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Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 84038-KG INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT IN THE AMOUNT OF SDR 5.3 MILLION (US$8.2 MILLLION EQUIVALENT) Public Disclosure Authorized AND A PROPOSED CREDIT IN THE AMOUNT OF SDR 23.9 MILLION (US$36.8 MILLION EQUIVALENT) TO THE KYRGYZ REPUBLIC Public Disclosure Authorized FOR THE FIRST PHASE OF THE CENTRAL ASIA ROAD LINKS PROGRAM (CARs-1) March 27, 2014 Transport Sector Unit Sustainable Development Department Europe and Central Asia Region Public Disclosure Authorized 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. CURRENCY EQUIVALENTS (Exchange Rate Effective February 28, 2014) Currency Unit = Kyrgyz Som (KGS) KGS 49 = US$1 US$ 1.53 = SDR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS AADT Average Annual Daily Traffic Standards ADB Asian Development Bank IRI International Roughness Index BCP Border Crossing Point ISA International Standards on Auditing BOMCA Border Management Programme in Central JICA Japan International Cooperation Agency Asia MOTC Ministry of Transport and Communications CADAP Central Asia Drug Action Program NCB National Competitive Bidding CAREC Central Asia Regional Economic NPV Net Present Value Cooperation NRRP National Road Rehabilitation (Osh-Batken- CARs Central Asia Road Links Isfana) Project CARs-1 The First Phase of the Central Asia Road NSDS National Sustainable Development Strategy Links Program NSW National Single Window CARs-2 The Second Phase of the Central Asia Road ORAF Operational Risk Assessment Framework Links Program OSCE Organization for Security and Cooperation CBA Cost-Benefit Analysis in Europe CBTA Cross-Border Transport Agreement OBI Osh-Batken-Isfana CEFACT Centre for Trade Facilitation and e- PDO Project Development Objective Business PIU Project Implementation Unit CPS Country Partnership Strategy PLUAD Regional Road Agency DEPs Local Maintenance Depots POM Project Operational Manual EBRD European Bank for Reconstruction and RAP Resettlement Action Plan Development RIBS Regional Improvement of Boarder Services EC European Commission RMD Road Asset Management Department EDB Eurasian Development Bank ROW Right of Way EIA Environmental Impact Assessment RPF Resettlement Policy Framework EIRR Economic Internal Rates of Return SDR Special Drawing Rights EMP Environmental Management Plan EU European Union SNIP Design Standards GDP Gross Domestic Product SOE Statement of Expenditures FM Financial Management SOP Series of Projects ICB International competitive bidding TOR Terms of Reference IDA International Development Association TRACECA Transport Corridor Europe-Caucasus-Asia IDB Islamic Development Bank TSCC Transport Sector Coordinating Committee IFAC International Federation of Accountants UAD Road Department IFR Interim Financial Report UN United Nations IMF International Monetary Fund WTO World Trade Organization IPF Investment Project Financing IPIG Investment Project Implementation Group IPSAS International Public Sector Accounting Regional Vice President: Laura Tuck Country Director: Saroj Kumar Jha Country Manager: Alexander Kremer Sector Director: Laszlo Lovei Sector Manager: Juan Gaviria Task Team Leader: Cordula Rastogi CENTRAL ASIA: Central Asia Road Links – Kyrgyz Republic (CARs-1) TABLE OF CONTENTS Page I. STRATEGIC CONTEXT................................................................................................. 1 A. Regional Context ........................................................................................................... 1 B. Country Context ............................................................................................................ 3 C. Sectoral and Institutional Context ................................................................................. 4 D. Higher Level Objectives to which the Program and Project Contributes ..................... 5 II. PROGRAM AND PROJECT DEVELOPMENT OBJECTIVES ................................ 6 A. The Program Objective ................................................................................................. 6 B. The Project Development Objective (PDO) and Key Indicators of CARs-1 ................ 6 III. PROJECT AND PROGRAM DESCRIPTION .............................................................. 8 A. Project Components ...................................................................................................... 8 B. Project Financing........................................................................................................... 9 C. Program Phases and Component (Series of Projects) ................................................. 10 IV. IMPLEMENTATION ..................................................................................................... 11 A. Institutional and Implementation Arrangements ......................................................... 11 B. Arrangements with Development Partners ................................................................. 12 C. Results Monitoring and Evaluation ............................................................................. 12 D. Sustainability ............................................................................................................... 12 V. KEY RISKS AND MITIGATION MEASURES.......................................................... 13 A. Risk Ratings Summary Table ..................................................................................... 13 B. Overall Risk Rating Explanation ................................................................................. 13 VI. APPRAISAL SUMMARY .............................................................................................. 13 A. Economic Analysis ..................................................................................................... 13 B. Technical ..................................................................................................................... 14 C. Financial Management ................................................................................................ 15 D. Procurement ................................................................................................................ 15 E. Social (including Safeguards) ...................................................................................... 16 F. Environment (including Safeguards) ........................................................................... 16 G. Other Safeguards Policies Triggered .......................................................................... 17 Annex 1: Results Framework and Monitoring ........................................................................ 18 Annex 2: Detailed Project Description ...................................................................................... 23 Annex 3: Implementation Arrangements ................................................................................. 26 Annex 4: Operational Risk Assessment Framework (ORAF) ................................................ 38 Annex 5: Implementation Support Plan ................................................................................... 41 Annex 6: Economic Analysis of the Program and Project ...................................................... 44 Annex 7: Regional, Country and Sectoral Context.................................................................. 56 Annex 8: Program Overview and Complementarities with other Projects ........................... 65 Annex 9: Map .............................................................................................................................. 68 PAD DATA SHEET Central Asia Central Asia Road Links - Kyrgyz Republic (P132270) PROJECT APPRAISAL DOCUMENT EUROPE AND CENTRAL ASIA ECSTR Report No.: PAD559 Basic Information Project ID EA Category Team Leader P132270 B - Partial Assessment Cordula Rastogi Lending Instrument Fragile and/or Capacity Constraints [ ] Investment Project Financing (IPF) Financial Intermediaries [ ] Series of Projects [ X ] Project Implementation Start Date Project Implementation End Date 02-July-2014 15-Jun-2019 Expected Effectiveness Date Expected Closing Date 01-July-2014 15-Jun-2019 Joint IFC No Sector Manager Sector Director Country Director Regional Vice President Juan Gaviria Laszlo Lovei Saroj Kumar Jha Laura Tuck Borrower: Government of Kyrgyz Republic Responsible Agency: Ministry of Transport and Communications Contact: Mr. K. Mamaev Title: Director, IPIG Telephone No.: +996 312 610472 Email: [email protected] Project Financing Data(in USD Million) [ ] Loan [ ] Grant [ ] Guarantee [ X ] Credit [ X ] IDA Grant [ ] Other Total Project Cost: 54.00 Total Bank Financing: 45.00 Financing Gap: 0.00 Financing Source Amount BORROWER/RECIPIENT 9.00 International Development Association (IDA) 45.00 Total 54.00 Expected Disbursements (in USD Million) Fiscal Year 2015 2016 2017 2018 2019 Annual 5.00 8.00 10.00 12.00 10.00 Cumulative 5.00 13.00 23.00 35.00 45.00 Proposed Development Objective(s) The Central Asia Road Links (CARs) program is the result of a collaborative effort initiated by respective governments in the Central Asia region which has been developed as a regional, multi-phase program considered as a regional transformational project under IDA16 and IDA 17. The program has the overall objective