Kyrgyz Republic : CAREC Transport Corridor I (Bishkek-Torugart Road) Project 3 - Additional Financing

Transport / Road transport (non-urban)

The terrain of the Kyrgyz Republic is dominated by the Tian Shan and Pamir mountain systems, which together occupy about 65% of the country. Trade and travel in this landlocked country are highly dependent on road transport. Endorsed under the CAREC Transport and Trade Facilitation Strategy, the approximate 539 km Bishkek Torugart road forms part of the CAREC Transport Corridor 1 and has several important functions. The road, part of the old Silk Road that once linked Europe with what is now the PRC, is the shortest thoroughfare from Kashi, a vibrant cultural and trade center in the PRC, to consumer markets in northern Kyrgyz Republic and beyond. It is also the only north south trunk road in central Kyrgyz Republic, where the city of Naryn, in particular, depends heavily on it for connecting to the rest of the country. It is the only road that provides direct access at present to Issyk Kul lake region, one of Central Asia's best-known tourist destinations with a huge growth potential. However, costly, unreliable, and unsafe travel caused by the poor road conditions has hampered social and economic development along the road corridor, particularly for Naryn Province.

As one of the key development partners for the country's roads, ADB financed the improvement of 114 km (km 365 479) of the road corridor in 2008 and 2009, and helped the government strengthen trade ties with its neighbors through CAREC. In 2010 the Government of the People's Republic of China financed the improvement of 223 km (most of km 9 272), and in 2012 the Islamic Development Bank financed the improvement of 93 km (km 272 365) of the road corridor. The project will improve the 60 km section from At Beit to Torugart (km 479 539) at the Kyrgyz Republic PRC border, the last segment of the road corridor. Together with the improvement works in other sections and the corridor's full opening to traffic by 2017, this will enable all-weather smooth flow of local traffic between Bishkek and Torugart, as well as international through-traffic from the PRC to Central Asia and beyond, unleashing one of the key constraints to national and regional trade competitiveness and inclusive growth. Apart from the economic benefits of time savings, reliability, and reduced transport costs, better road conditions and protective structures will help reduce the risk of accidental toxic spills and material runoff from vehicles, therefore benefiting the ecosystem of nearby Chatyr Kul Lake a wetland of international significance protected under the Ramsar Convention on Wetlands. The project will also support a long-term, results-oriented program of learning and development for the Ministry of Transport and Communications (MOTC) and other government staff. It will result in better-informed staff, equipped to champion strategies for reducing life-cycle costs and improving user cost recovery.

The project road site conditions are unique elevation is over 3,000 meters and the weather allows only about 5 months (May October) in a year for any construction work; the ground is permanently frozen, and part of the road alignment is close to a unique wetland. Civil works were procured using a tailored design build delivery method to share the cost and risk of design changes between the project executing agency and the contractor, and allow the contractor to bring more economical and relevant technology and construction methods to the site. Detailed engineering investigations by the contractor and the construction supervision consultant indicate that additional engineering measures (mainly increasing the road embankment height, using suitable subgrade materials, and installing additional road drainage systems) are necessary to address the unforeseen frost heaves in some sections. This will help prevent premature pavement failure caused by pavement cracking and extend road service life.

The project was approved in June 2011 with a loan in various currencies equivalent to SDR35,041,000 from ADB's Special Funds resources. The loan became effective in February 2012 and will close on 31 March 2016. Contract packages for the works and construction supervision and environmental management were awarded in 2012. The project has been performing well and the present project performance rating is on track. The total project cost has increased by $18 million, from

$70 million in 2011 to $88 million in 2014. The cost overruns, resulting from the detailed engineering design under the design build delivery arrangement, are attributed to corrective engineering measures and input price increases. The government has accordingly requested financing to achieve the project's intended outputs with greater technical quality. Given that additional engineering measures by nature are an integral part of ongoing civil works, additional financing is deemed a more suitable instrument than options of restructuring, scaling down, and/or canceling the project.

Project cost overruns under the original loan were met through provision of additional financing.

The project was closed on 31 December 2017 and achieved its outcome. Average travel time between Naryn and Torugart (border with the PRC) has reduced to about 2.5 hours (target 4 hours). In 2016, more than 5 companies providing freight transport services in Naryn (target 5 companies).

The last 60 km section of the Bishkek-Torugart road (km 479-km 539), repaired, rehabilitated, or reconstructed to meet national Category III road standards with roadside truck parking facility and special haydraulic features for protecting the environment and preserving the road structure

Improved infrastructure management skills of MOTC and other government agency staff

As of the end of the 2016 construction season, civil works were fully completed. The completed works in 2016 included strengthening culvert pipe outlets (rock-fill blanket and slope protection), full installation of traffic signs and signal bars, and the drainage system for spillage collection at six sections. The defect liability period was expired on 16 Oct 2016, and the contractor handed over the site to the MOTR.

EMP monitoring was conducted properly. The EMR for January-June 2017 was submitted. The EMP compliance was assessed as satisfactory in June 2017 in the course of the post construction audit and project completion review mission.

Infrastructure management skillss were improved as intended under the original Loan 2755.