Azerbaijan: Second Road Network Development Investment Program

Sovereign Project | 45389-001

Summary

The MFF is intended to finance projects under the Investment program. The projects intended to be financed include: a) construction of a total of approximately 63 km of road sections on the new Masalli-Shorsulu road, comprising (i) an approximately 30 km section between the cities of Masalli and Jalilabad (Project 1) and (ii) an approximately 33 km section between the cities of Jalilabad and Shorsulu (Project 2); b) project implementation support for construction supervision and project management covering planning, procurement, project implementation, financial management and safeguard compliance; c) capacity development for MOT comprising support for improving the sustainable management of the road network.

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Procurement Documents

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Project Name Second Road Network Development Investment Program
Project Number 45389-001
Country Azerbaijan
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
MFF Facility Concept 0071-AZE: Second Road Network Development Investment Program
Ordinary capital resources US$ 500.00 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Private sector development
Sector / Subsector

Transport - Road transport (non-urban)

Gender Equity and Mainstreaming Some gender elements
Description The MFF is intended to finance projects under the Investment program. The projects intended to be financed include: a) construction of a total of approximately 63 km of road sections on the new Masalli-Shorsulu road, comprising (i) an approximately 30 km section between the cities of Masalli and Jalilabad (Project 1) and (ii) an approximately 33 km section between the cities of Jalilabad and Shorsulu (Project 2); b) project implementation support for construction supervision and project management covering planning, procurement, project implementation, financial management and safeguard compliance; c) capacity development for MOT comprising support for improving the sustainable management of the road network.
Project Rationale and Linkage to Country/Regional Strategy

The development of transport infrastructure is one of the key tasks of the Government to sustain GDP growth and promote trade with neighbouring countries. The poor condition of the national road network poses a challenge. Approximately 56% of the main road network is in a poor state and needs urgent repair, and the majority of lower category roads are in an extremely poor condition. The road sector in Azerbaijan faces four main problems: (i) poor road conditions, (ii) inadequate program delivery due to weak institutional capacity, (iii) inadequate maintenance of roads, and (iv) poor quality of construction. These bottlenecks lead to higher than average construction and maintenance costs.

The Second Road Network Development Program will promote regional cooperation and integration, and widen access to social and economic opportunities via improved road infrastructure in Azerbaijan. The program will also strengthen the government's capacity in strategic planning, project preparation and implementation, maintenance and governance in the road subsector.

Impact Greater economic growth in Azerbaijan and expanded trade with neighboring countries
Project Outcome
Description of Outcome An efficient, adequate, safe, and sustainable southern motorway corridor from Baku in Azerbaijan
Progress Toward Outcome To be determined at completion.
Implementation Progress
Description of Project Outputs

About 63 km of newly constructed motorway between Masalli and Shorsulu.

Improved program management and implementation capacities of ARS

Improved transport sector governance.

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

Two tranches have been approved under the MFF. Project 1 (Loan 2921-AZE) is under implementation, while Project 2 (Loan 3144-AZE) is not yet effective.

For Project 1, all contracts have been awarded and are ongoing. Civil works progress is low but is expected to improve in the coming months as delays in the preparation and approval of construction drawings has been largely solved. Safeguard monitoring is ongoing and no major issues were identified.

For Project 2, procurement of civil works and recruitment of construction supervision consultant are at an advance stage.

Geographical Location Masalli - Shorsulu
Summary of Environmental and Social Aspects
Environmental Aspects The projects under tranches 1 and 2 are classified as environment category A. The EIA report recommends specific mitigation measures with regard to highway design and construction and a robust long-term monitoring program, and also proposes an offset program. The contracts for the supervision consultant, program management consultant, and the civil works contractors will include stringent provisions for compliance with environmental safeguards.
Involuntary Resettlement

Tranche 1 is classified as category A for involuntary resettlement.

Tranche 2 is classified as category B for involuntary resettlement.

Indigenous Peoples The investment program area does not have any known social or cultural groups classified as indigenous peoples under ADB's Safeguard Policy Statement. Tranche 1 is classified as category C for indigenous peoples impact.
Stakeholder Communication, Participation, and Consultation
During Project Design Coordination with NGOs monitoring construction activities in the corridor will continue and be improved.
During Project Implementation Public consultation will continue as a means to achieve maximum beneficiary buy-in during implementation.
Business Opportunities
Consulting Services All consulting services to be financed under the Facility will be procured in accordance with ADB's Guidelines on the Use of Consultants (2013, 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 (2013, as amended from time to time). Procurement plans will be developed for each tranche project.
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 TransportMr. Musa Panahov, Deputy Ministerpanahov@mintrans.az1054, Tbilisi Avenue Baku, AZ1122 Republic of Azerbaijan
Timetable
Concept Clearance 13 Apr 2012
Fact Finding 25 Jun 2012 to 29 Jun 2012
MRM 24 Jul 2012
Approval 04 Oct 2012
Last Review Mission -
Last PDS Update 17 Mar 2015

MFF Facility Concept 0071-AZE

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 625.00 Cumulative Contract Awards
ADB 500.00 - 0.00 0.00 %
Counterpart 125.00 Cumulative Disbursements
Cofinancing 0.00 - 0.00 0.00 %

Evaluation Documents

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