implement a regional project to improve border-crossing infrastructure and develop national single window facilities to be linked via a regional platform/cloud.

A training on customs modernization and risk management for CAREC countries was organized in May 2010 in Shanghai Customs College. One international consultant was engaged to review the experience of pilot of joint customs control in selected CAREC countries.

The 2nd Annual Meeting of the CAREC Federation of Carrier and Forwarder Associations (CFCFA) took place 9-10 August 2011 at Issyk-Kul, Krygyz Republic. The meeting was attended by about 50 participants representing more than 20 trade logistics associations from all ten CAREC member countries. Highlights of the meeting include:

" Working Groups Formation. Three working groups were created to focus on (1) promotion of common standards, processes and introduction of international practices that will benefit the transport and logistics system of CAREC countries; (2) Cross-border and Corridor Development; and (3) CFCFA organizational and Funding. Each group prepared their initial work plans for 2011-2012 which were approved by the general assembly.

" Session on FIATA Standards. Mr. Thomas Sim, FIATA Advocacy Body Vocational Training Chairman, made presentations on FIATA principles, vocational training programs, and standardized documents. He also explored possible cooperation between FIATA and CFCFA on vocational training.

" Election of Officers. Capt. Lin Zhong, former CFCFA Vice Chairman and China International Freight Forwarders Association (CIFA) Vice Secretary General, was appointed as CFCFA Chairman; while Mr. Kakhramon Sydiknazarov, President of Association of International Road Carriers of Uzbekistan (AIRCUZ), was elected to succeed Capt. Lin. Three new Executive Directors were also elected.

The CPMM Quarterly Report for April-June 2011 was published and distributed at the CAREC 10th Ministerial Conference in Baku (November 2011). This report reflects methodological revisions which took effect from April 2011.

CFCFA, in coordination with the Xinjiang Uygur Logistics Association (XULA) and with the assistance of the Asian Development Bank (ADB), organized the 2nd CFCFA Logistics Training on 27-29 November 2011 at Yilong Hotel, Urumqi, PRC.

The three-day training, which aimed to raise the level of professionalism, efficiency, and management skills of carriers, freight forwarders, and logistics companies in the region, focused on (i) supply chain management, (ii) multimodal transport, and (iii) trade logistics management and development in Xinjiang Uygur Autonomous Region. Forty participants -- mostly managers and officials of XULA-affiliated companies -- benefited from the training.

The CFCFA Chairman addressed the New Eurasian Continental Bridge meeting in Lianyungang, PRC on 1 December 2011. The meeting, sponsored by the Lianyungang Port Group and China Railway International Multimodal Transport Co., Ltd., sought to deal with PRC seaport congestion caused by inland railway capacity constraints. CFCFA is willing to engage in discussions with shipping companies and with governments over how to address these issues.

Further integration of Pakistan and Turkmenistan into CAREC continues. The Pakistan International Freight Forwarders Association has formally applied for membership in CFCFA and is expected to become a CPMM partner in 2012.

The TA funded additional trade logistics training programs in Kazakhstan and Mongolia in June 2012.

The 2011 CPMM Annual Report was presented to CAREC senior officials at the June 2012 Senior Officials' Meeting. A CFCFA Business Networking Forum was organized in conjunction with the CAREC SOM in Hohhot.

The TA is funding CPMM data collection for the second half of 2012.

Minor changes in scope were processed to increase the level of effort provided under the TA by national consultants.

A CFCFA website (cfcfa.net) has been developed to provide information on the activities of CFCFA and an interactive page for the corridor performance measurement and monitoring results. Work is ongoing to link CFCFA member sites with CFCFA.net and provide full access to the CPMM database for member associations to conduct their own research.

The CFCFA held its 3rd Annual Meeting to plan its activities under the CAREC integrated trade facilitation agenda. Participants discussed work plans for 2012 -13, updated status of priority projects, and discussed and approved CFCFA membership applications.

Participants also elected a new Chairman, Vice-Chairman, and members of the Executive Board, and appointed a new Secretary. CFCFA officers and CFCFA member contact information is available at cfcfa.net.

The meeting provided an opportunity for experience sharing with the recently established Greater Mekong Subregion Freight Transport Association (GMS-FRETA).

In December 2012, the technical assistance budget was increased and the closing date extended to allow for continuation of CPMM and to devise means for increasing the volume of railway TCD data included in the CPMM database.

A CPMM workshop was conducted on 1 March 2013 in Almaty to devise ways to improve the use of CPMM as a tool to prompt meaningful reforms. Workshop participants reviewed and shared the experience in conducting CPMM under the Central Asia Regional Economic Cooperation (CAREC) Program since 2009. They discussed how to maximize use of the CPMM data in increasing efforts to facilitate trade, and how to introduce CPMM in other subregions.

The CAREC Transport and Trade Facilitation Strategy mandates that the performance of six priority CAREC corridors be measured and monitored. Using CPMM, sources of excessive cost and delay encountered by goods in transit are identified, and courses of action to eliminate these impediments are determined. CPMM serves as a useful guide for decision makers in policy formulation, investment decisions, and process improvements.

The workshop was conducted by the Asian Development Bank's CAREC Trade Facilitation team, together with CAREC Institute.

From 10-13 April 2013 the CAREC Institute, CAREC Secretariat, ADB Institute, and CAREC Trade Facilitation team organized an Integrated Trade Facilitation Learning Opportunity for CAREC Decision Makers to learn from Georgia's experience with "At the Border" and "Behind the Border" reforms and implementation. The program involved a series of seminars and site visits in Tbilisi, Batumi, and Sarpi. National focal points, customs officials, and representatives of border management agencies from CAREC countries joined a study tour that highlighted Georgia's trade facilitation reforms and showed the benefits of replicating them.

Georgian officials discussed customs institutional reforms, border management strategy, and other measures to integrate trade facilitation, while participants presented similar reforms by their own governments.

The participants observed reforms in action at the Batumi Seaport and Customs Clearance Zone, and at the Sarpi Customs Border Crossing Point, where they saw how technology enables transparent and efficient customs procedures, minimizing the time required for goods to cross between Georgia and Turkey. Discussions highlighted the importance of using technology to modernize customs and of improving transparency and integrity in customs procedures.

The study tour was organized by the CAREC Institute and the CAREC Secretariat and co-sponsored by the ADB Institute. Speakers came from the Organization for Security and Cooperation in Europe, United Nations Development Programme, Border Management Programme in Central Asia, and World Customs Organization.

A minor change in implementation arrangements was processed in May 2013 to (i) commission consultants to expand the volume of data documenting railway movements along CAREC corridors, and (ii) permit the engagement of additional national consultant services.

The CAREC program works with the private sector through the CAREC Federation of Carrier and Forwarder Associations (CFCFA) to facilitate trade in the region. During the CFCFA Logistics Training held in Bishkek, Kyrgyz Republic on 25 -27 June 2013, about 40 participants from the private sector, academia, and government became more familiar with best practice in supply chain management, demand management and customer service, procurement and supply management, managing inventory flows in the supply chain, global logistics, relationships and third-party logistics, supply chain finance, management of distribution centers and warehouses, and supply chain management technology. Participants also discussed key challenges on logistics and supply chain management. The training was organized by CFCFA in coordination with the Kyrgyz Republic Freight Forwarders Association, Kyrgyz Freight Operators Association, and Association of the International Road Transport Operators of the Kyrgyz Republic, with ADB's assistance.

The 2012 CPMM Annual Report was distributed to participants of the June 2013 Senior Officials' Meeting (SOM) in Almaty. CFCFA presented highlights from the report to to SOM.

On 1 -2 July 2013, CFCFA Logistics Training was held in Dushanbe, Tajikistan. Representatives of carriers, freight forwarders, and logistics companies in Tajikistan learned from a short course which focused on supply chain management, multimodal transport, and trade logistics management and development aimed at helping them cope with delays along CAREC corridors, reduce losses in transit of perishables, and minimize empty backhauls. CAREC organized the training in coordination with the Association of International Automobile Transport of Tajikistan, a new CPMM partner.

Benefiting from CAREC Institute support, CFCFA conducted a series of activities in Tashkent, Uzbekistan during 19-23 August 2013. These activities focused on developing the capacity of CFCFA to conduct profession education courses, engage with the local business community, and conduct its annual meeting.

Together with CAREC Institute, CFCFA piloted a program of professional education courses on Supply Chain Management, Logistics, and FIATA (International Federation of Freight Forwarders Associations) Standards. Members of CFCFA designed, delivered, and benefited from the courses. 60 participants from all CAREC countries attended the training (19-21 August 2013). The training raised the efficiency and management skills of CFCFA partners, familiarized them with FIATA standards, and established a modality for organizing future such programs.

On 22 August 2013, CFCFA organized a Business Networking Forum (BNF). More than 100 participants attended, including Customs officials and development partners. The BNF enabled representatives of logistics, transport, and trading companies from CAREC countries to meet with each other and with representatives of the local business community to develop business relationships, explore opportunities for collaboration, and learn about PSOD programs.

CFCFA prepared its work plan for 2014 and held its election during its 4th Annual Meeting on 23 August 2013. Issues discussed during the meeting include: (i) strengthening dialogue with CAREC governments for a truly public private partnership and standardization of procedures; (ii) adoption of international practices through information sharing and capacity building; (iii) amendments to the CFCFA Charter to encourage enterprises membership and define the responsibilities and tenure of its officers; (iv) transfer of custody of the CFCFA website (cfcfa.net) from ADB to the Association for Development of Business Logistics and augmentation of the content, design, and maintenance of the site to serve as an information hub for trade-related data in the region (and source of revenue for CFCFA) that will be useful to freight forwarders, transport, and logistics companies; and (v) findings of and proposed refinements to the corridor performance measurement and monitoring (CPMM) reports with emphasis on improvement of rail data collection and analysis. Actions also were taken to maintain the registration of CFCFA in Hong Kong for another year and to establish a banking relationship for CFCFA.

Two CPMM quarterly reports covering the first half of 2013 were prepared and distributed at the October 2013 CAREC SOM and Ministerial Conference. The Ministerial Conference adopted a refined Transport and Trade Facilitation Strategy 2020: CFCFA members took part in country consultations organized earlier in the year by ADB consultants as part of the TTFS stock-take exercise.

Consultants engaged in May 2013 to (i) help expand the volume of railway data in the CPMM database and (ii) identify trade facilitation issues specific to railways delivered two consultant reports (in September 2013 and January 2014). These reports guided revisions of CPMM data collection forms. The consultants conducted a training program in Almaty on 28 October 2013 to discuss proposed revisions with CPMM coordinators and associated freight forwarders engaged in the collection of railway data for CPMM. CPMM coordinators familiarized themselves with the railway-specific terminology and accepted the proposed revisions.

A further change in implementation arrangements together with an extension of the closing date to 31 December 2014 was processed in October 2013 to allow the TA to cover the cost of (i) ad hoc legal services associated with the establishment of the CAREC Federation of Carrier and Forwarder Associations (CFCFA) and (ii) transfer of custody of the CFCFA website (cfcfa.net) from ADB to CFCFA.

In November 2013, work began in earnest to transfer the CFCFA website from ADB custody to CFCFA itself (specifically to a CFCFA member association in Uzbekistan on behalf of CFCFA). Transitional costs covered by the TA support software acquisition, website hosting, and rebuilding the site on a new platform. A beta version of the revamped site was activated in January 2014.

A third quarterly CPMM report covering July-September 2013 was prepared and posted to the CFCFA website in December 2013.

An additional minor change in TA implementation arrangements was processed in January 2014 to increase the level of effort provided for recruitment of national consultants. Subsequently, a CPMM database manager and a TA program manager were engaged to support the delivery of TA outputs in 2014.

Memoranda of Understanding (MoU) for the first six months of 2014 were signed by CPMM partners. These MoU specify the number of data samples to be provided by CPMM partners for inclusion in the CPMM database.

A first draft of a CPMM primer and forward-looking retrospective was submitted to ADB in November 2013. The draft was revised and submitted for peer review in February 2014. A published version will be distributed at the November 2014 CAREC Ministerial Conference.

TA implementation is proceeding in a satisfactory manner. The 2013 CPMM Annual Report was circulated at the June 2014 Senior Officials' Meeting. The report was subsequently re-edited, posted to the CAREC Program and CFCFA websites, and distributed to participants at the Asia Pacific Trade Facilitation Forum in September 2014. CPMM MoUs for 2014 have been concluded with CPMM partners. Since its annual general meeting in August 2013, CFCFA has begun to update, expand, and take custody of its website from ADB. This process will be completed by 31 October 2014.

A further minor change in implementation arrangements was processed in August 2014 to provide essential support for the delivery of TA activities and outputs to ensure successful achievement of the R-PATA outcome.

CFCFA convened its Annual General Meeting in Urumqi, PRC, to coincide with the conduct of the 4th China Eurasia Expo. CFCFA representatives attended the Expo as a business networking opportunity. CFCFA elected its officers and members of its Executive Board. The Executive Board met separately and reported back to the annual general meeting on matters pertaining to CFCFA registration and sustainability.

A second CAREC Trade Facilitation learning opportunity (funded jointly by CAREC Institute, ADB Institute, and the European Union Delegation to PRC and Mongolia) was held in Mongolia in October 2014 to allow CAREC countries to benefit from the experience of Baltic countries in modernizing their sanitary and phyto-sanitary measures. A study of the market conditions in CAREC countries for providing insurance coverage against cargo loss and theft has been commissioned and completed. Both activities are integral to the refined TTFS (adopted by the 12th CAREC Ministerial Conference in October 2013), which reiterates the importance of increasing the involvement of the private sector in developing measures to facilitate trade. The TA also co-sponsored a Regional Workshop on Modern Transport and Logistics (in December 2014) that was organized by USAID and members of CFCFA.

To ensure the sustainability of CFCFA, an Executive Board meeting was convened 11-12 December 2014 in Hong Kong, China for the purpose of establishing a banking relationship (so that membership dues and advertising revenues generated by cfcfa.net might be deposited and used to meet CFCFA obligations) and agreeing arrangements for a company Secretary to maintain CFCFA's registration in Hong Kong, China. In the event, unexpectedly, HSBC elected not to open a bank account for CFCFA. This has created a situation in which CFCFA is unable to mobilize and consolidate the resources of its members to engage a company secretary, a mandatory requirement for companies registered in Hong Kong, China.

In response, a third and final extension of the TA closing date to 30 September 2015 was processed to provide adequate time to ensure CFCFA sustainability. The TA will also support publication of the proceedings of the second CAREC Trade Facilitation Learning Opportunity and the conduct of trade logistics training for Turkmenistan carriers and forwarders.

Geographical Location Afghanistan. Azerbaijan, Mongolia, PRC, Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, Uzbekistan
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design The project was designed in close consultation with the CAREC countries. The priority activities of the TA were identified jointly by the countries concerned.
During Project Implementation

Special efforts are being made to encourage private sector participation during implementation. In February 2011, CFCFA organized a Business Networking Forum in Chongqing, PRC. The Forum brought together over 200 attendees and provided an opportunity for the Chongqing government agencies, as well as transport operators and freight forwarders, to meet and network with their CAREC counterparts. Representatives from Central Asia transport operators and transport businesses demonstrated keen interest in expanding access to inland PRC. In addition to delegates representing associations which are already members of CFCFA, over a dozen companies from KAZ, KGZ, MON, TAJ, UZB, and other provinces of PRC participated in the event. Delegates made presentations on their associations and each country was provided a booth to exhibit their materials and hold discussions with counterparts from other countries. Subsequent Business Networking Forums have been organized in Hohhot (June 2012) and Tashkent (August 2013).

A CFCFA capacity building seminar was organized for the same audience of the business network forum. The seminar focused on (i) supply chain and multimodal transport issues, and (ii) application of FIATA standard freight forwarding documents for the CAREC region.

In July 2011, CFCFA launched a survey of its member associations to assess the impact on CAREC of the first year's experience of the Kazakhstan-Russia-Belarus Customs Union. This complements a parallel survey undertaken by the CAREC Customs Cooperation Committee.

Business Opportunities
Consulting Services A total of 25 person-months of international consultant and 25 person-months of national consultant inputs will be required to provide technical services. Consultants will be selected ang engaged by ADB as individuals.
Responsible ADB Officer Jeff Procak
Responsible ADB Department East Asia Department
Responsible ADB Division Public Mgt, Financial Sector and Regional Coop Division, EARD
Executing Agencies
Asian Development Bank Yuebin Zhangyuebinzhang@adb.org6 ADB Avenue, Mandaluyong
Metro Manila, Philippines
P.O. Box 789, 1099 Manila,
Philippines
Timetable
Concept Clearance 26 Mar 2009
Fact Finding 11 Mar 2009 to 25 Mar 2009
MRM -
Approval 25 Sep 2009
Last Review Mission -
PDS Creation Date 05 May 2009
Last PDS Update 25 Mar 2015

TA 7353-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
25 Sep 2009 - 25 Sep 2009 31 Dec 2012 30 Sep 2015 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
2,761,000.00 0.00 500,000.00 0.00 0.00 0.00 3,261,000.00 25 Sep 2009 2,999,238.45

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