The World Bank Second Phase of the Central Asia Road Links Program (P145634) REPORT NO.: RES37459 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SECOND PHASE OF THE CENTRAL ASIA ROAD LINKS PROGRAM APPROVED ON FEBRUARY 25, 2015 TO MINISTRY OF FINANCE TRANSPORT EUROPE AND CENTRAL ASIA Regional Vice President: Cyril E Muller Country Director: Lilia Burunciuc Regional Director: Ranjit J. Lamech Practice Manager/Manager: Binyam Reja Task Team Leader: Cordula Rastogi, Aidai Bayalieva The World Bank Second Phase of the Central Asia Road Links Program (P145634) I. BASIC DATA Product Information Project ID Financing Instrument P145634 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 25-Feb-2015 31-Aug-2020 Organizations Borrower Responsible Agency Ministry of Finance Ministry of Transport Project Development Objective (PDO) Original PDO The Central Asia Road Links (CARs) program has the overall development objective to increase transport connectivity between neighboring countries in Central Asia along priority cross-border road links and to support improvements in road operations and asset management practices. The program is the result of a collaborative effort initiated by respective governments in the Central Asia region which has been developed as a regional, multi-phase program considered as a regional project under IDA16 and IDA 17 with substantialtransformational impact. The project development objective (PDO) of the Second Phase of the Central Asia Road Links Program (CARs-2) is to increase transport connectivity between the Republic of Tajikistan and neighboring countries along priority cross-border road links in Sugd Oblast and to support improvements in road operations and asset management practices. The road sections to be financed under CARs-2 prioritize connectivity between Sugd Oblast in Tajikistan with Batken and Osh Oblasts in the Kyrgyz Republic and Ferghana Oblast in Uzbekistan. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-55930 25-Feb-2015 16-Apr-2015 12-Oct-2015 31-Aug-2020 38.25 26.44 10.73 IDA-D0300 25-Feb-2015 16-Apr-2015 12-Oct-2015 31-Aug-2020 6.75 6.48 0 The World Bank Second Phase of the Central Asia Road Links Program (P145634) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES SUMMARY OF PROJECT STATUS. Overall Implementation Progress is assessed as Satisfactory, as the project is on track, especially with Component 1 (civil works) being completed well ahead of the initial schedule. The project is assessed to achieve its PDO by the project closing date, however, greater focus should be placed on Component 2 (institutional) to accelerate completion of these activities. As of May 4, 2019, total disbursement by MOT was US$ 36.31 (including government counterpart financing), out of which IDA financing disbursement of US$32.49 million equivalent (or 74% of total IDA financing). Current commitment stands at US$9.48, expected to be disbursed under the existing contracts by the project closing. Component 1: The civil works as originally planned under the project were completed well ahead of the schedule and are assessed at high quality. The project sections are considered as the best sections in terms of quality, road furniture in the country, where MOT with its ownership had direct supervision and management of the project. As the project managed to have savings under the civil works contract, the remaining section of Kanibadam-Patar (total 6.7 km long) will be completed, and the construction supervision consultant and contractor are now mobilized and have started works. The MOT has developed all necessary safeguards documentation and signed amendments to the contracts with the Contractor, but government counterpart funding on several payments are outstanding. Component 2: Activities under the Institutional component are progressing as well, albeit at a slower speed compared to Component 1. Implementation of the agreed additional activities to be covered by the project savings needs to be accelerated to be able to complete all works and services by the project closing date. Some of the ongoing activities need to be brought back on track, and outstanding procurement and contract management issues need to be addressed. Component 3: The project management remains satisfactory with a strong ownership and leadership of the MOT management. In terms of staffing within the Project Implementing Group (PIG), the contract with a Procurement Specialist (consultant) was terminated earlier this year, and the position is currently vacant. MOT was asked to fill the position by no later than July 15, 2019. PROPOSED CHANGES. During the Bank team’s visit and subsequent letter by the Ministry of Finance dated May 7, 2019 (#5/5-19/260) and received by the Bank on May 16, 2019, the Ministry of Finance requests the Bank to consider another project restructuring related to the IDA Credit Agreement splitting the existing category in two, thereby re- establishing (the original) “works” as a separate category (funded as before, with shares of 83% for IDA and 17% for Government counterpart funding), in addition to a new (second) category “Goods, Non-consulting, Consulting Services, Training and Incremental Operating Costs (including audit)”) at now proposed 100% financing from IDA Credit. This would, however, require an Amendment to the Financing Agreement. The World Bank Second Phase of the Central Asia Road Links Program (P145634) The request for opening a separate designated account for the credit is not needed since there is a single designated account for both the credit and grant financing under the project. Following this clarification to the MOT PIG, on June 26, 2019 in an email to the Bank, the MOT PIG confirmed that the request for a separate designated account could be disregarded. II. DETAILED CHANGES REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Current Current Actuals + Proposed Disbursement % Ln/Cr/TF Expenditure Allocation Committed Allocation (Type Total) Category Current Proposed IDA-55930- Works 26,500,000.00 18,748,206.51 22,850,000.00 83.00 83.00 001 Currency: Goods, Non- XDR Consulting, Consulting Services, 0.00 0.00 3,650,000.00 100 Training and Incremental Operating Costs Total 26,500,000.00 18,748,206.51 26,500,000.00