Georgia : North–South Corridor (Kvesheti–Kobi) Road Project

Project Name

North–South Corridor (Kvesheti–Kobi) Road Project

Project Number

51257-001

Country / Economy

• Georgia

Project Status

Active

Project Type / Modality of Assistance

• Loan

Source of Funding / Amount

Loan 3803-GEO: North-South Corridor (Kvesheti-Kobi) Road Project

Source	Amount
Ordinary capital resources	US$ 415.00 million

Loan: North-South Corridor (Kvesheti-Kobi) Road Project

Source	Amount
European Bank for Reconstruction and Development	US$ 60.00 million

Operational Priorities

• OP1: Addressing remaining poverty and reducing inequalities
• OP2: Accelerating progress in gender equality
• OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
• OP6: Strengthening governance and institutional capacity
• OP7: Fostering regional cooperation and integration

Sector / Subsector

• Transport / Road transport (non-urban)

Gender

Effective gender mainstreaming

Description

The project will improve connectivity and safety along the North-South Corridor by (i) constructing about 23 kilometers (km) of climate-resilient two-lane highway between Kvesheti and Kobi (the project road) and about 5 km of all-weather access roads, and (b) increasing road safety awareness; (ii) establishing a visitor center in the Khada Valley to support tourism activities; and (iii) enhancing the capacity of the Roads Department on project and contract management. The project expands efforts of the Asian Development Bank (ADB) and other development partners to upgrade the country's national highway network along key economic corridors. It will enhance inclusive economic growth and regional connectivity.

The project is aligned with the following impacts: (i) economic growth and regional connectivity enhanced; and (ii) trade, tourism, and economic corridors improved. The project will have the following outcome: connectivity, safety, and livelihoods along the North-South Corridor improved.

Project Rationale and Linkage to Country/Regional Strategy

The Government of Georgia is making substantial investments in infrastructure intended to take advantage of its location and tourism attractions, and is emphasizing the country's transit trade through development of the East-West and North-South

transport corridors. The East-West Highway is part of Corridor 2 of the Central Asia Regional Economic Cooperation (CAREC) Program, and connects to the NorthSouth Corridor at Mtskheta, directly north of Tbilisi. The EastWest Highway is being upgraded with the assistance of ADB, the European Investment Bank, the Japan International Cooperation Agency, and the World Bank. The North-South Corridor connects the Russian border (Kazbegi) to the Armenian border (Sadakhlo) and the Azerbaijani border (Red Bridge). It is a lifeline for Georgian and Armenian economic activities, and provides the only land access to the Russian Federation.

The North-South Corridor connects Tbilisi (1,159,000 people) to the Mtskheta-Mtianeti region (95,000 people) in the north and to the Kvemo Kartli region (424,000 people) in the south. It serves as the main transport artery for the Mtskheta-Mtianeti region, and spans quite diverse and spectacular terrain, from the historic capital of Georgia (Mtskheta) north

to Stepantsminda in the Greater Caucasus mountains. The region is home to many tourist attractions, including cultural heritage sites, ski resorts, natural park, and monuments. Traffic disruption, adverse climate conditions, safety hazards, and slow travel times are major impediments to meeting increasing transport demand and harnessing the tourism potential of the region. The government has developed a tourism strategy for the region that identified, through a value chain analysis, a number of opportunities and priority interventions for the Gudauri and Khada valleys. Lack of tourist information centers, inadequate guest house services, and limited guide training were identified among the possible areas for improvements.

Through the project, ADB will help the government in: (i) ensuring that adequate climate change adaptation, gender-sensitive, and road safety features are incorporated into the engineering design; (ii) implementing a biodiversity action plan and a stakeholder engagement plan to mitigate key project risks; and (iii) expanding the regional spillover and economic benefits supported by other ADB-assisted projects in Georgia and Armenia. Further, ADB's leading role in the CAREC program will provide the government with tools and opportunities for information sharing and learning on road safety and asset management.

Impact

Economic growth and regional connectivity enhanced; Trade, tourism, and economic corridors improved

Project Outcome

Description of Outcome

Connectivity, safety, and livelihoods along the North-South Corridor improved

Progress Toward Outcome

Implementation Progress

Description of Project Outputs

Project roads constructed, and road safety awareness increased

Khada Valley visitor center established

Capacity of the Roads Department for project and contract management enhanced

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

Geographical Location

K'veshet'i, Kobi

Safeguard Categories

Environment

A

Involuntary Resettlement

A

Indigenous Peoples

C

Summary of Environmental and Social Aspects

Environmental Aspects

The proposed project is a greenfield project that passes through difficult mountainous terrain. The project is classified as category A for environment impacts. An Environmental Impact Assessment is being prepared in accordance with ADB's Safeguard Policy Statement 2009.

Involuntary Resettlement

The project is classified as category A for involuntary resettlement impacts. A Land Acquisition and Resettlement Plan is being prepared in accordance with ADB's Safeguard Policy Statement 2009.

Indigenous Peoples

The project is classified as category C for impacts on indigenous peoples impacts (no indigenous peoples in the project area).

Stakeholder Communication, Participation, and Consultation

During Project Design

During project design, stakeholders participation in any form of communication accessible to them will be conducted to ensure that the general public understands the proposed project.

During Project Implementation

Public consultations with relevant government agencies, local residents, and other participants will be encouraged to ensure proper dissemination of information regarding the proposed project.

Business Opportunities

Consulting Services

Consulting services will be required for supervising two civil works contracts. Consultants will be recruited through firms in accordance with ADB's Guidelines on the Use of Consultants (2013, as amended from time to time). Advance contracting and retroactive financing will be sought to ensure the readiness of the project.

The project management and construction supervision consultant contract was awarded to UBM Uluslararasi Birlesmis Musavirlik A.S. in June 2019; and mobilized in August 2019. An individual external monitor for land acquisition and resettlement plan contract was awarded in July 2019. The financial audit contract awarded in November 2018 under L3520 will be partially financed by the project.

Procurement

Procurement of all contracts through open competitive bidding will be done in accordance with ADB Procurement Policy and Regulations (2017, as amended from time to time). Advance contracting and retroactive financing will be considered and used to expedite the Project implementation. ADB approval of advance contracting will not commit ADB to subsequently approve the project or to finance the procurement costs.

The two civil works contracts for the construction of the Kvesheti-Kobi Road were awarded to (i) China Railway 23rd Bureau Group Co., Ltd. in August 2019 (Road Section); and (ii) China Railway Tunnel Group Co., Ltd. in September 2019 (Tunnel Section).

Contact

Responsible ADB Officer

Naqvi, Zaigham Ali Akbar

Responsible ADB Department

Sectors Group

Responsible ADB Division

Transport Sector Office (SG-TRA)

Executing Agencies

Ministry of Regional Development and Infrastructure of Georgia

Timetable

Concept Clearance

01 Aug 2018

Fact Finding

30 Apr 2019 to 03 May 2019

MRM

28 May 2019

Approval

01 Aug 2019

Last Review Mission

-

Last PDS Update

01 Aug 2019

Funding

Loan 3803-GEO