Kazakhstan : CAREC Transport Corridor 1 (Zhambyl Oblast Section) Investment Program - Tranche 2

Transport / Road transport (non-urban)

Roads are a key element of Kazakhstan's transport system. They play an important role in providing access to rural areas, and facilitating transit traffic and in-country transport movement. However, much of the road network is in poor condition-about 60% of the national roads require major rehabilitation and proper maintenance. Moreover, the feeder road network serving the rural population is not fully developed; and is characterized by poor conditions and a low service level, especially during wintertime. This results in high transport costs.

The road sector has long-standing bottlenecks: (i) the network is incomplete, and in some sections in bad condition; (ii) truck overloading is frequent, cutting into the economic life of road assets; (iii) revenues from transit are low, affecting cost recovery and reinvestment capabilities; (iv) inefficient cross-border procedures increase the burden on trade and traders, and raise the cost of doing business; (v) weak road sector planning affects sound investment sequencing; and (vi) project development and project management shortcomings create inefficiencies, high costs, and bad governance. These gaps translate into higher-than-average transport costs. They also hamper regional cooperation and integration opportunities, and ultimately the country's competitiveness.

The Government of Kazakhstan's Western Europe-Western PRC Corridor (the Corridor) Development Program intends to remove these constraints to improve the road sections in the Kazakhstan territory of CAREC Transport Corridor I, which total 2,715 km running from Khorgos through Almaty and Shymkent to the Russian Federation's western border. The Corridor Development Program will improve the existing road and construct bypasses and new alignments to make the Corridor suitable for international traffic.

The Government sought assistance from the international financial institutions to finance sections along the Corridor. ADB, with the Japan International Cooperation Agency (JICA) and the Islamic Development Bank (IDB) finance 470 km in Zhambyl Oblast. The European Bank for Reconstruction and Development, and the World Bank finance 102 km and 1,062 km, respectively.

Teaming up with IDB and JICA, ADB committed to improve 470 km in Zhambyl Oblast through the multitranche financing facility (MFF). On 13 January 2009, the Government and ADB entered into a framework financing agreement (FFA) for the MFF, with an aggregate principal amount not exceeding the equivalent of $700 million. ADB approved the MFF on 12 November 2008. ADB approved the first tranche for $340 million on 30 December 2008, and this second tranche of $187 million on 7 October 2009.

Contribution to sustainable economic development

Development of an efficient transport network in Zhambyl Oblast

Kulan-Blagoveshchenka and Zhambyl Border-Taraz road sections improved and open to traffic

Road maintenance facilities constructed and operational in 4 sites

Reconstruction of the following road sections were completed (i) km 358.6-389.4 in December 2012, (ii) km 310.5-358.6 in August 2013, and (iii) km 536-593 in January 2013. All road sections are open to traffic.

Works at Merke depot were completed as of Q2 2015 while works in other depots are ongoing.

There are no expected major negative impacts. The environmental impacts of the project road and prescribed environmental protection and mitigation measures cost about $1.0 million. The EA paid attention to potential impacts during construction, which include mismanagement of earthwork and aggregate site operations, mismanagement of lead contaminated soils, mismanagement of construction camp wastes and fuels, mismanagement of asphalt and concrete production, air pollution during construction, and bridge and culvert replacement and repair; implemented immediate remediation for any non-compliance with the EMP; and ensured that contractors take full responsibility for implementing the EMP.

EMP implementation is monitored through review missions, project progress reports, and bi-annual environmental monitoring reports.

The civil works for the km 310.5-389.4 road section require additional 151.8 hectares of land, and resettlement of 178 affected land users. The preliminary estimate for resettlement costs is $0.73 million. The EA completed relocating or reconstructing the affected structures/businesses before civil works start, and paying appropriate compensation before displacing affected persons; ensured that contractors take full responsibility for implementing the LARP; implemented immediate remediation for any non-compliance with the LARP; and ensured that they have regular consultation to resolve and follow up on matters raised by the public.

Supplemental LARP was prepared for newly identified APs.

LARP implemention is monitored through review missions, project progress reports, and bi-annual LAR internal monitoring reports and annual LAR external monitoring reports.

A number of consultations with raion (district) akimats and affected persons in the road sections, local officials (Akims, Deputy Akims, land allocation offices), and design firms have been conducted by IA since 2007. A census of all affected households and socioeconomic surveys of a 20% sample of the affected households were undertaken in May 2009 to assess resettlement impacts. As part of the preparation of the EIA extensive public consultations were undertaken from mid-2008 to early 2009, including two public hearings in two major towns (Kulan and Merke) along the sections. Questions and concerns related to the project were noted. Compensation issues and crossings for animals were among the common concerns raised in the consultations. Such concerns were incorporated in the environmental mitigation plan and land acquisition and resettlement plan.

A second round of public hearings was held in September 2009. The results and safeguard provisions for the Project were made available to all participants through a translated version of the EMP, which is the core of the EIA.