assessment of the transport sector...supplementary linked document 1: assessment of the transport...

Kazakhstan: Country Partnership Strategy Final Review Validation, 2012–2016, Supplementary Linked Document 1

ASSESSMENT OF THE TRANSPORT SECTOR

A. Sector Performance, Problems, and Opportunities

1. Sector Performance and Problems

1. Kazakhstan’s economic activities and wealth were unevenly spread over various regions and

scope for income redistribution was limited. In this context, transport planning had an important

complementary role to play. Efficient infrastructure and coherent policy and institutional measures

needed to combine toward an enabling environment for sustained broad-based social and economic

development.

2. Kazakhstan’s vast territory, low population density, mineral resources scattered across the

country, and location between Europe and Asia made it highly dependent on a cargo-intensive transport

system. With a relatively low density of railways and waterways, roads were the key element of the

transport system.1 However, much of the road network was in poor condition—about 60% of republican

roads needed major rehabilitation and proper maintenance. The feeder network serving the rural

population was not fully developed, in poor condition, and characterized by low service level, especially

during winter. This resulted in a high cost in transporting goods—the transport cost component of about

10% of cargo value was far above the average of about 4% in developed economies.

3. Kazakhstan’s three road networks were managed by different levels of government and their

road organizations: (i) republican roads were under the Ministry of Transport and Communications

(MOTC) and its Committee of Roads (COR), (ii) local or rural roads were under oblasts or provincial

governments, and (iii) urban roads were under municipality or city authorities. There were about 23,500

kilometers (km) of republican roads with only about 40% in asphalt-based surface; and about 70,116 km

of rural roads, of which 10% were asphalt-based.

4. Kazakhstan’s location at the center of transport flows between Europe and Asia created

significant transit potential and provided strategic arteries of emerging transcontinental routes. Few land

routes could avoid it when linking north to south or west to east. Trade between Asia and Europe,

amounting to $700 billion in 2009, was to reach $1 trillion by 2015, of which 20% was to go through

Kazakhstan. Transit traffic was to generate $1.1 billion in annual revenues.

5. Despite its strong potential, transit traffic fell short due to deteriorated infrastructure on the six

main CAREC (Central Asia Regional Economic Cooperation) international corridors. Technical and

operational characteristics were below international standards, with traffic exceeding allowable loads.

The average speed along the Europe–Caucasus–Asia corridor was less than 20 km per hour. Cross-border

impediments were also a barrier to traffic and trade. Major constraints included (i) unreasonable delays

and complicated procedures for customs and frontier inspection, (ii) inconsistency between national

transport legislation and international standards, and (iii) lack of international agreements on transit and

traffic regulations.

6. The road sector had long-standing operational and institutional bottlenecks: (i) the network was

incomplete with some sections in bad condition; (ii) truck overloading was frequent, cutting into the

economic life of road assets; (iii) transit revenues were low, affecting cost recovery and reinvestment

capabilities; (iv) inefficient cross-border procedures increased the burden on trade and raised the cost of

1 Strong growth in Kazakhstan’s economy led to a rise in road freight transport (in ton-kilometers) of about 10% per year and the

number of vehicles by about 5% per year. The motorization level of 100 cars per 1,000 persons in 2015 was the highest in the

region, although still low by European standards.

2 Kazakhstan: Country Partnership Strategy Final Review Validation, 2012–2016

doing business; (v) weak sector planning affected sound investment sequencing; and (vi) project

management shortcomings created inefficiencies.

7. Although road accidents had fallen by 7% per year, speeding and inadequate road design and

operations still caused many accidents and high fatality rate. Efficient road operations and traffic

management need reliable road network data. Complete road and traffic data was also crucial to efficient

planning. Advanced information systems could have included axle load monitoring and control, road

weather information systems, and traffic-recording equipment. Such systems would have provided data

to make the right maintenance decisions that ensure road restrictions were minimized and costs were

low.

2. Key Challenges and Opportunities

8. The road system faced challenges in respect to (i) network coverage, quality, and accessibility;

(ii) sector institutions; and (iii) funding maintenance and investments.

9. Coverage and accessibility. The republican road network offered reasonable coverage, albeit with

important missing links. Substantial investments were needed to make it complete and more effective.

Repair of provincial roads was also a priority. Parts of the network were impassable during winter. This

made access to rural areas, towns, and neighboring countries difficult.

10. Quality of assets. Major parts of the three road networks were in a poor state. MOTC wanted to

bring 86% of republican and 70% of rural roads into good condition.

11. Institutional and management gaps. Although the MOTC was becoming more efficient in

planning and monitoring, further reforms were needed. The oblast administrations were less capable and

needed technical backup. Unless addressed, the gap would affect rural and provincial road network

development. Institutional gaps were aggravated by lack of experience in outsourcing to the private

sector, and in project management skills and knowledge.

12. Road safety. In 2011, a total of 12,019 road accidents were recorded, with 2,707 fatalities and

14,000 injured. Speeding was a key contributor, but low quality construction, lack of security barriers,

lighting, and police oversight also were factors. Vehicle roadworthiness standards and supervision also

needed improvement.

13. Border crossing times. Cross-border time delays and costs became a burden on business, despite

improvements. Operators cited unreasonable delays, complicated procedures, too many inspections, and

lack of international agreements on transit and traffic regulation.

14. Road data and planning. Road and traffic data were out of date and incomplete. Planning

processes needed improvement. Existing road inspections and traffic surveys needed to be strengthened.

15. Funding. Maintenance was 7% of the sector budget and was underfunded. The issue was being

addressed with, private sector figuring more strongly in developing and maintaining assets, the

introduction of a road maintenance fund, a budget making larger and more predictable allocations, and

government tapping international financiers for capital expenditures. Domestic capital markets would be

tapped and public-private partnerships explored.

B. Government’s Sector Strategy

16. The 2020 Strategy for Economic Development and the State Program on Accelerated Industrial-

Innovative Development was adopted in 2010 to diversify the economy and promote balanced

Supplementary Linked Document 1: Assessment of the Transport Sector 3

development. Also relevant to the transport sector were the National Territorial Development Strategy,2

the Transport Sector Development Strategy for 2006–2015,3 and the Road Sector Development Program

for 2006–2012.4 Common to these was the goal of fostering sustainable development, improving living

standards, and increasing country competitiveness.

17. To support the 2020 Strategy, the Road Development Program for 2006–2012 was reformulated

(2010) into the Transport Infrastructure Development Program for 2010–2014. Under the Transport

Infrastructure Development Program, the government placed high priority on well-integrated

investments in international transit corridors and connecting roads. It focused on reconstructing corridors

and improving operation and maintenance systems to establish an efficient transport system.

18. Physical Investment. The Program would upgrade 5,311 kilometer (km) of national roads on the

6 international corridors passing through Kazakhstan during 2010–2014. Priority investments were

(i) reconstructing the Western Europe–Western China Corridor; (ii) reconstructing 12 road sections:

Shuchinsk–Kokshetau–Petropavlovsk–border with the Russian Federation, border with the Russian

Federation–Uralsk–Aktobe, Astana–Kostanai–Chelyabinsk, Zhetybay–border with Turkmenistan, Astana–

Karagandy, Almaty–Kapshagay, Taskesken–Bakhty, Usharal–Dostyk, Beyneu–Akzhigit–border with

Uzbekistan, Omsk–Pavlodar–Maikapshagai, Kurty–Burylbaytal, and Beineu–Aktau; and (iii) exploring

other potential transit routes on the west–east and north–south corridors. Some 9,673 km of local roads

were also to be constructed or rehabilitated. By 2020, 16,000 km of national roads were to be

constructed or reconstructed. About a quarter of the total construction cost and upgrading of road

infrastructure was to be met through external borrowing and a third through public-private partnership

concessions.

19. Nonphysical Investment. The Program was to improve strategic planning, promote market

reforms, enhance safety and maintenance standards, and strengthen private sector participation. It

focused on mitigating nonphysical barriers to cargo movement by addressing the limited coordination

among parties, inadequate technology at border crossings, and poor information management. A

competitive environment for transport services was planned to accelerate the integration of Kazakhstan’s

transport into the international transport system.

C. ADB Sector Strategy and Portfolio

20. According to the 2012–2016 Country Partnership Strategy, the Asian Development Bank (ADB)

was to support the modernization of the country’s transport and logistics system. CAREC road and rail

corridors were priorities for investment in the sector. It was the lead international agency supporting

Kazakhstan’s transport, customs cooperation, and trade facilitation activities in the CAREC framework.

Expected results are detailed in Table 1.

21. The transport sector dominated ADB assistance with over half of the portfolio (52.5%). These

comprised nine loans and three technical assistance (TA) operations. Loans were funded through two

multitranche financing facility (MFFs), two stand-alone projects, and a $68 million co-financing from the

Japan Bank for International Cooperation (JBIC). Table 2 provides details. Appendix 1 of the main text

shows details on the loans and TAs.

2 Government of Kazakhstan. 2006. Strategy of Territorial Development of the Republic of Kazakhstan up to 2015. Astana.

3 Government of Kazakhstan, Ministry of Transport and Communications. 2006. Transport Strategy of the Republic of Kazakhstan

Up to 2015. Astana.

4 Government of Kazakhstan, Ministry of Transport and Communications. 2006. Road Development Program for 2006–2012.

Astana.


22. One of three project preparatory TA was to prepare the Astana Sustainable Urban Transport

Project (Astana Light Rail Transit Project) for approval in 2012.5 It was delayed due to the redesign of the

original project after the country won the bid to host Expo 2017.

Table 1: ADB Sector Results Framework for Transport

Sector

Objectives

Sector Outcomes

and Indicators

Areas of

Intervention

Indicative Resource

Allocation and Thematic

Priorities

Develop an

efficient

transport and

logistics

system that is

integrated and

on a par with

the

international

system.

Increased and more efficient

movement of people and goods to

domestic and international markets

Transport cost in the final cost of

goods reduced to 5% by 2016 (2011

baseline: 10%)

Traffic increased to 3,500 vehicles per

day (vpd) on the Mangystau Oblast

section of CAREC Corridor 2 by 2016

(2009 baseline: 1,000 vpd)

Travel time between Aktau and Beineu

reduced to 4 hours by 2016 (2009

baseline: 12 hours)

National roads and

improvement of cross-

border infrastructure

Logistics improvement.

Sector-wide institutional

and governance reforms

Public-private partnerships

Knowledge support,

capacity development,

and policy dialogue

$605 million, 54% of

public sector resource

envelope for 2012–2014,

of which: economic

growth: 100%; private

sector development:

38%; regional

coordination and

integration: 100%.

Source: Independent Evaluation Department (IED).

Table 2: ADB Sovereign Assistance to Transport

Number Amount

($ Million) Loans TAs

Approved during 2012–2016 2 2 497.3

Approved before and Implemented during 2012–2016 7 1 1,258.6

Total 9 3 1,755.9

TA = technical assistance.

Sources: IED calculation based on ADB databases and mainframe. Data as of 31 December 2016.

D. Evaluation of ADB Sector Operations

1. Relevance

23. From a broad sector development perspective, the validation rates ADB’s support to the

subsector relevant. It agrees with the Country Partnership Strategy Final Review (CPSFR) that selection of

the transport sector in the country partnership strategy (CPS) was aligned with the government’s

development plan Kazakhstan 2020 that focused on infrastructure development and finance for economic

growth, diversification and industrialization. It also corresponded to the core area of ADB’s Strategy 2020

in infrastructure development and regional cooperation and integration.6

24. The CPSFR stated that infrastructure improvements were particularly important in rural and

remote areas where utilities and the transport network were inadequate. Investing in Kazakhstan’s road

system was a long standing priority to reduce the cost of transporting goods and people across a vast,

sparsely populated, and landlocked territory. The validation found that the CAREC corridor roads program

design was based on detailed sector assessments and road maps, so the approach taken to design was

justified.

25. All but one of the nine ADB-funded projects in the transport sector were closed by October 2016,

All four tranches of the CAREC Transport Corridor 1 (Zhambyl Oblast) program was financially closed in

5 ADB. 2011. TA 7865. Kazakhstan: Astana Light Rail Transit Project. Manila. A supplementary TA for $151,000 was approved in

May 2013.

6 ADB 2014. Midterm Review of Strategy 2020: Meeting the Challenges of a Transforming Asia and Pacific. Manila.


2015. The first three tranches were rated relevant by their respective project completion report (PCR).7

The CAREC Corridor 1 program was to contribute to improved transport connectivity in Zhambyl Oblast

and to boost regional connectivity and international trade. The PCRs concluded that all three tranches

were in line with government objectives and policies and strategies, plans and programs of ADB and the

CAREC program.

26. Project design for Tranche 1 addressed the need for improved safety, serviceability and

operational efficiency of the road network. But, one-third of the original loan amount was canceled due

to overestimation of civil works and consulting services costs and inclusion of excessive contingencies.

Minor design changes reflected actual conditions and needs of the local population.

27. The CPS final review flagged several design issues on Tranche 2 during its implementation. First,

a 20 km section of the road was realigned to put the transport corridor within Kazakhstan in response

to border security requirements of the Eurasian Economic Union. Second, it noted poor technical

specifications in all civil works contracts on road construction. Third, poor road maintenance depot

designs resulted in start-up delays. The design of Tranche 3 went unchanged from appraisal to

completion and was adequate to attain the intended outputs and objectives. Minor variations in works

contributed to improved road safety. Various stakeholders were involved during preparation,

implementation and completion of the project. The government showed a strong sense of project

ownership as the COR commissioned the project engineering design, monitored project implementation,

and inspected the project roads during defects notification period.

28. Tranche 4 of CAREC Corridor 1 is likely relevant, as it continued to support transport connectivity

in Zhambyl Oblast and boosting regional connectivity and international trade. Another four loans were

closed in 2016. These were Tranche 3 of Corridor 1, Tranche 1of CAREC Corridor 2, and the stand alone

loans for CAREC Corridor 3 and the Taraz Bypass in CAREC Corridor 1. These projects are also likely

relevant as they seek similar outcomes in terms of transport connectivity (e.g., Mangystau Oblast and

Shymkent-Tashkent sections) and regional connectivity and international trade. They are also in line with

government objectives and policies and strategies, plans and programs of ADB and the CAREC initiative.

29. The validation mission appreciates the strong developmental angles to the CAREC corridor roads

program.8 It noted that road design was driven by a commitment to achieve a level of service from

existing roads. The design of the MFF for CAREC Corridor 1 and the project under Tranche 1 used forecasts

from a feasibility study by the MOTC in 2007 (Report and Recommendation of the President, Appendix

14, Table A14.2). Based on this data, traffic volume seemed to have been overestimated. The design of

the MFF and Tranche 1 project of CAREC Corridor 2 (Mangystau Oblast) was not well established. It used

2007 traffic data and extrapolated this to 2010 using gross domestic product growth. During its round

trip drive on the Almaty to Taraz road (Wednesday and Thursday), the validation mission found traffic

very light in general with no vehicles for long stretches of the drive. Traffic on the Taraz Bypass was

almost non-existent.

7 ADB. 2014. Completion Report. CAREC Transport Corridor 1 (Zhambyl Oblast Section) [Western Europe-Western People’s

Republic of China International Transit Corridor] Investment Program (Project 1) in Kazakhstan. Manila; ADB. 2016. Completion

Report. CAREC Transport Corridor 1 (Zhambyl Oblast Section) [Western Europe-Western People’s Republic of China International

Transit Corridor] Investment Program (Tranche 2) (Kazakhstan). Manila; ADB. 2016. Completion Report. CAREC Transport

Corridor 1 (Zhambyl Oblast Section) [Western Europe-Western People’s Republic of China International Transit Corridor]

Investment Program (Tranche 3) (Kazakhstan). Manila.

8 ADB. 2008. Report and Recommendation of the President to the Board of Directors. Proposed Multitranche Financing Facility

and Administration of Loan CAREC Transport Corridor I (Zhambyl Oblast Section) [Western Europe-Western People’s Republic of

China International Transit Corridor] Investment Program (Kazakhstan). Manila. (RRP).


2. Effectiveness

30. The overall achievement of outcomes in the transport sector is likely less than effective. Sector

outcome targets are not seen to have been met by 2016 while completed projects indicate mixed results

based on the available data.

31. According to the CPS results framework, the government goal in the transport sector was to

develop an efficient transport and logistics system that was integrated and on par with international

standards. Correspondingly, expected sector outcome was an increased and more efficient movement of

people and goods to domestic and international markets, to be measured by three indicators:

(i) transport cost in the final cost of goods reduced to 5% by 2016 (2011 baseline: 10%), (ii) traffic volume

increased to 3,500 vehicles per day (vpd) in Mangystau Oblast section of CAREC Corridor 2 by 2016 (2009

baseline: 1,000 vpd), and (iii) travel time between Aktau and Beineu reduced to 4 hours by 2016 (2009

baseline: 12 hours).

32. The CPSFR argued that the first indicator was only casually estimated by the COR of the Ministry

of Investment and Development because it was vague and difficult to measure, and therefore excluded

this target from the effectiveness rating. However, as the CPSFR pointed out, the country operations

business plan 2016–2018 reported 9% for this indicator in 2014 (CPSFR, footnote 38), a slow trend

unlikely to catch the target of reduction from 10% in 2011 to 5% in 2016. In addition, with the additional

information in the PCRs for the three completed projects under CAREC Corridor 1 (footnote 7), the

validation mission is of the view the target was unlikely met. The PCR for Tranche 1 reported that during

2010–2013 passenger fares and cargo charges increased along the project sections, and assessed the

target unlikely achieved. The PCRs for Tranche 2 and 3 showed a reduction in vehicle operating costs, but

both were silent whether the target cost reduction was met.

33. For the second indicator, the CPSFR stated that it was 2,287 vpd for 2014, an improvement over

the 2009 baseline value of 1,000 vpd, but significantly lower than the 2012 value of 3,283 vpd. The

CPSFR argued the target would be achieved after the ongoing constructions of Tranche 2 roads are

completed (scheduled for end 2017) and the economic recovery picks up. The validation finds this

argument unconvinced, given the traffic volume in 2014 was 2,287 vpd, a level far behind the target of

3,500 vpd in 2016. As road constructions were delayed, the second target could be considered unmet

by the CPS results framework.

34. With respect to the third indicator, travel time between Aktau and Beineu for 2014 was

7 hours. The CPSFR stated that it was unlikely that the 450 km distance could be covered within 4 hours

by 2016, given that construction will be ongoing throughout 2016. In the validation’s view, even without

the construction delay, the target is unlikely to be met because it will require an average speed of 112

km per hour, an unlikely high speed given road conditions and the maximum allowable speed limit.9

35. At the project level, all four tranches of the CAREC Corridor 1 for Zhambyl Oblast program were

financially closed by October 2015.10

Tranches 1–3 have a PCR while the PCR for Tranche 4 has yet to be

prepared. Tranche 1 project was rated effective by the PCR and less than effective by the PCR validation

report due to partial achievement of road operations and maintenance at completion, shortfall in traffic

volume, and unmet target outcome.11

Actual traffic in 2013 on both Taraz – Kulan and Blagoveschenka

– Korday roads were only 80% of their pre-project (2007) levels (Tranche 1, PCR, Appendix 9, Table A9.1).

9 A check with the Google Maps showed a travel time of 6 hours 5 minutes between Aktau and Beineu (accessed 10 February

2017).

10 The JBIC component of Tranche 3 CAREC Corridor 1 was closed on 1 August 2016.

11 IED. 2015. Validation Report. Kazakhstan: CAREC Transport Corridor 1 (Zhambyl Oblast Section) [Western Europe-Western

People’s Republic of China International Transit Corridor] Investment Program (Project 1). ADB: Manila.


36. Both Tranches 2 and 3 were rated effective by the PCR, but no validation has been prepared. In

this validation’s view, Tranche 2 is likely less than effective due to significant implementation delays and

partial completion of its four road maintenance depots. More importantly, traffic in the Merke –

Blagoveschenka section was lower than expected. Recalculated traffic growth for 2014–2020 was under

3% per year while volume was only two-thirds of appraisal estimates for 2020. Actual traffic in 2014 was

marginally higher than appraisal forecast, but thereafter forecasts at the PCR time were significantly

lower than appraisal estimates (Tranche 2, PCR, Appendix 11, Table A11.1). The achievement in reduced

transport cost for freight is not clear.

37. Tranche 3 was likely to be effective in meeting intended outcomes at appraisal. According to the

PCR, long term traffic projections for the Otar – Blagoveschenka section is 28% above the appraisal target

for 2020. Average travel time on the Otar-Blagoveschenka-Kulan section was reduced to 6 hours in 2015

from 10 hours in 2009. The average annual daily traffic for the three road sections of Tranche 3 was

around 7,200 vpd in 2015 compared to about 4,000 vpd at appraisal. Cargo volume at the Karasu border

increased from around 393,000 tons in both directions in 2010 to around 911,000 in 2015. Vehicle

operating costs savings per km for freight vehicles realized at 16% in 2015 compared to 2010. The road

crash fatality rate fell by half to 0.16 per km in 2015 from 0.3 in 2015; and more than 20,000 people in

the project area benefited.

38. Tranche 1 under CAREC Corridor 2 (Mangystau Oblast) was financially closed in February 2016

while Tranche 2 projects are still under implementation. There is no data yet on both projects’ outcomes.

In the case of Tranche 1, the PCR has yet to be prepared but this validation noted that only 53.4% of the

original loan amount was disbursed at completion. While it is not possible to rate the effectiveness of

this MFF, this validation notes the target year is 2016 and as the MFF is not completed the outcome

targets could be considered unmet.

39. In addition to the two MFFs, two stand-alone road rehabilitation projects along CAREC Corridors

1 and 3 were approved. Both were financially closed by October 2016. The 65 km road rehabilitation of

the Taraz Bypass in Zhambyl Oblast under CAREC Corridor 1 was completed and was opened for

operation in 2015. Again there was no data on outcomes at this time but the validation mission observed

the very low traffic on the bypass, and is of the view the targeted traffic outcome of this project likely

not achieved. For CAREC Corridor 3, the validation mission found improvement of the 37 km road section

from Shymkent to Tashkent was then 80% complete with 25.2 km of new concrete paved road and three

out of seven underpasses completed. The validation also noted that only 64.5% of the original loan

amount was disbursed, indicating target outputs were likely under delivered. There were no data on

outcomes to rate the project’s effectiveness, but as the target year was 2015, they were not met as

expected. See a summary in Table 3.

Table 3: Summary Performance of ADB Transport Sector Operations

Indicator Performance Status

Sector-level outcome indicators

1. Transport cost reduced to 5% by 2016 (2011

baseline: 10%).

2. Traffic volume increased to 3,500 vpd in CAREC

Corridor 2 roads by 2016 (2009 baseline: 1,000

vpd).

3. Travel time from Aktau to Beineu reduced to 4

hours by 2016 (2009 baseline: 12 hours).

2016 data not available. But as of 2014, transport cost reduced to

9%. This slow trend unlikely to catch the target of reduction from

10% in 211 to 5% in 2016. The indicator is assessed unlikely met.

Traffic volume was 2,287 vpd in 2014. CAREC Corridor 2 projects

were not completed in 2016. The indicator is considered unmet.

Road constructions unfinished in 2016. Google Maps show the

travel time of more than 6 hours. The indicator is considered

unlikely met.

Completed road projects with PCR

CAREC Corridor 1, Tranche 1


Indicator Performance Status



The validation report assessed less than effective. Outcome targets

were not met in terms of traffic volume, travel time, transport cost,

and accident rate. Outputs were partially achieved in road

operations and maintenance components at completion.

This validation assessed likely less than effective due to traffic

volume being lower than appraisal estimate, and significant delays

and partial completion of road maintenance depots.

Completion delayed over 1.5 years. The tranche is considered likely

effective as outputs were delivered as envisaged and PCR data

show outcomes were met in travel time, traffic volume, travel time,

road accident rate. Transport cost is not clear though.

Other road projects




CAREC Corridor 3

Taraz Bypass (Zhambyl Oblast)

Completed. PCR to be prepared.

Completed with 53.3% of the loan disbursed.

Delayed and ongoing. Given the outputs were not delivered as

targeted in 2016, outcomes could be considered unmet.

As of 2016, 80% of project roads were completed as opposed to

the planned completion in 2015. Given the delays, outcomes could

be considered unmet as targeted for 2015.

Completed. PCR to be prepared.

Source: IED evaluation team.

3. Efficiency

40. Overall, the validation rates ADB’s transport sector operations likely efficient. The first three

tranches of CAREC Corridor 1 (Zhambyl Oblast) are efficient. Their recalculated economic internal rates

of return (EIRR) ranged from 14.8%-23.3%, demonstrating the projects’ economic viability. The CPSFR

stated that some projects will be able to achieve higher outputs due to additional funds from cost savings

and, therefore, ongoing transport projects then were likely to be efficient. Process efficiency was

satisfactory with no major implementation issues on the other completed and ongoing projects.

41. The validation notes that at completion, the EIRRs show the strong variability in traffic demand.

Tranche 1 was 16.2% at project completion compared to 28.1% at appraisal mainly due to a lower than

expected traffic. The EIRR for Tranche 2 is 14.8%, slightly below appraisal of 16.4% due to lower than

forecast of average daily traffic growth beyond 2016, resulting from the economic slowdown in 2014

and slow recovery of the Kazakhstan and the regional economy primarily caused by drop in mineral prices

and slower economic growth in the People’s Republic of China (PRC). For Tranche 3, the EIRR at

completion was 23.3%, higher than the 16.6% at appraisal. This change was due to higher observed

traffic using the road and with construction costs within budget.

42. The CPSFR noted that some projects had cost overruns while others had savings that were used

to expand their scope during implementation. In the validation’s view, delays in implementation and

changes in scope most likely did not affect outputs, outcomes or impacts of the projects. Savings, if

applied to the financing of other project components, may generate additional outputs, which, in turn,

may entail expenditures and benefits. However, in the absence of specific information and data on such

expenditures and benefit, an assessment of the incremental added net value and the EIRR is not possible.

43. The PCRs for Tranches 1, 2, and 3 of CAREC Corridor 1 found the MFF to have been implemented

smoothly without any major implementation issues. The validation mission’s discussions with ADB and


government staff confirmed that there were also no major implementation issues on the other completed

and ongoing projects. Therefore, process efficiency was satisfactory.

4. Sustainability

44. The validation assesses ADB’s assistance to the transport sector as likely sustainable.

45. Sector performance has been constrained by institutional and management gaps, weaknesses in

road data and planning, and road safety issues. As the country worked to improve the quality and

coverage of the road network, it faced chronic funding shortages for road maintenance. Although budget

allocation for maintenance reportedly increased over the years, actual funds made available have been

lower than requirements. Maintenance was only 7% of sector budget, hence underfunded with routine

maintenance reportedly being frequently applied to seriously deteriorated locations. This is also evident

in Tranche 1 of the CAREC Corridor 1 program which saw independent validation downgrade the original

PCR sustainability rating to less than sustainable.12

Further, the current financial and economic

uncertainty due to significantly reduced oil revenues and volatile exchange rates, have an effect on the

government budget.

46. Given the sector context, positive steps have been taken, albeit now at a nascent stage, to

improve sustainability. Institutional reforms are taking place to improve road maintenance and asset

management. KazAvtoZhol Joint Stock Company was established in 2013 with responsibility for

implementing government-funded road projects and maintaining the national highways. While the

institutional capacity and financial performance of KazAvtoZhol are yet to be seen, its ability to become

fully self-financing will likely relieve pressure on the state budget for funding maintenance and

investments.

47. In response to financial and economic uncertainty, the government introduced tolls on select

main road corridors to mobilize resources for maintenance. Annual toll collection from the CAREC

Corridor 1 roads alone is projected at $10,000 per km, and such revenue will be sufficient to maintain

tolled sections and contribute to maintenance on untolled national highways. Given that there are few

prospects for oil prices to rebound, government’s ability to diversify budgetary resource for road

maintenance is critical. The PCRs for Tranches 2 and 3 of the CAREC Corridor 1 program indicated that

both project roads are primary candidates to become toll roads. The plan is to increase the current length

of tolled roads from 211 km to 6,911 km of key national highways by 2022. The viability of a tolling

system, to augment existing revenues, remains to be seen because traffic on any other roads than urban

is not likely to make them self-financing.13

48. The COR and KazAvtoZhol is also continuing institutional reforms in road maintenance with a

performance-based maintenance project planned for implementation with ADB financial and

institutional support. A functioning road asset management system is also expected to be put in place

to help effectively monitor and plan road operations and maintenance.14

49. With an improved road network and coverage, a key sector concern is managing the number and

severity of accidents. Road safety is seen to improve through capacity building in road safety

management and engineering; data collection and analysis; traffic law enforcement; and road safety

advocacy and education. Road safety controls have been installed along Tranches 2 and 3 roads of CAREC

Corridor 1.

12

Key issues were: chronic funding shortage for maintenance of road systems; routine maintenance expenditure was lower than

needed for active projects during the CPS period; the toll system anticipated at project formulation did not materialize; and road

operations and maintenance component of the project was significantly delayed or partially completed.

13 The tolling of roads appears less likely in the near or medium-term future as traffic volumes are low on international and

republican roads. In the case of the Tranche 1 roads, the expected toll system anticipated at project formulation did not

materialize.

14 The results-based road maintenance system will monitor the status of roads and prioritize maintenance and vehicle weight and

axle load control.


50. New technologies have also reduced corruption and increased weight compliance. The Ministry

of Investment and Development strictly enforces the axle load regulation of 10 tons per vehicle and uses

special automated measuring devices and transport control post along CAREC Corridor 1. This should

reduce the deterioration in road assets.

51. Given the status of the macro-economy and oil revenues potential, the government is likely to

provide funding for its public road sector expenditures. During the CPS period 2012–2016, it has provided

substantial allocation for road maintenance or about $100 million during 2013–2015. This validation

agrees with a CPSFR rating of likely sustainable for the transport sector operations under the assumption

that efforts to improve funding and diversification of revenue sources is sustained, road network projects

are prioritized based on a road asset management system, and that reforms in sector management

continue.

5. Development Impact

52. The validation assessed development impacts in the transport sector as likely satisfactory. The

CAREC roads are international transit corridors. But the validation mission found that more time is needed

for transit traffic to evolve as originally envisaged. Current data mainly point to inclusive impacts on the

sparsely populated hinterlands within the road influence areas. There is little evidence on benefits to the

national economy and external trade, as expected in the design and monitoring framework. At the same

time, some unintended negative impacts were also noted.

53. Future performance of the corridor roads depends on progress made by current regional

cooperation initiatives and further investments in enabling and complementary infrastructure, policies

and institutions. But the prospect of a Kazakhstan economic recovery is a good sign for future traffic.

Additional information received from ADB’s Central and West Asia Department in March 2017 show

recent progress made on regional economic integration between Kazakhstan and other economies under

the CAREC Program. Shanghai Cooperation Organization road transport agreement and International

Roads Transport custom guarantee system became effective in January 2017. Taking these into account,

net benefits of ADB’s support in the transport sector could prevail in the next few years. Overall, the

validation considers the transport sector operations’ development impact likely satisfactory.

54. Local benefits. The CPSFR stated that rehabilitation of national roads mostly benefited the

surrounding population as the main users of the road. The validation agrees, and this is confirmed in

available PCRs for three of the four completed tranches under the CAREC Corridor 1 program. The projects

were reported to have reduced the local travel time, improved access to local markets and facilities, and

provided employment opportunities and income to local residents.15

Under Tranche 2, vehicles using the

Blagoveschenka–Merke road section, including commercial cargo and passenger vehicles, doubled from

2009 after completion of the road. A significantly shorter travel time increased access of local people to

regional markets and social services. From 2009 to 2013, unemployment in Zhambyl oblast fell from

6.0% to 5.1%. Most of those employed on the project were local people. The impact of the stand-alone

Taraz Bypass project is likely moderate based on the small traffic observed.

15

Local government authorities and residents informed the ADB PCR mission for Tranche 3 that the roads improved: (i) travel

convenience; (ii) access to markets, social service facilities, and business areas in Almaty, Korday, Merke, and Taraz; and

(iii) employment opportunities and income. In Turar Ryskulov raion in Kulan, residents said travel time in Otar–Blagoveschenka–

Kulan stretch had fallen from 10 hours to 6 hours and that road safety and environmental conditions improved in Kulan since

cargo trucks no longer travelled on village roads. Cafes, small shops, and fuel stations at both ends of the Kulan Bypass increased

employment opportunities and incomes. In Korday raion, a cafe and a fast food restaurant reportedly opened with the road

towards Karasu and the parking area trucks at the Karasu border crossing. Additional local businesses are expected. Along Otar–

Blagoveschenka road, drivers, and passengers noted increased travel comfort due to smoother pavement and the construction

of rest areas, bus stops, and gender-sensitive toilets.


55. Regional benefits. Being transit corridors, the CPSFR also stated benefits for interregional and

cross-border trade. The mission did not find this evident in the PCRs. The PCRs for Tranches 2 and 3

claimed that the improved corridors will lower the cost of trade and stimulate economic activity between

Kazakhstan and its neighbors. Both did not give support data, and achievement is pending on completion

of other future operations. There is limited evidence on corridor impacts to the national economy and

external trade. Current traffic volume on Tranches 1 and 2 roads is below expectation. In travelling back

and forth along the Almaty to Taraz project road, the mission noted traffic was very light generally and

with none for long stretches. Traffic on the Taraz Bypass was almost non-existent.

56. Kazakhstan has benefited from several regional TAs in building institutional and operational

capacity for regional cross-border transport.16

While the many of these initiatives are relatively new and

their effectiveness cannot be fully assessed at this time, the outlook is positive based on the project

roads’ potential as cited in the PCRs for Tranches 2 and 3: (i) the road being part of a national transit

corridor connecting the European Union, the Russian Federation, and Kazakhstan with the PRC;

(ii) establishment of the Eurasian Economic Union in 2015; (iii) development of the Center of International

Cooperation in Khorgos in line with the regional economic integration programs of Kazakhstan and the

PRC; and (iv) improvements at the Karasu border crossing with the Kyrgyz Republic

57. With lower than expected traffic for most of the improved roads, the validation mission is not

convinced about broad regional impacts (e.g., trade with the PRC, Kyrgyz Republic, the Russian

Federation, and Uzbekistan) as first envisaged from the CAREC Corridor 1 program. But it notes there

have been regional benefits associated with border crossings linked to the roads. For example, cargo

volume in both directions of the Karasu border crossing reportedly increased to 911,000 tons in 2015

from 393,000 tons in 2010. Bus and truck traffic run along the CAREC Corridor 3 road from Shymkent to

Tashkent.

58. Unintended impacts. The PCRs reported that some unintended negative impacts did occur. These

included a rise in road accidents and unintended environmental and safeguards issues along the project

roads: road accidents in Zhambyl Oblast increased by 31% in 2012 and this trend continued in 2013

(Tranche 1); increase in the land area and number of people affected by the project; (Tranche 1 and

Tranche 2), and road construction cut trees but reforestation works had not started (Tranche 2).

E. Other Assessments

59. ADB Performance. The validation agrees with the CPSFR assessment that ADB’s performance is

satisfactory. According to the completion reports of Tranches 1, 2 and 3 of the CAREC Transport Corridor

1 program, ADB’s performance was satisfactory. The project was administered from ADB headquarters

with active involvement of the Kazakhstan Resident Mission. ADB built a sound relationship and provided

substantial and timely support to the executing and implementing agencies (MOTC/Ministry of

Investment and Development, Committee of Roads)

60. ADB collaborated with the Ministry of Finance and MOTC to strengthen project readiness through

due diligence reports and safeguards and economic analysis. During implementation, ADB provided

timely guidance and support in approving advance actions; preparing and evaluating documents related

to procurement of civil works and consulting services by providing prompt and detailed feedback; and

holding close consultations for timely and practical resolution of safeguards, and financial and technical

issues. ADB’s close monitoring contributed to timely project completion. During the project, ADB and the

Islamic Development Bank did not coordinate their operations. Teamwork between ADB and Japan

International Cooperation Agency also facilitated effective project preparation, implementation, and

completion.

16 These support the Almaty-Bishkek economic corridor initiative, enhanced road safety, gender inclusive growth, private sector

trade facilitation, regional transit trade facilitation, alignment of customs trade facilitation measures with best practice, sanitary

and phytosanitary measures, and coordinated border management (para.79).


61. Borrower Performance. The validation agrees with the CPSFR assessment that borrower

performance is satisfactory. According to the completion reports for Tranches 1, 2, and 3 of the CAREC

Corridor 1 program, performance of the borrower, the executing agency, and the implementation agency

was satisfactory. The change of the executing agency from Ministry of Transport and Communication to

the Ministry of Investments and Development did not affect project implementation as the Committee

of Roads kept its role as implementing agency. The latter has been implementing ADB-funded projects

and other projects using international financing along CAREC Corridor 1, which provided the needed

experience in adequately managing externally funded projects. The implementing agency implemented

the project in accordance with ADB guidelines and policies, facilitated timely release of counterpart funds,

and complied with covenants. As this was the first project after reorganization of the executing agency,

guidance by and consultation with ADB was needed, particularly on safeguards, procurement, consultant

recruitment and contract administration because the executing agency lacked experience with ADB

guidelines.

F. Overall Rating

62. The validation rates the transport sector program successful on the borderline of score of 1.60,

with the ratings of relevant, less than effective, efficient, likely sustainable, and likely satisfactory

development impacts. Details are in Table 4.

Table 4: Transport Sector Rating

Criterion CPSFRa

CPSFR Validationb

Key Reasons for Difference

Relevance Relevant Relevant

Effectiveness Effective Less than effective Sector outcome targets are not expected to be met by

2016, the less than effective rating for CAREC Corridor 1

(Tranche 1), and the data to date pointing to a mixed

rating for the other projects.

Efficiency Likely efficient Efficient

Sustainability Likely sustainable Likely sustainable

Development

impacts

Satisfactory Satisfactory

Overall score 2.0 1.8

Overall rating Successful Successful

a ADB. 2016. Country Partnership Strategy Final Review: Kazakhstan, 2012–2016. Manila.

b Validation’s assessments.

Source: Independent Evaluation Department.

G. Lessons and Recommendations

63. Lessons. The PCR for Tranche 1 of CAREC Corridor 1 for Zhambyl Oblast identified three lessons.

First, the need for realistic cost estimates. Costs for civil works and consulting services were overestimated

at appraisal while contingencies were excessive. This resulted in cancellation of 34% of the loan amount.

Changes in scope and design were also needed to accommodate geological conditions and needs of the

local population. These were not identified at design stage. In validation’s view, the PCR was not clear

why costs were overestimated or which aspects of design changes could have been anticipated at

appraisal.

64. The design stage for ADB is the project preparatory technical assistance or feasibility study stage.

Objective of that stage is a rough (conceptual) estimate of designs and costs. Geological constraints

reveal themselves typically at the engineering stage of a project and could not have been captured by

the conceptual ADB design.


65. Second, the need for clear identification of the role of the project management consultant. The

expected role of the consultant was unclear as the original terms of reference did not properly define the

tasks and deliverables of each expert. This resulted in many refinements to the terms of reference during

implementation. These roles and responsibilities should be properly defined during project preparation.

66. Third, the need for improvement of the executing agency’s project management capacity.

Inadequate knowledge in the MOTC and the Committee on Roads regarding safeguards and procurement

and a lack of staff with appropriate expertise were major factors affecting project implementation and

ultimately led to stakeholder complaints. Support for capacity and enhancing knowledge in the executing

agency and KazAvtoZhol are important, particularly for procurement, safeguards, and contract

administration.

67. Validation agrees with the second and third lessons and offers additional two lessons. First, it

was evident from the report and recommendation of the President and field observations that accurate

traffic assessments were not done causing a gross overestimation of benefits. The overestimation of the

traffic also likely had an effect on the proposed project design pointing to potential overinvestments. Use

of old traffic data and substandard techniques for forecasting should be avoided.

68. Second, expectations for tolling on some of Kazakhstan’s roads must be carefully evaluated for

viability. If traffic where tolling is proposed is light, like the Almaty-Taraz road as observed by the

validation mission, then tolls will not generate revenues rather reduce traffic.

69. This is a bold assumption. Tolls set at a high level may indeed deter traffic provided that the

traffic has alternative routes. In the case of the project roads, one would have to assess whether such

alternatives exist and at what toll level traffic would reroute. Both aspects are not assessed. In reality,

international transit traffic and long distance Kazak traffic has no such alternatives.

70. Recommendations. The completion reports for Tranches 1, 2 and 3 of the CAREC Corridor 1

program offered several recommendations. First, the executing agency should continue to conduct road

safety audits, raise road safety awareness, and increase police oversight. It must do monthly reviews of

the safety performance of project roads, including speed surveys and accident data to determine

necessary engineering and/or enforcement countermeasures.

71. Second, in the context of operational maintenance reforms wherein the completed road is

converted to a toll road, it is recommended to implement integrated road management, based on the

Intelligent Transport System solutions, to enable better traffic planning and control and improve road

safety and road asset management. The Government should continue also support KazAvtoZhol in

making a transition toward establishing more toll roads to fund overall road network maintenance. MOTC

will need to allocate more funding so that KazAvtoZhol is able to undertake road maintenance. The

government should monitor and follow up on these initiatives.

72. Third, the completion report recommended improvement in border crossing infrastructure. The

government should engage in dialogue with neighboring countries and take a unified approach to

enhance the project corridor’s operational reliability, user-friendliness, and sustainability.

73. Fourth, the completion report recommended private sector participation in the road sector. The

competence of the local construction industry should first be assessed and plans developed to strengthen

capacity. Alternative approaches to private sector participation in road operation and maintenance

should be assessed, i.e., funding modalities, institutional setup, operational mechanisms, and contractual

frameworks, including performance-based maintenance contracts.

74. Fifth, the completion report recommends that project schedules take account of (i) lengthy

government procedures to sign loan documents and initiate effectiveness, (ii) time and resources for


archeological studies and other mandatory due diligence; and (iii) additional works from user

perspectives like crossing for cattle and agricultural machinery.

75. Validation concurs with the recommendations. It also recommends that implementation of a

project performance management system be closely monitored by ADB to ensure the quality of the

system and usefulness of data collected at project start and completion.

76. Traffic data of major roads should be routinely collected. This will enable more accurate

estimation of traffic levels to determine economic viability of road subsector investments, maintenance

needs, and the viability of policy proposals such as tolling of Kazakhstan’s roads.

15

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ASSESSMENT OF THE TRANSPORT SECTOR PORTFOLIO

Basic Project

Information Expected Impact, Outcome and Output CPSFR Assessment

CPSFR Validation

Assessment

`Loan 2503: CAREC

Transport Corridor

1 (Zhambyl Oblast

Section) [Western

Europe-Western

People's Republic of

China International

Transit Corridor]

Investment

Program - Tranche

1

Approval Date:

30 Dec 08

Closing Date: 20

Mar 14 (PCR –

June 2014)

Amount ($, M)

Approved:

340.0

Actual: 224.1

EA/IA

EA: MOTC

IA: Committee

of Roads under

MOTC

Impact (of the Overall Corridor Investment including the

Investment Program): Sustainable economic development.

Indicator 1: By 2020, GDP growth of 68% from 2010

baseline. GDPs of Kazakhstan’s economic partners will

increase by 43% for other Central Asian countries,a

4% for

Russian Federation, 6% for the PRC, and 4% for the EU.

Status at Completion: Likely to be achieved. In 2013,

Kazakhstan GDP increased by 51.88%, while that of the

Russian federation increased by 28.88% (as measured in

equivalent US dollars). The GDP of EU member countries

increased by 1.39 % on average.

Indicator 2: By 2020, increased values of external trade

reflected in the expansion of exports (by 32%) and imports

(by 33%). More particularly, exports to other Central Asian

countries increased by 50%, Russian Federation 25%, PRC

36%, and EU 28%. Conversely, imports from other Central

Asian countries increased by 48%, Russian Federation 27%,

PRC 37%, and EU 30%. Status at Completion: Likely to be

achieved. From 2010 to 2013, the value of exports to the

PRC and Russian Federation increased by 44% and 91%,

respectively, while the value of imports from the PRC and

Russian Federation increased by 348% and 82%,

respectively. Values of the export to the Central Asian

countries increased on average by 34% (2010–2013), while

trends in import value were mixed.b

Indicator 3: By 2020, outputs of transport sector increased

by 79% and distribution sector increased by 77%,

compared with 2010 baseline. Status at Completion: Less

likely to be achieved. No data have been collected

regarding the nationwide outputs achieved in the

transport sector by 2013; however, the government’s total

investment in the transport and trade sector increased by

46.10% from 2010 to 2013.

The impact indicators in both the RRP and PCR

were for the whole corridor and were expected to

be achieved in 2020. As a result, it is difficult to

attribute the initial achievements in the PCR

project framework to the project.

The CPSFR rates the project as less than effective

because there was no data on project outcomes

and only partial progress was made in the

establishment of road maintenance facilities at

four sites.

Indicator 1: Not assessed.

Indicator 2: Initial achievements:

PCR indicated that the project increased volume of

trade and diversified the number of entrepreneurs

in the trading and tourism industries.


Tranche 1 is relevant. Design

addressed improved safety,

serviceability and

operational efficiency of the

road. But still, one-third of

the original loan amount

was canceled due to

overestimation of civil works

and consulting services

costs and inclusion of

excessive contingencies.

The validation mission

appreciates the strong

developmental angle to the

CAREC corridor roads

program. Road design is

driven by a commitment to

achieve a level of service

from existing roads. This

likely led to an

overestimation of traffic and

overinvestment in the road.

Tranche 1 is less than

effective due to its lower

than expected road usage

and partial achievements on

road operations and

maintenance system at

completion. Validation of

the Tranche 1 completion

report by IED later

downgraded its rating to

less than effective because

of the mixed results on their

outcomes and outputs.

16 K

azakhstan: Country P

artnership Strategy F

inal Review

Validation, 2012

–2016

Basic Project


CPSFR Validation

Assessment

Outcome: Efficient transport system in Zhambyl Oblast.

Indicator 1: By 2015c

, increased average traffic volume

from 4,000 vpd in 2007 to 7,000 vpd.


, reduced average travel time between

Zhambyl Oblast and the southern Kazakhstan border and

Otar from 10 hours to 6 hours.


, reduced transport cost for freight

from 10% to 5% of the cargo value [baseline year not

given in DMF].


, reduced accident rate from 0.3

fatality/km in 2006 to 0.1 fatality/km.

Note: The CPSFR used a different set of outcome

indicators compared with the DMF attached to the

PFR and the PCR. The CPSFR had only two

indicators compared to 4 in the DMF.

Indicator 1: Increased average traffic volume to

2,000 vpd in 2014 from 1,000 vpd in 2007

Assessment (Note: Most of these sentences were

taken from the PCR.): AADT in 2012 was 4,298

vehicles for the Taraz-Kulan section, and 3,911

vehicles for the Blagoveschenka-Korday road

section.

The economic internal rate

of return for Tranche 1 was

16.2% at project completion

compared to 28.1% at

appraisal mainly due to a

lower traffic forecast. Given

the low volume of traffic

under CAREC Transport

Corridor 1 for Zhambyl

Oblast and the Taraz

Bypass, the EIRR for this

road is likely below the

threshold level of 12% real.

Overall, the project is rated

efficient.

Project sustainability is less

likely sustainable given the

chronic funding shortages

for road maintenance and

the inability for the

government to realize its

plan to introduce a toll

system to collect funds for

the maintenance. Sufficient

funding of road

maintenance will be an

issue in the longer term

especially when other road

projects are completed and

routine road maintenance

will be needed.

The validation [IED] assessed

development impacts in the

transport sector as likely less

satisfactory. It agrees with

the CPSFR that a

comprehensive analysis of

sector level impacts is

premature at this time, as

most projects are still

Indicator 2: Reduced average travel time to 1 hour

in 2014 from 2 hours in 2007

Assessment: In 2013, the average travel time was

reduced to 6.5 hours between Almaty and Taraz

City. (PCR)

Passenger fares did not decrease as expected, but

increased sections (e.g., taxi and bus fares

between Taraz and Kulan increased about 33% in

2013 compared to 2010). Similar trends were

observed in cargo charges, and consequently, a

reduction in travel and freight cost was assessed

unlikely to be achieved.

Note: Indicators 3 and 4 were not presented in the

CPSFR. Indicator 3 was assessed as part of its

assessment for Indicator 2. Indicator 4 was not

assessed.

Output 1: Reconstructed highway sections in Zhambyl

Oblast

Indicator: 125-km road reconstructed on time, within

budget, and meeting technical specifications with IRI of

less than 3 m/km.

Output 2: Improved road operations and maintenance

system.

Indicator 1: Sustainable road maintenance and operation

system prepared and pilot projects formulated.

Indicator 2: ITS strategy developed.

Indicator 3: Investment plan for ITS agreed for

implementation under the subsequent projects.

Output 1: Achieved. 125 km road reconstruction

completed (79 km and 46 km) and open to traffic.

Roughness of project sections was reduced from 5-

7 on the IRI to 1.1.

Output 2, Indicator 1: Partly achieved. The road

maintenance and operation system was proposed

and considered in the newly adopted national

transport program, but no pilot projects were

formulated.

Output 2, Indicator 2: Achieved. An ITS strategy

was proposed and considered in the new national

transport program.

Output 2, Indicator 3: Partly achieved. Facilities for

the ITS were not implemented, although

budgetary resources were allocated.

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Basic Project


CPSFR Validation

Assessment

PCR rated the project effective in achieving its

expected outputs and outcomes.

ongoing. The project road is

an international transit

corridor and simply not

meant to impact sparsely

populated in the

hinterlands. But recent

observations by the

evaluation mission point

only to project impacts on

populations in the

immediate area with little

evidence on its impact on

the national economy and

external trade, as envisaged

in the design and

monitoring framework.

Efficiency: EIRR was 16.2%, higher than the ADB

benchmark of 12%, but lower than the 28.1%

expected at appraisal. PCR rated the project

efficient.

Sustainability: PCR rated the project likely

sustainable. The PCR indicated funds would be

sufficient to maintain the project as the

government would introduce a toll system.

Loan 2562: CAREC

Transport Corridor

1 (Zhambyl Oblast

Section) [Western

Europe-Western


China International

Transit Corridor]

Investment

Program - Tranche

2

Approval Date: 7

Oct 09

Closing Date: 22

Oct 15

Amount ($, M)

Approved:

187.0

Actual: 184.7

EA/IA

EA: MOTC

IA: Committee

of Roads under

MOTC

Impact: Sustainable economic development. By 2020,

Kazakhstan's

(i) GDP growth by 60% from the 2010 level.

(ii) Export and import growth by 30% from the 2010 level.

Not assessed.

Tranche 2 is relevant with

several design issues during

implementation.

Tranche 2 generally met its

intended outcomes and

outputs. The project roads

with their reduced

roughness resulted in

reduced travel time and

vehicle operating costs,

improved road safety, and

comfortable conditions for

long distance passenger and

commercial travelers.

Reduction in transit time

and vehicle operating costs

stimulated transport along

the corridor. Overall,

Tranche 2 is likely less than

effective due to the partial

completion of its 4 road

maintenance depots and a

lower than expected traffic

growth along the Merke –

Blagoveschenka section.

Outcome: Development of an efficient transport system in

Zhambyl Oblast. By 2015 c

:

Indicator 1: Increased average traffic volume to 7,000 vpd

from 4,000 vpd in 2007.

Indicator 2: Reduced average travel time between Zhambyl

Oblast and South Kazakhstan border and Otar to 6 hours

from 10 hours [Note: baseline year not given in DMF].

Indicator 3: Reduced transport cost for freight to 5% of the

cargo value from 10% in 2008.

Indicator 4: Reduced road accident rate to 0.1 fatality/km

from 0.3 fatality/km in 2006.

Indicator 5: Tranche 2 benefitting about 10,000 people in

the project area.

Note: The CPSFR used only 2 outcome indicators,

with a different set of targets compared with

those presented in the DMF attached to the PFR.

The CPSFR used the following:

Indicator 1: increased average traffic volume to

4,000 vpd in 2014 from 2,500 vpd in 2007

Assessment: All road sections are open to traffic.

Road users benefit from the completed road

sections. No data on achievement of outcome

indicators.

Indicator 2: reduced average travel time between

Zhambyl Oblast and south Kazakhstan border and

Otar to 1.5 hours in 2014 from 3 hours in 2007

Assessment: All road sections are open to traffic.

Road users benefit from the completed road

sections. No data on achievement of outcome

indicators.

Indicators 3-5 were not assessed.

Output 1: About 79 kilometers of reconstructed highway

section in Zhambyl Oblast.

Note: In addition to the output and indicator given

in the DMF that was attached to the PFR, the

CPSFR had one more output with one indicator,

and an additional indicator for output 1.

18 K



inal Review

Validation, 2012

–2016

Basic Project


CPSFR Validation

Assessment

Indicator 1: By 2013, highway section km 310.5–km 389.4

in Zhambyl Oblast reconstructed with IRI of less than 3

m/km.

Additional indicator (from CPSFR):

Indicator 2: Reconstructed 59 km of the Zhambyl Border-

Taraz road sections (km 536-593) on time, within budget

and with pavement IRI < 3 m/km by 2013

Additional Output and Indicator (from CPSFR):

Output 2: Road maintenance facilities constructed and

operational in 4 sites

Indicator: Constructed 4 road maintenance facilities in

Otar, Merke, Akyrtobe, Korday; and operational by 2013

Output 1, Indicator 1: Achieved. Road section km

358.6-389: 4 reconstruction completed ahead of

schedule in December 2012 and now open to

traffic. Road section km310.5-358.6:

reconstruction completed in August 2013 and now

open to traffic.

Tranche 2 is rated efficient.

The EIRR for Tranche 2 is

14.8% or slightly below

appraisal of 16.4% due to

lower than forecast of

average daily traffic growth

beyond 2016.

ADB’s program of assistance

to the transport sector as

likely sustainable.

Government has steadily

increased funding for road

sector expenditures on

public roads. The COR and

KazAvtoZhol is continuing

institutional reforms in road

maintenance with a

performance-based

maintenance project

planned for implementation

with ADB financial and

institutional support. But

still, adequate funding for

road maintenance is a long

term issue that depends on

the government budget

performance and equally

affects all projects in the

road sector. Further, even as

institutional capacity is

improving, there is still no

functioning road asset

management system in

place to help monitor and

plan effective road

operation and maintenance.





Output 1, Indicator 2: Reconstruction of the road

section km 536-593 commenced in March 2010,

completed in January 2013, and now open to

traffic.

Output 2: As of original closing date of 30 June

2015, partially completed. Progress is: Korday

(85%), Otar (53%), Akyrtobe (63%) and Merke

(100%).

Project is likely to be rated less than effective.

Sustainability: Road maintenance facilities

construction in 4 sites along the corridor need to

be completed and operational. Government has

chronic funding shortage for road maintenance.

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Basic Project


CPSFR Validation

Assessment

the CPSFR that a




most projects are only

recently completed. The

project road is an

international transit corridor

and simply not meant to

impact sparsely populated

in the hinterlands. But

current observations by the



populations in the





in the design and


Loan 8251: CAREC

Transport Corridor

1 Investment

Program - Tranche

3

Approval Date:

31 May 10

Closing Date: 1

Aug 16

Amount ($, M)

Approved:

68.0

Actual: 68.3

EA/IA

EA: MOTC

IA: Committee

of Roads under

MOTC

This loan is related to Loan 2697-KAZ: CAREC Transport

Corridor 1 (Zhambyl Oblast Section) [Western Europe-

Western People's Republic of China International Transit

Corridor] Investment Program - Tranche 3. Thus, there was

no separate assessment done for this loan.

Loan 2697: CAREC

Transport Corridor

1 (Zhambyl Oblast

Section) [Western

Impact: To contribute to sustainable economic

development by promoting international trade and

regional cooperation. By 2020 [2010 baseline],

Kazakhstan’s

Not assessed. Tranche 3 is relevant . The

design of went unchanged

from appraisal to

completion and was

20 K



inal Review

Validation, 2012

–2016

Basic Project


CPSFR Validation

Assessment

Europe-Western


China International

Transit Corridor]

Investment

Program - Tranche

3

Approval Date:

15 Nov 10

Closing Date: 22

Apr 15

Amount ($, M)

Approved:

173.0

Actual: 164.7

EA/IA

EA: MOTC

IA: Committee

of Roads under

MOTC

(i) GDP growth by 60%.

(ii) Export and import growth increased by 30%.

adequate to attain the

intended outputs and

objectives. Minor variations

in works contributed to

improved road safety.

Tranche 3 was likely

effective in achieving

intended outcomes and

outputs at appraisal.

Reestimated traffic growth

are well above appraisal

Other benefits observed

were an increase in cargo

volume at the Karasu border

crossing and more

businesses such as gas

stations, cafes and shops

along the project road.

Tranche 3 is rated efficient.

The EIRR at completion was

23.3% as compared to

16.6% at appraisal. This

change was due to higher

observed traffic using the

road and with construction

costs within budget.

ADB’s program of assistance

to the transport sector as

likely sustainable.

Government has steadily

increased funding for road

sector expenditures on

public roads. The COR and

KazAvtoZhol is continuing

institutional reforms in road

maintenance with a

performance-based

maintenance project

planned for implementation

with ADB financial and

Outcome: Efficient connectivity, improved road safety, and

institutional effectiveness. By 2015:


from 4,000 vpd in 2007.

Indicator 2: Reduced average travel time through Zhambyl

Oblast between the southern Kazakhstan border and Otar

to 6 hours from 10 hours in 2009.


cargo value from 10% in 2008;


from 0.3 fatality/km in 2006; and

Indicator 5: Project 3 benefitting about 8,000 people in the

project area.

Note: The CPSFR had only 2 outcome indicators

with different targets compared to those used in

the DMF that was attached to the PFR. The CPSFR

used the following:


2,500 vpd in 2015 from 1,000 vpd in 2009

Assessment: Works in all road sections were

completed and roads were open to traffic. Traffic

volume increased by 300% as initially observed.

Indicator 2: Reduced average travel time through

Zhambyl Oblast between the southern Kazakhstan

border and Otar to 3 hours by 2015 from 5 hrs in

2009

Assessment: Works in all road sections were

completed and roads were open to traffic. An

average of 50% time savings is initially observed.

Achievement of outcome indicators still being

monitored.


Output: 118 km of road section in Zhambyl Oblast of the

CAREC Transport Corridor 1 reconstructed.

By 2013, road section from km 383–404, km 162–260,

approach to Kyrgyz border reconstructed with IRI of less

than 3 m/km.

Output: Achieved. Road construction of 20 km at

road section Km 383-404 was completed in

October 2013, and the road was open to traffic

(JICA funded). Construction at road sections km

162-260 and Korday-KGZ border were

substantially completed in November 2014.

Sustainability: Based on RRP of the investment

program, government would increase budget

allocation and introduce toll system for road

maintenance. However, government has chronic

funding shortage for road maintenance.

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Assessment

institutional support. But

still, adequate funding for

road maintenance is a long

term issue that depends on

the government budget

performance and equally

affects all projects in the

road sector. Further, even as

institutional capacity is

improving, there is still no

functioning road asset

management system in

place to help monitor and

plan effective road

operation and maintenance.





the CPSFR that a




most projects are still

ongoing. The project road is

an international transit

corridor and simply not

meant to impact sparsely

populated in the

hinterlands. But recent

observations by the



populations in the





in the design and


Loan 2735: CAREC

Transport Corridor


development. By 2020 [2010 baseline], Kazakhstan’s

Not assessed. No PCR has been prepared

for Tranche 4 of the MFF

22 K



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Validation, 2012

–2016

Basic Project


CPSFR Validation

Assessment

1 (Zhambyl Oblast

Section) [Western

Europe-Western


China International

Transit Corridor]

Investment

Program - Tranche

4

Approval Date:

21 Feb 11

Closing Date: 27

Apr 15

Amount ($, M)

Approved:

112.0

Actual: 104.2

EA/IA

EA: MOTC

IA: Committee

of Roads under

MOTC

(i) GDP growth by 60%.

(ii) export and import growth increased by 30%

after its completion in 2015.

Although project outputs

were achieved, there was no

data on project outcomes

and the CPSFR could not

rate the effectiveness of this

project.

Outcome: Development of an efficient transport network

in Zhambyl Oblast. By 2015:


from 4,000 vpd in 2007.

Indicator 2: Reduced average travel time through Zhambyl

Oblast between the southern Kazakhstan border and Otar

to 6 hours from 10 hours in 2009.


cargo value from 10% in 2008.


from 0.3 fatality/km in 2006.

Indicator 5: Project 4 benefitting about 8,000 people in the

project area.

Note: The CPSFR had only 2 outcome indicators

with different targets compared to those used in

the DMF attached to the PFR. The CPSFR used the

following:


2,000 vpd in 2015 from 1,000 vpd in 2007

Assessment: Road construction was completed in

May 2014, and road section was open to traffic.

Outcome indicators are being monitored.

Indicator 2: Reduced average travel time through

Almaty-Korday-Blagoveshchenka-Merke-Tashkent-

Terment road section to 2 hours in 2015 from 4

hours in 2009

Assessment: Road construction was completed in

May 2014, and road section was open to traffic.

Outcome indicators are being monitored.


Output: 49 kilometers of road section in the Zhambyl

Oblast upgraded from category II to category IB.

Indicator: By 2013, road section from km 260.5–km 310.5

reconstructed with IRI of less than 3 m/km.

Note: The CPSFR had a different output statement

and indicator compared to the DMF attached to

the PFR: The CPSFR used the following:

Output: Almaty-Korday-Blagoveshchenka-Merke-

Tashkent-Terment road section improved and open

to traffic.

Indicator: Reconstructed 49 km of the road section

on time, within budget and with pavement IRI < 3

m/km by 2014

Assessment: All concrete pavement works for 49

km were completed on time. The road section is

open to traffic.

Sustainability: Government increased budget for

road maintenance. Among EA initiatives include:

(i) installation of a comprehensive and unified road

asset management system, including automated

weighing facilities and traffic count data system;

and (ii) integration of road safety audit activities

into regular road operation.

Project likely to be sustainable.

Loan 2824: CAREC

Corridor 1 ( Taraz

Bypass)

Impact: Increased trade in Kazakhstan.

Indicator: By 2020, Kazakhstan’s trade volume increased by

10% from 2011.

Not assessed. The 65 kilometer road

rehabilitation of the Taraz

Bypass in Zhambyl Oblast

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Approval Date: 7

Dec 11

Closing Date: 28

Apr 16

Amount ($, M)

Approved:

85.0

Actual: 82.3

EA/IA

EA: MOTC

IA: Committee

of Roads under

MOTC

Outcome: Better connectivity for the Zhambyl Oblast

section of the CAREC Transport Corridor 1. By 2015:

Indicator 1: Average travel time through Zhambyl Oblast—

between the southern Kazakhstan border and Otar—

reduced to 7 hours, from 10 hours in 2009.

Indicator 2: average traffic volume along the project road

increased to 7,000 vpd, from 4,000 vpd in 2007.

Indicator 3 (Added in CPSFR): By 2015, reduced accident

rate on the project road to 0.1 fatality/km from 0.3

fatality/km in 2006.

Note: The CPSFR used a different target for

indicator 1 (compared with the one presented in

the DMF attached to the RRP), and had an

additional indicator.

Indicator 1: By 2015: reduced average travel time

through Zhambyl Oblast between the southern

Kazakhstan border and Otar to 6 hours from 10

hours in 2009

Assessment: Road construction is complete.

Outcome indicators are currently being monitored.

under CAREC Corridor 1 is

complete and was opened

in 2015 for operation.

There was no data on

outcomes but the validation

mission did observe the very

low volume of traffic using

the bypass (i.e. traffic was

light in general and there

were no vehicles for long

stretches of the road; traffic

on the Taraz Bypass was

almost non-existent).

Therefore, the validation

rates the outcome of the

project to be less than

effective.

Given the low traffic on the

road, the expected quantity

of economic benefits to be

generated by the project

will likely not be realized in

the near to medium term.

Therefore, the EIRR for this

road will likely be below the

threshold level of 12% real.

Indicators 2-3 Assessment: Road construction is

complete. Outcome indicator is currently being

monitored

Output 1: Approximately 7.7 km upgraded road, from

category-II to category-IB with four lanes.

Output 2: Approximately 57.4 km of new category-II

bypass road.

Indicator for Outputs 1 and 2: By 2015, works on the

project road from km 483 to km 536 completed with IRI of

less than 3 m/km.

Note: The CPSFR had some modifications in terms

of the output statement, and an additional

indicator.

Output: A 65 km road section (Taraz bypass)

reconstructed

Indicator 1: By 2015, road section from km 483–

km 536 reconstructed with IRI of less than 3 m/km

Indicator 2: By 2015, a 65 km road section (Taraz

bypass) reconstructed:

- an approximate 7.7 km upgraded road, from

category-II to category-IB with four lanes

- an approximate 57.4 km new category-II bypass

road (According to the CPSFR, these are indicators

in the RRP).

Output Assessment: The road works for the 65-km

Taraz Bypass Road was substantially completed in

December 2015.

Efficiency: Rating is likely to be less than efficient

due to implementation delays (the loan was

supposed to close on 31 Dec 2015)

Project status: On track in terms of actual contract

awards and disbursements, although contract

awards and disbursement are 90% and 88%,

respectively. Should be 100% by Dec 2015. Closing

date extended from 30 Jun to 31 Dec 2015 due to

implementation delays.

Loan 2728: CAREC

Corridor 2


development and regional cooperation under CAREC.

Not assessed. The rationale for the MFF

and its Tranche 1 project

24 K



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Validation, 2012

–2016

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CPSFR Validation

Assessment

(Mangystau Oblast

Sections)

Investment

Program - Tranche

1

Approval Date:

20 Dec 10

Closing Date: 29

Feb 16

Amount ($, M)

Approved:

283.0

Actual: 151.1

EA/IA

EA: MOTC

IA: Committee

of Roads under

MOTC

Indicator: By 2020, increased Kazakhstan GDP to $300

billion from about $114 billion (2009).

was poorly developed in the

RRP. The need for the road

in terms of demand was not

well established. The RRP

also used 2007 traffic data

and extrapolated it to 2010

based on GDP growth.

Given the validation

mission’s observations of

traffic on the Almaty-Taraz

road, this likely led to an

overestimation of traffic on

the project road because of

the sparse population and

economic activity in the

oblast.

At the time of IED

validation, there is no data

yet on the project’s

outcomes and outputs. The

PCR has yet to be prepared.

However, IED noted that

only 53.3% of the original

loan amount was disbursed

at completion. While it is

not possible to rate the

effectiveness of this MFF,

this validation notes the

target year is 2016 and as

the MFF is not completed

the outcome targets are

likely not to be met.

Outcome: Increased transport connectivity and efficiency

and institutional effectiveness. By 2016:

Indicator 1: Increased traffic volume to 3,500 vpd from

about 1,000 vpd in 2009.

Indicator 2: Reduced travel time between Aktau and

Beineu to 4 hours from 12 hours in 2009.

Indicator 3: National road safety improvement strategy

with action plans prepared and implemented.

Indicator 4: Reduced road user costs to $0.43/vehicle-km

from $0.64/vehicle-km (2010).

Indicator 5: Average processing time per truck at border

crossing points reduced to 30 minutes per truck from 1.5

hours.

Indicator 6: Number of accidents per year on the corridor

reduced to 140 from 152 in 2009.

Note: The CPSFR used a different output statement

and indicators compared with the DMF attached

to the PFR: The DMF had 5 indicators, while the

CPSFR had 2. The CPSFR used the following:

Outcome: Efficient transport network connecting

Aktau to Manasha

Indicator 1: Increased traffic volume to 1,000 vpd

in 2015 from 500 vpd in 2010

Assessment: Outcome indicators are currently

being monitored after completing road

construction in December 2014.

Indicator 2: Reduced travel time between Aktau

and Manasha to 2 hours in 2015 from 3 hours in

2010

Assessment: Outcome indicators are currently

being monitored after completing road

construction in December 2014.


Output 1: Two road sections (km 372.6–km 514.3 and km

574–km 632.3) reconstructed.

Indicator 1: About 200-km road sections constructed with

pavement IRI of less than 4m/km by 2013.

Indicator 2: HIV and human trafficking awareness program

implemented by 2011.

Output 2: MOTC’s capacity for project and asset

management strengthened.

Indicator 1: Program management unit effectively

functioning

Indicator 2: Computerized road management system

implemented by 2016

Indicator 3: Timely submission of subsequent tranche

projects to ADB

Indicator 4: Road asset management system implemented

for programming.

Indicator 5: Performance-based contract for routine

maintenance piloted by 2015.

Note: The CPSFR had (i) only 2 outputs, (ii)

different targeted dates for output 1 indicators,

and (iii) only two indicators for output 2, (using a

different target date for one of the indicators)

compared with those in the DMF, which was

attached to the PFR.

Output 1, Indicator 1: 200-km road sections (km

372.6-km 514.3 and km 574-km 632.3)

reconstructed on time, within budget and with

pavement IRI < 4m/km by 2014

Assessment: Construction in 200-km road sections

(Km 372.6 – 514.4 and Km 574 – 632.3) was

substantially completed in December 2014. All

roads are open to traffic.

Output 1, Indicator 2: HIV and human trafficking

awareness program implemented by 2012

Assessment: HIV and human trafficking awareness

program developed and implemented at the

beginning of 2014. Hence, a delay from the

original target year of 2012.

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Indicator 6: Tranche 3 project prepared and implemented

by MOTC, with less consultant input.

Output 3: Cross-border infrastructure and facilities

improved

Indicator 1: By 2016, facilities and infrastructure at border

crossing between Uzbekistan and Kazakhstan modernized.

Indicator 2: training of officials working at border with

Uzbekistan completed by 2016.

Output 2, Indicator 1: Program management unit

effectively functioning by 2015

Assessment: Program management unit is

effectively functioning since May 2013, when PMC

was on board.

Output 2, Indicator 2: Computerized road asset

management system implemented by 2015

Assessment: With the recent organizational

changes and introduction of Kazavtozhol for the

asset management, this indicator may have to be

reformulated.

Output 2, Indicators 3-6 were not assessed.

Output 3 was not assessed.

Efficiency: EIRR for the entire 430 km road (project

1 & 2) was computed at 16.1% at appraisal.

Project is on track in terms of contract awards and

disbursements.

Likely efficient (although with delays)

Loan 2967: Central

Asia Regional

Economic

Cooperation


development and regional cooperation under CAREC.

Indicator: By 2020, increased GDP of Kazakhstan to $300

billion from $114 billion in 2009.

Not assessed. Projects under Tranche 2 are

still being implemented.

Therefore, it is not possible

to rate the effectiveness of

26 K



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Validation, 2012

–2016

Basic Project


CPSFR Validation

Assessment

Corridor 2

(Mangystau Oblast

Section) Investment

Program - Tranche

2

Approval: Date:

13 Dec 12

Closing: Date: 31

Oct 17

Amount ($, M)

Approved:

371.3

Actual: na

EA/IA

EA: MOTC

IA: Committee

of Roads in

Mangystau

Oblast

Outcome: Increased transport connectivity and efficiency in

the Mangystau region.

By 2017:

Indicator 1: increased traffic volume to 1,700 vpd from

1,200 vpd in 2012 on section between Shetpe and

Zhetibay.

Indicator 2: increased traffic volume to 5,600 vpd from

1,200 vpd in 2012 on section between Aktau and Zhetibay.

Indicator 3: reduced road-user costs to $0.43/vehicle-km

from $0.64/vehicle-km in 2010.

Indicator 4: number of accidents per year on the two

sections reduced to 45 from 68 in 2009.

Indicator 5: reduced travel time between Aktau and Shetpe

to 2 hours from 3.5 hours in 2012.

Additional outcome indicators in CPSFR but not in the DMF

attached to the PFR:

Indicator 6: By 2018, increased traffic volume to 14,332

vpd from 11,780 vpd in 2013 on section between Zhetybay

and Zhanaozen.

Indicator 7: By 2018, reduced travel time between

Zhetybay and Zhanaozen to 1 hour from 1.5 hours in

2013.

Note: The CPSFR used 2018 as its targeted year in

terms of the outcome indicators, while the DMF

attached to the PFR used 2017.

Indicators 1-7: Outcome indicators will be

measured after completing road construction.

the MFF for CAREC

Transport Corridor 2 for

Mangystau Oblast.

Given the low level of

economic activity and

sparse population for the

Mangystau Oblast projects,

validation’s view is that the

EIRR for these road projects

will also likely be below the

threshold level.

Output: Mangystau Oblast road section from Shetpe to

Zhetibay (Km 632.3 to Km 719) and Zhetibay to Aktau (Km

719 to Km 802) of CAREC Corridor 2 reconstructed.

Indicator 1: 86.7-km road section from Shetpe to Zhetibay.

Indicator 2: an 83-km road section from Zhetibay to Aktau

reconstructed to roughness index of 3, from an average of

6.

Additional Output (from CPSFR): Output 2: Zhetybay-

Zhanaozen road section reconstructed.

Indicator: By 2017: 73-km road section from Zhetybay to

Zhanaozen (Km 0 - 73) reconstructed to roughness index

of 3, from an average of 6 in 2013.

Note: There was no timeline given for the output

indicators in the DMF attached to the PFR. In the

CPSFR, a timeline was given (2017).

Indicators 1-2: Works ongoing.

Indicator for Output 2: Works ongoing.

Efficiency: As of 4Q 2015,Project is on track in

terms of contract awards and disbursements

Likely efficient (but with delays).

Loan 2916: CAREC

Corridor 3

(Shymkent-

Tashkent Section)

[Link to the

Impact: Closer regional cooperation and increased trade

along the CAREC corridor 3.

Indicator: By 2018, volume of regional trade along CAREC

Corridor 3 increased to $350 million from $150 million in

2012.

Not assessed. Improvement of the 37 km

road section from Shymkent

to Tashkent was 80%

complete with 25.2 km of

new concrete paved road

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Western Europe-

Western People's

Republic of China

International

Transit Corridor]

Road Improvement

Project

Approval

Date: 05 Oct 12

Closing

Date: 31 Oct 16

Amount

($, M)

Approved:

125.0

Actual:

80.7

EA/IA

EA: MOTC

IA: South

Kazakhstan

Committee of

Roads

Outcome: Efficient transport network in the South

Kazakhstan section of CAREC Corridor 3. By 2015 [2011

baseline]:

Indicator 1: Average traffic volume from Shymkent to

Tashkent increased to 2,000 vpd from 1,000 vpd.

Indicator 2: Travel speed improved by 20 km/hour from 60

km/hour.

Indicators 1-2 will be measured after completing

road construction.

and three out of seven

underpasses completed.

There is no data on

outcomes and outputs to

rate the project’s

effectiveness but as the

target year was 2015, they

were clearly not met as

expected. Moreover,

validation [IED] did note

that only 64.5% of the

original loan amount was

disbursed.

Given the similarity of the

CAREC Transport Corridor 3

for Mangystau Oblast

projects on the low level of

economic activity in the

region and its sparse

population, validation’s

view is that the EIRR for

these road projects will also

likely be below the

threshold level.

Output: A 37-km (km 705 to km 742) rehabilitated road

section from Shymkent toward Tashkent. By 2015:

Indicator 1: The project road section rehabilitated with an

IRI of less than 3 m/km from current IRI of 5 m/km.

Indicator 2: Seven million people will benefit from the

project.

Indicator 1: Overall works progress is at 81.3%.

About 32-km concrete pavement, and 6 (out of 7)

underpasses completed.


Efficiency: As of 4Q 2015, Project is on track in

terms of contract awards and disbursements.

Rating to be likely efficient, but with delays.

AADT = annual average daily traffic, ADB = Asian Development Bank, CAREC = Central Asia Regional Economic Cooperation, CPSFR = country partnership strategy final review, DMF

= design and monitoring framework, EIRR = economic internal rate of return, GDP = gross domestic product, IA = implementing agency, IED = Independent Evaluation Department,

IRI = international roughness index, ITS = intelligent transport system, KAZ = Kazakhstan, KGZ = Kyrgyz, km = kilometer, M = million, m = meter, MOTC = Ministry of Transport and

Communications, na = not applicable, PCR = project completion report, PFR = periodic financing request, PMC = project management consultant, PRC = People’s Republic of China,

RRP = report and recommendation of the President, T = tenge, vpd = vehicles per day,

a Central Asian countries include Afghanistan, Armenia, Azerbaijan, Georgia, Pakistan, Tajikistan, the Kyrgyz Republic, Turkmenistan, and Uzbekistan.

b The values of import to Kazakhstan increased in 2010–2013 from most of the Central Asian countries, for example, 1,855% from Turkmenistan and 422% from Tajikistan, while the

imports from Azerbaijan declined.

c The outcome indicators were designed for the investment program at appraisal. Hence, the achievement of the indicators is expected to be measured after the investment program’s

completion.

Sources: Report and Recommendation of the President, Periodic Financing Request Reports, Design and Monitoring Frameworks, Project Completion Reports, Draft Country Partnership

Strategy Final Review for Kazakhstan (2012-2016), ADB’s Loan Financial Information System, and IED’s database.

assessment of the transport sector...supplementary linked document 1: assessment of the transport...

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