The World Bank

Document of The World Bank

FOR OFFICIAL USE ONLY

Report No: RES15150

RESTRUCTURING PAPER

ON A

PROPOSED PROJECT RESTRUCTURING OF SERBIA ROAD REHABILITATION AND SAFETY PROJECT LOAN IBRD-82550 APRIL 26, 2013

TO THE

REPUBLIC OF SERBIA –

December 23, 2014

Transport and ICT Global Practice Europe and Central Asia

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

ABBREVIATIONS AND ACRONYMS

DLI Disbursement Linked Indicator DLP Defects Liability Period EBRD European Bank for Reconstruction and Development EIB European Investment Bank EIRR Economic Internal Rate of Return EMP Environmental Management Plan FY Fiscal Year GoS Government of Serbia PAD Project Appraisal Document PDO Project Development Objective PERS Public Enterprise Roads of Serbia PBMC Performance Based Maintenance Contract WB World Bank

Regional Vice President: Laura Tuck Country Director: Ellen A. Goldstein Senior Global Practice Director Pierre Guslain Practice Manager: Juan Gaviria Task Team Leader: Moustafa Baher El-Hefnawy

SERBIA Road Rehabilitation and Safety Project

CONTENTS

DATASHEET Page 4

ANNEX 1: RESULTS FRAMEWORK AND MONITORING Page 9 ANNEX 2: REVISED IMPLEMENTATION PROGRAM Page 12 ANNEX 3a: ORIGINAL DLI TARGETS Page 18 ANNEX 3b: REVISED DLI TARGETS Page 20 ANNEX 4: SYSTEMATIC OPERATIONAL RISK RATING TOOL Page 22

3 DATA SHEET Serbia SERBIA ROAD REHABILITATION AND SAFETY PROJECT (P127876) EUROPE AND CENTRAL ASIA ECCU4

Report No: RES15150

Basic Information Project ID: P127876 Lending Instrument: Specific Investment Loan Regional Vice President: Laura Tuck Original EA Category: Partial Assessment (B) Country Director: Ellen A. Goldstein Current EA Category: Partial Assessment (B) Senior Global Practice Pierre Guislain Original Approval Date: 26-Apr-2013 Director: Practice Juan Gaviria Current Closing Date: 31-Oct-2018 Manager/Manager: Moustafa Baher El- Team Leader: Hefnawy

Borrower: Republic of Serbia Responsible Public Enterprise Roads of Serbia Agency:

Restructuring Type Form Type: Full Restructuring Paper Decision Authority: Country Director Approval Restructuring Level 2 Level:

Financing ( as of 05-Dec-2014 ) Key Dates Approval Effectiveness Original Revised Project Ln/Cr/TF Status Signing Date Date Date Closing Date Closing Date P127876 IBRD-82550 Effective 26-Apr-2013 27-Nov-2013 24-Oct-2014 31-Oct-2018 31-Oct-2018 Disbursements (in Millions) % Cancelle Disburse Undisbur Project Ln/Cr/TF Status Currency Original Revised Disburse d d sed d P127876 IBRD-82550 Effective USD 100.00 100.00 0.00 0.23 99.75

Policy Waivers

4 Does the project depart from the CAS in content or in other significant Yes [ ] No [ X ] respects? Does the project require any policy waiver(s)? Yes [ ] No [ X ]

A. Summary of Proposed Changes The proposed Level Two restructuring of the Road Rehabilitation and Safety Project (IBRD 8255-YF) is based on a request from the Borrower (letter dated November 28, 2014) to address the needs resulting from the massive floods which occurred during the period May 11-17, 2014 creating large devastation in the country and to revise the priorities for road network rehabilitation after the floods. The restructuring involves the following:

(i) change in the project implementation schedule due to the flood damage and consequently the change in the rehabilitation priorities to reflect the network condition; (ii) extension of the Loan Closing Date by 14 months to December 31, 2019, to compensate for the multiple delays in Project effectiveness associated with government changes and parliamentary elections and the need to prioritize works as part of flood rehabilitation; (iii) update of the Results Framework to reflect the revised Project implementation schedule; (iv) changes to the Disbursement Linked Indicators (DLIs) to reflect the revised Project implementation schedule; (v) changes to the annual financing percentages for particular road segments, to reflect the reduced availability of financing from Public Enterprise Roads of Serbia (PERS) during Year 1 of implementation due to the floods; Government of Serbia (GoS) will increase its financing percentage during later years to achieve the originally-defined counterpart funding participation by the end of the project; and (vi) additional procurement methods to allow for the use of Design and Build for first year program which covers priority works contracts under Component 1. Change in Implementing Agency Yes [ ] No [ X ] Change in Project's Development Objectives Yes [ ] No [ X ] Change in Results Framework Yes [ X ] No [ ] Change in Safeguard Policies Triggered Yes [ ] No [ X ] Change of EA category Yes [ ] No [ X ] Other Changes to Safeguards Yes [ ] No [ X ] Change in Legal Covenants Yes [ ] No [ X ] Change in Loan Closing Date(s) Yes [ X ] No [ ] Cancellations Proposed Yes [ ] No [ X ] Change to Financing Plan Yes [ ] No [ X ] Change in Disbursement Arrangements Yes [ X ] No [ ] Reallocation between Disbursement Categories Yes [ ] No [ X ] Change in Disbursement Estimates Yes [ X ] No [ ] Change to Components and Cost Yes [ X ] No [ ] Change in Institutional Arrangements Yes [ ] No [ X ] Change in Financial Management Yes [ X ] No [ ] Change in Procurement Yes [ X ] No [ ]

5 Change in Implementation Schedule Yes [ X ] No [ ] Other Change(s) Yes [ ] No [ X ] Appraisal Summary Change in Economic and Financial Analysis Yes [ X ] No [ ] Appraisal Summary Change in Technical Analysis Yes [ X ] No [ ] Appraisal Summary Change in Social Analysis Yes [ ] No [ X ] Appraisal Summary Change in Environmental Analysis Yes [ ] No [ X ] Appraisal Summary Change in Risk Assessment Yes [ ] No [ X ]

B. Project Status The project was approved in April 2013, and became effective on October 24, 2014. Effectiveness delays resulted from multiple Government changes and substantial flood damage of project roads. Implementation is about to start, although the procurement process for Year 1 Works (the priority works) is well advanced, contractor selection processes are completed, and works are expected to start shortly after the re-structuring. The selection of the supervision consultant and technical assistance to the Project Implementation Team (PIT) is also well advanced. The supervision consultant is expected to be in place by January 2015. Project Objectives continue to be achievable.

C. Proposed Changes

Development Objectives/Results Project Development Objectives Original PDO The proposed PDO is to improve the condition and safety of the National Road Network for road users by supporting the Republic of Serbia in the implementation of the first phase of its National Road Network Rehabilitation Program. Change in Project's Development Objectives Change in Results Framework Explanation: The target values for the intermediate outcome indicators have been revised to reflect the revised implementation schedule and closing date of Dec 31, 2019. Target dates for the PDO indicators and intermediate indicators, dependent on civil works completion, have been revised to reflect the new priority delivery schedule. In addition, the baseline value and target value for the indicator: Roads in good and fair condition as a share of total National Roads were added; and the baseline and target values for the core indicator: Size of total classified network were revised to reflect new network definitions.

Financing Change in Loan Closing Date(s) Explanation: The Loan Closing date will be extended from October 31, 2018 to December 31, 2019, reflecting delays in effectiveness and the need to prioritize works as part of flood rehabilitation. The extension will also allow the inclusion of part of the Defects Notification Period under the extended project implementation period. Ln/Cr/T Status Original Closing Current Closing Proposed Closing Previous Closing

6 F Date Date Date Date(s) IBRD- Effective 31-Oct-2018 31-Oct-2018 31-Dec-2019 31-Oct-2018 82550 Change in Disbursement Arrangements Explanation: Due to the large demands on the government’s budgetary resources following the floods, GoS will not co- finance the first year priority works under Component 1 of the Project. So for the first year priority works, only loan funds will be used. The revised counterpart contribution from GoS will be increased during later years in the Project so that the originally defined counterpart participation is achieved by the end of the project. Disbursement Estimates Change in Disbursement Estimates Explanation: The change in the disbursement estimates is to reflect the delays in Loan Effectiveness and consequently implementation; and the change in the first year program due following the severe May floods. Fiscal Year Current (USD) Proposed (USD) 2013 0.00 0.00 2014 4,000,000.00 0.00 2015 25,000,000.00 2,000,000.00 2016 24,000,000.00 30,000,000.00 2017 21,000,000.00 28,000,000.00 2018 15,000,000.00 20,000,000.00 2019 11,000,000.00 20,000,000.00 Total 100,000,000.00 100,000,000.00

Components Change to Components and Cost Explanation: A minor change is proposed to Component 1 to reflect the change in priorities for the road sections to be rehabilitated as a result of the flood damage. The proposed cost for Component 1 will not change, and 37 sections will be co-financed by the Bank and EIB (within the range of 35 – 40 sections identified during appraisal), with a total length of 795 km (instead of 800 – 810km). The total length of sections of 795 km co-financed by the Bank and EIB include125 km of priority works and 670 km of other rehabilitation works. This component will continue to support the incorporation of road safety measures in the design of the Project's road sections and subsequent institutionalization of road safety practices. No changes will take place to Components 2 or 3. Current Component Proposed Component Current Cost Proposed Action Name Name (US$M) Cost (US$M) Road Rehabilitation and Safety Investments (264 357.72 357.72 Revised million Euros)

7 Institutional Institutional Strengthening (3.10 Strengthening (3.10 4.20 4.20 million Euros) million Euros) Project Detailed Design, Project Detailed Design, Supervision, Supervision, Management and Management and 25.56 25.56 Monitoring (18.4 million Monitoring (18.4 million Euros) Euros) Total: 387.48 387.48

Other Change(s) Change in Financial Management Explanation: Upon the Client's request, two different designated accounts will be used: one for EIB and one for the World Bank in order keep better track of disbursements and expenditures and simplify financial management and monitoring. Change in Procurement Explanation: For the selection of designers and construction firms for the first year priority works, the bidding documents and contract for design and build approach, and Limited International Bidding (LIB) procurement method will be used to speed up the selection process. Invitations to bid will be sent to firms already mobilized in the vicinity of the priority works. LIB is in full compliance with the Bank’s Procurement Guidelines, and will be only used for the priority works contracts (first year contracts), all of which will be subject to prior review. The Bank team is fully satisfied with the procurement process and has agreed to the use of LIB in July 2014, and has provided its no objection to the first works contracts on November 5, 2014. Change in Implementation Schedule Explanation: Due to the changed rehabilitation priorities as a result of flood damage, the rehabilitation schedule is proposed to be changed. The changes reflect the need to undertake priority works in Year 1, and the need to re-distribute the way in which road sections are co-financed across the extended five year implementation period schedule. Year 5 is also proposed to be used to cover some of the obligations under the Defects Notification Period.

Change(s) in Appraisal Summary Appraisal Summary Change in Economic and Financial Analysis Explanation: Due to the change in priorities following the May floods, the planned rehabilitation of certain road sections was advanced from the latter years of the Program to the first year. The Economic Internal Rate of Return (EIRR) of these sections varies between 16% and 44%. Appraisal Summary Change in Technical Analysis Explanation: The nature of the works will remain the same but the sections that will be rehabilitated under the first year

8 program are different due to the change in the rehabilitation priorities following the May floods as explained under Components.

9 ANNEX 1: Results Framework and Monitoring Road Rehabilitation and Safety Project

Project Development Objective (PDO):

To improve the condition and safety of the National Road Network for road users by supporting the Republic of Serbia in the implementation of the first phase of its National Road Network Rehabilitation Program.

Revised Project Development Objective: n/a

Original PDO Level Results D=Dropped Cumulative Target Values** Responsibility C=Continue Unit of Data Source/ Indicators* N= New Baseline Frequency for Data Core Measure Methodology R=Revised 12/2014 12/2015 12/2016 12/2017 10/2018 12/2018 12/2019 Collection Reduction in road traffic accidents with fatalities on the Percenta PERS and improved roads in the first 100% 100.00 100.00 95.00 93.00 90.00 Annual Police reports ge Police phase of NRNRP

Improvement in road conditions measured by a reduction in the Performance average IRI for the roads in the IRI 5.42 5.56 4.41 3.53 2.5 2.5 Annual PERS Audit Report first phase of NRNRP

Revised PDO Level Results Indicators Reduction in road traffic accidents with fatalities on the Percenta PERS and 100% 100.00 100.00 100.00 95.00 93.00 90.00 Annual Police reports improved roads in the first ge Police phase of NRNRP Improvement in road conditions measured by a reduction in the Performance IRI 5.56 5.56 4.81 4.72 3.16 2.8 2.5 Annual PERS average IRI for the roads in the Audit Report first phase of NRNRP

ORIGINAL INTERMEDIATE RESULTS INDICATORS

Road Survey Road Condition Survey Kilomete 0.00 0.00 2000 5000 7000 9000.00 Annual PERS Completed on National Roads rs Consultant Report Implementation of a circular for None, Impleme the preparation of rehabilitation except for Implem ntation programs based on socio- Text on IFI Annual PERS entation of a PERS economic & regional funded circular considerations projects PBMC Contracts in Kilomete Performance 600 1,500 2,000 3,000 Annual Implementation rs Audit Report PERS Performance Kilomete Roads rehabilitated, Non-rural 0 119 543 834 1,000 1,125 Annual Audit Report, rs PERS PERS Safety Inspection of National PERS, Kilomete Roads beyond the first phase of 0 200 400 700 1,000 Annual Performance rs PERS NRNRP Audit Report Estimated

based on 2008. Roads in good and fair Mid Term Road Percenta condition as a share of total & End of Conditions ge PERS National Roads Project Survey. Updated at Mid Term Revised Intermediate Result Indicators Road Survey Consultant Road Condition Survey Kilomete 0.00 0.00 0.00 2000 5000 7000 9000 Annual Report PERS Completed on National Roads rs

Implementation of a circular for None, Implem the preparation of rehabilitation except for Implem entation programs based on socio- Text on IFI Annual PERS PERS entation of a economic & regional funded circular considerations projects

11 PBMC Contracts in Kilomete Performance 600 600 600 600 1,500 2,000 3,000 Annual PERS Implementation rs Audit Report

Performance Kilomete Roads rehabilitated, Non-rural 0 110 253 453 820 1,100 Annual Audit Report, PERS rs PERS

Safety Inspection of National PERS, Kilomete Roads beyond the first phase of 0 200 400 700 1000 Annual Performance PERS rs NRNRP Audit Report

Estimated based on 2008. Roads in good and fair Road Percenta condition as a share of total 58.80 58.8 59.20 59.80 61.00 62.00 63,50 Annual Conditions PERS ge National Roads Survey. Updated at Mid Term

Size of the total classified Kilomete 16,900 16,900 16,900 16,900 16,900 16,900 Annual PERS PERS network rs

ANNEX 2: REVISED IMPLEMENTATION PROGRAM

Road Rehabilitation and Safety Project

Year 1 – Emergency (Priority) Works

Budget for Budget for Category Category Length of Original year of Original sub- designing and techical control TOTAL No. Section 2012 2013 rehabilitation (km) implementatn project implementation (mil and supervision (mil EUR) EUR) (mil EUR)

(М-4), Lazarevac - Aranđelovac - Topola 1 IB 23 IB 27 8.713 2014 (I) IBRD/EIB/RS 2.973 0.094 3.067 section: Aranđelovac 4 (Orašac) – Krćevac

(М-4), Lazarevac - Aranđelovac - Topola 4 IB 23 IB 27 17.607 2014 (I) IBRD/EIB/RS 5.381 0.171 5.552 section: Lazarevac 4 - Aranđelovac 1

(М-4) Loznica - Valjevo - Lajkovac 10 IB 23 IB 27 27.018 2014 (I) IBRD/EIB/RS 8.918 0.283 9.200 section: Zavlaka 2 (Likodra) – Pričevići (М-4) Loznica - Valjevo - Lajkovac 12 IB 23 IB 27 20.279 2015 (II) IBRD/EIB/RS 6.253 0.198 6.451 section: Loznica 5 - Zavlaka 2 (Likodra) (М-4) Šabac - Loznica - M.Zvornik, section: Mali Zvornik - IB 21 IB 26 14.150 2015 (II) IBRD/EIB/RS 4.756 0.151 4.907 Banja Koviljača 12 (М-19.1) Mali Zvornik - Rogačica - Užice, section: Mali II 144 IB 28 13.526 2016 (III) IBRD/EIB/RS 5.746 0.182 5.928 Zvornik - Ljubovija, from km 28+160 to km 41+686 (М-19.1) Mali Zvornik - Rogačica - Užica 25 II 144 IB 28 section: Mali Zvornik – Ljubovija, from km 4+540 to km 23.620 2016 (III) IBRD/EIB/RS 11.492 0.364 11.857 28+160 TOTAL I year - Emergency Works IBRD/EIB 124.913 45.518 1.443 46.961

Year 1 Works

IBRD/EIB/ W 2 IB 27 IB 39 М-9 Vlasotince - Svođa 12.510 2014 (I) 5.818 0.145 0.201 0.015 6.179 RS

IBRD/EIB/ W 5 IB 13 IB 21 М-21 Irig 2 (Vrdnik) - Ruma 1 (highway) 15.245 2014 (I) 5.546 0.139 0.191 0.014 5.890 RS

IBRD/EIB/ W 6 IA 4 IB 23 М-5 Užice 3 - Kratovska Stena 37.028 2014 (I) 11.500 0.288 0.397 0.029 12.213 RS

IBRD/EIB/ W 7 IB 16 IB 25 М-23 Topola 2 - Kragujevac 5 29.500 2014 (I) 8.673 0.217 0.299 0.022 9.211 RS

IBRD/EIB/ W 8 IB 13 IB 21 М-21.1 Požega - Ivanjica 40.342 2014 (I) 10.270 0.257 0.354 0.026 10.907 RS

IBRD/EIB/ W 11 IB 14 IB 35 М-25 Kladovo - Brza Palanka 23.565 2014 (I) 9.000 0.225 0.311 0.023 9.558 RS

E 4 IA 4 IB23/28 М-21 Kneževići - Bela Zemlja - Užice 3 15.171 2014 (I) EBRD 6.071 0.152 0.209 0.015 6.447

E 6 IB 26 IB 29 М-8 Prijepolje - Sjenica 3 (Merdare) 11.300 2014 (I) EBRD 5.415 0.135 0.187 0.014 5.751

W Highway Е-75 (М-22), Belgrade - Novi Sad, rehabilitation IBRD/EIB/ 5.500 2014 (I) 2.692 0.093 2.785 11a of pavement from km 108+000 - km 117+000, L=5.5 km RS W Roundabout on the Novi Pazar bypass and the sate road IB IBRD/EIB/ 0.500 2014 (I) 0.300 0.010 0.310 11b 26 (М-8) RS I year - IBRD/EIB/RS (regular part of the Project) 190.661 65.285 1.557 2.252 0.156 69.250

Year 2 Works

Year 3 - Works

Length of Budget for Budget for Technical Category Category Original year of Original Supervis'n TOTAL No. Section rehabilitatn works (mil designing (mil control (mil 2012 2013 implementatn sub-project (mil EUR) (mil EUR) (км) EUR) EUR) EUR) IBRD/EIB/ 20 IB 19 IB 15 М-3 Vrbas 3 (Bačko Dobro Polje) - Srbobran 1 (Feketić) 10.708 2016 (III) 3.282 0.082 0.113 0.008 3.485 RS IBRD/EIB/ 21 II 150 IB 27 М-4 Markovac 1 (highway) - Svilajnac 1 (Kusiljevo) 6.530 2016 (III) 2.215 0.055 0.076 0.006 2.352 RS IBRD/EIB/ 22 II 128 IB 34 М-25.1 Braničevo 2 (Tribrode) - Bratinac 1 (Nabrđe) 31.870 2016 (III) 8.731 0.218 0.301 0.022 9.272 RS IBRD/EIB/ 23 IB 15 IB 22 М-22 Ušće - Raška 2 32.253 2016 (III) 7.828 0.196 0.270 0.020 8.313 RS IBRD/EIB/ 24 IB 13 IB 21 Р-117 Ivanjica - Sjenica 1 (Sjeničko jezero) 37.500 2016 (III) 11.839 0.296 0.408 0.030 12.573 RS М-24 Požarevac 4 - Zabrega (Voževac) (19.532km) IBRD/EIB/ 26 IB 22 IB 33 35.287 2016 (III) 11.451 0.286 0.395 0.029 12.161 М-24 Zabrega (Voževac) - Lješnica (15.755км) RS IBRD/EIB/ 27 IB 13 IB 21 М-21 Kosjerić 1 (Selo) - Požega 25.425 2016 (III) 9.296 0.232 0.321 0.023 9.872 RS IBRD/EIB/ 29 IB 15 IB 22 М-22 Raška 2 - Novi Pazar 3 (Vanja) 17.872 2016 (III) 4.476 0.112 0.154 0.011 4.754 RS IBRD/EIB/ 30 IB 27 IB 39 М-9 Svođe - Babušnica 21.358 2016 (III) 9.553 0.239 0.330 0.024 10.145 RS IBRD/EIB/ 31 IB 13 IB 21 Р-117 Ivanjica - Sjenica 1 (Sjeničko Jezero) 23.978 2016 (III) 8.404 0.210 0.290 0.021 8.925 RS IBRD/EIB/ 32 II 130 160 Р-216 Ćuprija 4 - Despotovac 1 (Vojnik) 22.425 2016 (III) 8.108 0.203 0.280 0.020 8.611 RS IBRD/EIB/ 33 IB 22 IB 33 М-24 Negotin 4 - SR/BUL (Bregovo) 12.779 2016 (III) 4.378 0.109 0.151 0.011 4.649 RS IBRD/EIB/ 34 IB 11 IB 13 М-24 Zrenjanin 8 (Aradac) - Ečka 8.529 2016 (III) 2.822 0.071 0.097 0.007 2.997 RS III year - IBRD/EIB/RS (regular part of the Project) 286.514 92.383 2.310 3.187 0.231 98.111

Year 4 - Works

ANNEX 3a: ORIGINAL DLI TARGETS

Road Rehabilitation and Safety Project

Total disbursement Disbursement as 12/2014 12/2015 12/2016 12/2017 amount a percent of total (million loan Euros) 1. DLI 1: Road Rehabilitation and Safety DLI 1.1 DLI 1.2 DLI 1.3 DLI 1.4

Km of roads rehabilitated and 68 358 702 807 safety measures incorporated under Project (cumulative) Disbursement amount due (million Euros) / percent 11.25 10.08 9.05 3.99 34.375 46.58%

2. DLI 2: Road safety Actions DLI 2A.1 DLI 2A.4 DLI 2A.5 Road Safety DLI 2A.3 750 km inspected 1000 km Inspection 500 km inspected DLI 2A: Road safety inspection & inspected & 700 Contract Signed & 250 km safety contract signing; and km of roads 500 km safety km safety measures covered by road safety inspection DLI 2A.2 measures measures implemented and low cost road safety measures 250 km implemented implemented implemented (cumulative) inspected

DLI 2B.1 DLI 2B.2 20 persons awareness DLI 2B : Capacity building and trained to campaigns in 20 awareness campaigns undertake road schools in the safety vicinity of the audit/inspection Project’s roads Disbursement amount due 5.63 5.04 4.53 2.00 17.19 23.29% (million Euros) / percent

3. DLI 3 Maintenance Management Reforms DLI 3.1 DLI 3.3 DLI 3.4 DLI 3.6 Adoption of PBMC for 1500 PBMC for an PBMC for an revised km competitively additional 500 additional 1000 maintenance & tendered km competitively km competitively rehabilitation tendered; tendered design . standards; DLI 3.5 DLI 3.7 PBMC for 1500 PBMC for a total DLI 3.2 km in of 2,000 km in Preparation of implementation implementation strategic plan for the introduction of PBMC

Disbursement amount due (million Euros) / percent 5.63 5.04 4.53 2.00 17.19 23.29%

Total Disbursement 22.51 20.16 18.11 7.98 68.75 93.16%

ANNEX 3b: REVISED DLI TARGETS

Road Rehabilitation and Safety Project

Total Disbursement Disbursement 12/2018 as a Amount 12/2015 12/2016 12/2017 percentage of extension (million total loan Euros) 1. DLI 1: Road Rehabilitation & DLI 1.1 DLI 1.2 DLI 1.3 DLI 1.4 Safety

Km of road rehabilitated and safety measures incorporated under the 125 203 576 795 Project (cumulative)

Disbursement amount due (million 13.87 11.38 7.34 1.78 34.38 46.58% Euros) / percept

2. DLI 2: Road safety actions DLI 2A: Road safety inspections DLI 2A.1 DLI 2A.2 DLI 2A.3 DLI 2A.4 contract signing: and km of roads Road Safety 750 km inspected 1,000 km inspected 700 km safety covered by road safety inspection inspection Contract & 250 km safety & 500 km safety measures and low cost road safety measures Signed measures measures implemented implemented (cumulative) implemented implemented

DLI 2B: Capacity building and DLI 2B.1 DLI 2B.2 awareness campaigns 20 persons awareness certified to do road campaigns in 20 safety schools in vicinity audit/inspection of project roads

Disbursement amount due (million 6.93 5.69 3.67 0.89 17.19 23.29% Euros) / percent

3. DLI 3: Maintenance DLI 3.1Adoption of Management reforms revised maintenance & rehabilitation design standards; DLI 3.2 Preparation DLI 3.4 DLI 3.6 of strategic plan for PBMC for an PBMC for an the introduction of additional 1,000 km additional 1,0500 PBMC; competitively km competitively tendered; tendered; DLI 3.3 DLI 3.5 DLI 3.7 PBMC for 1,000 PBMC for 1,000 PBMC for an km competitively km in additional 1,000 km tendered implementation in implementation Disbursement amount due (million 6.93 5.69 3.67 0.89 17.19 23.29% Euros) / percent TOTAL Disbursement amount 27.734 22.762 14.685 3.569 68.75 93.16%

ANNEX 4: Systematic Operations Risk-rating Tool (SORT) Serbia: ROAD REHABILITATION AND SAFETY PROJECT (P127876) Stage: Restructuring

Risks

Risk Category Rating at Approval Previous Rating Current Rating

Political and Governance  -- moderate  -- moderate  -- substantial Macroeconomic  -- substantial  -- substantial  - substantial Sector Strategies and Policies  -- substantial  -- substantial  -- substantial Technical Design of Project or Program  --substantial  -- substantial  -- substantial Institutional Capacity for Implementation and --moderate -- moderate --moderate Sustainability    Fiduciary  --moderate  -- moderate  -- moderate Environment and Social  -- moderate  - moderate  -- moderate Stakeholders  --low  -- low  -- low Other  -- -  -- -  -- - Overall  --moderate  --moderate  -- moderate