Azerbaijan: Second Road Network Development Investment Program - Tranche 2

Transport / Road transport (non-urban) - Transport policies and institutional development

2018: Civil works for the new motorway Jalilabad-Shorsolu is 100% completed, taking over certificate issued on 1 June 2018. Major change in scope of T2 approved on 6 June 2018; construction supervision contract signed on 8 Nov 2018; civil works contracts for M5/R57 signed on 28 Nov 2018.

2019: Construction along key sections of M5/R57 ongoing.

2020: Works completed for Lot 1 (46.5 km) and Lot 2 (11 km) on 30 Nov 2020. Minor change and extension of T2 approved on 29 Sep 2020.

Q1 2021: MOF concurrence on amendments to FFA and LA received on 14 Jan 2021. Variation no. 2 of works contract approved on 1 February 2021. Progress on works on local roads reached 35% against the target of 41% as of end March 2021. Delay was due to unfavorable weather condition (rain and snowfall).

EBRD grant financing developed the road safety study and a study on design standards and performance-based road maintenance contracts; the studies were completed in December 2018.

A new motorway between Jalilabad and Shorsolu constructed and M5/R57 road sections rehabilitated.

Program management and implementation capacities of AAY improved.

Transport sector governance improved.

Local roads rehabilitation program implemented.

Local roads rehabilitation: Achieved progress reached 35% against the target of 41% as of end March 2021. Delay was due to unfavorable weather condition (rain and snowfall).

Jalilabad and Shorsolu motorway: Civil works contract was signed on 20 August 2015. Civil works commenced in January 2016 and completed, taking over certificated issued on 1 June 2018.

M5/R57 road sections: Civil works contracts were signed on 28 Nov 2018. Civil works completed on 30 Nov 2020.

Project management: Construction supervision consultant contract was signed on 29 October 2015 for Jalilabad-Shorsolu motorway. Construction supervision contract signed on 8 Nov 2018 for M5/R57 road sections. Required report preparation and submission are attended to during project implementation.

EBRD grant financing developed the road safety study and a study on design standards and performance-based road maintenance contracts; the studies were completed in December 2018. Feasibility study on tolling system completed in July 2018.

An environmental assessment and review framework was prepared for the entire MFF as required by ADB's Safeguard Policy Statement (2009). According to the MFF, each tranche is to be assessed and categorized separately. The proposed motorway is a new alignment, tranche 1 section passes through settled areas and tranche 2 section passes through wetlands. Project 2 is also classified as environment Category A.

An environmental impact assessment (EIA) report was prepared for the entire alignment covering both sections under Project 1 and Project 2. The EIA was approved by ADB and disclosed on the ADB website in 2012. The EIA recommends specific mitigation measures with regard to motorway design and construction and a robust long-term monitoring program. The contracts for the supervision consultant, program management consultant, and civil works include stringent provisions for compliance with environmental safeguards. An ecological expert and environmental specialist was engaged to ensure implementation of the environmental management plan. Assurances to mitigate potential harm to the wetlands are also included in the framework financing agreement and loan agreements.

The Project is categorized 'B' for resettlement. A LARF for the Program was prepared and approved in July 2012. The LARP was prepared for the Project and land acquisition is complete. A due diligence report was prepared in July 2013. LARP implementation for T2 has been completed, compensation payments have been paid since 2014.

The construction of the Project requires the acquisition of approximately 172.5 ha in 3 villages within the districts of Neftchala, Bilasuvar, and Jalilabad including 55.22 ha of private land, 21.99 ha of municipality-owned land and 95.29 ha of State reserve land. There is no impact to structures and trees. In total, 86 households will be affected. AAY submits internal monitoring reports. Grievance is monitored through the supervision consultant.

The Project has no adverse impact on indigenous peoples.

Ethnic Azeri accounts for most of the population in the project area; few other nationalities include Talysh, who are not negatively affected by the Project. Project is thus classified as Category C for indigenous peoples as defined under ADB's SPS (2009).