Completion Report Project Number: 46145-001 Loan Number: 2916 August 2018 Kazakhstan: CAREC Corridor 3 (Shymkent–Tashkent Section) Road Improvement Project This document is being disclosed to the public in accordance with ADB’s Public Communications Policy 2011. CURRENCY EQUIVALENTS Currency unit – tenge (T) At Appraisal At Project Completion (3 September 2012) (30 June 2016) T1.00 = $0.00666 $0.00295 $1.00 = T150.00 T338.25 ABBREVIATIONS AADT – annual average daily traffic ADB – Asian Development Bank CAREC – Central Asia Regional Economic Cooperation COR – Committee of Roads CSC – construction supervision consultant EBRD – European Bank for Reconstruction and Development EIA – environmental impact assessment EIRR – economic internal rate of return EMP – environmental management plan EMR – environmental monitoring report GDP – gross domestic product ICB – international competitive bidding IEE – initial environmental examination IRI – international roughness index JSC – Joint Stock Company km – kilometer LARF – land acquisition and resettlement framework MID – Ministry of Investments and Development MFF – multitranche financing facility MOF – Ministry of Finance MOTC – Ministry of Transport and Communications O&M – operation and maintenance OCR – ordinary capital resources PPMS – project performance management system SMA – stone mastic asphalt TA – technical assistance VAT – value added tax VOC – vehicle operating cost GLOSSARY CAREC Transport – Western Europe–Western China International Transit Corridor running Corridor 1 from Khorgos at the border with the People’s Republic of China, through Almaty and Shymkent, to the western border with the Russian Federation. CAREC Transport – International Transit Corridor connecting the Russian Federation with the Corridor 3 Middle East and South Asia. NOTES (i) The fiscal year (FY) of the Government of Kazakhstan and its agencies ends on 31 December. “FY” before a calendar year denotes the year in which the fiscal year ends, e.g., FY2018 ends on 31 December 2018. (ii) In this report, “$” refers to United States dollars, T refers to Kazakhstan tenge. Vice-President Wencai Zhang, Operations 1 Director General Werner Liepach, Central and West Asia Department (CWRD) Director Dong-Soo Pyo, Transport and Communications Division, CWRD Giovanni Capannelli, Kazakhstan Resident Mission (KARM), CWRD Team leader Oleg Samukhin, Transport Specialist, CWRD Team members Asem Chakenova, Project Officer, KARM, CWRD Glenda Jurado, Associate Project Analyst, CWTC, CWRD In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. CONTENTS Page BASIC DATA i MAP v I. PROJECT DESCRIPTION 1 II. DESIGN AND IMPLEMENTATION 1 A. Project Design and Formulation 1 B. Project Outputs 2 C. Project Costs and Financing 3 D. Disbursements 4 E. Project Schedule 5 F. Implementation Arrangements 5 G. Consultant Recruitment and Procurement 6 H. Safeguards 7 I. Monitoring and Reporting 8 III. EVALUATION OF PERFORMANCE 9 A. Relevance 9 B. Effectiveness 9 C. Efficiency 10 D. Sustainability 10 E. Development Impact 12 F. Performance of the Borrower and the Executing Agency 12 G. Performance of the Asian Development Bank 13 H. Overall Assessment 13 IV. ISSUES, LESSONS, AND RECOMMENDATIONS 14 A. Issues and Lessons 14 B. Recommendations 15 APPENDIXES 1. Design and Monitoring Framework 16 2. Project Cost at Appraisal and Actual 17 3. Project Cost by Financier 18 4. Project Contract Packages 19 5. Disbursement of ADB Loan Proceeds 20 6. Contract Awards of ADB Loan Proceeds 21 7. Chronology of Main Events 22 8. Status of Compliance with Loan Covenants 23 9. Project Implementation Schedule 30 10. Economic Reevaluation 31 11. List of Parameter Values/Assumptions 38 BASIC DATA A. Loan Identification 1. Country Republic of Kazakhstan 2. Loan number and financing source 2916-KAZ (Regular Ordinary Capital Resources) 3. Project title CAREC Corridor 3 (Shymkent–Tashkent Section) Road Improvement Project 4. Borrower Republic of Kazakhstan 5. Executing agency Ministry of Transport and Communications (changed to Ministry of Investments and Development) 6. Amount of loan Original: $125.00 million 7. Project completion report number 1695 8. Financing modality Project Loan B. Loan Data 1. Fact-Finding – Date started 24 April 2012 – Date completed 4 May 2012 2. Loan negotiations – Date started 16 August 2012 – Date completed 22 August 2012 3. Date of Board approval 5 October 2012 4. Date of loan agreement 28 May 2013 5. Date of loan effectiveness – In loan agreement 26 August 2013 – Actual 27 November 2013 – Number of extensions 1 6. Project completion date – Appraisal 31 December 2015 – Actual 26 September 2016 7. Loan closing date – In loan agreement 30 June 2016 – Actual 30 June 2016 – Number of extensions 0 8. Financial closing date – Actual 31 October 2016 9. Terms of loan – Interest rate London interbank offered rate (LIBOR) +0.60% per annum as provided by Section 3.02 of the Loan Regulations, less a credit of 0.20% as provided in Section 3.03 of the Loan Regulations 0.15% per annum – Commitment charge 0 – Maturity (number of years) 20 – Grace period (number of years) 4 10. Terms of relending (if any) Not applicable ii 11. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 18 December 2013 31 October 2016 34.4 Effective Date Actual Closing Date Time Interval 27 November 2013 30 June 2016 31 b. Amount ($ million) Increased Canceled Last Original during during Revised Amount Undisburseda Allocation Implementation Implementation Allocation Disbursed Balance Category (1) (2) (3) (4=1+2–3) (5) (6 = 4–5) Works 111.00 0.00 33.02 77.98 77.96 0.02 Consulting 3.00 0.00 0.28 2.72 2.72 0.00 Services Contingencies 11.00 0.00 11.00 0.00 0.00 0.00 Total 125.00 0.00 44.30 80.70 80.68 0.02 a The undisbursed balance was canceled at loan financial closing on 31 October 2016. C. Project Data 1. Project cost ($ million) Cost Appraisal Estimatea Actual Foreign exchange cost 371.20 218.61 Total 371.20 218.61 a The project was not split into foreign exchange cost and local currency cost categories at appraisal. 2. Financing plan ($ million) Cost Appraisal Estimate Actual Implementation cost Government of Kazakhstan-financed 45.40 15.93 ADB-financed (km 705–742, 37 km) 114.00 80.68 EBRD-financed (km 742–804, 62 km) 179.10 122.00 Total implementation cost 338.50 218.61 Contingencies Government of Kazakhstan-financed 4.30 0.00 ADB-financed 11.00 0.00 EBRD-financed 17.40 0.00 Total interest during construction cost 32.70 0.00 ADB = Asian Development Bank, EBRD = European Bank for Reconstruction and Development, km = kilometer. iii 3. Cost breakdown by project component ($ million) Component Appraisal Estimate Actual A. Base Costa 1. Civil Works a. km 705–742, 37 km (ADB) 111.00 77.96 b. km 742–804, 62 km (EBRD) 173.30 120.20 2. Consultants a. Construction supervision and external 3.00 2.72 safeguards monitoring (ADB) – b. Construction supervision (EBRD) 4.70 1.80 c. Institutional development (EBRD) 1.10 0.00 3. Taxes and duties 45.40 15.93 Subtotal Base Cost (A) 338.50 218.61 B. Contingenciesb 1. ADB 11.00 0.00 2. EBRD 17.40 0.00 3. Government 4.30 0.00 Subtotal Contingencies (B) 32.70 0.00 Total Project Cost (A+B) 371.20 218.61 ADB = Asian Development Bank, EBRD = European Bank for Reconstruction and Development, km = kilometer a In mid-2012 prices. b Contingencies for price escalation include a reserve for possible changes in the exchange rate from the current rate $1=T150. Physical contingencies are computed at 7% for civil works. Sources: Ministry of Transport and Communications, Ministry of Investments and Development, ADB estimates and loan financial information system. 4. Project schedule Item Appraisal Estimate Actual Date of contract with consultants (ADB financed) – Construction Supervision, Contract CSP 1 Q2/2013 18 June 2014 – Safeguards Monitor, Contract CSP 2 Q3/2015 28 October 2015 Completion of engineering designsa Civil works contract Date of award Q2/2013 28 November 2013 Completion of work Q4/2015 30 June 2016 a The Ministry of Transport and Communications (MOTC) conducted the feasibility study and design preparation in 2008. Under ADB TA 8068, the consultant studied the existing designs and reviewed the preliminary design for the feasibility study in 2012. 5. Project performance report ratings Implementation Period Rating From Q4 2013 to Q4 2013 On track From Q1 2014 to Q4 2014 On track From Q1 2015 to Q4 2015 On track From Q1 2016 to Q4 2016 On track Q = quarter. D. Data on Asian Development Bank Missions No. of No. of Specialization of Name of Missiona Date Persons Person-Days Membersb Fact-finding 24 April–4 May 2012 6 66 a, c, e, f, j Consultation 1 3–12 April 2013 3 33 a, h, j Consultation 2 3–11 June 2013 3 27 a, h, j Country safeguards review 5–15 September 2013 2 22 e, d Inception 21–30 October 2013 5 50 a, d, h Review 1 19–24 May 2014 3 18 a, j Safeguards monitoring 8–11 July 2014 4 16 d, e, j Review 2 29 September– 5 30 a, b, c, h, j 4 October 2014 Review 3 25 February–11 March 2015 5 75 a, h, j, k iv Review 4 25–30 May 2015 8 48 a, e, f, h, I, k Review 5 12–23 October 2015 1 12 b Consultation 3 14–25 January 2016 1 12 b Pre-project completion review 27–28 May 2017 4 8 a(2), h, l Project completion review 21–25 May 2018 a Missions were combined with other Kazakhstan projects.