The World Bank Kabul Urban Transport Efficiency Improvement Project (P131864) REPORT NO.: RES39564 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF KABUL URBAN TRANSPORT EFFICIENCY IMPROVEMENT PROJECT APPROVED ON APRIL 3, 2014 TO MINISTRY OF FINANCE, ISLAMIC REPUBLIC OF AFGHANISTAN TRANSPORT SOUTH ASIA Regional Vice President: Hartwig Schafer Country Director: Henry G. R. Kerali Regional Director: Guangzhe Chen Practice Manager/Manager: Olivier P. Le Ber Task Team Leader(s): Abdul Hameed Khalili, Mohammad Ajmal Askerzoy The World Bank Kabul Urban Transport Efficiency Improvement Project (P131864) ABBREVIATIONS AND ACRONYMS ARTF Afghanistan Reconstruction Trust Fund FM Financial Management GoIRA Government of Islamic Republic of Afghanistan KM Kabul Municipality Km Kilometer MoF Ministry of Finance O&M Operation and Maintenance PDO Project Development Objective PMU Project Management Unit The World Bank Kabul Urban Transport Efficiency Improvement Project (P131864) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID Financing Instrument P131864 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 03-Apr-2014 31-Dec-2019 Organizations Borrower Responsible Agency Ministry of Finance, Islamic Republic of Afghanistan Kabul Municipality (KM) Project Development Objective (PDO) Original PDO Improve road condition and traffic flows on selected corridors of Kabul city. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-17061 11-Apr-2014 11-Apr-2014 11-Apr-2014 31-Dec-2019 90.50 74.79 15.71 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Kabul Urban Transport Efficiency Improvement Project (P131864) Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. Background: The Grant (TF-017061) for US$ 90.5 million for the Kabul Urban Transport Efficiency Improvement Project (KUTEI) was approved on April 3, 2014 and was declared effective on April 11, 2014. The current closing date of the Grant is December 31, 2019. The Project Development Objective (PDO) is to improve road conditions and traffic flows in selected corridors of Kabul city. The project comprises three components: (i) Road Infrastructure; (ii) Capacity Building; and (iii) Project Management Support. 2. As of November 22, 2019, US$76.5 million (85.53%) of the Grant is committed and US$74.79 million (82.65%) is disbursed with a balance of US$7.3 million in the project designated account. The likelihood of achieving the project development objective (PDO) and implementation progress are rated as “Satisfactory” and “Moderately Satisfactory” respectively. 3. Project Status: The status of implementation of the project components is summarized below. Component A. Road Infrastructure (US$68.94 million): This component finances the improvement of 40 km of selected segments of roads in four priority corridors of Kabul city. It includes the rehabilitation of road surfaces, roadside drains, pedestrian walkways, installation of street lights, and road safety measures, including reconstruction of 6.95 km of Wazir Abad drainage canal. From the total 11 roads rehabilitation contracts (40km), 8 contracts have been completed for a total of 31.09 km, and roads are opened to the traffic. The construction for the remaining 3 ongoing road contracts for a total of 9.00km with a value of US$9,25 million will resume on April 10, 2020 after the rainy season. The project also financed the construction of 6.95 km drainage canal for which the physical progress stands at 90%. The implementation of this contract is lagging the original schedule. The project also financed application of Thermoplastic road marking and installation of traffic signs over 30.62km roads for Kabul city. The contract is under implementation and progress stands at 14%. All ongoing civil works contracts are expected to be completed by June 30, 2020. There is a small works activity (US$400,000) for junction channelization targeting four separate locations. This activity would be initiated soon and would be implemented during 2020. Component B. Capacity Building (US$ 13.71 million): This component provides technical assistance to KM in various areas: (i) Consultancy for Area Accessibility & Street Function Optimization in Kabul City Center, (ii) Public Transport Studies, (iii) Operation & Maintenance Productivity, and (iv) Other relevant studies and designs. The updates of each sub-component is provided as follows: (i) Consultancy for Area Accessibility & Street Function Optimization in Kabul City Center. The project carried two rounds of procurement process for this activity, but the process failed to hire a consultant due to lack of qualified consultants and inefficient procurement process and low client capacity, therefore, the decision is made to drop this activity. (ii) Public Transport Studies. During the project MTR, the implementing agency (KM) informed the bank that the demand study of public transport has been awarded to a consultant from KM’s internal resources, and the feasibility study was expected to be completed by March 2018. It was planned that KUTEI will hire a consultant to do the business plan and detailed engineering design for one or two public transport service corridors once the feasibility study is completed. Despite several reminders, this activity has been seriously delayed, therefore, the decision is made to drop this activity, and the related intermediate result indicator would be dropped from the project results framework. The World Bank Kabul Urban Transport Efficiency Improvement Project (P131864) (iii) Operation & Maintenance. KM has completed the first round of procurement process and only one lot was awarded. The goods were delivered to the O&M Department of Kabul Municipality. It was planned that for the remaining assorted road routine maintenance equipment, KM will initiate another round of procurement. This is proposed to be dropped due to insufficient time and partial cancellation of project funds. (iv) Consultancy for Design & Review of 40km Roads in Kabul. The consultancy contract for this activity was awarded on October 23, 2018 with a total value of US$ 694,623.00. The consultant was mobilized, and the contract was successfully implemented. KM has 40km of priority roads design ready for financing. Component C. Project Management Support (US$7.85 million): Under this component, the project finances consultancy services to enhance KM’s human resource capacity for KUTEI’s project management and implementation, provision for on-the-job training, and knowledge sharing. It also includes incremental operating costs for project management. 4. KM has mobilized a fully functional Project Management Unit (PMU) for the implementation of the project. The team consists of individual local and international consultants and KM’s civil servants. KUTEI/KM has prepared and implemented a comprehensive on the job training plan. KM follows MoF strategy to institutionalize the capacity within the government structures. 5. The Project follows legal covenants as well as Bank fiduciary and safeguards policies. However, the annual external audit report for the FY1397 (2018) was due by June 21, 2019, which has been delayed. The delay is beyond KM's control as the Supreme Audit Office (SAO) was unable to mobilize the audit consultants to carry out the audit on time. The Bank agreed with SAO with a revised submission date of December 21, 2019 for the submission of overdue audit report. The team got the authorization from WFA and FM Manager for processing restructuring with outstanding audit report. II. DESCRIPTION OF PROPOSED CHANGES 6. The purpose of this restructuring is to allow enough time for smooth completion of the ongoing activities under the project and carry out a comprehensive study to develop the Urban Transport Strategy for Kabul city. 7. The following changes are proposed as part of this restructuring: (i) an extension of the Grant closing date by 12 months from December 31, 2019 to December 31, 2020; (ii) partial cancellation of US$10.00 million project funds, due to cancellation of consultancy activities under component B and C; and (iii) update of the results framework (drop the indicator for high volume public transport feasibility study and business plan finalized and read for implementation), disbursement forecast, and implementation schedule. Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ The World Bank Kabul Urban Transport Efficiency Improvement Project (P131864) Implementation Schedule ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Components and Cost ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications TF-17061 Effective 31-Dec-2019 31-Dec-2020 30-Apr-2021 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE The World Bank Kabul Urban Transport Efficiency Improvement Project (P131864) CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation BORROWER' S REQUEST TF-17061- Disburs USD 90,500,000.00 10,000,000.00 02-Dec-2019 80,500,000.00 FOR 001 ing COUNTRY REASONS OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed TF-17061-001 | Currency: USD iLap Category Sequence No: 1 Current Expenditure Category: GD,WK,NON CS, CS,TRG AND IOC 90,500,000.00 59,409,815.03 80,500,000.00 100.00 100.00 Total 90,500,000.00 59,409,815.03 80,500,000.00 . The World Bank Kabul Urban Transport Efficiency Improvement Project (P131864) . Results framework COUNTRY: Afghanistan Kabul Urban Transport Efficiency Improvement Project Project Development Objectives(s) Improve road condition and traffic flows on selected corridors of Kabul city. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline End Target Improve average vehicle speed Average vehicle speed on the selected corridors in the off-peak 18.00 0.00 time. (Kilometers) Access to all-season roads within a 500 meter range Number of people in urban areas provided with access to all- season roads within a 500 meter range under the project 0.00 5,000.00 (Number) “Fair” and above surface condition of major urban road network improved “Fair” and above surface condition of major urban road network 84.00 94.00 improved (Percentage) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target Capacity Building The World Bank Kabul Urban Transport Efficiency Improvement Project (P131864) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target All O&M equipments purchased, installed and KM staffs are No Yes capable to operate and maintain the equipment (Yes/No) High volume public transport feasibility study and business plan No Yes finalized and ready for implementation (Yes/No) Action: This indicator has been Marked for Deletion Road infrastructure Roads rehabilitated, Non-rural (Kilometers) 5.00 32.00 Road rehabilitated by KM Dept of Works and Maintenance 12.00 36.00 (Kilometers) Junction channelization along 4 selected corridors (Number) 0.00 4.00 IO Table SPACE The World Bank Kabul Urban Transport Efficiency Improvement Project (P131864)