Roads and Inclusive Development in Armenia -Rural Road Sector Project (RRSP)

Haruya Koide Principal Regional Cooperation Specialist Office of Regional Economic Integration Asian Development Bank

ARM: RRSP -Road Sector = Predominant Transport Mode

The Armenian road network = 7,700 km

78% = paved 19% = gravel 3% = earth roads

Road transport =
98% of passenger traffic 66% of freight traffic
2

ARM: RRSP - Road Sector

The road network comprises:
Main highways (1,560 km, about 80% = in good condition) Secondary roads connecting the districts to the main highways (1,800 km, about 80% = in good condition) Local roads serving rural communities (4,320 km)
11 %
GOOD

28 %
FAIR

61 %
VERY POOR/POOR

About 84% of the rural road network = not passable during winter

ARM: RRSP - Poverty & Infrastructure Poverty and Infrastructure = Strong Linkage *Rural population = 1.2 million people (about 38%) = > 45% are poor *Improved Overall Poverty
POOR POOR 50 % (2000) 29.8% (2005)

(World Bank, Country Economic Memorandum, February 2007)

*Poverty Reduction Pace = rural areas < overall, mainly because of:
constrained economic activities, which are primarily attributable to: mountainous topography and poor transport infrastructure = high transport costs

ARM: RRSP - Roads (Before Project) (Gegharkunik Marz, Vardenis District)

ARM: RRSP - Road Maintenance Work & Road Construction Industry

ARM: RRSP - Poverty and Infrastructure

Poverty and Infrastructure = Examples *Agriculture Produce Losses (World Bank, 2004) >40% survey participants = > 50% produce lost *Limited Social Services Poor road conditions have constrained both timely access to health and other social services, and access to and the time spent for education *Limited Transport Services Poor road conditions have also reduced or stopped: *bus services, and/or *road freight services in some rural areas, because the operators try to avoid damages to their vehicles or they perceive high costs of driving on very poor/poor roads.

ARM: RRSP - Government Policy and Program

*Rural infrastructure development = the cornerstone of the Governments Poverty Reduction Strategy Paper (PRSP) *Government has thus developed rural infrastructure development programs with the main purpose of reducing rural poverty *Government's long-term transport strategy and plan (2006-2015) accords highest importance to rural road development

ARM: RRSP - Government Policy and Program (Road Sector)

*Government developed a lifeline roads network program (LLNP) with assistance from the World Bank (2004) *improves access of rural communities to the national highway system in the most optimal manner *targets high priority rural feeder roads (secondary and local roads) totaling about 2,700 km under the Armenian Roads Directorate (2007~)

ARM: RRSP - External Assistance (Road)

Interstate/ Main Roads (Regional) World Bank (1995-2005) Lincy (2000-2011) Regional Roads Regional Roads

Secondary Roads

Rural Roads

Secondary Roads Secondary Roads LLRN (2,700 km)

MCC (2008-2011)

940 km ($67 m) RRSP 263 km ($48 m)

ARM: RRSP - External Assistance (Road)

MCC $67 million 940km (Blue) (2007-2011) ADB $49 million 263km (Red) (2008-2011)
Gergharkunik Ararat

World Bank (1995-2005)

Shirak Kotayk

Armavir

Lincy (Yerevan: Red) (Out of Yerevan: Black) (2000-2011) km 940

($67 m)

World Bank (1995-2005)

ARM: RRSP - Project Component

Road Connectivity Improvement Road Infra Management Taxes and Duties Subtotal Contingencies IDC Total ($ million) 45.73 3.40 9.59 58.72 5.33 0.79 64.84

*TA: Transport sector development strategy was attached to the project. *A project governing council (PGC), comprising representatives from key stakeholders within and external to the Ministry of Transport and Communications (MOTC), provided overall oversight and supervision for the Project. The PGC comprised 11 members: (i) minister of MOTC, (ii) first deputy minister of MOTC, (iii) first deputy minister of finance and economy, (iv) first deputy minister of justice, (v) deputy minister of territorial administration, (v) five representatives from civil society, and (vi) head of the Project Management Unit.

ARM: RRSP - Financing Plan

($ million) 47.92 73.9% 16.92 26.1% 64.84 100.0%

ADB1 Government Total

1 This comprises the original loan ($30.6 million) and the supplementary loan ($17.32 million).

ARM: RRSP - ADB Support: Value Added

Flexible financing and enhanced resource mobilization for the LRNP by using ADBs sector lending modality Transport sector strategy TA Strong partnerships with the major donors (USA, Lincy Foundation, UNAIDS, World Bank, etc) ADBs subsequent lending to maximize benefits to the country ADBs North-South Corridor Investment Program International Airport (Yerevan) Subway improvement (Yerevan)

ARM: RRSP - Complementarity & Synergy with Other Partners

Synergy
LLNP

(Rural Roads) Roads

Complementarity
Transport sector support TA Agriculture

MCC RRRP

ADB RRSP ($48m)

Lincy Roads

World Bank Railways

Multilaterals (UNESCAP & etc)

TA

Agriculture

MCC

530,000 Beneficiaries 400,000

Bilaterals
TA

Intl Airport

EBRD

Bilaterals

TA

130,000

350,000 Beneficiaries

ARM: RRSP - Complementarity & Synergy with Other Partners

LLNP Agriculture

Original Plan 880,000 beneficiaries 73% of Total rural population

MCC RRRP

ADB RRSP $48 m

AGRICULTURE

MCC

530,000 beneficiaries = 44% of Total Rural Population 400,000 130,000

350,000
= of Total Rural Population

beneficiaries

29 %

Actual 153,000 beneficiaries 13% of Total rural population, due to cancellation of the MCC program

ARM: RRSP - Project Screening

SSTA 2007

Construction Supervision and Subproject Preparation Consultants Mid 2007-2011 2007 2008
Const season

2009
Const season

2010

2011

Project selection criteria (PSC) (Engineering, economic, environmental, social/resettlement, etc)

Construction Supervision

Package 1

DD

Construction

Liability Period
DD B

Construction

Liability Period

Subproject Preparation

Package 2

PSC

Yes

No

Reevaluation of subprojects (costs, engineering, EIRRs, environmental and social assessments, resettlements, etc)

Subproject

DD

Detailed design

Documentation

Tendering

Bidding

ARM: RRSP - Connectivity for Inclusive and Balanced Development

Interstate/ Main Roads (Regional) World Bank (1995-2005) Lincy (2000-2011)
North-South Corridor International Airport (Yerevan) Subway (Yerevan)

Secondary Roads

Rural Roads

Cities, towns, and villages

LLRN (2,700 km)

RRSP 263 km ($48 m)

Roads and Inclusive Development in Armenia -Rural Road Sector Project

MOTC ARD

ADB

Multilaterals

Bilaterals

10

Efficient transport connectivity among international corridors, secondary roads and rural feeder roads supports inclusive and balanced growth in Armenia

Thank you

22

Roads and Inclusive Development in Armenia - Rural Road Sector Project

11

Roads and Inclusive Development in ArmeniaRural Road Sector Project

For More Information

Contact
Mr. Haruya Koide Principal Regional Cooperation Specialist Office of Regional Economic Integration Asian Development Bank E-mail: hkoide@adb.org Phone: 63-2-632-6124 Fax: 63-2-636-2183

23

12