Public Disclosure Authorized East-West Roads Project (Almaty-Korgos Section): Western Europe - Western China International Transit Corridor EUROPE AND CENTRAL ASIA Kazakhstan Transport & ICT Global Practice IBRD/IDA Specific Investment Loan FY 2012 Seq No: 10 ARCHIVED on 08-Jun-2017 ISR28437 Implementing Agencies: Republic of Kazakhstan, Ministry of Investments and Development Public Disclosure Authorized Key Dates Key Project Dates Bank Approval Date:01-May-2012 Planned Mid Term Review Date:28-Dec-2012 Original Closing Date:30-Jun-2017 Effectiveness Date:14-Jun-2013 Actual Mid-Term Review Date:28-Dec-2012 Revised Closing Date:30-Jun-2017 Public Disclosure Authorized Project Development Objectives Project Development Objective (from Project Appraisal Document) The project development objectives (PDOs) are to increase transport efficiency along the section of the Western Europe-Western China Road Corridor within Almaty Oblast and to modernize highway management on sections of the Western Europe-Western China Road Corridor. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Public Disclosure Authorized Name Component 1: Upgrade and construction of the road section of the Western Europe-Western China Road Corridor within Almaty Oblast:(Cost $1252.00 M) Component 2: Modernize highway management of sections along the Western Europe-Western China Road Corridor:(Cost $4.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Moderate Moderate 6/8/2017 Page 1 of 7
Implementation Status and Key Decisions Overall implementation progress and quality of works is satisfactory. Total disbursements have reached US$543 million (51% of total Loan) as of June 1, 2017 with undisbursed balance of US$ 524 million. The project needs to be restructured following a request from the GoK to earmark the US$490 million savings to additional upgrade of their core road corridor network. The original cost estimates at the time of project preparation were based on the market analysis in Kazakhstan. The savings accrued from two main sources: (i) the depreciation of the Kazakhstan tenge, which lost about 100% of its value against the US dollar between 2012 and 2016 whereas the majority of the construction inputs was locally sourced; and (ii) cost-effective procurement and diligent contract management that ensured value-for-money and cost of construction below the estimates set at the appraisal. Concrete pavement works are completed on all 305 km of road section along the Lots 1C-6C. All remaining works (i.e. marking, signal posts, lighting poles, etc.) are expected to be completed by July 2017, which is the current closing date for the project. Full opening of the road with rest areas and bus stops is expected by September 2017. Safeguards compliance is rated moderately satisfactory because reclamation of some borrow pits is lagging behind schedule. The so-called "Kanapiya case" has been resolved. Project is in full compliance with financial conditions of the Legal Agreement including timely submission of interim unaudited financial reports and annual audited financial statements. Overall the progress on institutional development components during FY 2017 has been satisfactory. The outcome of the main components supporting the policy dialogue between the World Bank and the GoK during the past year can be summarized as follows: 1. Quality Charter: The Project team has recommended that the consulting firm Grusamar Ingenieria and CR focus on how the operation and maintenance along the Western China Western Europe could fully benefit from the Quality Charter concept. The team also recommended to take into consideration the gradual inflow of funds that will come from the implementation of the E-tolling strategy along the corridor. The consultants have recently submitted the interim report, which is being reviewed by the Bank and CR teams. 2. E-tolling: During the first phase of the assignment, CR with the help of consultants has completed technical design of the tolling system for the Almaty-Khorgos section, for which all approvals from Government agencies have been received. CR now embarks on a second phase which objective is to procure civil works for implementation of the tolling system on Almaty-Khorgos. During the third phase, CR will introduce tolling on other sections of the Western Europe Western China corridor out of the EWRP proceeds once the project will be restructured. Since neither feasibility study nor detailed design documents have been prepared for the rest of the corridor yet, the Bank and the CR teams are working jointly on the procurement strategy, so that contractors could be responsible for the design, supply and installation of the system. A grant from a Korean Green Growth Trust Fund was secured for 2017-2018 to support the GoK to implement its tolling strategy, including the development of a financial model testing different levels of tariffs, taking into account vehicle emission class and social aspects (willingness to pay by urban and village people), so that policy makers can make informed decisions to balance political goals and public acceptability.the government sees revenues from tolled roads as additional support to cover the operation and maintenance cost, therefore it decided to toll up to 25% of the republican network by 2023. Electronic tolling can help improve traffic management and planning through collecting and providing valuable and timely information to road users, improve trade facilitation through interoperable systems between neighboring countries, and improve road safety. The Bank is supporting CR and KAZ in the planning and implementation of the e-tolling system on a wide range of emerging and critical topics, including willingness-to-pay, financial modelling, and communication strategy. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- Moderate Moderate Macroeconomic -- Moderate Moderate Sector Strategies and Policies -- Moderate Moderate Technical Design of Project or Program -- Low Low Institutional Capacity for Implementation and Sustainability -- Moderate Moderate 6/8/2017 Page 2 of 7
Fiduciary -- Low Low Environment and Social -- Moderate Moderate Stakeholders -- Low Low Other -- Moderate Moderate Overall -- Moderate Moderate Results Project Development Objective Indicators Transport Efficiency: Vehicle Operating Costs (Amount(USD), Custom) Value 0.26 0.26 0.24 0.23 Transport Efficiency: Travel time (Hours, Custom) Value 5.00 5.00 4.00 3.00 Modernization of highway management: Introduction of sound operation and maintenance practices along the WE-WC Corridor. (Kilometers, Custom) Value 0.00 0.00 300.00 600.00 Modernization of highway management: Financing gap for operations and maintenance activities along the WE-WC Corridor. (Percentage, Custom) 6/8/2017 Page 3 of 7
PHINDIRITBL Value 50.00 50.00 30.00 20.00 Roads in good and fair condition as a share of total classified roads (Percentage, Custom) Value 70.00 70.00 90.00 95.00 Size of the total classified network (Kilometers, Custom Supplement) Value 2,660.00 2,660.00 2,660.00 2,660.00 Overall Comments Intermediate Results Indicators Roads constructed, non-rural (Kilometers, Custom) Value 0.00 170.00 300.00 305.00 Date 12-Jan-2012 24-Jun-2016 05-Jun-2017 30-Jun-2020 6/8/2017 Page 4 of 7
PHINDIRITBL PHINDIRITBL PHINDIRITBL PHINDIRITBL Kazakhavtodor gradually operates and maintains portions of the SWRP section of the WE-WC Road Corridor (Kilometers, Custom) Value 0.00 0.00 0.00 600.00 Date 25-Jan-2012 24-Jun-2016 24-Jun-2016 30-Jun-2020 CR and Kazakhavtodor Staff familiar with new operation and maintenance methods (Number, Custom) Value 0.00 100.00 300.00 300.00 Date 01-Mar-2012 03-Jun-2015 05-Jun-2017 30-Jun-2020 User survey --the number of users the Motorway Management Unit has interviewed (Number, Custom) Value 0.00 0.00 200.00 500.00 Length of the road network for which new user-pay principles (e.g., tolling) are agreed upon. (Kilometers, Custom) Value 0.00 750.00 750.00 300.00 Overall Comments 6/8/2017 Page 5 of 7
Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P128050 IBRD-81560 Effective USD 1,068.00 1,068.00 0.00 543.33 524.67 51% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P128050 IBRD-81560 Effective 01-May-2012 10-Oct-2012 14-Jun-2013 30-Jun-2017 30-Jun-2017 Cumulative Disbursements Restructuring History There has been no restructuring to date. 6/8/2017 Page 6 of 7
Related Project(s) There are no related projects. 6/8/2017 Page 7 of 7