Kazakhstan : CAREC Transport Corridor 1 (Zhambyl Oblast Section) Investment Program - Tranche 4

Project Name

CAREC Transport Corridor 1 (Zhambyl Oblast Section) Investment Program - Tranche 4

Project Number

41121-053

Country / Economy

• Kazakhstan

Project Status

Closed

Project Type / Modality of Assistance

• Loan

Source of Funding / Amount

Loan 2735-KAZ: CAREC Transport Corridor 1 (Zhambyl Oblast Section) [Western Europe-Western People`s Republic of China International Transit Corridor] Investment Program - Tranche 4

Source	Amount
Ordinary capital resources	US$ 112.00 million

Strategic Agendas

• Inclusive economic growth
• Regional integration

Drivers of Change

• Governance and capacity development

Sector / Subsector

• Transport / Road transport (non-urban)

Gender

No gender elements

Description

Project 4 will contribute to sustainable economic growth by spurring transit traffic, promoting trade, and strengthening regional cooperation. The outcome will be an efficient transport network in Zhambyl Oblast. The output will be a 49 km section upgraded from category-II to category-IB. Civil works will involve a km 261.5-km 310.5 section with four lanes within the existing right-of-way. It will comprise two components: road development and construction supervision consultancy.

Project Rationale and Linkage to Country/Regional Strategy

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 (which was reduced to $225 million), the second tranche of $187 million on 7 October 2009, the third tranche of $173 million in 15 November 2010, and the fourth tranche on 21 February 2011.

Impact

Contribution to sustainable economic development

Project Outcome

Description of Outcome

Development of an efficient transport network in Zhambyl Oblast

Progress Toward Outcome

Road users start to benefit from the 49-km completed road section.

Implementation Progress

Description of Project Outputs

49 km of road section in Zhambyl Oblast of the CAREC Transport Corridor 1 reconstructed

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

Works for 49-km road section (Blagoveshchenka-Aspara) were completed in May 2014. The road section now open to traffic.

Geographical Location

Almaty, Almaty Oblysy, Qorghas, Shymkent, Taraz, Yuzhno-Kazakhstanskaya Oblast', Zhambyl Oblysy

Safeguard Categories

Environment

B

Involuntary Resettlement

B

Indigenous Peoples

C

Summary of Environmental and Social Aspects

Environmental Aspects

No major negative impacts were reported during the project implementation.expected, and the eEffective implementation of the EMP will minimized and mitigated any all adverse environmental impacts during construction. The tender and contract documents will contained details of the environmental management and monitoring requirements. The contractors will be responsible for implemented ing the EMP. With CSC help, MOTC will monitored the contractors' effective compliance with to the EMP requirements.

EA and ADB monitor the EMP implementation through review missions, progress reports, and bi-annual environment monitoring reports.

Involuntary Resettlement

The civil works required additional land because the right-of-way needed to be expanded from the existing 40 meters to 70 meters and to bypass the territory of the Kyrgyz Republic in two places.

Some 54 households and six legal entities lost their lands. Of these, one leaseholder lost more than 10% of its productive land. About 171.7 ha of lands was acquired, of which about 171.6 ha are agricultural lands and 0.1 ha are used for commercial purposes. Most of the affected lands (109.7 ha) are leased for 49 years; 16.1 ha leased for 5-12 years; and 0.1 ha are privately owned.

About 34 ha of land temporarily used for construction were rented at current rental rates. Contractors restored the rented land to its original condition at completion of civil works.

A land acquisition and resettlement plan (LARP) was prepared based on the detailed engineering design, local government statistics, and public consultations with local stakeholders including affected persons. The implementation of the LARP costed about 26.2 million Tenge. The LARP was updated to reflect the results of the supplementary evaluations (of loss due to loss of long-leased government land) for 57 leased agricultural plots, confirmation of existence or otherwise of any affected people left with small uneconomic portions of leased land, and validation of the vulnerable status of 13 households. The government had completed land acquisition by May 2011 and paid compensations to the affected persons prior to their displacement or loss of land.

EA and ADB monitor the LARP implementation through review missions, progress reports, and bi-annual LAR monitoring reports.

Indigenous Peoples

No people fitting ADB's definition of indigenous peoples are affected by the project.

Stakeholder Communication, Participation, and Consultation

During Project Design

Intensive consultations were held during project preparation with various stakeholders, including representatives of the government, civil society, local communities, and the private sector. The consultations covered major project issues such as project alternatives, potential benefits, and social and environmental impacts. Consultations reveal a high degree of public support for Project 4. The design has incorporated the views of stakeholders. Special attention was given to the needs and constraints faced by women, internally displaced people, refugees, and other vulnerable groups. The consultations also helped identify the role of each stakeholder.

Grievance redress mechanism was set up in 2010. The establishment of Coordination Liaison Group (CLG) strengthens the grievance mechanism. A CLG Coordinator was engaged to monitor and report complaints, and facilitate resolution.

During Project Implementation

Stakeholder participation and consultation were conducted during project implementation, as needed.

Business Opportunities

Consulting Services

Recruitment of all ADB-financed consultants followed ADB's Guidelines on the Use of Consultants. Consulting firms were 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 followed ADB's Procurement Guidelines. Civil works contracts over $3 million were procured through international competitive bidding (ICB) without pre-qualification of bidders. ADB's prior review procedures were followed. MOTC included the relevant sections of ADB's Anticorruption Policy in all bidding and contractual documents.

Contact

Responsible ADB Officer

Galiev, Almazbek

Responsible ADB Department

Central and West Asia Department

Responsible ADB Division

Transport and Communications Division, CWRD

Executing Agencies

Ministry of Industry and Infrastructure Development formerly "Ministry of Investments and Developments"

Timetable

Concept Clearance

19 Feb 2008

Fact Finding

13 Jul 2011 to 19 Jul 2011

MRM

-

Approval

21 Feb 2011

Last Review Mission

-

Last PDS Update

23 Sep 2015

Funding

Loan 2735-KAZ