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World Bank Document Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 44068-KZ PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN Public Disclosure Authorized IN THE AMOUNT OF US$2.125 BILLION TO THE THE REPUBLIC OF KAZAKHSTAN FOR A SOUTH WEST ROADS PROJECT: WESTERN EUROPE – WESTERN CHINA INTERNATIONAL TRANSIT CORRIDOR (CAREC-1b & 6b) Public Disclosure Authorized April 7, 2009 Sustainable Development Department Central Asia Country Unit Europe and Central Asia Region 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 Public Disclosure Authorized Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective: January 30, 2009) Currency Unit = Kazakhstan Tenge (KZT) KZT 120.00 = US$1.00 US$1.00 = KZT 0.0083 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank IMF International Monetary Fund APL Adaptable Programmatic Loan IPSAS International Public Sector Accounting BEEPS Business Environment and Enterprise Standards Performance Survey ISA International Standards on Auditing BP Bank Procedure JERP Joint Economic Research Program CAREC Central Asia Regional Economic JICA Japan International Cooperation Agency Cooperation MoF Ministry of Finance CIS Commonwealth of Independent States MoTC Ministry of Transport and Communications CPS Country Partnership Strategy MOU Memorandum of Understanding CPI Corruption Perception Index NCB National Competitive Bidding DPL Development Policy Loan NFRK National Fund of the Republic of EARF Environmental Assessment Review Kazakhstan Framework NPV Net Present Value EBRD European Bank for Reconstruction and OP Operation Policy (of the World Bank) Development PCR Physical Cultural Resources EIA Environmental Impact Assessment PMC Project Management Consultants EMP Environment Management Plan POM Project Operations Manual ERR Economic Rate of Return PPP Public Private Partnership ESIA Environmental and Social Impact RAP Resettlement Action Plan Assessment RMS Road Management System FSU Former Soviet Union ROSC Reports on Observance of Standards & GAC Governance and Anti-Corruption Codes GDP Gross Domestic Product RPF Resettlement Policy Framework GPN General Procurement Notice RSDP Road Sector Development Program GRSF Global Road Safety Facility RTRP Road Transport Restructuring Project HDM4 Highway Development and Management SBD Standard Bidding Document Model (fourth version) SIL Specific Investment Loans IBRD International Bank for Reconstruction and SNIP Technical Standards and Regulations of the Development Former Soviet Union ICB International Competitive Bidding SOE Statement of Expenditure IDB Islamic Development Bank TOR Terms of Reference IDF Institutional Development Fund TSDS Transport Sector Development Strategy IFIs International Financial Institutions UNDB United Nations Development Business IFR Interim Financial Report WBI World Bank Institute IFRS International Financial Reporting WE-WC Western Europe – Western China Standards Vice President: Shigeo Katsu, ECAVP Country Director / Manager: Motoo Konishi / Sergei I. Shatalov, ECCU8 Sector Director: Peter D. Thomson, ECSSD (Acting) Sector Manager: Henry G. R. Kerali, ECSSD Task Team Leader: Henry G. R. Kerali / Jacques Buré, ECSSD KAZAKHSTAN SOUTH WEST ROADS PROJECT CONTENTS Page A. STRATEGIC CONTEXT AND RATIONALE ..................................................................1 1. Country issues......................................................................................................................1 2. Trade and transport sector issues.........................................................................................3 3. Rationale for Bank involvement..........................................................................................5 4. Higher level objectives to which the Project contributes ....................................................6 B. PROJECT DESCRIPTION..................................................................................................7 1. Lending instrument..............................................................................................................7 2. Program objective and phases .............................................................................................7 3. Project development objective and key indicators ..............................................................8 4. Project components..............................................................................................................9 5. Lessons learned and reflected in the project design ..........................................................11 6. Alternatives considered and reasons for rejection .............................................................12 C. IMPLEMENTATION .........................................................................................................13 1. Partnership arrangements...................................................................................................13 2. Institutional and implementation arrangements.................................................................14 3. Monitoring and evaluation of outcomes/results ................................................................15 4. Sustainability .....................................................................................................................16 5. Critical risks and possible controversial aspects ...............................................................16 6. Loan/credit conditions and covenants ...............................................................................20 D. APPRAISAL SUMMARY ..................................................................................................22 1. Economic and financial analyses.......................................................................................22 2. Technical............................................................................................................................23 3. Governance and anti-corruption action plan......................................................................24 4. Fiduciary............................................................................................................................25 5. Social .................................................................................................................................26 6. Environment ......................................................................................................................29 7. Safeguard policies..............................................................................................................30 8. Policy Exceptions and Readiness ......................................................................................33 i Annex 1. Country and Sector or Program Background ..........................................................34 Annex 2. Major Related Projects Financed by the Bank and/or other Agencies ..................43 Annex 3. Results Framework and Monitoring..........................................................................44 Annex 4. Detailed Project Description.......................................................................................47 Annex 5. Project Costs ................................................................................................................56 Annex 6. Implementation Arrangements ..................................................................................57 Annex 7. Financial Management and Disbursement Arrangements......................................66 Annex 8. Procurement Arrangements .......................................................................................76 Annex 9. Economic and Financial Analysis ..............................................................................83 Annex 10. Safeguard Policy Issues.............................................................................................91 Annex 11. Governance and Anti-Corruption Action Plan.....................................................102 Annex 12. Project Preparation and Supervision ....................................................................108 Annex 13. Documents in the Project File.................................................................................109 Annex 14. Statement of Loans and Credits.............................................................................110 Annex 15. Country at a Glance ................................................................................................111 Annex 16. Maps - IBRD 36239 and 36538...............................................................................113 ii KAZAKHSTAN SOUTH WEST ROADS PROJECT PROJECT APPRAISAL DOCUMENT EUROPE AND CENTRAL ASIA ECSSD Date: April 7, 2009 Team Leader: Henry G. R. Kerali/Jacques Buré Country Director: Motoo Konishi Sectors: Roads and highways (100%) Sector Director: Peter D. Thomson Themes: Regional integration (P); Trade Country Manager: Sergei I. Shatalov facilitation and market access (S); Other rural Sector Manager: Henry G. R. Kerali (Acting) development (S) Project ID: P099270 Environmental screening category: Full assessment (Category-A) Lending Instrument: Specific Investment Loan (SIL) Project Financing Data [X] Loan [ ] Credit [ ] Grant [ ] Guarantee [ ] Other: For Loans/Credits/Others: Total Bank financing (US$ million): 2,125.00 Proposed terms: Variable-spread
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