Kazakhstan: Central Asia Regional Economic Cooperation Corridors 1 and 6 Connector Road (Aktobe–Kandyagash) Reconstruction Project

Sovereign Project | 52286-001

The proposed project will (i) reconstruct the 89-kilometer highway connecting Aktobe and Kandyagash, and (ii) strengthen the institutional capacity of KazAvtoZhol.

The project is aligned with the following impact: more jobs created, and Kazakhstan integrated into the regional and global economic system. The project will have the following outcome: efficient, reliable, and safe movement of people and goods in West Kazakhstan increased.

Output 1: Aktobe Kandyagash highway reconstructed to category I standard. The project will upgrade the 89-km two-lane category II and III road to a four-lane category I road that will connect Aktobe to Kandyagash. The project will widen the road to the category I standard with climate-resilient features, construct roadside service areas with sanitary facilities especially for women, reconstruct all bridges, build two new bypasses of villages, and improve road safety.

Project Details

  • Project Officer
    Georget, Johan
    Central and West Asia Department
    Request for information
  • Country
    Kazakhstan
  • Sector
    • Transport
Project Name Central Asia Regional Economic Cooperation Corridors 1 and 6 Connector Road (Aktobe–Kandyagash) Reconstruction Project
Project Number 52286-001
Country Kazakhstan
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3829-KAZ: CAREC Corridors 1 and 6 Connector Road (Aktobe-Kandyagash) Reconstruction Project
Ordinary capital resources US$ 167.02 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Partnerships
Sector / Subsector

Transport / Road transport (non-urban)

Gender Equity and Mainstreaming Effective gender mainstreaming
Description

The proposed project will (i) reconstruct the 89-kilometer highway connecting Aktobe and Kandyagash, and (ii) strengthen the institutional capacity of KazAvtoZhol.

The project is aligned with the following impact: more jobs created, and Kazakhstan integrated into the regional and global economic system. The project will have the following outcome: efficient, reliable, and safe movement of people and goods in West Kazakhstan increased.

Output 1: Aktobe Kandyagash highway reconstructed to category I standard. The project will upgrade the 89-km two-lane category II and III road to a four-lane category I road that will connect Aktobe to Kandyagash. The project will widen the road to the category I standard with climate-resilient features, construct roadside service areas with sanitary facilities especially for women, reconstruct all bridges, build two new bypasses of villages, and improve road safety.

Output 2: Institutional capacity of KazAvtoZhol strengthened. This output will strengthen KazAvtoZhol's institutional capacity by providing equipment; staffing; and training on financial management, procurement, project management, gender, and social safeguards management. The training sessions will include a minimum of 30% participation by women.

Project Rationale and Linkage to Country/Regional Strategy

Kazakhstan has a total road length of about 97,000 km, of which about 63% is nominally classified as paved. About 24,000 km of the road network are classified as republican (national) roads, of which 92% is paved; these are managed centrally by the Committee of Roads under the Ministry of Industry and Infrastructure Development (MIID). Akimats (regional administrations) manage the rest, which consist of oblast (provincial) roads (33,000 km) and district (40,000 km) roads. Republican roads are further classified as international, national, and regional highways. Much of the road network was constructed during the Soviet era with obsolete technical standards and has deteriorated because of inadequate maintenance and harsh weather conditions. As of January 2014, about 32% of republican roads, 18% of oblast roads, and 10% of district roads were estimated to be in good condition, partly because of institutional inefficiency and underinvestment. In 2014, MIID set targets of 38% of republican roads to be in good condition by 2016 and 48% by 2020.

Many republican roads form part of transcontinental transport and trade corridors that span the vast territory of Kazakhstan to and from dynamic growth centers in neighboring countries and beyond. Improving these corridors to access markets in neighboring countries and in Europe, the Middle East, and South Asia is critical for Kazakhstan's economic diversification and growth. Owing to the country's size and low population density, maintaining an integrated national transport infrastructure is costly. Travel distances within the country are long; for example, the Center West (Nur-Sultan Aktau) corridor is about 2,730 km, while the Center South (Nur-Sultan Almaty) corridor is about 1,215 km. Besides increasing vulnerability to climate change, Kazakhstan's harsh continental climate makes transport infrastructure highly susceptible to extreme weather events and associated disasters (e.g., heavy snowfall, high winds, floods, and extreme temperatures). This requires special planning and design considerations in infrastructure provision, resulting in a substantial increase in construction and maintenance costs.

Poor road condition is also a contributing factor in road crashes. The cost of road crashes in Kazakhstan is estimated at $2 billion $4 billion per year (about 4% of GDP in 2013). The traffic-related fatality rate for Kazakhstan is about 21.9 per 100,000 population, which is double the rate in Uzbekistan and more than four times higher than the average for Western Europe. Despite a rapidly growing fleet (4.2 million vehicles in 2013 and increasing at an annual average rate of more than 5%), the number of reported fatalities in Kazakhstan fell from a peak of 4,365 in 2007 to 2,086 in 2017. However, the number of injuries rose by 17% and the number of crashes rose by 7% over the same period. The government is committed to improving road safety and endorsed the CAREC regional road safety strategy for 2017 2030 at the 15th CAREC ministerial conference in Islamabad in October 2016.

Kazakhstan has strategic policies and plans that influence transport sector development. These strategy documents define the objectives to be achieved in the road subsector and in other sectors. Foremost is the state program of infrastructure development _Nurly Zhol_ (bright path) for 2015 2019 announced by the Kazakh President in November 2014. To be implemented from 2016 to 2020, Nurly Zhol prioritizes domestic transport links of strategic importance and regional impact, and aims to connect the national capital, Nur-Sultan, with other urban agglomerations and/or second-tier cities in the country through integrated rail, air, and road networks. Nurly Zhol expected priority physical infrastructure and improved connectivity to foster business-driven regional economic integration through enhanced mobility, allowing the establishment of distributed production and delivery systems. Nurly Zhol is expected to generate a significant number of new jobs and incomes through investments and is currently being updated to extend to 2025. At the operational level, the most relevant strategy is KazAvtoZhol's 2013 2022 strategy, most recently updated in February 2018 with targets to (i) improve 5,100 km of republican roads; (ii) conduct routine, midterm, and capital repair on 10,100 km of republican roads; (iii) ensure 88% of the republican road network in good or fair condition; (iv) toll about 15,917 km republican roads (72% of republican road network); and (v) build 260 roadside facilities. The ambitious tolling target is linked to a proposal for KazAvtoZhol to greatly increase its self-financing through toll revenues.

The project is part of the 460 km Aktobe Kandyagash Makat road project, which connects the oil- and mineral-rich provinces of Aktobe and Atyrau, serving a population of 1.7 million. The Asian Development Bank (ADB) approved to finance the 299 km Kandyagash Makat section in 2016. In 2018, the government requested ADB to finance an additional section of 89 km connecting Aktobe and Kandyagash, while the government will be financing the remaining 72 km under the state budget with a target completion date by 2020. The Aktobe Makat link is a connector road that links CAREC corridors 1b and 6a, two major trade routes, to the Russian Federation and the European Union, Kazakhstan's major trade partners. It will integrate these two international corridors to greatly reduce transport cost and increase travel speed along the corridors and contribute to Kazakh trade facilitation.

The Aktobe Makat road is a two-lane, category II and III republican road built in 1970s. Because of deterioration, the road pavement, bridges, and culverts (which were designed for a lower axle load) are barely able to cope with the rapidly increasing and heavy traffic loads from the oil wells and refineries in the region. Traffic between Aktobe and Atyrau is increasingly being diverted to the northern Aktobe Oral Atyrau route, as the travel time is nearly the same despite an additional 500 km detour. Poor road connectivity has also become a key social issue as it has contributed to the growing rural urban income and wealth disparity in West Kazakhstan.

ADB assistance in the Kazakh transport sector has been largely successful. ADB started its transport operations in Kazakhstan in 2000. It approved the first multitranche financing facility for the CAREC Transport Corridor 1 (Zhambyl Oblast Section) Investment Program in 2008 with an aggregate amount not exceeding $700 million and completed it in 2015 with a rating of successful. ADB approved a second road subsector multitranche financing facility in 2010 for the CAREC Corridor 2 (Mangystau Oblast Sections) Investment Program with an amount not exceeding $800 million. Tranche 1 with a loan amount of $283.0 million was completed in 2015 and rated successful. Tranche 2 with a loan amount of $371.3 million was approved in 2012 and will be completed by the end 2019. ADB also approved project loans of (i) $95.0 million to finance the CAREC Corridor 1 (Taraz Bypass) Project in 2011, completed in 2015 with a successful rating, and (ii) $240.0 million in 2016 to reconstruct the 299 km Aktobe Makat road in 2016 and the project is ongoing.

ADB, in collaboration with other development partners, has jointly supported institutional restructuring and capacity development in the Kazakh transport sector. Support has focused on (i) separating policy making and planning from implementation of road works; (ii) developing a road asset management system; (iii) introducing results-based planning and monitoring, and modern transport information technologies; (iv) institutionalizing road safety audits; (v) enforcing control of traffic overloading; and (vi) expanding toll road operations. These interventions have been largely effective because of close and effective coordination and collaboration among the development partners and good government ownership. Such coordination will remain critical as the government continues its efforts related to road system modernization, efficient use of road assets, and further reduction in transport and logistic costs.

The project is aligned with ADB's Strategy 2030 (operational cluster 3 on infrastructure and economic connectivity) and supports four of its seven operational priorities: (i) addressing remaining poverty and reducing inequalities; (ii) accelerating progress in gender equality; (iii) tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability; and (iv) fostering regional cooperation and integration. Improving the project road is the government's top priority to improve connectivity in West Kazakhstan. The project is fully in line with ADB's country partnership strategy for Kazakhstan, 2017 2021, especially the strategy's objective to facilitate smooth trade across borders and establish regional and global value chains through exchanges of best practice and private sector development. The project also supports the CAREC Transport and Trade Facilitation Strategy 2020.

Impact More jobs created and Kazakhstan integrated into the regional and global economic system (Kazakhstan 2050 Strategy)
Project Outcome
Description of Outcome Efficient, reliable and safe movement of people and goods in the West Kazakhstan increased
Progress Toward Outcome Civil works - two packages for a total of 89 km were awarded on 17 November 2020. Both contractors mobilized.Consulting services - a construction supervision consultant and project management unit mobilized.
Implementation Progress
Description of Project Outputs

Aktobe-Kandyagash highway reconstructed to category I standard

Institutional capacity of KazAvtoZhol strengthened

Status of Implementation Progress (Outputs, Activities, and Issues) Two civil works contracts awarded.
Geographical Location Aktobe, Kandyagash
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The IEE has established that there are no significant environmental impacts that cannot be either totally prevented or adequately mitigated to levels acceptable national and international standards. Adequate mitigation measures were incorporated into project design and will be implemented through the EMP.
Involuntary Resettlement DDR identified that the project right of way is fully under state ownership and possession with no present and future land acquisition and resettlement impact. Due to these findings of the social due diligence, the project is categorized as C with the following additional measures being implemented: (i) public consultations should be conducted by the Contractor and Supervision Consultant prior to construction works; (ii) special condition provisions on safeguards should be added in bidding documents, where applicable; (iii) a full time social safeguards specialist at KazAvtoZhol should be onboard prior to Project implementation; (iv) training on social safeguards of staff of KazAvtoZhol and Contractor should be conducted by the Supervision Consultant prior to start of civil works; (v) strong Grievance Redress Mechanism should be effective during all project stages; (vi) KazAvtoZhol should ensure regular and close monitoring of the Project activities stating from project implementation with semiannual reporting to ADB and implementation of corrective measures if any; and (vii) Framework/Amendment to Host Country or other Agreement be signed with the Government in 2019.
Indigenous Peoples The project does not involve any distinct ethnic minority community in the project areas, so it does not trigger requirements on indigenous peoples under ADB's SPS 2009.
Stakeholder Communication, Participation, and Consultation
During Project Design Public consultations were conducted. Issues discussed included, but were not limited to protection of communities from construction and environmental disturbances, and of safety hazards to workers and the public during construction, temporary employment opportunities, and how villages along and off road can benefit from the Project.
During Project Implementation Public consultations will be conducted from time to time during the project implementation.
Business Opportunities
Consulting Services All consultants will be recruited according to ADB's New Staff Instructions for Borrower Administered Consulting Services, and also PAI 2.05.
Procurement All procurement of works will follow ADB's New Procurement Reform Framework.
Responsible ADB Officer Georget, Johan
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Transport and Communications Division, CWRD
Executing Agencies
JSC "NC "KazAvtoZhol"
[email protected]
8 Amman Street, Business Center "Milano"
Timetable
Concept Clearance 19 Oct 2018
Fact Finding 20 May 2019 to 24 May 2019
MRM 16 Jul 2019
Approval 27 Sep 2019
Last Review Mission -
Last PDS Update 08 Sep 2021

Loan 3829-KAZ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Sep 2019 17 Sep 2020 14 Dec 2020 30 Jun 2025 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 229.35 Cumulative Contract Awards
ADB 167.02 29 Sep 2021 134.57 0.00 89%
Counterpart 62.33 Cumulative Disbursements
Cofinancing 0.00 29 Sep 2021 52.93 0.00 35%

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Title Document Type Document Date
Central Asia Regional Economic Cooperation Corridors 1 and 6 Connector Road (Aktobe–Kandyagash) Reconstruction Project: Procurement Plan Procurement Plans Jul 2021
Guarantee Agreement (Ordinary Operations) for Loan 3829-KAZ: Central Asia Regional Economic Cooperation Corridors 1 and 6 Connector Road (Aktobe–Kandyagash) Reconstruction Project Guarantee Agreements Oct 2020
Amendment to the Loan Agreement (Ordinary Operations) for Loan 3829-KAZ: Central Asia Regional Economic Cooperation Corridors 1 and 6 Connector Road (Aktobe–Kandyagash) Reconstruction Project Loan Agreement (Ordinary Resources) Oct 2020
Loan Agreement (Ordinary Operations) for Loan 3829-KAZ: Central Asia Regional Economic Cooperation Corridors 1 and 6 Connector Road (Aktobe–Kandyagash) Reconstruction Project Loan Agreement (Ordinary Resources) Sep 2020
Central Asia Regional Economic Cooperation Corridors 1 and 6 Connector Road (Aktobe–Kandyagash) Reconstruction Project: Project Administration Manual Project/Program Administration Manual Sep 2019
Central Asia Regional Economic Cooperation Corridors 1 and 6 Connector Road (Aktobe–Kandyagash) Reconstruction Project: Gender Action Plan Gender Action Plans Sep 2019
Central Asia Regional Economic Cooperation Corridors 1 and 6 Connector Road (Aktobe–Kandyagash) Reconstruction Project: Report and Recommendation of the President Reports and Recommendations of the President Sep 2019
Fourth Health Sector Development Project - Additional Financing: Project Administration Manual Project/Program Administration Manual Jun 2019

Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.


Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Individual Consultant - Project Manager Individual - Consulting Closed 16 Apr 2021 22 Apr 2021
Individual Consultant - Project Manager Individual - Consulting Closed 25 Feb 2021 03 Mar 2021
Individual Consultant - Financial Management Specialist Individual - Consulting Closed 25 Feb 2021 03 Mar 2021
Individual Consultant - Road Engineer Individual - Consulting Closed 25 Feb 2021 03 Mar 2021
Individual Consultant - Social and Environmental Safeguards Specialist Individual - Consulting Closed 25 Feb 2021 03 Mar 2021
52286-KAZ: Central Asia Regional Economic Cooperation Corridors 1 and 6 Connector Road (Aktobe–Kandyagash) Reconstruction Project [AKRP/CW/OCB-01/Lot-01 (km 11-52); AKRP/CW/OCB-01/Lot-02 (km 52-100)] Invitation for Bids Closed 23 Aug 2019 08 Oct 2019
Construction Supervision Consultant Firm - Consulting Closed 20 Jun 2019 19 Jul 2019

Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
PROJECT MANAGER Loan 3829 09 Jun 2021 NURLANBEK OMIRBAYEV | 11/4 SATPAYEV STREET APT 30 010000 NUR-SULTAN CITY KAZAKHSTAN JSC "NC "KazAvtoZhol" 226,435.38 199,898.69
CONSTRUCTION SUPERVISION CONSULTANT Loan 3829 07 Jan 2021 DONGSUNG ENGINEERING CO., LTD. | 24 YANGJAE-DAERO 62-GIL SONGPA-GU, SEOUL, 05711 KOREA, REPUBLIC OF JSC "NC "KazAvtoZhol" 2,777,673.61 2,467,411.43
RECONSTRUCTION OF AKTOBE-KANDYAGASH ROAD KM52-100 Loan 3829 21 Dec 2020 JV "AKZHOL KURYLYS - AZVIRT LLC - ASSANA | 16 ARDAGER STREET, TAUSHYK VILLAGE, TAUSHYK RURAL DISTRICT TUPKARAGAN MANGIS KAZAKHSTAN JSC "NC "KazAvtoZhol" 48,413,337.89 48,232,905.52
RECONSTRUCTION OF AKTOBE-KANDYAGASH ROAD (KM11-52) Loan 3829 21 Dec 2020 JV "LLP SP SINEMIDASSTROY-TODINI CONSTRUZIONI | NURSULTAN NAZARBAYEV AVENUE BUILDING 184/1, 446, URALSK 090000 KAZAKHSTAN JSC "NC "KazAvtoZhol" 84,659,900.81 84,344,380.60