Kazakhstan: MFF - Central Asia Regional Economic Cooperation Corridor 2 (Mangystau Oblast Sections) Investment Program (Facility)

Sovereign Project | 43439-013

Summary

The investment program will (i) reconstruct 790 km roads of CAREC Corridor 2 in Mangystau--this includes the 430 km Aktau-Manasha section, the 84 km Beineu-Akzhigit (Uzbekistan border) section, and the 237 km Zhetybai-Fetisovo section; (ii) strengthened capacity for planning, project management, and asset management; and (iii) improved cross-border infrastructure and facilities. These outputs will be achieved through two components: road development and capacity development.

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Project Name MFF - Central Asia Regional Economic Cooperation Corridor 2 (Mangystau Oblast Sections) Investment Program (Facility)
Project Number 43439-013
Country Kazakhstan
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
MFF Facility Concept 0047-KAZ: MFF - Central Asia Regional Economic Cooperation Corridor 2 (Mangystau Oblast Sections) Investment Program (Facility)
Ordinary capital resources US$ 800.00 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 investment program will (i) reconstruct 790 km roads of CAREC Corridor 2 in Mangystau--this includes the 430 km Aktau-Manasha section, the 84 km Beineu-Akzhigit (Uzbekistan border) section, and the 237 km Zhetybai-Fetisovo section; (ii) strengthened capacity for planning, project management, and asset management; and (iii) improved cross-border infrastructure and facilities. These outputs will be achieved through two components: road development and capacity development.
Project Rationale and Linkage to Country/Regional Strategy

Mangystau Oblast is Kazakhstan's major oil- and mineral-producing region on the eastern shore of the Caspian Sea. Aktau, Mangystau's capital, is a regional hub for transporting the Caspian's bulky cargoes of oil and oil products to European and Asian countries, and for transit traffic connecting the surrounding oilfield developers to other countries. Aktau is an integral part of three international transport corridors-- Transport Corridor Europe-Caucasus-Asia, North-South, and Inogate. Cargo transported across the Caspian Sea amounts to 30 million tons, of which 38% is via Aktau port. Consequently, investments have been poured in pipelines, shipping services, and Aktau port. As spillover traffic from the pipeline and the transport of goods increase, roads become indispensable.

More than half of the road surface in Mangystau Oblast is gravel or earth, and most of the paved sections are severely deteriorated and impassable. Traffic on the Akau-Beineu road has grown by 7% annually. Despite its strategic role as an arterial route, most of the road is in bad shape, as steep slopes and sharp turns limit the allowable speed. Congestion occurs daily, and the actual axle load of vehicles exceeds the road's design capacity. The road's inadequate serviceability and the consequent 12-hour travel time between Aktau and Beineu bloat transport costs and restrict trade.

The investment program will reconstruct the 790 km of CAREC Corridor 2 roads in Mangystau Oblast. The investment program roads connect Kazakhstan to Azerbaijan, and Europe through the Caspian Sea to the west; to the Russian Federation to the north; to Uzbekistan to the southeast; and to Turkmenistan to the south. The investment program effectively responds to bottlenecks, risks, and mitigation measures, which were assessed in the road map.

The investment program aligns with ADB's Strategy 2020 and its country operations business plan for 2010-2011, as well as CAREC's Transport and Trade Facilitation Strategy and Action Plan. It also aligns with the Kazakhstan's 2020 Strategy, SPAID, and TSP.

Impact Increased national economic growth and regional trade
Project Outcome
Description of Outcome Efficient transport network in Mangystau Oblast connecting Aktau to Manasha, Beineu to Akzhigit (Uzbekistan border), and Zhetybai to Fetisovo
Progress Toward Outcome Transport efficiency can be measured after road construction.
Implementation Progress
Description of Project Outputs

Mangystau Oblast road sections improved and open to traffic

MOTC's capacity for project and asset management strengthened

Cross-border infrastructure and facilities improved

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

Tranche 1 (L2728): The loan of $283 million was approved in December 2010, and declared effective in May 2012. The loan savings of $104 million was cancelled in July 2014. The road construction in 200-km road sections (km 372.6 - 514.3 and km 574 - 632.3) of the Aktau -Manasha road was completed in December 2014. The road users are starting to benefit from these improved road sections. The project''s capacity building component is still ongoing. The loan is expected to be closed in 2016.

Tranche 2 (L2967): The loan of $371.3 million was approved in December 2012, and declared effective in January 2014. The works in upgrading a 169.7-km section of the national highway A380 between Aktau and Beineu just commenced. The loan is expected to be closed in 2017.

Geographical Location Mangystau Oblast Section of the Astrakan-Aktau Corridor
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects MOTC prepared an environmental assessment and review framework for the investment program following ADB's Safeguard Policy Statement, and Kazakhstan laws.
Involuntary Resettlement MOTC prepared a land acquisition and resettlement framework for the investment program following ADB's Safeguard Policy Statement, and Kazakhstan laws.
Indigenous Peoples No indigenous peoples will be affected by the investment program.
Stakeholder Communication, Participation, and Consultation
During Project Design Public consultations were conducted during project preparation (LARP, IEE and detailed design), and will continue to be held to reflect local concerns in the project design.
During Project Implementation Public consultations will continue to be held to reflect local concerns in the project design.
Business Opportunities
Consulting Services Recruitment of all consultants financed from ADB will follow ADB's Guidelines on the Use of Consultants and the procurement plans for each of the tranche projects under the investment program. Consulting firms will be selected and engaged using ADB's quality- and cost-based selection procedures and the full technical proposal method.
Procurement Procurement of goods, civil works, and related services financed from ADB will follow ADB's Procurement Guidelines and the procurement plans to be developed for each tranche project under the investment program. Civil works contracts over $3 million will be procured through international competitive bidding (ICB) without pre-qualification of bidders. National competitive bidding (NCB) for civil works could be conducted for contracts not exceeding $3 million. ADB's prior review procedures will be followed. MOTC agreed to include the relevant sections of ADB's Anticorruption Policy in all bidding and contractual documents.
Responsible ADB Officer Zheng Wu
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Transport and Communications Division, CWRD
Executing Agencies
Ministry of Investments and DevelopmentMr. Nurlanbek Omirbayevumirbayev@mtc.gov.kz, vaisova_b@mtc.gov.kzTransport Tower, 47 Kabanbay Batyr Avenue, Astana 010000, Kazakhstan
Timetable
Concept Clearance 18 Jun 2010
Fact Finding 17 Jun 2010 to 12 Apr 2011
MRM 11 Aug 2010
Approval 28 Sep 2010
Last Review Mission -
PDS Creation Date 23 Jul 2010
Last PDS Update 19 Mar 2015

MFF Facility Concept 0047-KAZ

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 1,212.00 Cumulative Contract Awards
ADB 800.00 - 0.00 0.00 %
Counterpart 412.00 Cumulative Disbursements
Cofinancing 0.00 - 0.00 0.00 %

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