The World Bank Report No: ISR8587 Implementation Status & Results Kazakhstan Customs Development Project (P096998) Public Disclosure Copy Operation Name: Customs Development Project (P096998) Project Stage: Implementation Seq.No: 7 Status: ARCHIVED Archive Date: 31-Mar-2013 Country: Kazakhstan Approval FY: 2008 Product Line: IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Specific Investment Loan Implementing Agency(ies): Key Dates Board Approval Date 27-Nov-2007 Original Closing Date 31-Dec-2012 Planned Mid Term Review Date Last Archived ISR Date 19-May-2012 Effectiveness Date 24-Mar-2009 Revised Closing Date 31-Dec-2014 Actual Mid Term Review Date Project Development Objectives Project Development Objective (from Project Appraisal Document) The development objective is to increase the efficiency, effectiveness and accountability of the CCC in order to: (i) promote internationally acceptable practices for expeditious processing of international trade flows, so as to further integrate the country into the world economy and improve the investment climate and competitiveness, (ii) improve taxpayer compliance with the Customs Code and thereby increase revenue collection, (iii) and support transparency of customs operations in order to reduce the potential for corruption and increase predictability for traders. The project will facilitate Kazakhstan#s accession to the WTO, as well as post- accession support. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Institutional Development, Governance and HR Management 16.75 Customs Operations 16.30 Information and Communication Technology 28.41 Public Disclosure Copy Project Management 1.00 Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Unsatisfactory Overall Risk Rating Moderate Implementation Status Overview 1. Until March 2012, project activities moved at a steady pace aided by a dedicated PMU. Most of the large consulting contracts had been signed and their implementation is Page 1 of 5 The World Bank Report No: ISR8587 completing allowing the possibility to move to the next phase of IT development. commenced. As a result, the CD has extended the end date of the project by two years to December 2014. 2. However, since April 2012, progress in engaging in new activities under the project has been slow. Particularly, the implementation of the single window, integrated tariff system and e-declaration under the project, which have the potential of considerable reducing clearance time and improving trade facilitation, have been delayed. Public Disclosure Copy 3. On the positive side, the prerequisite work needed to prepare for the IT procurements and business process reengineering task are nearing completion. Training at the Regional Training Institute financed under the project is progressing well. 4. Key performance indicators show progress in several areas (as measured by client surveys). In particular, there has been a significant reduction in the time taken to cross borders - from 29 hours in 2011 to 10.2 hours in 2012. There has also been a slight improvement in the time taken for final clearance at inland posts, although major improvements will likely only be realized once project investments in business process reengineering and ICT system implementation are completed. The rate of physical inspection has also fallen from the baseline of 70% in 2006 to 18.6% in 2011 to 22.5% in 2012. The number of documents required to be presented for Customs clearance has fallen from 14 in 2009 to 12 in 2010 to only 3 in 2011 and 2012. 5. The creation of the Customs Union required Kazakh authorities to strengthen non-CU border controls with China, Kyrgyzstan and Uzbekistan. Simultaneously, customs control has been removed on the northern borders with Russia which now has only the border police. 3 operation centers were created in Shymkent (for Kyrgyz and Uzbek borders), Almaty (for China border) and Mangistau (for borders with the Caspian Sea, Turkmenistan and Uzbekistan). These centers have been equipped with modern surveillance equipments for which KZT 14 billion was allocated from the Republican budget. 6. The Chairman CCC has assured the Bank that the reforms will be fast-tracked to compensate for past delays. Locations Country First Administrative Division Location Planned Actual Kazakhstan Not Entered Almaty Oblysy Kazakhstan Not Entered Astana Qalasy Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Reduction in average customs processing time Text Value 1.3 days 0.80 days or 19 hours client 75% reduction at the border posts (based on client surveys) survey / 1.4 hours on customs by end of the Project Date 01-Jan-2009 05-Nov-2012 31-Jul-2012 Comments Significant improvement in Public Disclosure Copy clearance time. Reduction in percentage of physical Text Value Physical inspections 70% 18.6% Physical inspections reduced inspections of import declarations by Customs. to 20% Date 29-Jun-2007 05-Nov-2012 31-Jul-2012 Comments Although the same as last year, the indicator has shown huge improvement from baseline. Already reached target level. Page 2 of 5 The World Bank Report No: ISR8587 Increase in ratio of total revenue collected by Text Value KZT100.0 m 189% increase 20% increase in ratio customs to number of customs staff. Date 01-Oct-2009 05-Nov-2012 31-Jul-2012 Comments Significant increase. Public Disclosure Copy (CCC has been collecting average monthly data on efficiency. This has been multiplied by 12 to compare with the annual baseline data). Improved perception of traders and other Text Value Baseline survey on client 62% improved perception Sgnificant improvement stakeholders regarding the frequency of perception to be conducted unofficial payments to customs officials as on project initiation measured by periodic surveys Date 31-Dec-2008 05-Nov-2012 31-Jul-2012 Comments Significant improvement from baseline. Baseline survey completed in July 2011. Number of documents required for border/ Number Value 14.00 3.00 7.00 customs clearance for imports Date 01-Mar-2009 05-Nov-2012 31-Dec-2012 Comments Significant improvement well beyond the target value enshrined in the Customs Code. Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Comprehensive training strategy, curriculum, Text Value Not in place Ongoing successfully. Distance learning is used for and distance learning systems are developed continuous professional and used for continuous professional development by atleast 20% development of CCC staff of customs staff. Date 30-May-2008 05-Nov-2012 29-Jun-2012 Public Disclosure Copy Comments Progress good. Implementation in progress. Integrated Tariff Automated System is Text Value Not in place Delayed Integrated Tariff Automated developed and made operational and System is developed and incorporates all other agency requirements. made operational and incorporates 100% of all other agency requirements. Date 30-May-2008 05-Nov-2012 29-Jun-2012 Comments Integrated tariff system will be developed in 2012 Page 3 of 5 The World Bank Report No: ISR8587 Increase in ratio of total additional revenue Text Value Currently additional revenue Will be initiated as soon as Additional revenue generated assessed as a result of post clearance controls generated as a result of post the QCBS -03 contract is as a result of post clearance to total revenue assessed. clerance control is 2% completed in the March 2013 control becomes 25% Public Disclosure Copy Date 29-Jun-2007 05-Nov-2012 03-Dec-2012 Comments This will be undertaken after implementation of QCBS 3 is in an advanced stage. New integrated IT system is available by the Text Value Not in place Not yet due New integrated IT system is end of 2010, piloted by end of 2011, and is fully fully operational operational by end of 2012 Date 30-May-2008 05-Nov-2012 31-Dec-2012 Comments This activity is not due yet. It will be commenced after the consulting activities are completed. Data on Financial Performance (as of 28-Nov-2012) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P096998 IBRD-48740 Effective 27-Nov-2007 02-Feb-2008 24-Mar-2009 31-Dec-2012 31-Dec-2014 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P096998 IBRD-48740 Effective USD 18.50 18.50 0.00 3.26 15.24 18.00 Disbursement Graph Public Disclosure Copy Page 4 of 5 The World Bank Report No: ISR8587 Public Disclosure Copy Key Decisions Regarding Implementation A revised action plan has been agreed between the Bank and CCC, which need to be implemented on a tighter time frame. Based on this plan, many activities have been front- loaded. Restructuring History There has been no restructuring to date. Related Projects There are no related projects. 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