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Technical Assistance Consultant's Report Armenia: Preparing the North-South Road Corridor Development Project

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Technical Assistance Consultant's Report Armenia: Preparing the North-South Road Corridor Development Project Technical Assistance Consultant’s Report Project Number: 7208-ARM May 2010 Armenia: Preparing the North-South Road Corridor Development Project Prepared by PADECO Co., Ltd. For Asian Development Bank 6 ADB Avenue, Mandaluyong City Philippines This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design. Asian Development Bank TA7208-ARM Ministry of Transport and Communication Republic of Armenia Preparing the North-South Road Corridor Development Project VOLUME I MFF Framework FINAL REPORT May 2010 TA7208-ARM Preparing the North-South Road Corridor Development Project Final Report PADECO Co., Ltd. Volume I VOLUME I MFF FRAMEWORK CONTENTS Page EXECUTIVE SUMMARY SECTION 1 INTRODUCTION ........................................................................................................................... 1 1.1 Study Background .............................................................................................................. 1 1.2 Report Structure ................................................................................................................. 2 SECTION 2 NATIONAL ECONOMY ................................................................................................................. 3 2.1 Introduction ......................................................................................................................... 3 2.2 Economic Development ..................................................................................................... 3 2.3 Economic Forecast ............................................................................................................. 4 2.4 Population ........................................................................................................................... 6 2.5 Trade and Exchange Rates ............................................................................................... 6 2.6 Volume of Output................................................................................................................ 7 2.7 Fuel Consumption .............................................................................................................. 8 SECTION 3 SUB REGIONAL TRADE AND TRANSPORT .............................................................................. 9 3.1 Regional Context ................................................................................................................ 9 3.2 Freight Transport ................................................................................................................ 9 3.3 Domestic Context ............................................................................................................. 10 3.4 Road Transport ................................................................................................................. 10 3.5 Rail Transport ................................................................................................................... 10 3.6 Rail Passenger Services .................................................................................................. 18 3.7 Impact of Border Openings .............................................................................................. 19 SECTION 4 ROAD SUB SECTOR .................................................................................................................. 22 4.1 Introduction ....................................................................................................................... 22 4.2 Road Network and Condition ........................................................................................... 22 4.3 Road Safety ...................................................................................................................... 23 4.4 Transport Demand............................................................................................................ 23 4.5 Fuel Consumption ............................................................................................................ 25 4.6 Subsector Challenges ...................................................................................................... 25 4.7 Institutional Capacity ........................................................................................................ 27 4.8 International Support ........................................................................................................ 31 4.9 Investment Plan and Road Map ....................................................................................... 34 4.10 Monitoring Framework ...................................................................................................... 34 4.11 PPP Potential in Road Sector .......................................................................................... 36 4.12 The North–South Corridor ................................................................................................ 41 4.13 PPP Potential for Tranche 2 ............................................................................................. 51 4.14 Assessment of Environmental Impacts from Road Sub Projects .................................... 56 i TA7208-ARM Preparing the North-South Road Corridor Development Project Final Report PADECO Co., Ltd. Volume I TABLES Page Table 2-1: GDP 2001–2008........................................................................................................................................ 3 Table 2-2: MOTC Road Budget 2006–2010 (AMD Billion) ........................................................................................ 4 Table 2-3: Impact of Recession 2008–2014 .............................................................................................................. 5 Table 2-4: Vehicle Imports 2008–2009 ...................................................................................................................... 5 Table 2-5: Population 2002–2008 .............................................................................................................................. 6 Table 2-6: International Trade 2004–2009 ($ Million) ................................................................................................ 7 Table 2-7: Principal Traded Goods (% By Value) ...................................................................................................... 7 Table 2-8: Principal Trading Partners (% By Value) .................................................................................................. 7 Table 2-9: Agricultural And Industrial Output 2003–2007 (‘000 Tons) ...................................................................... 8 Table 2-10: Transport Fuel Use by Type (%) ............................................................................................................ 8 Table 3-1: Freight by Mode 2001–2008 ................................................................................................................... 10 Table 3-2: Rail Freight by Commodity ...................................................................................................................... 14 Table 3-3: Calculations for Determining Potential Containerization ........................................................................ 16 Table 3-4: With-Project Additional Road Freight Forecast ...................................................................................... 18 Table 4-1: Road Length by Marz 2008 ..................................................................................................................... 22 Table 4-2: IRIs 2005–2008 ....................................................................................................................................... 22 Table 4-3: Road Accidents 2001–2008 .................................................................................................................... 23 Table 4-4: Vehicle Fleet End-2006 ........................................................................................................................... 24 Table 4-5: Passengers by Mode 2001–2008 ........................................................................................................... 25 Table 4-6: Transport Fuel Use by Type (%) ............................................................................................................. 25 Table 4-7: Road Subsector Institutional Capacity Development Program .............................................................. 28 Table 4-8: IFI Assistance to the Road Subsector .................................................................................................... 33 Table 4-9: Road Subsector Investment Program Impact Monitoring ..................................................................... 34 Table 4-10: Strengths and Weaknesses of Armenia’s PPP Environment ............................................................... 39 Table 4-11: Risk Allocation and Methods of Mitigation ............................................................................................ 40 Table 4-12: Asian Highways ..................................................................................................................................... 42 Table 4-13: NSRC IRIs 2008 ...................................................................................................................................
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