World Bank approves US$ 2.12 billion for Kazakhstan's roads

By Richard High05 May 2009

The World Bank has approved a US$ 2.125 billion loan for Kazakhstan's South-West Roads Project.

The project aims to upgrade trade routes linking China to Russia and Western Europe through Kazakhstan, and, according to a Bank statement, bring a "helpful economic stimulus" to some of Kazakhstan's poorest provinces. It will also boost Kazakhstan's competitiveness and bring significant economic benefits to the country, as well as to the Kyrgyz Republic, Tajikistan and Uzbekistan, added the statement.

The loan will finance and rehabilitate a 1062 km-long stretch of road between Shymkent and Aktobe/Kyzylorda Oblast border. This is part of a US$ 7.5 billion International Transit Corridor development program by the Government to upgrade approximately 2800 km of the Central Asia Regional Economic Cooperation (CAREC) Program corridors within Kazakhstan linking China (at Khorgos) to Russia (at Zhaisan).

"Upgrading this key road will give a major stimulus to the Kazakh economy because construction of new stretches of the road and rehabilitation of the existing sections will create about 35000 new jobs and will generate substantial indirect benefits to most of the population in the Kazakh provinces of Kyzylorda and South Kazakhstan Oblasts, which are the poorest parts of the country," said Sergei Shatalov, World Bank country manager in Kazakhstan.

"The road will improve access to markets for the local communities living along the Corridor, and stands to benefit some three million people living in the neighbouring provinces. Such a stimulus is very important at this time of the crisis."

The Project comprises five components:

1. Upgrading and reconstructing a road section along the Corridor within Kyzylorda Oblast, excluding Kyzylorda bypass;

2. Upgrading and reconstructing road sections along the Corridor within South Kazakhstan Oblast and the Kyzylorda and Shymkent bypasses;

3. Project Management Consultants to assist the Committee for Roads with the management of all activities associated with the Project;

4. Institutional development and preparation of action plans to improve road safety and road services; and

5. Consulting services for supervision of civil works.

Much of Kazakhstan's road network was constructed during the Soviet era and has significantly deteriorated thanks to a lack of adequate maintenance. About 50% of the country's road network needs major maintenance or full rehabilitation.

This is a major factor in Kazakhstan's poor road safety record, with road accidents and fatality rates increasing in recent years.

The current state of the road network is also hindering development of international and regional trade and limits access by rural communities to essential public services and work opportunities.

The loan has a maturity of 25 years, including 5 year grace period. The project will start later this year and is expected to take four years to complete.

The main agency responsible for project implementation is the Committee for Roads of the Ministry of Transport and Communication.

Since July 1992, the Bank has provided 33 loans to Kazakhstan totalling more than US$ 4.2 billion.

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