Concept Paper

Project Number: 46543 May 2013

Proposed Grant Republic of Tajikistan: Central Asia Regional Economic Cooperation Corridors 3 and 5 Enhancement Project

CURRENCY EQUIVALENTS (as of 30 April 2013)

Currency unit – somoni (TJS)

TJS1.00 = $0.2099

$1.00 = TJS4.7651

ABBREVIATIONS

ADB – Asian Development Bank ADF – Asian Development Fund AH – Asian Highways CAREC – Central Asia Regional Economic Cooperation km – kilometer MOT – Ministry of Transport PAM – project administration manual PIU – project implementation unit PPTA – project preparatory technical assistance RRP – report and recommendation of the President to the Board of

Directors

NOTE

In this report, "$" refers to US dollars.

Vice-President X. Zhao, Operations 1 Director General K. Gerhaeusser, Central and West Asia Department (CWRD) Director X. Yang, Transport and Communications Division, CWRD Team leader Z. Wu, Transport Specialist, CWRD Team members N. Djenchuraev, Environment Specialist, CWRD D. Hill, Senior Transport Specialist, CWRD G. Jurado, Operations Assistant, CWRD M. Mamayson, Associate Project Analyst, CWRD

V. Medina, Social Development Specialist (Safeguards), CWRD F. Nuriddinov, Project Officer, CWRD D. Perkins, Counsel, Office of the General Counsel S. Soetantri, Transport Specialist, Regional and Sustainable

Development Department J. Stickings, Senior Social and Gender Development Specialist, CWRD

C. Tiangco, Energy Specialist, CWRD Peer reviewer J. Procak, Regional Cooperation Specialist, East Asia Department

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS

Page

I. THE PROJECT 1

A. Rationale 1 B. Impact, Outcome, and Outputs 2 C. Investment and Financing Plans 3 D. Indicative Implementation Arrangements 3

II. DUE DILIGENCE REQUIRED 3

III. PROCESSING PLAN 4

A. Risk Categorization 4 B. Resource Requirements 4 C. Processing Schedule 4

IV. KEY ISSUES 4

APPENDIXES

1. Basic Project Information 6

2. Problem Tree 7

3. Design and Monitoring Framework 8

4. Project Preparatory Technical Assistance 10

5. Initial Poverty and Social Analysis 15

Lake Karakul

Kayrokkum Reservoir

Lake Sarez

DUSHANBE

KulobMuminobod

Shuroobod

Rushon

Kurgonteppa

Khujand

TursunzodaShahrinav

HissorSomoniyon

Yovon

Norak

Jilikul

Dusti

Isoev

Panj

Farkhor

Vose

Nulvand

Shakhrituz

Panji Poyon

Vakhdat

Sarband

Ismoili SomoniVakhsh

Panjakent

Ayni

Varzob

Istaravshan

Shakhriston

GonchiNov

Konibodom

Darband

Rogun

Khovaling

Garm

MehronJirgatol

Tojikobod

Ishkoshim

Roshtkala

Murgob

Kizil-ArtPass

Akbaytal Pass

Anzob Pass

Shakhristan Pass

Kulma Pass

BustonTaboshar

Gafurov

Proletar

ChkalovskKayrokkum

Khorug

Kalaikhumb

Tavildara

Vanch

Dangara

Baljuvon

Sovet

Moskva

Vorukh

Isfara

Kuybishev

Obikiik

Zafarobod

Shaydon

Kubodiyon

Fayzobod

Karamik

Sayron

GORNO-BADAKHSHANAUTONOMOUS REGION

SUGDREGION

REGIONSUNDER DIRECT

REPUBLICANJURISDICTION

KHATLON REGION

UZBEKISTAN

UZBEKISTAN

KYRGYZ REPUBLIC

PEOPLE'SREPUBLIC OF

CHINA

A F G H A N I S T A NNational Capital

Regional Center

Autonomous Regional Center

District Center/Town

Railway

River

CAREC Corridor 3

CAREC Corridor 6

Asian Highway 66

Proposed Road

Planned Road

Existing Road

International Boundary

CAREC Corridor 5

Boundaries are not necessarily authoritative.

TAJIKISTAN

CAREC CORRIDORS 3 AND 5 ENHANCEMENT PROJECT

Kilometers

0 50 100

N

13-0

04

6b

AV

73 00'Eo

73 00'Eo

69 00'Eo

69 00'Eo

40 00'No

40 00'No

37 00'No

37 00'No

Cleared/Updated by :

Edited by:

Note :

JOJI TOKESHI, TJRMNINA FENTON, CWRD24 February 2012

RICARDO CHAN, OSEC24 February 2012

First Proof, 9 January 2013Second Proof, 9 January 2013Third Proof, 25 February 2013Fourth Proof, 4 March 2013Fifth Proof, 30 April 2013Sixth Proof, 3 May 2013Seventh Proof, 3 May 2013Eight Proof, 6 May 2013Ninth Proof, 16 May 213

PROOF ONLY

This map was produced by the cartography unit of the Asian Development Bank. The boundaries, colors, denominations, and any other information shown on this map do not imply, on the part of the Asian Development Bank, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries, colors, denominations, or information.

I. THE PROJECT

A. Rationale

1. Tajikistan is landlocked and depends on transport corridors for investment, job creation, trade, and ultimately economic growth and poverty reduction. High transport costs, owing to ailing transport infrastructure and low network connectivity coupled with geographic isolation and mountainous terrain, pose a significant barrier to the country’s economic and social development. The proposed project1 will improve the Central Asia Regional Economic Cooperation (CAREC) Corridors 3 and 5 and their associated sub-network by enhancing the 89 kilometer (km) Sayron–Karamik section, rehabilitating the 88 km Vose–Khovaling road, and strengthening road safety and maintenance. It will also extend access to local communities through improving rural access roads and public facilities, providing solar power solutions for villages with winter electricity deficiencies and conducting associated trainings. This will improve national road network connectivity and quality of service, promote trade and facilitate the economic and social development in Tajikistan, and contribute to reducing isolation. The basic project information is in Appendix 1. 2. The backbone of Tajikistan’s national road network, comprising three CAREC corridors and three Asian Highways (AH), has been largely improved with assistance from the Asian Development Bank (ADB) and other development partners.2 This enables Tajikistan to serve as an important transit route in the Central Asian region. With continued trade facilitation supports from ADB3 and other development partners, and the planned rail line extension to connect with the Afghanistan railway network, the synergistic effect will offer new opportunities to intensify regional cooperation and trade, particularly with Tajikistan’s admission to the WTO on 2 March 2013. 3. The overlapping portion of CAREC Corridors 3 and 5—Dushanbe to the border with Kyrgyz Republic—is a two-lane highway of about 340 km. Around 160 km of the road passes along deep riverbanks and is difficult to widen as constrained by mountainous topography. Because of the government’s stretching limited budget for longer road coverage at the time of project design in 2006 and the low traffic forecasted at the time, design for the Sayron-Karamik section adopted one asphalt concrete layer.4 Additionally, other rehabilitation work such as rock excavation, drainage and concrete retaining walls was reduced in quantity due to a lack of funds. Rehabilitation of the section was completed in August 2011. Presently, the traffic has surged in both volume and axle loading along the section, degrading the pavement condition faster than initially designed. There is an imminent need to enhance the Sayron-Karamik section to extend road service life, and strengthen road safety and maintenance for better serviceability. Moreover, the traffic capacity on CAREC Corridors 3 and 5 is likely to be realized earlier than planned, necessitates improving connectivity and capacity of associated sub-network.5

1 The Asian Development Bank will provide a project preparatory technical assistance, as detailed in Appendix 4.

2 CAREC Corridor 3 (concurrently AH65) runs east-west from the border with Uzbekistan through Dushanbe to the

border with Kyrgyz Republic; CAREC Corridor 6 (concurrently AH7) runs north-south from the border with Uzbekistan through Dushanbe to the border with Afghanistan; CAREC Corridor 5 overlaps with Corridor 3 from the border with Kyrgyz Republic up to Dushanbe, and with Corridor 6 from Dushanbe to the border with Afghanistan; AH66 starts at Dushanbe, passing through Vakhdat, Dangara, Vose, Kulob, Khorug, Murgob, before reaching Kulma Pass (to China).

3 ADB. 2013. Report and Recommendation of the President to the Board of Directors: Proposed Loan and Grants to

Kyrgyz Republic and the Republic of Tajikistan for the Central Asia Regional Economic Cooperation Regional Improvement of Border Services Project. Manila.

4 ADB. 2007. Report and Recommendation of the President to the Board of Directors: Proposed Loan and Asian

Development Fund Grant to the Republic of Tajikistan for the CAREC Regional Road Corridor Improvement Project. Manila. The project will be closed in September 2013 upon completion of the institutional strengthening component.

5 For example, rehabilitation of the Kurgonteppa-Dangara road is largely completed; extensional rehabilitation work for

Dangara-Khovaling road is ongoing. Improvement of the Darband-Kalaikhumb road that links CAREC Corridors 3 and 5 to AH66 is planned for 2014, of which the project feasibility study is near completion. Various sections of the AH66 between Kulob and Murgob are being rehabilitated or planned for improvement in next 3 to 5 years.

2

4. Vose-Khovaling-Tavidara road extends the first ADB-assisted road in Tajikistan, starting at AH66 and connecting through the Darband-Kalaikhumb road to the CAREC Corridors 3 and 5. This road was a republican road during the Soviet Union time but has seriously deteriorated due to prolonged inadequate maintenance and recent flood damage, causing transport difficulty and safety concerns. The government prioritized rehabilitating the Vose-Khovaling road, with the Khovaling-Tavidara road to follow afterwards. Improvements to this link will cut travel time almost in half from KGZ-TAJ border to the Khatlon Province, opening a new trade corridor in the most populous region in Tajikistan, providing easier access to southern markets, and enhancing economic connections with CAREC Corridors 3 and 5, AH 66, and Afghanistan and beyond.6 5. Progress has been made on policy and institutional reforms in Tajikistan’s transport sector including (i) developing the Transport Sector Master Plan, 7 (ii) restructuring the Ministry of Transport’s (MOT), (iii) strengthening maintenance, and (iv) building procurement capacity through introducing competitive bidding. While more development including road databank development and vehicle overloading control is underway, substantial gaps remain. The core problem is the poor road connectivity and serviceability, deteriorating infrastructure network, deficient asset management, limited private sector involvement, and limited institutional capacity. Poor connectivity and high transport costs have caused constrained economic and social development. A problem tree analysis is in Appendix 2. 6. Improvement of regional and national transportation network remains the government top priority, as stressed in the government’s Poverty Reduction Strategy 2013-2015, and Tajikistan’s National Development Strategy 2015. The project is part of the country’s Transport Sector Development Program up to 2025 and included in the government’s 2013–2015 Public Investment Program. It also fits well with ADB’s Strategy 2020 in two core operational areas (infrastructure and regional cooperation and integration) and is in line with the ADB country partnership strategy for Tajikistan (2010–2014).8 ADB assistance in Tajikistan’s transport sector has been successful. The project design incorporates key lessons learned from past experience including (i) obtaining government assurances on project sustainability; (ii) expanding the project’s social development benefits; and (iii) using advance contracting to avoid initial implementation delays. B. Impact, Outcome, and Outputs

7. The impact of the project will be enhanced regional economic cooperation and inclusive economic growth in Tajikistan. The outcome will be improved regional network (CAREC Corridors 3 and 5 and associated sub-network) connectivity. The project outputs will be (i) improved road conditions and enhanced road safety on CAREC Corridors 3 and 5 and associated sub-network totaling 177 km, Sayron–Karamik road section (89 km) and Vose–Khovaling road (88 km); 9 (ii) extended access to local communities through improvement of rural access roads and public facilities, provision of solar power solutions for villages with winter electricity deficiencies and associated trainings; and (iii) institutional strengthening on project management, contract

6 The road will alleviate future traffic pressure to the national capital by providing a new conduit for traffic bound for the

country’s south part or Afghanistan and beyond. Multi-modal goods transport at Vose rail station was functioning efficiently before disconnected to Uzbekistan rail network. With the extension of southern rail line to connect with Afghanistan railway network, goods can be again efficiently transported to Afghanistan and beyond through either AH66 and CAREC Corridor 5/6 or the rail network.

7 ADB. 2011. Developing Tajikistan’s Transport Sector—Transport Sector Master Plan. Manila.

8 The improvement of Sayron–Karamik section was included in the Country Operations Business Plan for Tajikistan

(2013–2014). The government sent a letter on 6 December 2012 requesting ADB assistance for financing also the Vose–Khovaling road.

9 Inclusive of safety engineering features such as traffic signage, road markings, traffic barriers, sidewalks, and slope

protection measures, with estimated $2 million for Sayron–Karamik section and $4 million for Vose-Hoveling road.

3

supervision, and efficient road maintenance through piloting performance-based maintenance contract. The preliminary design and monitoring framework is in Appendix 3. C. Investment and Financing Plans

8. The project is estimated to cost $79 million. The investment and financing plans are summarized in Tables 1 and 2, respectively.

Table 1: Summary Investment Plan Item Cost

a ($ million)

A. Base Cost Road improvement and safety enhancement Improvement of the Sayron–Karamik road section 11.5 Rehabilitation of the Vose–Khovaling road 39.5 Extended access to local communities 3.0 Institutional strengthening Performance-based road maintenance 3.0 Consulting services for engineering, supervision and project management 3.0 Consulting services for project auditing 0.1 Recurrent cost for project administration including land acquisition and resettlement

1.0

Taxes and duties 8.9 Subtotal (A) 70.0

B. Contingencies 9.0 Total (A+B) 79.0

a In mid-2012 prices.

Source: Asian Development Bank estimates.

Table 2: Tentative Financing Plan

Source Amount ($ million) Share of Total (%)

Asian Development Bank (ADF grant) 64.0* 81.0 Government 15.0 19.0

Total 79.0 100.0 ADF = Asian Development Fund. * Comprising $10 million from country allocation and $54 million from ADF savings and cancellations. Source: Asian Development Bank estimates.

D. Indicative Implementation Arrangements

9. MOT will be the executing agency and has implemented six ADB-assisted road projects since 1998. Its project implementation unit staff has the necessary experience and skills, and will be assisted by the technical departments of MOT and project management consultants during project implementation. 10. Project implementation will take 4 years. Advance contracting and retroactive financing to expedite project implementation will follow ADB's procurement and consulting services guidelines (2010, as amended from time to time).

II. DUE DILIGENCE REQUIRED

11. MOT started a conceptual engineering design in 2012 and is continuing to improve the design work, including collection of related economic, social, and poverty data in project areas.10

10

Following a request from the Borrower dated 4 April 2013, ADB approved, on 12 April 2013, a change in the scope of G0245-TAJ to include as an additional output the undertaking of feasibility study for this project.

4

Additional work is required to fill the data gap and develop a mutually agreeable project design. Besides the sector, economic, financial and governance due diligences, attention will also be paid to below aspects following the loan reconnaissance mission in April 2013:

Technical. Enhancement of the Sayron-Karamik section will be finalized after a further pavement inspection. Solar power solutions for villages with winter electricity deficiencies, low-cost effective road safety measures, and performance-based road maintenance will be further explored. Project design advance is not envisaged.

Safeguards. The project is categorized B for environment and involuntary resettlement, and C for indigenous people. Project preparatory technical assistance (PPTA) consultants on resettlement, environment and/or indigenous peoples will carry out required due diligence work following ADB Safeguard Policy Statement (2009) to further confirm the proposed categories and prepare safeguards documents.

Poverty and Social. The PPTA consultant will conduct poverty and gender analysis to identify suitable entry points (road lighting, access roads, roadside rest areas/market places, off-grid solar power solutions, etc.) for local community development.

III. PROCESSING PLAN

A. Risk Categorization

12. The project is considered low risk as (i) the total grant amount does not exceed $200 million; (ii) ADB's previous experience in Tajikistan’s transport sector was successful; (iii) MOT has the capacity to implement the project; and (iv) anticipated project safeguard categorization of B for both involuntary resettlement and environment, and C for indigenous peoples.

B. Resource Requirements

13. In addition to bank staff inputs, a PPTA (Appendix 4) of $650,000 equivalent will be provided to assist MOT in project preparation and further due diligence. The government was informed that the provision of the PPTA does not commit ADB to finance any ensuing project. C. Processing Schedule

14. The processing schedule comprises the following milestones (Table 3).

Table 3: Proposed Processing Schedule

Milestone Expected Date

Fact-Finding 22 May-5 June 2013

Interdepartmental/Peer Reviews 10-17 June 2013

Management Review Meeting/Staff Review Meeting 25 June 2013

Grant Negotiation 8–9 July 2013

Board Consideration 30 August 2013

Source: Asian Development Bank estimates.

IV. KEY ISSUES

15. Procurement needs to start soon to accommodate the government’s request of commencing main civil works in 2013. With the short lead time, a unit rate contract based on the preliminary design will be adopted for procuring civil works. A lump sum item for detailed design will be included in the Bill of Quantities and performed by the contractor during contract execution.

5

This solution, through a thoughtfully planned PPTA and the close cooperation among ADB, the government and the executing agency, proved to be effective without compromising project quality for a similar project—Central Asia Regional Economic Cooperation Corridor 6 (Ayni–Uzbekistan Border Road) Improvement Project—approved by the Board in September 2012. Accordingly, the following issues with countermeasures are identified:

Under the PPTA, international consultants will be recruited individually and a national consulting firm will be engaged through single source selection to jointly improve the preliminary engineering design and project formulation.

Approval of advance actions for procuring consulting services and civil works prior to and in-principle approval of retroactive financing at the Management Review Meeting and/or Staff Review Meeting will be requested. The government has been advised that approval of advance contracting and in-principle approval of retroactive financing do not commit ADB to finance the proposed project.

6 Appendix 1

BASIC PROJECT INFORMATION

Aspects Arrangements

Modality ADF grant-financeda

Financing Summary Financing Plan

Source Amount ($ million)

Share of Total (%)

Asian Development Bank (ADF) 64.0* 81.0 Government 15.0 19.0

Total 79.0 100.0 ADF = Asian Development Fund. *Comprising $10 million from country allocation and $54 million from ADF savings and cancellations Source: Asian Development Bank estimates.

COBP/RCOBP ADB. 2012. Country Operations Business Plan: Tajikistan, 2013–2014. Manila.

Classification Sector (subsectors): Transport and ICT (road transport) Themes (subthemes): Regional cooperation and integration (trade and investment),

economic growth (widening access to markets and economic opportunities), and social development (other vulnerable groups)

Targeting classification: General intervention

Gender mainstreaming category: Some gender elements

Location impact: National (medium), regional (high), rural (medium), and urban (low)

Safeguards: Environment (B), involuntary resettlement (B), indigenous peoples (C).

Risk categorization

low risk

Partnership(s) No

Use of a PBA No

Parallel PIU No

Department and division

Central and West Asia Department, Transport and Communications Division

Mission leader and members

Zheng Wu (Transport Specialist) Nurlan Djenchuraev (Environment Specialist), David Hill (Senior Transport Specialist), Glenda Jurado (Operations Assistant), Maureen Mamayson (Associate Project Analyst), Vergel Medina (Resettlement Specialist), Farrukh Nuriddinov (TJRM Project Officer), Douglas Perkins (Counsel), Sri Soetantri (Transport Specialist), Jeremy Stickings (Senior Social and Gender Development Specialist), and Cinderella Tiangco (Energy Specialist).

ADB = Asian Development Bank, ADF = Asian Development Fund, COBP = country operations business plan, PBA = programmatic based approach, PIU = project implementation unit, RCOBP = regional cooperation operations business plan, TA = technical assistance. a An ADB member's eligibility for ADF grants under the revised grant framework is determined by its risk of debt distress. The latest debt sustainability analysis determined that Tajikistan had a high risk of debt distress and was therefore eligible to receive 100% of its ADF allocation as grants.

Appendix 2 7

PROBLEM TREE

Constrained economic and

social development

EFFECTS

Limited access to markets and social services

High transport costs

CORE PROBLEM

Constrained road connectivity and

serviceability

Deteriorating road infrastructure

Lagging network expansion

CAUSES

Deficient asset management

Insufficient financing

Operational

inefficiency and skills gap

Limited private

sector involvement

ROOT CAUSES

Low cost recovery

Incomplete legal and regulatory frameworks

Shortage of

qualified professionals

Inadequate institutional

arrangements

8 Appendix 3

DESIGN AND MONITORING FRAMEWORK

Design Summary

Performance Targets/Indicators

Data Sources/Reporting Mechanisms Assumptions and Risks

Impact By 2022 Assumption

Enhanced regional economic cooperation and inclusive economic growth in Tajikistan

Cross-border cargo volume for Tajikistan-Kyrgyzstan and Tajikistan-Afghanistan increased to 1,300,000 tons (2012 baseline: 530,000 tons) and to 1,500,000 tons (2012 baseline: 550,000 tons), respectively* Sample-based poverty headcount ratio in the Khatlon province declined to 30% (2009 baseline: 54%)*

National economic report (MOF and State Statistical Agency) Living Standards Measurement Survey (State Statistical Agency and World Development Indicators database, World Bank)

Continued commitment by the government to social and economic development in the region

Outcome By 2017 Assumption

Improved regional network (CAREC Corridors 3 and 5 and associated sub-network) connectivity

Reduced traffic crashes on Dushanbe –Karamik section of CAREC Corridors 3 and 5 and the Vose-Khovaling Road to 10 fatality per 100,000 population (2010 baseline: 18.1 fatality per 100,000 population)* National highways and provincial roads upgraded (177 km)

Traffic Police Department annual traffic accident report MOT road safety audit report MOT statistics

Continued commitment by the government to improve connecting road transport network Risk

Inadequate annual road maintenance allocation

Outputs By 2017 Assumptions

1. Improved CAREC Corridors 3 and 5 and associated sub-network and safety

2. Extended access

to local communities

88 km road section from Vose to Khovaling rehabilitated and reconstructed with IRI of less than 4 m/km 89 km road section from Sayron to Karamik enhanced with IRI of less than 3 m/km Road safety audit and awareness training completed (30% women), and road safety features installed and functional

a

Roadside rest areas with sanitary facilities for women constructed 30 km rural access roads improved

MOT project progress report and project completion report MOT project progress report and project completion report MOT project progress report and project completion report MOT annual report and project completion report MOT project progress report and project completion report

Minimum turnover of trained PIU staff during implementation Support from local governments and communities Close coordination among relevant government agencies during implementation

10 Appendix 4

PROJECT PREPARATORY TECHNICAL ASSISTANCE

A. Justification

1. The government of Tajikistan has requested ADB assistance for the CAREC Corridors 3 and 5 Enhancement Project which is important for national road network connectivity, particularly in the Khatlon Province, and for the socio-economic development of the country. Additional work will be required to continue due diligence for the project design and improvement of preliminary engineering design for the 89-kilometer (km) asphalt concrete overlay and 88-km road rehabilitation, and to undertake preparatory work for project implementation. In this regard, project preparatory technical assistance (PPTA) will be provided to produce a mutually agreeable project suitable for ADB financing. Under the PPTA, the consultants will build on existing project information to improve feasibility study and preliminary engineering design, prepare bidding documents and conduct bid evaluations. The consultants will work in close consultation with the Ministry of Transport (MOT) and other government agencies. The government was advised that technical assistance approval does not commit ADB to financing any ensuing project.

B. Major Outputs and Activities

2. The major outputs and activities are summarized in Table A4.1.

Table A4.1: Summary of Major Outputs and Activities

Major Activities Major Outputs

Due diligence on project feasibility study including design, engineering, cost estimates and safeguards

Bidding documents based on preliminary design (with drawings) for both 89-km overlay section and 88-km road rehabilitation Procurement plan; Project administration manual; Feasibility Study Report

Assist project executing agency to complete IEE, RP, and IP (if applicable)

IEE report; RP report; IP report (as needed)

Poverty, social and gender assessment

Summary Poverty Reduction and Social Strategy Gender Action Plan (as applicable)

Sector analysis Updated sector assessment and sector results framework; development coordination with development partners for the sector.

Updated Tajikistan Transport Sector Master Plan Economic assessment and financial analysis

Economic and financial analysis report

Governance assessment Procurement capacity and financial management assessment Risk Assessment and Risk Management Plan (Financial, procurement, governance)

IEE = initial environmental examination, IP = indigenous peoples, km = kilometer, RP = resettlement plan.

C. Cost Estimate and Proposed Financing Arrangement

3. The total cost of the TA amounts to an equivalent of $650,000, of which $500,000 equivalent will be financed on a grant basis by ADB's Technical Assistance Special Fund (TASF-IV). The government will provide counterpart financing comprising $100,000 in cash and the remainder as in-kind contributions (office space and supplies, secretarial assistance, domestic transportation, etc.). The detailed cost estimate is presented in Table A4.2.

Appendix 4 11

Table A4.2: Cost Estimates and Financing Plan Item Cost ($'000)

ADB Financing a

1. Consultants a. Remuneration and Per Diem i. International Consultants (12 person-month)

b 240.0

ii. National Consultants (33 person-months)c 86.0

b. International and Local Travel 30.0 c. Reports and Communications 10.0 2. Engineering Surveys and Preliminary Design 106.0 3. Impact and Social Surveys 10.0 4. Miscellaneous Administration and Support Costs 3.0 5. Contingencies 15.0 Total 500.0

d

a Financed by the Asian Development Bank's Technical Assistance Special Fund (TASF-IV).

b Includes remuneration and per diem, at $20,000 per person-month.

c Includes remuneration and per diem (if any), at about $2,600 per person-month.

d The total cost of the TA amounts to an equivalent of $650,000, of which contributions from ADB are presented in the table above. The government will provide counterpart financing comprising $100,000 in cash to the Ministry of Transport to cover the cost of the consulting services already provided by the national consultants and the remainders as in-kind contributions (office space and supplies, secretarial assistance, domestic transportation, etc.), whose value, together with the cash contribution, is estimated to account for 23.1% of the total TA cost.

Source: Asian Development Bank estimates.

D. Consulting Services

4. The PPTA will require 6 international consultants of 12 person-months and 7 national consultants of 33 person-months. The consultants shall have adequate experience and expertise in road engineering, structure engineering, hydrology engineering, geotechnical engineering, solar energy installations associated with transport infrastructure, engineering procurement, economic analysis, social, resettlement and environment safeguards. All consultants will be selected in accordance with ADB’s Guidelines on the Use of Consultants (2010, as amended from time to time).

5. To expedite the preliminary engineering design, MOT mobilized technical specialists from the State Unitary Enterprise "Research, Design and Survey Institute" (the Design Institute) in November 2012 for topographical, geological, hydrological and survey works. MOT informed ADB that the Design Institute is presently the only consulting service entity in the Republic of Tajikistan that has adequate experience, qualification, and facilities for assisting the engineering design of roads that pass through difficult mountainous terrain and sophisticated geological conditions. In fact, the Design Institute has been engaged as local partners by various international consulting firms in almost all ADB assisted road projects in Tajikistan. It also performed satisfactorily as the local engineering firm under PPTA 8052-TAJ that led to the project approval by the Board in September 2012. While competition is encouraged to benefit the development of local consulting industry in the medium to long term, given that the engineering design tasks requested under this PPTA represent a natural continuation of previous work performed by the Design Institute, and the fact that this firm has in-depth knowledge of local conditions and exceptional experience for which it is clearly better qualified, it is recommended for this particular assignment to single source select the Design Institute that will comprise all relevant national consultants. Further, as the Design Institute will prepare the preliminary design with technical advisory support from international consultants whose assignments can be carried out independently, all international consultants and the national environmental specialist will be recruited individually with each having his/her own outputs. ADB project officer will take the team leader role and handle contract administration task.

12 Appendix 4

6. The PPTA, among other tasks, will address the following aspects relating to the ensuing project: (i) updated capacity assessment of the executing agency and suggested measures to minimize procurement and financial management risks; (ii) proposed project procurement plan and relevant bidding documents; and (iii) indicative implementation schedule with proposed sequencing of consultant recruitment and procurement bidding and awarding.

Table A4.3: Summary of Consulting Services Requirement International

Name of Positions

Person-months

Required

National

Name of Positions

Person-months

Required

Highway Specialist/Procurement Expert 5 Highway Engineer 6

Geotechnical Engineer 2 Geotechnical Engineer 4

Hydrologist 2

Environmental specialist 1 Environmental specialist 3

Resettlement/social development specialist 1 Bridge Engineer 3

Transport economic/financial specialist 1 CAD Specialist 12

Clean energy specialist 2 Materials Engineer 3

Total 12 33

Source: Asian Development Bank estimates.

7. The outline terms of reference for the PPTA consultants are described in paras. 8 to17.

8. Highway engineers/ procurement expert (international, 5 person-months; national, 6 person-months). The international consultant will have a bachelor’s degree or above in engineering with at least 20 years experience in highway planning and design, managing multidisciplinary team and administering large civil works projects. Familiarity with FIDIC and its harmonized MDB version and procurement experience of design/build projects is a prerequisite. The national consultant will have an engineering degree qualification and 8 years’ related experience. The consultant will further improve completed work as related but are not limited to: (i) conduct due diligence on designs, scope, cost estimates and improve the preliminary design; (ii) provide inputs to ADB processing documents such as the report and recommendations to the President (RRP), the project administration manual (PAM), and so on; (iii) work with other team members on the preparation of the bills of quantities, associated drawings, and the bidding and contract documents for the design/build civil works package in conformity with ADB requirements and the project procurement plan; and (iv) conduct procurement capacity assessment of the executing agency and assist in organizing the bidding and with the preparation of bid evaluation reports (consulting services, goods and works).

9. Geotechnical engineers (international, 2 person-months; national, 4 person-months). The international consultant will have a Bachelor’s degree or above in civil engineering and 10 years of related work experience in geotechnical and/or hydrogeologic field investigations. Experience in Tajikistan or regional countries will be an advantage. The national consultant will have an engineering degree qualification and 8 years’ related experience. The consultant will further improve completed work as related but are not limited to: (i) work with engineering consultants to conduct the geotechnical survey and others as needed; (ii) provide specialty inputs for preliminary design of slops and bridges; and (iii) contribute to the preparation and completion of the bills of quantities, associated drawings and the contract documents for the design/build civil works package(s) related to the highway improvements in conformity with ADB requirements and the project procurement plan.

10. Environmental specialist (international, 1 person-month; national, 3 person-months). The international consultant will have a master’s degree or above with at least 10 years related

Appendix 4 13

experience in environmental impact assessment and relevant environmental report preparation and implementation; and proven familiarity with ADB requirements and experience in dealing with relevant governments’ institutions and project implementation units. Experience in Tajikistan or regional countries will be an advantage. The national consultant will have education background relevant to undertake environmental impact assessment works, and at least 5 years related experience and is familiar with implementation of Tajikistan environmental protection law. The consultant will further improve completed work as related but are not limited to: (i) conduct the due diligence to confirm there are no significant potential impacts and the environment category B is appropriate; (ii) prepare a project initial environmental examination report and environmental management plan following the format and contents specified in the ADB Safeguard Policy Statement (2009) and ensure rigor in the English version; (iii) assist the executing agency with stakeholder participation, consultation, and involvement during project preparation and disclosure of relevant information; (iv) discuss relevant Safeguard Policy Statement requirements for project implementation with project stakeholders, assist in incorporating environmental management plan in the civil works bidding documents; and (v) assist in preparing inputs for the RRP and PAM.

11. Resettlement/ social development specialist (international, 1 person-month). The international consultant will have appropriate degree qualification with 10 years related experience in involuntary resettlement preparation and implementation; and proven familiarity with ADB requirements and experience in dealing with relevant governments’ institutions and project implementation units. Experience in Tajikistan or regional countries will be an advantage. The consultant will further improve completed work as related but are not limited to: (i) describe the institutional arrangements for social safeguard implementation; (ii) estimate the budget requirements for involuntary resettlement and indigenous peoples safeguards; (iii) describe or propose schemes for grievance redress as well as for social safeguard monitoring and evaluation; (iv) prepare a resettlement plan and indigenous peoples action or development plan (as needed) in accordance with ADB’s policies and procedures on involuntary resettlement and indigenous peoples development; (v) conduct gender analysis and socioeconomic related surveys and prepare a summary poverty reduction and social strategy including gender strategy and/or measures as appropriate; and (vi) provide inputs on social safeguard in the PAM.

12. Transport economic/ financial specialist (international, 1 person-month). The international consultant will have a bachelor’s degree or above in economics and/or engineering, and 8 years experience in conducting economic and financial analysis of similar transport projects. Experience in Tajikistan or regional countries will be an advantage. The consultant will further improve completed work as related but are not limited to: (i) review and summarize the project economic rationale, including summarizing and evaluating the project's economic risks; (ii) identify and acquire data required during project preparation; (iii) assess the financial management capacity and procedures and recommend any changes as appropriate; (iv) conduct according to ADB’s Guidelines for the Economic Analysis of Projects and other relevant publications the economic and financial analysis (as appropriate), alternative and least-cost analysis, and fiscal impact and sustainability analysis; (v) identify potential project-related risks in three specific thematic areas: (a) public financial management, (b) procurement, and (c) anticorruption based on their procurement assessment and financial management assessment, and prepare a governance risk assessment and management plan; and (vi) provide inputs for all related reports including the RRP and PAM.

13. Clean energy specialist (international, 2 person-months). The international consultant will have a bachelor’s degree or above in energy or related field, and relevant experience in designing and implementing infrastructure projects using clean energy techniques. Familiarity with the energy sector of Tajikistan or regional countries will be an advantage. The consultant will further improve completed work as related but are not limited to (i) assess the viability of applying solar and other

14 Appendix 4

renewable energy solutions to improve road serviceability and safety, and community development alongside the road in public and/or private sector; (ii) recommend potential sites and areas for renewable energy applications; and (iii) propose most feasible renewable energy technology interventions at both levels (road serviceability and safety, and community development) along with estimated quantities and budgetary estimates.

14. Hydrologist (national, 2 person-months). The national consultant will have a bachelor’s degree or above in hydrology, physical geography, or engineering with a strong focus on hydrology, plus 8 years related experience. The consultant will further improve completed work as related but are not limited to: (i) work with the highway specialist, highway engineer, bridge engineer and geotechnical specialist to conduct the hydrological survey and other surveys as needed; (ii) provide specialty inputs for preliminary design of bridges; and (iii) contribute to the preparation and completion of the bills of quantities, associated drawings and the contract documents for the design/build civil works package(s) related to the bridges within the highway improvements in conformity with ADB requirements and the project procurement plan.

15. CAD specialist (national, 12 person-months). The national consultant(s) will have appropriate degree/diploma qualification and at least 5 years related experience in highway improvement projects of similar type. The consultant will further improve completed work as related but are not limited to update and prepare design drawings for the highway improvement including roads, bridges, drainages, etc., as directed by the international engineering team.

16. Bridge engineer (national, 3 person-months). The national consultant will have an engineering degree qualification and 8 years related experience. The consultant will further improve completed work as related but are not limited to: (i) work with engineering consultants to conduct the preliminary design for bridges including costing; and (ii) contribute to the preparation and completion of the bills of quantities, associated drawings and the contract documents for the design/build civil works package(s) related to the bridges within the road improvements in conformity with ADB requirements and the project procurement plan.

17. Materials engineer (national, 3 person-months). The national consultant will have appropriate degree/diploma qualification in civil engineering and at least 10 years related experience in major road construction works especially in material testing. The consultant will further improve completed work as related but are not limited to provide inputs of materials source supply, acceptance standards of materials, and material testing methods for the preliminary design, as directed by the international engineering team. E. Implementation Arrangements

18. MOT will be the project executing agency who has implemented a number of ADB-assisted road projects. MOT will appoint a project manager dedicated to the PPTA to monitor the day-to-day progress of implementation and prepare necessary documents and reports. The project manager will oversee the consultants’ activities and facilitate all facets of PPTA administration with the support of additional staff appointed by MOT. MOT will provide, among others, (i) counterpart staff, who will work closely with the consultants; (ii) office facilities in Dushanbe; and (iii) local transport for field trips.

19. The consulting services will be implemented over a period of 12 months, with estimated TA commencement starting on 2 June 2013 and completing on 28 February 2014. To facilitate project implementation, some consultant inputs will be retained as necessary for preparatory procurement and safeguard support services after ADB Board approval. TA funds will be disbursed in accordance with ADB’s Technical Assistance Disbursement Handbook (2010, as amended from time to time). The PPTA will be financially closed by June 2014.

Appendix 5 15

INITIAL POVERTY AND SOCIAL ANALYSIS

Country: Tajikistan Project Title: Central Asia Regional Economic Cooperation Corridors 3 and 5 Enhancement Project

Lending/Financing Modality:

Project/Grant Department/ Division:

CWRD/CWTC

I. POVERTY IMPACT AND SOCIAL DIMENSIONS

A. Links to the National Poverty Reduction Strategy and Country Partnership Strategy

The government of Tajikistan adopted in 2007 the National Development Strategy (NDS) for the Period to 2015 that aimed at (i) promoting sustainable economic growth, (ii) improving public administration, and (iii) developing human resources. In formulating its third phase Poverty Reduction Strategy (PRS) 2013–2015 under the NDS, the

government reiterates the importance of infrastructure development in promoting economic development and creating favorable conditions for poverty reduction. Likewise, the country partnership strategy emphasizes improving physical transport infrastructure as a driver of increased regional trade and foreign investment. Tajikistan’s interest in improving the country’s infrastructure is also reflected in its strong advocacy of regional cooperation—Tajikistan is one of the most active participants in the energy, transport, and trade facilitation activities under the Central Asia Regional Economic Cooperation (CAREC) program. Tajikistan prioritizes infrastructure, including road development, to achieve its development objectives and reduce poverty through trade facilitation and improved access to domestic and international markets and natural resources in remote areas of the country. Improved connectivity and access to social services and markets is a development priority for the Khatlon Province. To support regional cooperation and inclusive economic growth and social development in the region, the project will finance (i) improving 177 kilometers (km) of road for the CAREC Corridors 3 and 5 and associated sub-network, which includes enhancing Sayron–Karamik road section (89 km) and rehabilitating Vose-Khovaling road (88 km); (ii) strengthening road safety and maintenance; and (iii) improving local communities.

B. Targeting Classification

General Intervention Individual or Household (TI-H) Geographic (TI-G) Non-Income MDGs (TI-M1, M2, etc.) The project mainly seeks to improve the 89 km Sayron–Karamik section on the CAREC Corridors 3 and 5, and rehabilitate the 88 km Vose-Khovaling road that connects the transport handicapped and economically disadvantaged Vose and Khovaling districts to Khatlon regional centers and the national capital. Renewable energy installations will also be included under the project for improving road safety and community development. This will improve network connectivity and mobility, reduce transport cost, increase access to social services and markets for the local population in the project areas, facilitate the economic and social development particularly in southern Tajikistan, and contribute to reducing isolation in the country.

C. Poverty and Social Analysis

1. Key issues and potential beneficiaries.

The poverty rate in Tajikistan remains highest among Commonwealth of Independent States (CIS) countries. According to the latest Tajikistan Living Standards Survey (2009) from the World Bank, complete and extreme poverty rates in Khatlon Province between 2007 and 2009 increased from 47.0% and 8.7% to 53.9% and 21.3%, respectively. More than 220,000 people live in the Vose and Khovaling districts—known for agricultural produces, particularly cotton, wheat, vegetables, animal production, and gold mines. Low living standard of population, a high unemployment rate, and prevailing number of able bodied population resulted in increased labor migration to CIS countries and especially to Russian Federation. As a result, many households in the project area are headed by women. Largest share of household income comes from remittances, while permanent jobs and selling of agricultural products contribute to a lesser extent. The poor faces problems in coping with poverty as marketing of agricultural produce and accessing goods from outside are hindered significantly by the condition of the road and the consequent high costs of transportation. These as well constrain the development of mining industry that otherwise could have generated much needed job opportunities. The project is aimed at improving the 89 km Sayron–Karamik section on the CAREC Corridors 3 and 5, and rehabilitating the 88 km Vose-Khovaling road that connects the transport handicapped and economically disadvantaged Vose and Khovaling districts to Khatlon regional centers and the national capital. Renewable energy installations will also be included under the project for improving road safety and community development. The economic benefits accrued by savings in road user costs, energy consumptions, agricultural and industrial production, and travel time will be significant. Various types of road users—domestic passengers, cargo transporters, farmers, industries, traders, and other local residents—will benefit, and hence, better income opportunities for the poor.

16 Appendix 5

2. Impact channels and expected systemic changes.

The population in Khatlon is mainly engaged in agricultural activities, especially cotton growing and cattle raising. Only two or three percent of the population work in the industrial sector. Road is important for the social and economic development of the region due to the lack of other effective transport means including railways and aviation. The project will benefit the living situation of the poor and the excluded by providing more access to better and more affordable services and offering better opportunities to raise income and improve sustainable employment. Short-term, low skill employment for the poor and vulnerable will be created during project construction. Medium to long-term wise, improved road conditions and network connectivity reduce transport costs, which increase trade competitiveness and market integration and reduce the price of commodities sold in the market. Moreover, the road improvement is a precondition for developing the mining sector and stimulating further development of agriculture sector in this region, which will in return bring employment opportunities for local communities, reduce labor migration, and ultimately contribute to poverty reduction.

3. Focus of (and resources allocated in) the PPTA or due diligence.

$500,000 is proposed to be allocated from TASF-IV. Resettlement/social development specialist will be recruited and targeted group consultations with local communities, local stakeholder organizations, and district governments will be undertaken under the PPTA.

4. Specific analysis for policy-based lending.

Not applicable.

II. GENDER AND DEVELOPMENT

1. What are the key gender issues in the sector/subsector that are likely to be relevant to this project or program? Limited employment options at home have led an estimated one million Tajik citizens to migrate abroad (particularly to Russia) for work, making the country the world’s leading recipient of remittances as a share of GDP. Households headed by women in Tajikistan are more likely to fall below the poverty line than those headed by men, partly because of limited access to markets to sell their agricultural and other produce. Female-headed households are increasingly faced with the need not only to cover reproductive and household tasks but also productive and livelihood responsibilities; but often there are few opportunities to earn cash income, and women remain at the low end of the value chain of agricultural products. Furthermore the educational attainment of girls and women is declining, with high dropout rates after grade 9. In the project area (which has the highest rate of labor migration in the country) many households are headed by women [these and other figures to follow after social and gender analyses conducted]. Severely deteriorated roads and lack of effective transportation mean that travel to markets, schools and medical posts/centers is difficult, lengthy, and expensive. The project will not only benefit women by reducing travel time and transport costs to reach the service centers and markets they need, but will also provide short-term, low skill employment opportunities during construction. Transport to Dushanbe, Kurgonteppa, and other market centers will be cheaper, faster, safer, and more reliable, and goods will be cheaper to buy and agricultural products quicker to sell.

Gender research and analysis conducted during the PPTA and fact-finding stages will investigate local women’s priorities and concerns related to the project, and how they may most effectively be addressed. This will include measures which may be necessary to ensure women benefit fully from the improvements to the main highway; the community development component (cf. output 3 of DMF); and particularly the use of clean energy to benefit public areas—e.g. public lighting in villages, water heating for facilities such as schools or medical posts/centers, and lighting for road safety. Again ways will be sought to maximize benefits to women, e.g. by use of clean energy to meet their particular needs, or increasing maternal and childcare at health posts. These gender dimensions will be incorporated into the revised DMF.

2. Does the proposed project or program have the potential to make a contribution to the promotion of gender equity and/or empowerment of women by providing women’s access to and use of opportunities, services, resources, assets, and participation in decision making?

Yes No A gender assessment will be conducted under the PPTA, and a gender strategy and/or measures will be developed to address issues identified and ensure maximization of benefits to women.

3. Could the proposed project have an adverse impact on women and/or girls or widen gender inequality? Yes No

4. Indicate the intended gender mainstreaming category: GEN (gender equity theme) EGM (effective gender mainstreaming) SGE (some gender elements) NGE (no gender elements)

During PPTA and fact-finding, gender features of the project will be looked at to explore if EGM categorization could be achieved.

III. PARTICIPATION AND EMPOWERMENT

1. Who are the main stakeholders of the project, including beneficiaries and negatively affected people? Identify how they will participate in the project design.

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Road users, local communities living in the project areas, people who have the opportunity of getting employment during road construction with the civil works contractor and during road maintenance activities after road completion. Other stakeholders would include local government agencies, NGOs, and Ministry of Transport.

2. How can the project contribute (in a systemic way) to engaging and empowering stakeholders and beneficiaries, particularly, the poor, vulnerable and excluded groups? What issues in the project design require participation of the poor and excluded?

Meetings with local governments, NGOs and/or community-based organizations, and focus group consultations with local communities and/or affected people, supplemented by surveys, will be conducted. Issues to be discussed include, but not limited to, land acquisition and resettlement compensation of affected persons (if any), protection of communities from construction and environmental disturbances, and of safety hazards to workers and the public during construction, temporary employment opportunities, and how villages along and off the main road maximally benefit from the project.

3. What are the key, active, and relevant civil society organizations in the project area? What is the level of civil society organization participation in the project design?

Information generation and sharing (Medium) Consultation (Medium) Collaboration Partnership

4. Are there issues during project design for which participation of the poor and excluded is important? What are they and how shall they be addressed? Yes No The proposed activities will mainly involve rehabilitating the existing road. Current road alignment remains unchanged and no road widening is envisaged.

IV. SOCIAL SAFEGUARDS

A. Involuntary Resettlement Category A B C FI

1. Does the project have the potential to involve involuntary land acquisition resulting in physical and economic displacement? Yes No The proposed activities mainly involve rehabilitating the existing road. Current road alignment remains unchanged and no road widening is envisaged. Site visit showed no relocation is expected and about three shops will be temporarily impacted during construction. The due diligence work under PPTA will further verify before a resettlement plan is prepared.

2. What action plan is required to address involuntary resettlement as part of the PPTA or due diligence process?

Resettlement plan Resettlement framework Social impact matrix

Environmental and social management system arrangement None

B. Indigenous Peoples Category A B C FI

1. Does the proposed project have the potential to directly or indirectly affect the dignity, human rights, livelihood systems, or culture of indigenous peoples? Yes No 2. Does it affect the territories or natural and cultural resources indigenous peoples own, use, occupy, or claim, as their ancestral domain? Yes No No indigenous peoples are living in the project area. 3. Will the project require broad community support of affected indigenous communities? Yes No No indigenous peoples are living in the project area. 4. What action plan is required to address risks to indigenous peoples as part of the PPTA or due diligence process?

Indigenous peoples plan Indigenous peoples planning framework Social Impact matrix Environmental and social management system arrangement None

V. OTHER SOCIAL ISSUES AND RISKS

1. What other social issues and risks should be considered in the project design?

Creating decent jobs and employment (Low) Adhering to core labor standards (Low) Spread of communicable diseases, including HIV/AIDS (Low)

2. How are these additional social issues and risks going to be addressed in the project design?

An action plan will be developed during the design stage to provide employment opportunities so that local communities will be involved in the road construction to the extent possible. The project design will include measures to raise public awareness of the risks of HIV/AIDS and other sexually transmitted infections and drugs.

VI. PPTA OR DUE DILIGENCE RESOURCE REQUIREMENT

1. Do the terms of reference for the PPTA (or other due diligence) contain key information needed to be gathered during PPTA or due diligence process to better analyze (i) poverty and social impact; (ii) gender impact, (iii) participation dimensions; (iv) social safeguards; and (vi) other social risks. Are the relevant specialists identified?

Yes No

2. What resources (e.g., consultants, survey budget, and workshop) are allocated for conducting poverty, social and/or gender analysis and participation plan during the PPTA or due diligence? Consultants and survey budget.