South-West Corridor Road Project

Project Description

The EBRD is considering making a loan for the rehabilitation and upgrading of the 102 km road section between the Russian border and the city of Aktobe, which is part of “Western Europe – Western China” Corridor.

The project is part of the Government’s effort to upgrade the western Europe – western China international transport corridor. Other road sections of this corridor will be rehabilitated by attracting parallel financing from the World Bank, Asian Development Bank, Islamic Development Bank and Kazakhstan. Improvement of this corridor will facilitate the transit of goods and passengers between Kazakhstan, China, Russia and Europe and develop regional integration.

Transition Impact

The transition impact of the proposed Project is derived from its support of the Government of Kazakhstan efforts to widen private sector involvement in the road sector and increase its effectiveness.

The two specific transition objectives of the Project are:

(i) preparation and launch of the first road sector PPP following international best practice; and

(ii) in the area of routine and winter maintenance contracting, introduction of service level agreements to promote further the development of client – supplier relationships in the road sector, and preparation of the sector for the introduction of performance-based maintenance contracts.

The Client

The Borrower is the Republic of Kazakhstan. The Project will be implemented by the Committee for Roads at the Ministry of Transport and Communications.

EBRD Finance

Estimated USD 180 million.

Project Cost

Estimated USD 207 million.

Environmental Impact

Categorised B/1 under the 2003 Environmental Policy, requiring an environmental analysis and audit, covering environmental, health and safety, labour and community issues. The project involves mainly refurbishment of existing roads with some short re-alignments with the objective to improve road safety. The Environmental and Social due diligence (ESDD) carried out by independent consultants established detailed baseline environmental and social conditions of the project site, assessed the potential environmental and social impacts of the project and developed an Environmental and Social Management Plan (ESMP) comprising mitigation and monitoring measures. The ESMP addresses typical impacts associated with road rehabilitation projects, such as land use change, noise, atmospheric and water pollution, and recommends specific measures to mitigate the environmental and social risks and impacts of the project as identified in the ESDD.  Alternative location, design and construction options for curve straightening, grade levellings, bypasses, flyovers, bridges, viaducts, interchanges and local access roads were considered under the technical due diligence.   

The loan became effective on 29 September 2009 after the Client confirmed their approval of the ESMP.  The construction works started in April 2011. For the monitoring of the project, an international construction supervision consultant was assigned. An international Project Management Consultant (PMC) was also assigned to assist the Client in managing the project, including its environmental and social aspects, and to supervise the implementation of the ESMP.

A Kazakh CSO raised concerns regarding resettlement and public consultation issues associated with the project in 2009 and 2010, which were addressed by EBRD to the satisfaction of the CSO. No further issues of concern were raised by any stakeholders. Considering the nature of the project (refurbishment of roads with minor realignments) and the expertise of consultants engaged to monitor the project and assisting the client in the implementation of the ESAP, EBRD’s environmental and social monitoring focused on reviewing the annual environmental and social reports (AESR) prepared by the Client and project progress reports prepared by the construction supervision and project management consultants.

A complaint (2014/04) was registered with the Project Complaint Mechanism (PCM) on 24 November 2014. The Complaint makes allegations of defects in project implementation (including, among others, absence of off-ramps for convenient access, lighting along certain sections of the road, and crossings for pedestrians, cattle and agricultural machinery as well as damages to public property and toilet facilities) , which it states has caused harm to the residents along the road corridor. The Complaint also provides a list of measures that the Complainant thinks should have been included in the project and also raises concerns about the lack of the Bank’s response to its communication on these issues. In late 2014, the Bank appointed an independent monitoring consultant to review the status of the ESAP and the issues raised in the Complaint, and a monitoring visit to the project was carried out in December 2014. The review of the ESAP implementation concluded that most actions in the ESAP had been implemented. The review did not identify any major issues with regard to the issues raised in the Complaint and concluded that design requirements had been fulfilled as required under the applicable regulations. A further road safety audit will be carried out in Q3 2015 to identify and address any road safety issues related to the project.

Technical Cooperation

USD 1.5 million provided by Japan/Europe Cooperation Fund (managed by EBRD) to assist the Borrower with the preparation of a PPP concept paper and subsequent transaction advisory services for a pilot PPP project preparation.

Amount and donor to be confirmed for advisory services in the area of routine maintenance contracting.

 

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