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Background

Kazakhstan, located at the center of transport flows between Asia and Europe, provides strategic arteries for emerging transcontinental routes. It has a great transit potential, as few land transport routes can avoid the country when going north to south or east to west of the two continents via Central Asia.

To maximize its strategic location, Kazakhstan has invested heavily in upgrading its transport linkages. By 2010, it accounted for $12 billion of the estimated $25 billion investments earmarked for the development of the 6 transport corridors of the Central Asia Regional Cooperation (CAREC) in 2008–2017. Passing through 7 of CAREC’s 11 member countries Corridor 2 is the most extensive of these corridors. It connects Kazakhstan to Azerbaijan and Europe through the Caspian Sea to the west; to the Russian Federation to the north; to Uzbekistan to the southeast; and to Turkmenistan to the south.

In support of the 3 corridor 2 projects planned by Kazakhstan, the Asian Development Bank (ADB) approved the CAREC Corridor 2 (Mangystau Oblast Sections) Investment Program in September 2010. The investment program was to be financed through a multitranche financing facility (MFF) not exceeding $800 million, $233 million of which was approved in December 2010 to help cover the cost of project 1.

Under project 1, 200.5 kilometers of the Manasha–Shetpe highway in Mangystau Oblast, Kazakhstan’s major oil- and mineral-producing region, was upgraded to international standards. Dangerous curves were removed, pavement roughness and road geometrics were improved, and road safety facilities were installed. Pedestrian overpasses and sheltered bus stops and rest areas with gender-sensitive toilets were constructed. The project management capacity of the executing agency, the Ministry of Transport and Communications (MOTC), and its successor, the Ministry of Investment and Development (MID) was strengthened. A World Bank-financed road asset management system was developed. An inventory of road assets was completed, and preparation of maintenance and rehabilitation planning tools continued until project completion.

Successful upgrading of the road infrastructure resulted in shorter travel time, lower freight costs, and lower road crash rates along the highway that connects Mangystau’s capital of Aktau to the CAREC transport corridor 2. Aktau is a regional hub for transporting Caspian’s bulky oil and oil product cargoes, and for transit traffic between the surrounding oilfield developers and other countries. Improved transport to and from this port city which, in 2010 was the artery for 38% of the 30 million tons of cargo transported annually across the Caspian Sea, supports increasing trade and strengthens regional cooperation under CAREC.

Despite a start-up delay of over 2 years, the project was completed on time and with an unused loan amount of $104 million. Initial delays were attributable to the need to comply with government regulations on loan effectiveness; the slow mobilization of construction equipment, machinery, and materials; and more. Unused loan proceeds, representing savings in works contract amounts, were cancelled in July 2014.

The MID succeeded the MOTC as executing agency, following government reorganization in August 2014. The Committee of Roads was the implementing agency.

Project Information
Report Date: 
September, 2017
Main Sector: 
Country: 
Project Number: 
Project/Modality: 
MFF
Loan Number: 
2728
Source of Funding: 
OCR
Date Approved: 
20 December 2010
Report Rating: 
Successful

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