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Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 66462-GE PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 25.8 MILLION Public Disclosure Authorized (US$40.00 MILLION EQUIVALENT) AND A PROPOSED LOAN IN THE AMOUNT OF US$30 MILLION TO GEORGIA Public Disclosure Authorized FOR THE SECOND SECONDARY AND LOCAL ROADS PROJECT (SLRP-II) FEBRUARY 21, 2012 Sustainable Development Department South Caucasus Country Unit Europe and Central Asia Region Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective January 1, 2012) Currency Unit = Georgian Lari (GEL) GEL 1.66 = US$ 1.00 US$1.551 = SDR 1.00 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS AADT Average Annual Daily Traffic MCC Millennium Challenge Corporation ADB Asian Development Bank MENR Ministry of Environment and Natural Resources CPS Country Partnership Strategy MESD Ministry of Economy and Sustainable Development EA Environmental Assessment MRDI Ministry of Regional Development and Infrastructure EIB European Investment Bank NBG National Bank of Georgia EIRR Economic Internal Rate of Return NCB National Competitive Bidding EMP Environmental Management Plan NPV Net Present Value ESMF Environmental and Social Management Framework ORAF Operational Risk Assessment Framework FA Financing Agreement PAD Project Appraisal Document FEWHIP First East West Highway Improvement Project PBC Performance Based Contract FM Financial Management PDO Project Development Objective FMAR Financial Management Assessment Report PIP Project Implementation Plan FMM Financial Management Manual PIU Project Implementation Unit FPU Foreign Project Unit POM Project Operational Manual GEL Georgian Lari (currency unit) RAP Resettlement Action Plan HDM 4 Highway Design and Maintenance model, Ver-4 RD Roads Department IBRD International Bank for Reconstruction and RPF Resettlement Policy Framework Development ICB International Competitive Bidding SDR Special Drawing Rights IDA International Development Association SEWHIP Second East West Highway Improvement Project IFI International Financing Institution SIL Specific Investment Loan ISP Implementation Support Plan SLRP Secondary and Local Road Project JICA Japanese International Cooperation Agency TOR Terms of Reference KRRIP Kakheti Regional Roads Improvement Project TRRC Transport Reform and Rehabilitation Center Regional Vice President: Philippe H. Le Houerou Country Director: Asad Alam Sector Director: Laszlo Lovei Sector Manager: Henry G. R. Kerali Task Team Leader: Joseph Melitauri Co-Task Team Leader Petrus Benjamin Gericke GEORGIA Second Secondary and Local Roads Project (SLRP II) TABLE OF CONTENTS Page I. STRATEGIC CONTEXT .................................................................................................1 A. Country Context ............................................................................................................ 1 B. Sectoral and Institutional Context ................................................................................. 1 C. Higher Level Objectives to which the Project Contributes .......................................... 3 II. PROJECT DEVELOPMENT OBJECTIVES ................................................................4 A. PDO............................................................................................................................... 4 B. Project Beneficiaries ..................................................................................................... 4 C. PDO Level Results Indicators ....................................................................................... 4 III. PROJECT DESCRIPTION ..............................................................................................5 A. Project Components ...................................................................................................... 5 B. Project Financing .......................................................................................................... 6 C. Lessons Learned and Reflected in the Project Design .................................................. 6 IV. IMPLEMENTATION .......................................................................................................7 A. Institutional and Implementation Arrangements .......................................................... 7 B. Monitoring and Evaluation of Results .......................................................................... 8 C. Sustainability................................................................................................................. 8 V. KEY RISKS AND MITIGATION MEASURES ............................................................9 A. Risk Ratings Summary Table ....................................................................................... 9 B. Overall Risk Rating Explanation .................................................................................. 9 VI. APPRAISAL SUMMARY ................................................................................................9 A. Economic and Financial Analyses ................................................................................ 9 B. Technical ..................................................................................................................... 11 C. Financial Management ................................................................................................ 11 D. Procurement ................................................................................................................ 12 E. Social (including Safeguards) ..................................................................................... 13 F. Environment (including Safeguards) .......................................................................... 14 Annex 1: Results Framework and Monitoring .........................................................................15 Annex 2: Detailed Project Description .......................................................................................17 Annex 3: Implementation Arrangements ..................................................................................28 Annex 4: Operational Risk Assessment Framework (ORAF) .................................................39 Annex 5: Implementation Support Plan ....................................................................................43 Annex 6: Ongoing Road Projects in Georgia ............................................................................46 Annex 7: Draft Procurement Plan..............................................................................................47 Annex 8: Map ...............................................................................................................................48 . DATA SHEET Georgia Second Secondary and Local Roads Project (SLRP II) (P122204) PROJECT APPRAISAL DOCUMENT . EUROPE AND CENTRAL ASIA ECSS5 . Basic Information Date: 20-Feb-2012 Sectors: Rural and Inter-Urban Roads and Highways (90%), Public administration- Transportation (10%) Country Director: Asad Alam Themes: Infrastructure services for private sector development (65%), Administrative and civil service reform (15%), Trade facilitation and Sector Manager/Director: Henry G. R. Kerali/Laszlo Lovei market access (10%), Regional integration (10%) Project ID: P122204 EA Category: B - Partial Assessment Lending Instrument: Specific Investment Loan Team Leader(s): Joseph Melitauri Joint IFC: No . Borrower: Georgia Responsible Agency: Road Department of the Ministry of Regional Development and Infrastructure Contact: Mr. Irakli Litanishvili Title: Deputy Chairman Telephone No.: Email: [email protected] . Project Implementation Period: Start Date: 31-Mar-2012 End Date: 30-Dec-2016 Expected Effectiveness Date: 30-Jun-2012 Expected Closing Date: 30-Jun-2017 . Project Financing Data(US$M) [ X ] Loan [ ] Grant [ ] Other [ X ] Credit [ ] Guarantee Proposed Terms The variable spread IBRD Loan has a final maturity of 25 years including a grace period of 10 years. The IDA Credit will be provided on the basis of 25 years to maturity including 5 years grace period. For Loans/Credits/Others Total Project Cost (US$M): 87.50 Total Bank Financing (US$M): 70.00 . Financing Source Amount(US$M) BORROWER/RECIPIENT 17.50 International Bank for Reconstruction and Development 30.00 International Development Association (IDA) 40.00 Total 87.50 . Expected Disbursements (in USD Million) Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 Annual 0.00 15.00 25.00 20.00 8.00 2.00 0.00 0.00 0.00 Cumulative 0.00 15.00 40.00 60.00 68.00 70.00 70.00 70.00 70.00 . Project Development Objective(s) To improve local connectivity and travel time for selected secondary and local roads, and to strengthen the capacity of the Roads Department to manage the road network. Components Component Name Cost (USD Millions) Rehabilitation and Improvement of Selected Secondary and Local Roads 86.00 Institutional Strengthening and Project Management 1.50 . Compliance Policy Does the project depart from the CAS in content or in other significant respects? Yes [ ] No [ X ] . Does the project require any waivers of Bank policies? Yes [ ] No [ X ] Have these been approved by Bank management? Yes [ ] No [ X ] Is approval for any policy waiver sought from the Board? Yes
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