OFFICIAL DOCUMENTS
The World Bank 1, Dniprovskiy Uzviz (380-44) 490-6671 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Kyiv 01010 INTERNATIONAL DEVELOPMENT ASSOCIATION Ukraine REGIONAL OFFICE UKRAINE, BELARUS AND MOLDOVA Public Disclosure Authorized February 2, 2017 H.E. Oleksandr Danylyuk Minister Ministry of Finance of Ukraine 12/2, Hrushevskyi Str., Kyiv, 01008, Ukraine
Your Excellency:
Subject: IBRD Loan No.8549-UA Ukraine Road Sector Development Project First Amendment to the Loan Agreement Public Disclosure Authorized We refer to following agreements signed by the following parties in relation to the above referenced Project:
(a) Loan Agreement between Ukraine ("Borrower") and the International Bank for Reconstruction and Development ("Bank") dated November 19, 2015 ("Loan Agreement"):
(b) Project Agreement dated November 19, 2015, signed between the Bank and the State Road Agency of Ukraine ("Ukravtodor") ("Project Agreement"):
We also refer to the letter No. 31-19030-02-15/37606 dated December 29, 2016 from Mr. Yuriy Butsa, Deputy Minister for European Integration, received by the Bank on December 30, 2016, requesting the removal of the following sub-project activities and cancellation of the associated loan proceeds amounting to $222.2 million: Public Disclosure Authorized
(a) Component 1: Road Rehabilitation and Safety Improvement - cancellation of bypasses at Poltava, Kopyly and Chutove, and associated consultants' services for relevant site supervision; and
(b) Component 2: Maintenance of Core National Road Corridors - cancellation of long-term maintenance contracts on M-03 and M-07, and associated consultants' services for relevant project management. Public Disclosure Authorized H.E. Oleksandr Danylyuk 2 February 2, 2017
We are pleased to inform you that the Bank has acceded to the request. Accordingly, the Loan Agreement is hereby amended as follows:
1 . Section 2.01 is amended to read as follows:
"2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in this Agreement, the amount of three hundred thirty seven million eight hundred thousand United States Dollars ($337,800,000), as such amount may be converted from time to time through a Currency Conversion in accordance with the provisions of Section 2.08 of this Agreement ("Loan"), to assist in financing the project described in Schedule 1 to this Agreement ("Project")."
2. The table in Section IV, Part A(2) in Schedule 2 to the Loan Agreement is amended to reflect the amount cancelled effective as of December 30, 2016 and reads as follows:
Amount of the Loan Percentage of Allocated Expenditures to be Category (expressed in USD) financed ______(inlusve of Taxes) (1) Goods, works, non-consulting services, 333,900,000 100% consultants' services, Training and Incremental Operating Costs
(2) Land Acquisition and Resettlement Costs 2,500,000 100% (3) Front-end Fee 1,400,000 Amount payable pursuant to Section 2.03 of this Agreement in accordance with Section 2.07 (b) of the General Conditions
(4) Interest Rate Cap or Interest Rate Collar 0 Amount due pursuant premium to Section 2.08(c) of this Agreement
Total 337,800,000
3. With reference to the provisions of Section II paragraph A.1 of Schedule 2 to the Loan Agreement, the performance monitoring indicators for the Project set out in Supplemental Letter the No. 2 to Loan Agreement and in the Supplemental Letter to the Project Agreement, dated November 19, 2015 and signed by the Bank and the Borrower, are hereby amended to read as set forth in Annex 1 to this Amendment Letter.
Except as specifically amended in this letter, all other provisions of the Loan Agreement remain in full force and effect. H.E. Oleksandr Danylyuk 3 February 2, 2017
Please confirm the agreement of the Borrower to the amendments set out in paragraphs 1 through 3 above by countersigning and dating the confirmation set forth below, and returning one fully signed original of this amendment letter to the Bank. One fully signed original should be retained by the Borrower. Upon receipt by the Bank of the copy of this amendment letter duly countersigned by the Borrower's authorized representative, this amendment letter shall become effective as of December 30, 2016.
Very truly yours,
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
Satu Kihkonen Country Director Belarus, Moldova and Ukraine Europe and Central Asia
AGREED:
UKRAINE
By:
Name: YS-t*t 1A
Title: - eu~,7w
Date: 6k
cc: H.E. Volodymyr Omelyan, Minister, Ministry of Infrastructure of Ukraine Mr. Maksym Nefiodov, First Deputy Minister, Ministry pf Economic Development and Trade of Ukraine Mr. Yuriy Butsa, Deputy Minister for European Integration, Ministry of Finance of Ukraine Mr. Slawomir Novak, Acting Head, State Road Agency of Ukraine Ms. Viktoriia Kolosova, Director, Department for Cooperation with International Financial Institutions, Ministry of Finance of Ukraine Ms. Olena Tregub, Director of the Department of Cooperation with International Financial Institutions, Ministry of Economic Development and Trade of Ukraine Mr. Mykhailo Vydoinyk, Director, International Cooperation and Protocol Department, Secretariat of the Cabinet of Ministers of Ukraine Mr. Frank Heemskerk, Executive Director, World Bank Mr. Roman Kachur, Senior Advisor to Executive Director, World Bank 4
ANNEX 1
Road Sector Development Project Revised Performance Monitoring Indicators
Project Development Objective Indicators Cumulative Target Values
Indicator Name Baseline YRI YR2 YR3 YR4 YR5 End Target
Reduction in travel time between 140 120 96 96 Poltava and Kharkiv (mm) Reduction in traffic accidents 139 96 85 85 involving injury and fatalities on (incl. 26 (18) (16) (16) Poltava to Kharkiv road fatalities)
Yes Condition in IRI of M-6 corridor IRI Range Yes Yes Yes at IRI <2 (Yes/No) 1.3-1.8 sustained 1.3-1.8 Road network management modernized measured by: (i) percentage reduction in accidents caused by over- 39 30 20 20 20 speeding (ii) percentage reduction in number of over-weight 30 30 25 20 15 trucks 5
Intermediate Results Indicators Cumulative Target Values
Indicator Name Baseline YRI YR2 YR3 YR4 YR5 End Target
Component 1: Road Rehabilitation and Safety Improvement
Roads constructed on M-03, non- 0 10 20 66 66 rural (kilometers) - (Core) 0_10_20_66_66 Component 2: Maintenance of Core National Road Corridors Roads maintained using long term performance based contracts 0 424 424 424 (number) Component 3: Network Management and Development Implementation of modem network management tools: (i) First phase implementation of weigh-in-motion control Yes Yes Yes system (yes/no) (ii) First phase implementation of No Yes national system of automatic Yes Yes Yes speed enforcement (yes/no) Tolling strategy, system specification and bidding No Yes Yes Yes Yes documents prepared (yes/no) Strategy for maintenance reform No Yes Yes Yes Yes prepared (yes/no) 6
Cumulative Target Values
Indicator Name Baseline YR1 YR2 YR3 YR4 YR5 End Target
Digital Passport implemented on National Roads (with up-to-date 0 5,000 10,000 21,000 21,000 conditions and traffic data) km Feasibility and detailed design 0 200 300 400 500 500 completed in KM (number) Cross-cutting issues Direct project beneficiaries (number), of which female (percentage):
Short term construction jobs: 0 200 600 1,000 1,200 1,200 Long term maintenance jobs: 0 0 400 600 800 800 Annual road safety beneficiaries: 0 10 10 20 20
Beneficiaries that feel project investments reflected their needs 0 65 80 80 (%) gender disaggregated Ukravtodor publishes annual report on GRM and how issues were resolved [including resolution rates] (Yes/No) 7
Indicator Description Project Development Objective Indicators
Indicator Name Description (indicator definition etc.) Frequency Data Source / Responsibility for Methodology Data Collection Reduction in travel time This indicator measures the average travel time reduction Annual Project Progress UAD between Poltava and Kharkiv along the M-03 corridor between Poltava and Kharkiv. Reports (minutes) This indicator will be measured at the end of the project and will be monitored annually for the roads improved under the project. Reduction in traffic accidents This indicator will measure the reduction of road crashes Annual Project Progress Traffic Police involving injury and fatalities injuries and fatalities along the M-03 corridor between Reports on Poltava to Kharkiv road Poltava and Kharkiv. Condition in IRI of M-6 This indicator will measure the overall condition of the 3 Annual Project Progress UAD corridor sustained main corridors that will be maintained under the project. Reports The corridors are already in good or fair condition and the objective is to sustain this condition at a level of <2 IRI national roads based on the average IRI of the network. Modernization of road network This indicator will measure the outcomes of key steps in Annual Project Progress Mol/ UAD management the provision of a modem system of network Reports (i) reduction in accidents management. This will include in particular the caused by over-speeding reduction in accidents caused by over-speeding (%) following the implementation of speed cameras and the (ii) reduction in number of reduction in number of over-weight trucks following the over-weight trucks (%) introduction of weigh-in-motion control. The baseline of this second indicator is the number observed in M06 and may not reflect perfectly the situation on M03. 8
Intermediate Results Indicators .. Data Source / Responsibility for definition etc.) Frequency Methooog Daapoltio Indicator Name Description (indicator Methodology Data Collection
Roads constructed on M-03, This indicator will measure the distance of the M-03 Quarterly Project Progress UAD non-rural (kilometers) - (Core) corridor between Poltava and Valky that will be Reports improved under this project. This is a core indicator of the World Bank. Roads maintained using long This indicator will measure the number of km Annual Project Progress UAD term performance based maintained under Output and Performance-based Road Reports contracts (number) Contracts (OPRC) financed by the operation. Implementation of modern This indicator will measure progress in the steps to be Quarterly Project Progress UAD/ Traffic network management tools: taken to achieve the successful roll out of a system of Reports Police (i) First phase implement- weigh-in-motion control and the progress with tation of weigh-in-motion implementation of initial phase of national speed control system (yes/no) enforcement system along the Kiev to Kharkiv road and corridor as evidenced by the installation of automatic (ii) First phase implement- speed enforcement cameras, associated processing tation of national system center and intensity of speed controls using mobile of automatic speed equipment. enforce-ment (yes/no) This indicator will measure the progress towards Annual Project Progress UAD readiness for e-tolling or alternative revenue generating Reports Preparation of e-tolling system (such as e-vignette). It will in particular focus on strategy (yes/no) the preparation of FS to assess viability and develop functional specifications and the preparation of bidding documents. This indicator will measure the steps towards the Annual Project Progress UAD Strategy-for maintenance implementation of the maintenance reform program, Reports reform prepared (yes/no) from capacity assessment to implementation of key reforms, in particular the decentralization of DAKs. 9
Indicator Name Description (indicator definition etc.) Frequency Data Source / Responsibility for Methodology Data Collection Digital Passport implemented This indicator will measure the implementation of Annual Project Progress UAD on National Roads (with up-to- Digital Passports, i.e. system of databases with up-to- Reports date ciioations and traffic date data on condition of the roads and maintenance data) kmi plans. The system will also be used to share information with the public via internet.
Feasibility and detailed design This indicator will measure the preparation of feasibility Quarterly Project Progress UAD completed in kmi studies and detailed design for the Lviv-Kirovograd- Reports Kherson corridor
Direct project beneficiaries This indicator measures the number of direct project Annual Project Progress UAD (number), of which female beneficiaries and percentage of female beneficiaries Reports (percentage) among them. Beneficiaries that feel project This indicator measures the share of beneficiaries (men Annual starting Project progress UAD investments reflected their and women) reporting that their concerns have been from the second reports needs (%) gender taken into account during project design and year of disaggregated implementation implementation Ukravtodor publishes annual This indicator measures the existence of an annual report Annual Project progress UAD report on GRM and how issues on GRM and how issues were resolved, including reports were resolved [including resolution rates resolution rates] (Yes/No)