World Bank Document Environmental Management Plan PAD Project Appraisal Document EU European Union PDO Project Development Objective FIDIC International Federation of Consulting Engineers

Document of

The World Bank

Report No: ICR00003566

IMPLEMENTATION COMPLETION AND RESULTS REPORT

(IBRD-79710)

ON A

LOAN

IN THE AMOUNT OF US$150 MILLION

TO THE

REPUBLIC OF BELARUS

FOR A

ROAD UPGRADING AND MODERNIZATION PROJECT

October 28, 2016

Transport and ICT Global Practice

Belarus, Moldova and Ukraine Country Unit

Europe and Central Asia Region

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EQUIVALENTS

(Exchange Rate Effective as of June 16, 2016)

Currency Unit = Belarussian Ruble

US$ 1.00 = 20,044 BYR

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS AM Aide-Memoire ICT Information Communications Technology

BoQs Bill of Quantities IP Implementation Progress

CAS Country Assistance Strategy ISR Implementation Status Report

CMU Country Management Unit MA-C MINSKAVTODOR-Center

CPS Country Partnership Strategy M&E Monitoring and Evaluation

CR (Borrower’s) Completion Report MOTC Ministry of Transport and Communication

DPL Development Policy Lending MS Marginally Satisfactory

EA Environmental Assessment NAS National Academy of Science

ECA Europe and Central Asia NPV Net Present Value

EIA Environmental Impact Assessment OVOS Official Environmental Impact Assessment

EIRR Economic Internal Rate of Return OP Operational Policy

EMP Environmental Management Plan PAD Project Appraisal Document

EU European Union PDO Project Development Objective

FIDIC International Federation of Consulting

Engineers

PIT Project Implementation Team

FM Financial Management PPP Public Private Partnership

FSU Former Soviet Union RUE Republican Unitary Enterprise

GDP Gross Domestic Product US$ United States Dollar (Currency unit)

HDM-4 Highway Design and Maintenance model,

Version4

VAT Value added Tax

HQ Headquarters VOC Vehicle Operations Costs

IBRD International Bank for Reconstruction and

Development

WB World Bank

ICB International Competitive Bidding WIM Weigh in Motion

ICR Implementation Completion & Results

Report

Regional Vice President: Cyril E. Muller

Country Director: Satu Kristiina J. Kahkonen

Country Manager: Young Chul Kim

Senior Global Practice Director: Pierre Guislain

Practice Manager: Juan Gaviria

Project Team Leader: Simon David Ellis, Nijat Valiyev

ICR Team Leader: Wei Winnie Wang

REPUBLIC OF BELARUS

Road Upgrading and Modernization Project

CONTENTS

Data Sheet

B. Key Dates ................................................................................................................... 1

C. Ratings Summary ....................................................................................................... 1

D. Sector and Theme Codes ........................................................................................... 2

E. Bank Staff ................................................................................................................... 2 F. Results Framework Analysis ...................................................................................... 2 G. Ratings of Project Performance in ISRs .................................................................... 4 H. Restructuring (if any) ................................................................................................. 5

I. Disbursement Profile .................................................................................................. 7 1. Project Context, Development Objectives and Design ................................................... 8

2. Key Factors Affecting Implementation and Outcomes ................................................ 12

3. Assessment of Outcomes .............................................................................................. 18

4. Assessment of Risk to Development Outcome ............................................................. 22

5. Assessment of Bank and Borrower Performance ......................................................... 23

6. Lessons Learned............................................................................................................ 25

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners............... 26

Annex 1. Project Costs and Financing .............................................................................. 27

Annex 2. Outputs by Component...................................................................................... 28

Annex 3. Economic and Financial Analysis ..................................................................... 37

Annex 4. Bank Lending and Implementation Support/Supervision Processes ................. 41

Stage of Project Cycle ............................................................................................... 42

Staff Time and Cost (Bank Budget Only)................................................................. 42

No. of staff weeks ..................................................................................................... 42

USD Thousands (including travel and consultant costs) .......................................... 42

Lending ..................................................................................................................... 42

Annex 5. Beneficiary Survey Results ............................................................................... 43

Annex 6. Stakeholder Workshop Report and Results ....................................................... 44

Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ......................... 49

Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ........................... 56

Annex 9. List of Supporting Documents .......................................................................... 57

Annex 10. Map.................................................................................................................. 58

1

A. Basic Information

Country: Belarus Project Name: Road Upgrading and

Modernization Project

Project ID: P118375 L/C/TF Number(s): IBRD-79710

ICR Date: 10/28/2016 ICR Type: Core ICR

Lending Instrument: SIL Borrower: REPUBLIC OF

BELARUS

Original Total

Commitment: USD 150.00M Disbursed Amount: USD 146.11M

Revised Amount: USD 146.11M

Environmental Category: B

Implementing Agencies:

Minskavtodor-Center (MA-C)

Cofinanciers and Other External Partners:

B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 10/29/2009 Effectiveness: 03/09/2011 07/05/2011

Appraisal: 09/03/2010 Restructuring(s):

02/21/2013

10/01/2014

11/26/2015

Approval: 11/11/2010 Mid-term Review: 11/05/2012 11/09/2012

Closing: 11/30/2014 05/31/2016

C. Ratings Summary

C.1 Performance Rating by ICR

Outcomes: Satisfactory

Risk to Development Outcome: Moderate

Bank Performance: Moderately Satisfactory

Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)

Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory

Quality of Supervision: Satisfactory Implementing

Agency/Agencies: Satisfactory

Overall Bank

Performance: Moderately Satisfactory

Overall Borrower

Performance: Moderately Satisfactory

2

C.3 Quality at Entry and Implementation Performance Indicators

Implementation

Performance Indicators

QAG Assessments (if

any) Rating

Potential Problem Project at

any time (Yes/No): No Quality at Entry (QEA): None

Problem Project at any time

(Yes/No): No

Quality of Supervision

(QSA): None

DO rating before

Closing/Inactive status: Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

Public administration- Transportation 1 1

Rural and Inter-Urban Roads and Highways 99 99

Theme Code (as % of total Bank financing)

Export development and competitiveness 20 20

Infrastructure services for private sector development 40 40

Regional integration 40 40

E. Bank Staff

Positions At ICR At Approval

Vice President: Cyril E Muller Philippe H. Le Houerou

Country Director: Satu Kristiina J. Kahkonen Martin Raiser

Practice Manager/Manager: Juan Gaviria Henry G. R. Kerali

Project Team Leader: Simon David Ellis Andreas Schliessler

ICR Team Leader: Wei Wang

ICR Primary Author: Wei Wang

F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document) The development objective of the project is to reduce transport costs for road users on the upgraded

sections of the M5 road, and introduce electronic tolling in Belarus as an efficient cost recovery

mechanism.

Revised Project Development Objectives (as approved by original approving authority)

The objectives of the Project are to reduce transport costs for road users on the upgraded sections of

the M5 road and introduce a modern axle-load control system in Belarus as a tool to increase road

sector sustainability.

3

(a) PDO Indicator(s)

Indicator Baseline Value

Original Target

Values (from

approval

documents)

Formally

Revised Target

Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 1 : Reduced vehicle operating costs on the upgraded section of the M5 road.

Value

quantitative or

Qualitative)

100

94

94

86

Date achieved 02/10/2010 11/30/2014 06/30/2015 06/30/2015

Comments

(incl. %

achievement)

This indicator was measured by percentage and was over achieved in target year.

Indicator 2 :

Axle load monitoring and control system has been supplied and installed on non-

tolled main roads in Bela

Value

quantitative or

Qualitative)

No

Yes

Yes

Date achieved 06/15/2013 03/31/2015 10/31/2016

Comments

(incl. %

achievement)

This indicator was achieved in target year. Now there are 100% of trucks weighed

on the network where WIM has been installed and where trucks are identified for

further weighing the processing time has been reduced by 75% (from 20 min to 5

min).

Indicator 3 : Tolling system

Value

quantitative or

Qualitative)

No

Yes

Not Applicable

Date achieved 02/10/2010 11/30/2014 11/30/2014

Comments

(incl. %

achievement)

This indicator and related component was dropped in 2013. The Government

decided to accelerate the full implementation and signed a PPP concession contract

in 2012 with a leading European firm. The target was still achieved successfully.

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target

Values (from

approval

documents)

Formally

Revised Target

Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 1 : Axle Load Monitoring and Control System installed and operational.

Value

(quantitative

or Qualitative)

No

Yes

Yes

4

Date achieved 06/15/2013 03/31/2016 10/31/2016

Comments

(incl. %

achievement)

This was achieved in target year. 100% of trucks are weighed on the network. The

processing time has been reduced by 75% (from 20 min to 5 min). There have been

2000 more special certificates issued for overweight vehicles than last year.

Indicator 2 : Roads constructed, non-rural (Kilometers, Core)

Value

(quantitative

or Qualitative)

0

52.70

52.70

Date achieved 02/12/2010 11/30/2014 09/30/2014

Comments

(incl. %

achievement)

This indicator was achieved before target date.

Indicator 3 :

Road Roughness measured through International Roughness Index (IRI) on

upgraded sections of M5 road (Number, Custom)

Value

(quantitative

or Qualitative)

3.30

2.00

1.14

Date achieved 02/10/2010 11/30/2014 09/30/2014

Comments

(incl. %

achievement)

This indicator was achieved before target date. By the time of ICR, the IRI was

further improved to 1.14, over achieving the target value.

Indicator 4 : Traffic Fatalities (Number, Custom)

Value

(quantitative

or Qualitative)

12.00

5.00

5.00

Date achieved 02/10/2010 11/30/2014 11/30/2014

Comments

(incl. %

achievement)

This indicator was achieved in target year.

Indicator 5 : Capacity to manage FIDIC type contracts (Text, Custom)

Value

(quantitative

or Qualitative)

No

Yes

Yes

Date achieved 02/10/2010 11/30/2014 09/30/2014

Comments

(incl. %

achievement)

This indicator was achieved before target date.

G. Ratings of Project Performance in ISRs

No. Date ISR

Archived DO IP

Actual Disbursements

(USD millions)

1 06/13/2011 Moderately Satisfactory Moderately Satisfactory 0.00

2 12/13/2011 Satisfactory Satisfactory 9.90

5


4 12/26/2012 Moderately Satisfactory Satisfactory 54.97








H. Restructuring (if any)

Restructuring

Date(s)

Board

Approved PDO

Change

ISR Ratings at

Restructuring

Amount

Disbursed at

Restructuring in

USD millions

Reason for Restructuring & Key

Changes Made DO IP

02/21/2013 Y MS S 67.95

Under the original design of the

project, the first stage of the

tolling system would have

been implemented with World

Bank funding, with the intention

to gradually expand the system

to about 2,600 km of major

highways in Belarus over several

subsequent years with the

Government's own funding. The

full implementation of the tolling

system would have taken about 5

to 7years. However, while the

functional design of the system

was carried out during the first

year of implementation of the

World Bank funded project, the

Government decided to

accelerate the full

implementation of the tolling

system. In early 2012, it signed a

PPP concession contract with a

leading European firm for the

supply and installation of the

system on about 2,600 km of

major highways, and its

operation during 20 years. The

contract is under implementation

and the first phase of the

new tolling system would be

operational in mid-2013. The

6

Restructuring

Date(s)

Board

Approved PDO

Change

ISR Ratings at

Restructuring

Amount

Disbursed at

Restructuring in

USD millions

Reason for Restructuring & Key

Changes Made DO IP

proposed change is to replace the

support for the tolling system by

support for the design, supply,

installation and commissioning

of a countrywide state-of-the-art

axle load monitoring and control

system.

10/01/2014 N MS MS 135.55

The Government of the Republic

of Belarus requested an

extension to the closing date by

12 months from November 30,

2014 to November 30, 2015. The

purpose of the extension is to

ensure sufficient time to

complete component 2 of

the project which is the

installation of a weigh-in-motion

(WIM) system which is required

for satisfactory achievement of

the Project Development

Objective.

11/26/2015 N MS MS 137.79

The Government requested an

extension of the closing date to

ensure sufficient time for

achievement of the Project

Development Objective. The

proposed change consists in an

extension of the closing date by

6 months from November

30, 2015, to May 31, 2016.

If PDO and/or Key Outcome Targets were formally revised (approved by the original approving body) enter

ratings below:

Outcome Ratings

Against Original PDO/Targets Satisfactory

Against Formally Revised PDO/Targets Satisfactory

Overall (weighted) rating Satisfactory

7

I. Disbursement Profile

8

1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

1. Country Background. At the time of appraisal, Belarus’ economic growth was facing

increasing constraints due to the limited flexibility of its economy, low levels of technological

innovation, and Russia’s policy of bringing the price of oil and gas supplied to Belarus to world market

levels. Belarus GDP expanded by 0.2 percent in 2009. Growth was projected to strengthen again in

2010, but to levels below those preceding the crisis, as capital markets were likely to remain risk

averse and as domestic investment was likely to grow at a more moderate pace. Lending by state

owned banks continued at a high rate in the first half of 2009, but this was curtailed later in the year

as credit policy was tightened. Net reserve targets under the IMF Stand-by Agreement for end-

September 2009 were met. Under the aegis of its Development Policy Loan (DPL), the World Bank

worked with the authorities on measures in liberalizing prices, reducing entry barriers, hardening

budget constraints, and enhancing social protection. Since the expiry of the IMF program in March

2010, monetary and fiscal policies loosened again and external imbalances had widened. To sustain

ambitious growth targets, while ensuring macroeconomic stability, the authorities were working on a

new liberalization and reform program. In particular, the aim was to attract significant Foreign Direct

Investment and benefit from Belarus’ strategic location and membership in the customs union with

Russia and Kazakhstan.

2. Sector Background. Contributing about 6 percent of GDP in 2008, transport was an important

economic sector in Belarus. The sector generated significant revenues from transit services, facilitates

trade and transportation, and contributed to the country’s balance of payments. In addition, the

transport sector accounted for about 6 percent of total employment in Belarus in 2008, with the largest

proportion of transport employment in roads (117,100 persons), followed by rail (70,400 persons).

The advantageous geographic position of Belarus, which serves as a bridge between the Russian

Federation and Western Europe, has made the country an important partner in the provision and

development of transportation infrastructure and services in Europe. The Trans-European Corridor II

(Berlin – Warsaw – Minsk - Moscow) and Corridor IX (Black Sea – Kiev –Minsk - Baltic countries),

which receive high priority from the Government, pass through the territory of Belarus. The M1/E30

highway is part of Corridor II, connecting the EU and Russia. Transit trade – largely by rail for goods

and by pipeline for oil and gas – is therefore a significant part of the economy. However, significant

investment in the transport infrastructure would be required to maintain and improve the contribution

that transport makes to the economy.

3. Despite the good track record in the past, sustainability of funding for roads was one of the

key issues to be addressed by the Government in the transport sector. The abolition of the National

Road Fund in early 2010 and the continued effects of the global financial and economic crisis in 2008

and 2009 exerted downward pressure on the Government’s fiscal space.

4. Belarus introduced road tolling in 1996 when a manual and open tolling system started to

operate on the M1/E30 road between Brest, Minsk and the border with the Russian Federation. Based

on the positive experience with road tolling on the M1 motorway over the last decade, the Government

saw road tolling as a future key source of funding for assuring the maintenance of the road network.

It planned to modernize the existing tolling facilities on the M1 motorway and gradually introduce

modern electronic tolling on most main roads over the next decade. The Government believed that the

introduction of a new tolling system in Belarus on the basis of state-of-the-art technologies would

9

help drastically raise efficiency and ensure a non-discriminatory tolling policy in relation to both

domestic and foreign users according to the rate of utilization of the road network and in compliance

with the EU directives. In addition, the tolling system would also help to raise the volume of financial

revenues into the budget.

5. Rationale for Bank Involvement. The rational for Bank assistance in this project was

twofold: (i) the Government requested a DPL and lending to support their investment programs in the

roads and railways sectors, and additional financing for the on-going Post-Chernobyl Recovery

Project on top of support for investments originally planned in the CPS; (ii) the World Bank had

extensive experience with road projects in the Former Soviet Union (FSU) and in the more recent EU

member countries (Poland, Romania, Bulgaria, and Hungary). In the particular context of the

originally proposed project, the Bank was also able to contribute its good knowledge in the area of

road tolling (original project Component 2).

1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved)

6. The original PDO as approved and stated in November 2010 Loan Agreement and consistent

with the Project Appraisal Document (PAD) was to reduce transport costs for road users on the

upgraded sections of the M5 road, and introduce electronic tolling in Belarus as an efficient cost

recovery mechanism.

(i) Project Outcome Indicators:

Reduced vehicle operating costs on upgraded section of the M5 road.

Electronic road tolling system introduced in Belarus on a section of the M5 road.

(ii) Intermediate Outcome Indicators:

Length of the M5 road sections upgraded.

IRI (International Roughness Index) reduced on the upgraded section of the M5 road.

Number of fatalities on the upgraded sections of the M5 road reduced.

Modern electronic road toll system is installed and operational on the section from km 22 to

km 131 of the M5 road.

Local institutions have good capacity to supervise FIDIC based road works.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and

reasons/justification

7. In 2012, the Government decided to accelerate the introduction of a country-wide electronic

tolling (later referred as e-tolling) system for trucks by signing a large PPP contract with a specialized

firm, outside the scope of this project. As a consequence, the content of Component 2 was redefined

as part of a Level-1 project restructuring approved on February 7, 2013. The support for the

introduction of the electronic road tolling system was replaced by supporting for the introduction of a

state-of-the-art axle load monitoring and control system which was later referred to as a Weight-in-

Motion system (WIM). The WIM was designed to be another key component of the overall asset

management system in Belarus.

8. Therefore, the revised PDO, as approved in September 2013 Loan Agreement Amendment,

was to reduce transport costs for road users on the upgraded sections of the M5 road and introduce a

modern axle-load control system in Belarus as a tool to increase road sector sustainability. The original

10

project outcome indicator “Electronic road tolling system introduced in Belarus on a section of the

M5 road” was replaced by “Axle Load Monitoring and control system introduced on non-tolled roads1

in Belarus” and the original project intermediate outcome indicator "Modern electronic road toll

system is installed and operational on the section from km 22 to km 131 of the M5 road" was replaced

by "Modern axle load control system is installed and operational". The summary of changes to the

monitoring indicators is presented in Annex 2, Section B.

1.4 Main Beneficiaries

9. Before project restructuring in 2013, the primary target group (beneficiaries) were road users

and residents in the area of influence of the project road. A social assessment was undertaken during

project preparation to identify social issues relevant to project objectives and execution. These

beneficiaries were expected to benefit from (i) reduced vehicle operating costs due to upgraded road

conditions; (ii) reduced travel time due to improved road conditions and operations of modern

electronic toll system; (iii) safer travel on the improved project road sections; (iv) employment

generation as the project created important employment opportunities during the construction phase,

mostly in the road construction industry.

10. The secondary target group included government institutions that were expected to benefit

from improved capacity in: (i) managing modern electronic road rolling system; (ii) conducting

economic evaluation of road investments using HDM-4 software (Highway Design and Maintenance

model); (iii) supervising FIDIC (International Federation of Consulting Engineers) based road works;

and (iv) road construction, repair and maintenance in accordance with European and international

standards.

11. After project restructuring in 2013 the secondary beneficiaries, namely government

institutions, changed slightly to reflect the change in Component 2 from the introduction of electronic

tolling to the introduction of a modern axle load monitoring and control system. Therefore the

improved capacity of managing modern electronic road rolling system was replaced by the improved

capacity to manage a modern axle load monitoring and control system.

1.5 Original Components (as approved)

12. The original project was approved by the Board on November 11, 2010 and became effective

on July 5, 2011. The project consisted of three components: (i) road upgrading; (ii) modernization of

road tolling system; and (iii) technical assistance and capacity building.

13. Component 1 – Road Upgrading (US$131 million). This component included: (i)

reconstruction of the existing two lanes and the construction of two additional lanes to carry a design

axle load of 11.5 tons; (ii) improvement of road safety features in line with EU road standards; (iii)

construction of about six two-level interchanges, seven overpasses, four bridges, two pedestrian

underpasses and bypasses at the village of Sosnovy (about 5.7 km long) and at the 8 village of Boyary

(about 4.2 km), where the alignment was shifted in order to increase the distance between the road

and the nearest houses; and (iv) implementation of a number of environmental impact management

1 The WIM was originally conceived to run independently from the e-tolling system and on non-tolled roads. However

during the design phase of the WIM it became apparent that the same infrastructure could be used and that the tolled

network had expanded rapidly. WIM has now been installed on tolled parts of the network.

11

features, such as protective noise barriers in the villages that were located near the alignment. The

total cost for construction was estimated to be US$131 million (approximately US$2.5 million per

kilometer on average) including contingencies.

14. Component 2 – Modernization of Road Tolling System (US$18 million). This component

included supply and installation of a modern electronic road tolling system based on microwave

technology on a 109 km section (from km 22 to km 131) of the M5 road between Minsk and Bobrujsk,

including supply of equipment such as (i) on-road tolling equipment, (ii) specialized vehicles and

equipment for control purposes, (iii) a centralized data processing center, (iv) software and computers,

and (v) on-board devices for vehicles.

15. Component 3 – Technical Assistance and Capacity Building (US$1 million). This

component aimed at strengthening of the institutional capacity of road sector institutions of the

Borrower by providing technical assistance and training, including (i) training on the new electronic

tolling system; (ii) support to BELGIPRODOR for updating its economic evaluation tools for road

projects, including training on HDM4 and procurement of software licenses; (iii) support to improve

the capacity of local institutions involved in supervision of road works at a level to carry out

supervision under FIDIC rules; (iv) technical assistance to BELAVTODOR in carrying out

benchmarking and harmonization of Belarusian road construction, repair and maintenance standards

and expenditure levels against and in accordance with European and international standards; (v)

support for carrying out the project audits; and (vi) other minor project-related technical assistance,

training and/or goods to support capacity building and Government institutions in the road sector.

1.6 Revised Components

16. There were changes to the name and the project activities of Component 2, which were done

as part of a Level -1 restructuring. Component 2 was changed from “Modernization of Road Tolling

System” to “Axle Load Monitoring and Control System, i.e., Weigh-in-Motion system”. The

procurement plan was revised to reflect the change in Component 2. The "Supply and Installation of

a road tolling system" was replaced by "Supply and Installation of Axle Load Monitoring and Control

System (i.e., Weigh-in-Motion or WIM)". Consulting services under this component were also

changed accordingly.

1.7 Other significant changes

17. The second restructuring was a Level -2 restructuring approved on October 1, 2014 to extend

the project closing date by 12 months from November 30, 2014 to November 30, 2015, as requested

by the Government. The purpose of the extension was to ensure sufficient time to complete

Component 2 of the project which was the installation of a weigh-in-motion (WIM) system and full

achievement of the project development objectives as well as full disbursement of loan funds. The

third restructuring was a Level -2 restructuring as requested by the Government of Belarus to further

extend the closing date by another six months to May 31, 2016 to allow for the successful completion

of the project following delays with the implementation of the WIM system.

12

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry

18. Soundness of the project preparation. The project preparation was initiated in late 2009 in

response to the Government’s request for a DPL and lending to support their investment programs in

the roads and railways sectors. The World Bank has extensive experience with road projects in the

FSU and in the more recent EU member countries that justified the rational for Bank involvement. In

the particular context of the originally proposed project, the Bank was able to contribute its good

knowledge in the area of road tolling (original project Component 2). The Board Approval was on

November 11, 2010 and the project became effective on July 5, 2011. Lessons of earlier operations

were taken into account during project preparation, in particular regarding to: (i) Complexity:

Experience showed that projects in transition countries need to be simple in design as the Government

was keen to deliver immediate and visible benefits to the population in line with agreed sector

priorities. Accordingly, this project was simple in design and was closely aligned with the

Government’s national road sector investment program, which targeted investments in the

rehabilitation, upgrading and modernization of transport infrastructure; (ii) Supporting Client

Objectives: Bank experience in Belarus showed that technical capacity was generally high, and that

implementation can proceed satisfactorily given the supportive governance environment and track

record of good governance. World Bank funded projects in Belarus faced difficulties in achieving

their objectives and scored low on sustainability if they included Bank-driven components, largely

due to the inability and unwillingness to implement difficult reform conditions with uncertain

outcomes. This project was closely aligned with the Government’s national road sector investment

and development program.

19. Assessment of the project design. The PDOs were important for the country and sector and

furthered the Bank’s Country Assistance Strategy (CAS). The PDOs reflected borrower’s

development priorities and the restructuring and the revised PDOs responded effectively to borrower’s

changing circumstances. However, both the original and revised PDOs and also the corresponding

PDO indicators refer to introduction of e-tolling/modern axle load control system, which is more of

an output than outcome and the formulation of the PDO itself should have actually referred to an

outcome. The PDO indicators for Component 1 of the project were well defined, but as described in

section 2.3, the PDO indicators for Component 2 were more output orientated which prevented

assigning satisfactory for this assessment.

20. Technical designs were prepared and completed by the clients and the World Bank team

reviewed the detailed design and the technical standards applied and was satisfied with the design

parameters and methods. The first project restructuring replaced e-tolling with WIM. WIM

complements the e-tolling because it uses the same infrastructure (gantries, electricity etc.) and is a

part of the overall road asset management strategy for MoTC.

21. Social and environmental safeguards were taken into consideration in project design. The

project was classified as Environmental Category "B" in accordance with World Bank Operational

Policy 4.01, "Environmental Assessment”. An EIA and an EMP for both construction and operation

phases were prepared by the Borrower.

22. The financial management arrangements were designed to place reliance on existing

institutional FM systems, i.e. by the existing departments of MA-C and using the existing institutional

13

mechanisms of financial management. Specifically, project financial management was primarily

carried out by the existing departments of MA-C. Elements of the existing accounting and reporting

as well as the system of internal controls of MA-C were used for project financial management.

23. Assessment of government commitments and participatory processes. Government’s

commitment appeared solid. On one hand, the project was in direct support of the Government’s

objectives for the road sector that were expressed in its program “Roads of Belarus 2006 – 2015”. On

the other hand, the Government’s commitment was demonstrated through funding 48.9 Belarussian

Rubles for road feasibility design, preparing bidding documents and technical supervision for

Component 1 of 52.7 km of roads from the state budget.

24. Key stakeholders such as residents along project impact area were consulted and interviewed

during project preparation through social assessment in order to identify social issues relevant to

project objectives and execution for Component 1 of road upgrading works. For the original

Component 2 of road tolling local consultations were carried out during project preparation for key

stakeholders such as truck owners and operators through the Association of International Road

Carriers of Belarus given that the road toll was to be collected from heavy vehicles only. No

consultations were carried out for the revised Component 2 of installing Weigh-in-Motion system.

25. Assessment of the project risks and mitigation measures. All risks were fiduciary oversight,

while most procurement activities were well-advanced at the time of appraisal and therefore, these

risks were downgraded to moderate with mitigation measures, so as the overall risk rating of the

project.

26. To summarize, strengths at entry include: the project’s alignment with the Government’s

strategy and the Bank’s CPS, the simple design of the project to address a fundamental need and

deliver immediate and visible benefits to the population without heavy reform agendas, strong

government commitment and the realistic assessment of risks and practical mitigation measures. The

Quality at Entry is rated as Moderately Satisfactory.

2.2 Implementation

27. Implementation arrangements. Since the project was first approved the road sector had

undergone some reform to optimize the institutional structure at the MoTC. When the project was

approved, the roads agency, Belavtodor, had responsibility for planning, implementation and

management of the network and “owned” the country’s contractors and consultants. As part of the

reform, on July 1st, 2013, Belavtodor was liquidated and replaced by the Head Directorate of the Road

Network, which is a structural unit responsible for network management, at the MoTC. The new

structure provides a road organization (‘Avtodor’) in each Oblast to perform the project and road

owner functions. A new organization called Belavtodor Holding Management Company Republican

Unitary Enterprise (RUE) was founded in July 2013, which comprises 19 independently managed

road and bridge contractors of Belarus (i.e., large and small size construction companies). However,

for the whole implementation period the MoTC formally delegated the responsibility for managing

the day-to-day preparation and implementation of the project to the Republican Unitary Enterprise

MINSKAVTODOR-Center (MA-C). MA-C has experienced staff in the areas of engineering,

procurement, project management and financial management. Within MA-C, a Project

Implementation Team (PIT) was created for the project, which consisted of experienced officials who

were assigned to work on the various aspects of project preparation and implementation. The World

14

Bank team supported MA-C in the necessary training of the specialists on the use of World Bank

guidelines and procedures for procurement, financial management, and environmental/social

safeguards management.

28. Progress of implementation. The implementation progress (IP) started as Marginally

Satisfactory (MS) reflecting the delay in project effectiveness. The main reason was the fact that

MoTC included the Value Added Tax (VAT) exemption provision in the Presidential Effectiveness

Decree. Normally, this was done by a separate document once a contract was in place. However, at

that time, there was a sense that this approach would be more efficient and would accelerate

implementation. On the contrary, it ended up delaying effectiveness exactly because it was a non-

standard VAT exemption request. Despite the eight months it took for project effectiveness, the

procurement of civil works contracts progressed well, and once the project became effective on July

5, 2011, the overall IP rating was upgraded to Satisfactory (S). By this time, four contracts for road

upgrading in Component 1 were signed and contractors mobilized, the design for the initially

envisaged electronic tolling under Component 2 was also completed with bidding documents prepared,

and capacity building activities were fully underway for Component 3, which indicated great

governance and project management from the Borrower. The IP was still rated as Satisfactory during

midterm review in November 2012. The review resulted in an agreement on the restructuring of the

project – Component 2 only. After that, the IP was downgraded to MS because the civil works were

delayed under Component 1 due to the contractor running into some financial difficulties because of

high inflation in 2011/12, and their inability to manage the subcontractors. Progress subsequently

picked up and the contracts were completed well within the project period.

29. Additionally, project restructuring to replace electronic tolling (e-tolling) with weigh-in-

motion (WIM) system of Component 2 caused another delay. The Government originally decided to

use the Bank loan to finance a pilot e-tolling on M5 road for 960 km, but later the Government saw

the urgency and critical value of implementing such a system and decided to accelerate the full

implementation of the e-tolling system and signed a PPP concession contract in 2012 with a leading

European firm Kapsch for the supply and installation of the system and its operation for 20 years.

After the original Component 2 was dropped, two options for the redesign of Component 2 were

discussed: (i) the introduction of WIM system in Belarus to protect road assets from premature

deterioration, and (ii) the design and partial implementation of an Intelligent Traffic Management

System in and around Minsk. As Belarus has substantial transit traffic it was decided that stopping

over-loaded trucks was the priority and it was decided to go ahead with the WIM system. The other

option of designing and implementing an Intelligent Traffic Management System is now being

implemented through the ongoing Transit Corridor Improvement Project in Belarus. The Bank team

has been fully behind the Government’s decision to roll out e-tolling and WIM as part of their strategy

on sustainable road asset management. The Government had a robust road sector strategy in place,

the re-scoping of the Bank’s support was more straightforward as it addressed the next priority

intervention.

30. However, the fact that the decision to drop the e-tolling component was done without Bank

consultation left much to be desired. Still, the e-tolling is now fully functional and covers national

road network for 1512 km till now, more than 50% of the original proposed pilot. It also reached the

proposed outcome as stated in the original PDO – e-tolling as an efficient cost recovery mechanism.

More details about how this component supports road sector financial sustainability are provided in

Section 4 Assessment of Risk to Development Outcome.

15

31. Since project restructuring in February 2013, progress was made on defining new scope of

work but the progress was not fast enough to meet the original agreed project closing date by

November 2014. The IP rating remained MS due to extremely tight time line for this revised

Component 2 though Component 1 of road upgrading and Component 3 of technical assistance and

capacity building were completed in advance with satisfactory results. The procurement process for

both the design consultancy services and the subsequent procurement of equipment suffered from

substantial delays for a number of reasons including: (i) delays in defining technical specification of

the system; (ii) protracted negotiations with operator of existing e-tolling system on integration issues;

(iii) delays in concluding contract negotiations due to unresolved issues on unavailability of

counterpart payments of VAT; and (iv) delays in contract award as the highly rated consultant firm

refused to follow up with contract negotiations and the employer had to proceed with SWEROAD

Solna – the secondly rated consultant. Though such issues were fully resolved later, such substantial

delays necessitated the extension of the project by 12 months. The project was further extended by 6

months to May 31, 2016 to accommodate delays in the procurement of the "Weigh-in-Motion" system.

Despite the initial procurement delays the installation, commissioning and testing went smoothly and

a state of the art WIM system is now in operation on the roads of Belarus (see Annex 2 Section C for

details).

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

Design

32. M & E Design. The results framework was in general well designed to capture outcome of

each component except Component 2. The original project outcome indicators well assessed the road

transport costs reduction of the upgraded road section along M5 corridor by measuring reduced

vehicle operating cost, but the second outcome of cost recovery from road users that would enhance

sustainability of road investments by measuring whether the electronic road tolling system would be

successfully introduced in Belarus on a section of the M5 road was not well captured and measured

as the corresponding indicator was more output oriented instead of an outcome. The electronic road

tolling system indicator was later replaced with axle load monitoring and control system introduced

during the first restructuring, and there was a similar issue with the corresponding indicator that only

captured the output. No changes were made to the Results Framework during the last two Level-2

restructuring.

33. Definition and measurement of the Intermediate Results Indicators was straightforward, as

these indicators were by their nature more specific and thus easier to define.

34. The indicators for Component 1 were appropriately targeted to measure improvements in the

roads riding quality and road safety. The indicators for Component 2 were well designed to capture

the output - if the modern electronic road toll system was installed and operational for the selected

road sections, but not for the outcome of “cost recovery mechanism”. After the first Level-1 project

restructuring, this indicator was revised to capture whether the axle load monitoring and control

system was installed and operational, which similar to the tolling indicator is an output and not a

measure of the stated outcome which was “increased sector sustainability”. However, as can be seen

from Section 3.2 and Section 4 (related to increased revenues from e-tolling) it can be seen that

implementation of these two network management tools have had substantial impact both on cost

recovery in the sector and long term sector sustainability.

16

35. The indicator for Component 2, both before and after restructuring – “modern electronic road

toll system is installed and operational” and “axle Load Monitoring and Control System installed and

operational” were more outputs oriented and did not capture the stated outcome as “e-tolling as

efficient cost-recovery mechanism” and “WIM as a tool to increase sector sustainability” in the PDOs.

Though both outcomes were achieved in the end of project completion, the M & E design could be

further improved to better capture the expected outcomes.

36. The indicator for Component 3 measured the local institution’s capacity to supervise FIDIC-

based road works with annual assessment, which was appropriate and was used to reflect improved

performance in this regard.

37. Implementation. MINSKAVTODOR-Center (MA-C) was responsible for the collection of

the project’s performance indicator data and analysis of the results. Progress towards the achievement

of the final targets was monitored through regular project progress reports and Bank’s implementation

reviews and Implementation Status and Results Reports (ISRs). The data needed for monitoring the

selected indicators were of the type that were normally collected by the Belarusian government

departments and agencies and thus were easily monitored.

38. Utilization. MA-C collected and reported on the requisite data at regular intervals. The

intermediate results indicators were used as intended to track physical progress of civil works and

capacity development. At project end, values also were obtained for all of the key indicators for project

assessment purposes.

2.4 Safeguard and Fiduciary Compliance

39. Safeguards. The project was classified as Environmental Category "B" in accordance with

World Bank Operational Policy 4.01, "Environmental Assessment", based on the fact that (i)

construction works as such were essentially confined to the existing right-of-way which was fully

owned by the State, (ii) there was no resettlement of people or businesses; and land acquisition was

limited to transfer of land between different State agencies, (iii) the potential environmental impacts

of the project were not expected to be significant or only of a temporary nature.

40. Overall, project implementation was in full compliance with the EMP and the environmental

management in this project was exceptional. Project documentation was in good order and

environmental issues and mitigation measures were properly reflected in contracts/Bill of Quantities

(BoQs), Environmental Assessment (EA)/ Official Environmental impact assessment (OVOS) reports

and other documents. Representatives of the National Academy of Science (NAS) provided their

recommendations regarding protection of endangered species since project design stage and were

involved in monitoring of impacts of road construction on biodiversity, especially on valuable forest,

wetland and water ecosystems. Contractors of civil works were prepared and addressed emerging

environmental issues properly. Special mitigation measures to protect affected Red Book species –

construction of designated artificial ponds for relocation of the population of crested newt and

replanting of bears onion and coralwort were taken jointly by the contractors and experts from NAS.

Permanent monitoring of forest ecosystems adjacent to the construction site was undertaken by NAS.

41. A social assessment as part of the original project appraisal was undertaken by the Government

in November 2009 to identify social issues relevant to project objectives and execution. Regarding

Component 1 of road upgrading works, it was found that the project had mostly positive impacts on

17

the living standards of the population of Belarus through its direct effects on employment and

contribution to economic growth. Regarding the original Component 2 of e-tolling and the revised

Component 2 of WIM, taking into account the successful implementation of e-tolling in Europe and

in the country, no negative impacts were expected.

42. The civil works were carried out within existing rights of way, except for the bypass of the

village of Sosnovy (about 5.7 km long) and at the village of Boyary, where the road alignment was

moved by about 50 meters from the existing road in order to increase the distance between the road

and the nearest houses. In both of these cases, the construction was on land owned by the State and

did not have any adverse impact on community or private land use. No private land needed to be

acquired, nor any private business affected in any way by the bypass at Sosnovy and the realignment

at Boyary.

43. Procurement. Procurement under the project was carried out by MA-C in accordance with

the World Bank’s “Guidelines: Procurement under IBRD Loans and Credits” dated May 2004, revised

October 2006 and May 2010; and “Guidelines: Selection and Employment of Consultants by World

Bank Borrowers” dated May 2004, revised October 2006 and May 2010, and provisions stipulated in

the Loan Agreement. A procurement capacity assessment was carried out in February 2010 to assess

the capacity of PIT. The risk level of the environment of conducting procurement under the project

(before mitigation measures) was assessed as “substantial”. A plan to mitigate the procurement risks

and strengthen implementation capacity was agreed with PIT and MoTC. Intensive training was

conducted to help PIT to improve its capacity in procurement under World Bank guidelines. All

contracts were subject to prior review by the World Bank. Frequent implementation reviews were

carried out by the World Bank project team that included technical staff, financial management

specialists and procurement accredited staff.

44. Since the first project restructuring to replace Component 2 with axle load monitoring and

control system (namely, weigh-in-motion), the procurement process for both the design consultancy

services and the subsequent procurement of equipment suffered from substantial delays that

necessitated the extension of the project by 12 months. The technical nature of this contract caused

delay in the procurement process. The team monitored the progress closely and frequently. It should

be noted that since award of the supply contract, implementation was to schedule.

45. Financial Management (FM). Financial management was carried out successfully

throughout project implementation. The design of FM placed much reliance on existing institutional

FM systems, i.e. by the existing departments of MA-C and using the existing institutional mechanisms

of financial management. The FM arrangements in BELAVTODOR and particularly in MA-C were

acceptable and the FM capacity was sufficient that satisfied the Bank’s requirements. Audit reports

were completed on time, and the auditor’s opinions for the financial statements for each year were

unqualified.

2.5 Post-completion Operation/Next Phase

46. The Bank continues to engage in the transport sector with an ongoing operation to improve

M6 transit corridor (P149697 - Transit Corridor Improvement Project). The same implementation

agency is involved in both lending projects. The ongoing project supports MoTC to establish a traffic

management center, provides MoTC and Beldor Center with state-of-the-art equipment for highway

monitoring, operations and maintenance. Other activities under the ongoing operation such as (i)

18

incorporating road safety measures into road reconstruction; (ii) integrating associated infrastructure

and equipment, including WIM from this project, and (iii) utilizing Information Communications

Technology (ICT) for enhanced traffic and road assets management will help further strengthen the

technical capacity of the implementation agency on maintaining roads and ICT infrastructure as well

as sustaining the good practice established with this closing project.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

47. Despite restructurings, the project objectives remained consistent with the Bank’s CAS. The

results framework of the CPS Progress Report clearly identified this project as a World Bank operation

in support of Pillar 2 (Entry, Regulatory Reform, and Competitiveness). Within that Pillar, one of the

higher-level objectives was to “facilitate competitiveness of the transport sector by supporting

modernization and upgrading of critical physical infrastructure in road and railway sectors” through

investment operations such as this project. The project was also in direct support of the Government’s

objectives for the road sector that were expressed in its program “Roads of Belarus 2006 – 2015”.

After the first project restructuring, the objectives were revised according to changing circumstances

and properly reflected the development priority to increase road sector sustainability.

48. For Component 1 which remained unchanged during the project, the design supporting

upgrading of 52.7 km of the M5 road from a 2-lane (Category 2) road to a 4-lane (Category 1B)

motorway together with road safety measures contributed to reduced vehicle operating costs and

traffic fatalities on the upgraded section of the M5 road. Component 2, both the originally planned e-

tolling system, and the later replaced installation of WIM supported both an efficient cost recovery

mechanism and increased sector sustainability. The Government accelerated full implementation of

the tolling system and signed a PPP concession for the supply and installation of the system on about

2,600 km of major highways, and its operation for 20 years. The revised component with WIM

complemented the electronic tolling because it uses the same infrastructure (gantries, electricity etc.)

and is a part of the overall asset management strategy for the Ministry and contributed to improved

road sector sustainability. It now includes 12 WIM installations and a systems architecture which links

with mobile and fixed weigh stations. These initiatives have all helped the Belarus road sector to be

among the best in the region with a well-maintained network and stable expenditure and funding (see

more details in Section 4 Assessment of Risk to Development Outcome). For Component 3 which

remained unchanged during the project, the training and technical assistance activities contributed to

improved institutional capacity of national and local road agencies as the overall objective of road

sector sustainability.

49. The Bank’s implementation assistance was responsive to client’s changing needs. Despite a

change of project component, the operation remained highly important to achieving country and Bank

development objectives.

50. Taken together, the overall relevance of objectives, design and implementation against both

original and revised PDO is Substantial.

3.2 Achievement of Project Development Objectives

19

51. The achievement of the overall original PDO is rated Substantial.

The achievement of the first sub-objective – to reduce transport costs for road users on the

upgraded sections of the M5 road – is rated High. Road roughness decreased from 3.2 to 2.0

after completion of civil works. Vehicle operating cost reduced by 14% as end target by June

2015, which surpassed the original target as 6%.

The achievement of the second sub-objective – to introduce electronic tolling in Belarus as an

efficient cost recovery mechanism – is rated Substantial. Despite the client’s decision to

finance the system themselves, it turned out to be ultimately successful with 1,5122 kilometers

of national roads operated for electronic tolling (See more details in Annex 2, Section C). The

electronic system BelToll has been in commercial operation since August 1, 2013. As of July

2015, more than 220,000 vehicles have been registered for the system being controlled by

more than 90 automatic stations3. The system generates sustainable financing for the road

network and infrastructure. For 2015, the estimated revenues were BYR 537 billion (US434

million, refer to Section 4 Sustainable Sector Finance for more statistics).

52. The achievement of the overall revised PDO is rated Substantial.

The achievement of the first sub-objective remains the same as in the original PDO and the

rate remained High.

The achievement of the second sub-objective – to introduce a modern axle load control system

in Belarus as a tool to increase sector sustainability – is rated Substantial. This sub-objective

was implemented well. Despite initial delays all equipment including the weigh-in-motion

control points, portable weight control stations, sensors, cameras, computing center and data

links were installed properly and to schedule with quality control. WIM was designed to

capture and record axle weights and gross vehicle weights as vehicles drive over a

measurement site. Following five months of operation the results are very encouraging - the

system is fully operational, there is weighing of 100% of trucks and those pre-identified as

being overweight are processed in a much reduced time frame (from 20 minutes to 5 minutes).

There have also been 2000 more special certificates issued for overweight vehicles in the

period to end of September 2016 than for the similar period in 2015.

3.3 Efficiency

53. The economic evaluation at appraisal stage was carried out in 2010 for project Components 1

(road investment) and 2 (tolling system).

54. For Component 1 of road investment the economic analysis was originally carried out using

the HDM4 software package, an evaluation period of 30 years and a discount rate of 12 percent. The

economic return of the project was sufficiently high to justify the proposed project. The discounted

net present value (NPV) of the World Bank financed section (52.7 km) was US$159 million with an

economic internal rate of return (EIRR) of 21 percent. Based on the sensitivity analysis, the project

was more sensitive to changes in traffic growth rates than in construction costs. The World Bank

team performed the ex-post economic evaluation of the project adopting all the actual data available

related to the investment costs, timing of the investments, annual traffic growth rate, and road user

benefits due to ride quality and road safety improvements. The actual cost of the road improvements

2 http://www.beltoll.by/index.php/en/beltoll-system/toll-roads/list-of-toll-segments 3 http://tollroadsnews.com/news/kapsch-belarus-expansion

https://en.wikipedia.org/wiki/Axle

20

was about 12 percent higher than appraisal estimates (see Annex 3). Rather than increasing by 5

percent for light vehicles and 3 percent for trucks and buses as forecast, traffic counts in fact declined

between 2010 and 2015 due to weaker than expected domestic economic growth, reduced

international freight traffic due to the worsening of the political and economic relations between the

Russian Federation and the European Union, and lower numbers of trips of light vehicles from Belarus

to Ukraine due to the conflict in the latter. As a result of these factors, the ex-post economic analysis

indicated that the actual discounted NPV of the project was US$ 36 million with an EIRR of 15.9

percent. The increase in the investment costs and the traffic reduction observed in 2015 were in part

compensated by the higher than expected roughness and road safety improvements. The ex-post EIRR

of 15.9 percent indicated the satisfactory economic justification of the project. More details of the ex-

post economic analysis are provided in Annex 3.

55. For Component 2 of road tolling at appraisal stage which was dropped later, the feasibility

study for the introduction of electronic road tolling for trucks over 12 tons on Belarus’ main highways

analyzed and compared eleven proposed combinations of different tolling technologies and toll levels.

For each of the eleven options the study looked at investment costs, annual operating and maintenance

expenditures, and expected toll revenues. It recommended introducing a tolling system based on

microwave technology, with retention and upgrade of the existing tolling system on the M1/E30 road.

56. For the revised Component 2 of “supply and installation of axle load monitoring and control

system”, the Borrower prepared feasibility study. The Bank team reviewed and confirmed the

technical and operational feasibility of the planned axle load monitoring and control system. The

detailed functional and technical design of the system was carried out by an international consulting

firm. The technology needed for the system was available from several suppliers. The proposed

technological option was to implement weigh-in-motion devices embedded in the pavement of all

major roads that carry large numbers of trucks. These devices were combined with vehicle recognition

technology and with ICT technology. Unlike static scales, WIM systems are capable of measuring

vehicles traveling at a reduced or normal traffic speed and do not require the vehicle to come to a stop,

which makes the weighing process more efficient. To address the gaps in the truck regulatory

framework and sustain the road sector, this option was by then regarded the most effective solution.

57. The efficiency is rated High against both the original and revised PDO.

3.4 Justification of Overall Outcome Rating

Rating: Satisfactory

58. As detailed above, the project was highly relevant to the Government’s strategy for the road

sector and the Bank’s most recent CPS. Most outcome targets were met and the PDO was achieved

efficiently. The project design was relevant to the project’s objectives and the investments were

economically justified. Despite the delays of Component 2 related to the change and installation of

Weigh-in-Motion system, given the complexity of the technical and procurement aspects, the Project

Implementation Team (PIT) from the counterpart and the project team from the Bank did a great job

to ensure quality implementation for each component.

59. As summarized in the table blow, against original PDO, the overall outcome rating is

satisfactory (substantial relevancy, substantial efficacy, and high efficiency), and against the revised

21

PDO, the overall outcome rating is satisfactory (substantial relevancy, substantial efficacy, and high

efficiency). Using the split evaluation, the combined overall outcome rating is Satisfactory.

Against Original

PDOs

Against Revised

PDOs

Overall

Relevance of PDOs,

design and

implementation

Substantial Substantial

Achievement of the

PDOs (Efficacy)

Substantial Substantial

Efficiency High High

Overall rating Satisfactory Satisfactory

Overall rating value 5 5

Weight (% disbursed

before/after PDO

change)

45.3% 54.7%

Weighted value 2.265 2.735 5

Final rating Satisfactory

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

60. Poverty impacts were not explicitly reflected in the PDO and results framework, but

experience elsewhere confirmed that upgraded and safer roads contributed to equitable growth and

reduced vulnerability, especially for those who remain near the poverty line, such as studies shown in

Cambodia. With respect to Belarus, over the past decade, rapid economic growth translated into

remarkable progress in poverty reduction, although the recent crisis was associated with a modest

poverty increase. The absolute poverty rate (national poverty line) declined from 30 percent in 2002

to about 6.3 percent in 2012. The country was also one of the most successful countries in the region

in sharing growth with the lowest 40 percent income group. In the 2006-2011 period mean income

growth averaged 6.4 percent, while growth of the lowest 40 percentile averaged 9.1 percent.

61. A social assessment was undertaken during project preparation to identify social issues

relevant to project objectives and execution (see Annex 6). Concerning the road upgrading works, the

implementing agency claimed that the project would have mostly positive impacts on the living

standards of the population of Belarus through its direct effects on employment and contribution to

economic growth. The PIT is planning to carry out another stakeholder workshop upon project

completion.

(b) Institutional Change/Strengthening

62. Institutional strengthening was a key feature of the project design. Within MA-C, a Project

Implementation Team (PIT) was created for this project, which consisted of experienced officials

from BELAVTADOR, MA-C, and other road sector agencies who have been assigned to work on the

various aspects of project preparation and implementation. The World Bank supported MA-C in the

necessary training of those specialists on the use of World Bank guidelines and procedures for

22

procurement, financial management, and environmental/social safeguards management. Additionally,

training and technical support were provided to staff of BELDORCENTER for the supervision of road

works under FIDIC rules. As project implementation was carried out by MA-C staff, the knowledge

gained will be maintained within the Ministry as long as key staff are retained.

(c) Other Unintended Outcomes and Impacts (positive or negative)

63. There are no noticeable negative impacts of the project.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

64. There was a stakeholder workshop conducted during project preparation regarding Component

1 of the road rehabilitation (see Annex 6). There were no objections from the public and concerns

about environmental impact caused by road rehabilitation work, ensuring road safety and roadside

service arrangement were addressed with proper mitigation measures. The PIT is planning to conduct

such a study after the full completion of the project.

4. Assessment of Risk to Development Outcome

Rating: Moderate

65. The development outcomes were: (1) to reduce transport cost; (2) to introduce modern axle-

load control system/WIM in Belarus as a tool to increase road sector sustainability.

66. At the time of this evaluation, there was negligible risk to the first outcome of reducing

transport cost.

Belarus has a good capacity to plan, manage and maintain its road infrastructure, with a very

good track record over the past decades. The state operates several enterprises for road

design, planning, research, standards, maintenance, and construction. The condition of the

road network is generally good, which is due in large part to the adequate allocation of

resources for road maintenance over the past decades.

Sustainable sector finance. Following a number of years of declining sector revenues the

Government undertook important steps towards sustainable sector finance and introduced

substantial increases in sector revenues and budget allocations for the road sector starting

2014. An important development was the promulgation of a new vehicle tax from January

2014 which was collected during the annual technical inspection of motor vehicles. In 2015

the estimated government revenues collected form this new fee were some BYR 2.3 trillion

(US$147 million and accounted for 71% of total road fund revenues) and were spent mostly

to finance expenditures on construction (39%), capital and current maintenance (20% and

2% respectively) of the republican road corridors and some on local roads.

Another significant development was the introduction of the e-tolling system, which has now

been deployed in selected roads in the country under concession to an international private

operator. The system has been operational since 2013, now covers 1,512 km and will be

expanded to cover all major road corridors including the M6 corridor. The e-tolling system

now generates sustainable financing for the road network and infrastructure. Estimated

revenues to the budget for 2015 were BYR 537 billion (US$34 million). Other sources of

revenue include minor revenues from axle load fees, transit cargo fees and fees paid by

foreign passengers cars accounting for a further BYR 372 billion (US$23.4 million) per year.

23

Establishment of the axle load monitoring and control system supported by Component 2 of

the project will directly ensure effective protection of the road assets and improve

sustainability of the current and future road investments in Belarus. Now that the system is

fully operational, there is weighing of 100% of trucks and those pre-identified as being

overweight are processed in a much reduced time frame (from 20 minutes to 5 minutes).

There have also been 2000 more special certificates issued for overweight vehicles in the

period to end of September 2016 than for the similar period in 2015. With this increased

focus on weight control this system is expected to become one of the key elements of the

effective institutional framework for sustainability of the road network. Thus,

implementation of both the original and revised project components address the important

development priority to increase the road sector sustainability in Belarus.

67. For the second outcome, the principle risk that the achieved development outcome may not be

sustained was moderate, and it involved the ability to maintain the WIM system and its integration

with the existing electronic tolling system. Although MA-C generally has good capacity but this

requires technically qualified staff and close coordination between multiple stakeholders. Through the

project implementation, the Bank was able to provide technical assistance and capacity building to

the clients, which was very helpful to keep the effectiveness of these investments. Meanwhile, the

Government is very committed in implementing and enforcing the WIM system, which is critical to

prevent overloaded trucks driving on roads and thus increase road sector sustainability. The

achievements after 5 months of WIM operation have clearly demonstrated the value of the system.

68. There were no financial, economic, political or environmental risks envisaged at the time of

this ICR. The Government is committed and takes ownership of the project, which is good to

sustainable the development outcome.

69. Taken together, the risk to development outcome is Moderate.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry

Rating: Moderately Satisfactory

70. The Bank’s preparation was thorough and collaborative, and built on lessons learned. The

scope of the project was strategically relevant and the approach was appropriate. Specific analyses of

technical, financial and economic aspects were carried out by experts in their respective fields. The

PDO and project design was simple and straightforward, though as mentioned above, parts of the

formulation of the PDO should have actually referred to an outcome not an output. The

implementation plan was practical with support for implementation agency on the use of World Bank

guidelines and procedures for procurement, financial management, and environmental/social

safeguards management. The project also included strengthening of the institutional capacity of road

sector institutions of the Borrower by providing technical assistance and training, in particular, the

capacity of local institutions to manage FIDIC-type civil works contracts. Despite change of

Component 2 requested by the Government that led to change of PDO, the scope of the project stayed

focused and uncomplicated. The M&E arrangement was well prepared and indicators were

24

uncomplicated with baseline collected properly, except the indicators for Component 2 as mentioned

the assessment of M & E design. Very detailed AMs from each mission demonstrated the Bank team’s

close collaboration with the recipient and implementing agency in preparation, appraisal and

implementation of the project. The only shortcoming at entry was that both the PDO and result

framework did not capture the outcome of “cost recovery” from the original Component 2 (e-tolling),

or the outcome of “increased sector sustainability” from the revised Component 2 (WIM). No PDO

level or intermediate indicators were included in the original and revised result framework to measure

these two outcomes. Admittedly, increased sustainability of roads might be difficult to measure as an

end-of-project outcome, especially attributing this to one specific element such as a new axle load

measuring & control system. But, even so, the PDO could have been changed to include another more

directly attributable and measurable outcome, or at least an indicator of the actual utilization of the

new WIM system as measured by the number of measurements generated, the number of enforcement

actions taken, or the percentage reduction of overweight vehicles. These shortcomings therefore

prevented assigning Satisfactory rating to the quality at entry.

(b) Quality of Supervision


71. Despite a small delay of project effectiveness, the procurement of most project activities were

well advanced after Board approval. The Bank was proactive in carrying out a series of fiduciary and

technical training programs following project effectiveness. The Bank’s supervision of fiduciary

aspects was exemplary. Supervision was carried out at regular intervals in the areas of environment

and social safeguards, financial management and procurement. Mission oversight in each area was

supplemented by training and assistance when requested, and proactively offered when deemed

necessary.

72. Mission reporting was timely and thorough, and assessments of performance were realistic

and accurately reported in ISRs. Harmonized systems and coordinated efforts were a major source of

success, with one implementation manual, one system for government to implement and one set of

reports to prepare.

73. The technical nature of the contract for the supply and installation of the WIM system for the

revised Component 2 caused a delay in the procurement process. In addition to slow procurement

processing there were a number of reasons for this including: (i) delays in defining technical

specification of the system; (ii) protracted negotiations with operator of e-tolling system on integration

issues; and (iii) delays in concluding contract negotiations due to delays of getting agreement on a

government waiver for VAT. The Bank team closely monitored this contract and promptly discussed

with the Country Management Unit (CMU) possible remediation actions. It should be noted that after

award of the supply contract, implementation was to schedule.

(c) Justification of Rating for Overall Bank Performance


74. The Bank’s performance was rated Moderately Satisfactory for quality at entry and

Satisfactory for quality of supervision. Therefore the overall Bank performance rating is Moderately

Satisfactory.

25

5.2 Borrower Performance

(a) Government Performance


75. The Government’s ownership and commitment were strong, as the objectives of RUMP were

consistent with the CPS and Belarus’ evolving development strategy and in direct support of the

Government’s objectives for the road sector that are expressed in its program “Roads of Belarus 2006

– 2015”. The Government also funded supervision of civil works for Component 1, which was

executed by specialized state agencies.

76. The project had a slow start due to delayed project effectiveness as discussed in Section 2.2.

Upon effectiveness, the project progressed well. All covenants were compiled with. Fiduciary

compliance was good, audit reports were submitted on time and auditor’s opinions unqualified,

environmental and social oversight were carried out with due diligence, and good implementation

plan endorsed. Follow-up actions were generally taken on a timely basis when required. However,

there were some delays to the project caused by the high-level Government interference in project

management such as redirecting the activities of Belarussian sub-contractors that slowed down

construction works on M5, and some delays with getting agreement on a waiver for VAT for

Component 2, which prevented from assigning Satisfactory performance to the Recipient.

(b) Implementing Agency or Agencies Performance


77. After the aforementioned initial delays, the project was implemented efficiently and

effectively by MA-C. Within MA-C, a Project Implementation Team was created, which consisted of

experienced officials who performed well with supervision; environmental and social monitoring;

financial management, accounts and audits; and data collection for economic evaluation. All major

civil works contracts and most of institutional activities were completed by the project closing date.

78. Mission review meetings were well attended, including high level officials whenever possible.

Implementation problems were usually addressed promptly and supervision was generally timely.

(c) Justification of Rating for Overall Borrower Performance


79. The Borrower ensured quality of preparation and implementation, and complied with

covenants and agreements towards the achievement of development outcomes. The combination of

the Government’s performance rating of Moderately Satisfactory and the Implementing Agency rating

of Satisfactory results in an overall Borrower Performance rating of Moderately Satisfactory.

6. Lessons Learned

80. The combination of supervision by local Bank staff whose proximity enabled them to

provide timely advice and solve problems, with the participation of international staff with

expertise in specific areas when needed, yields good results. In the case of RUMP, the successful

26

performance of the implementing agency in the areas of civil works, safeguards and financial

management, for example, was due both to the commitment and qualifications of MA-C staff and the

effective, timely support from local and HQ-based Bank staff when needed.

81. On-the-job training for PIU staff clearly improved implementing agency’s capacity to

manage FIDIC type contracts.

82. Sufficient flexibility in project design. Though the implementation agency has strong

capacity, experiences showed that decisions made at the ministerial level can sometimes be overturned

(permanently or temporarily). In a case of a sophisticated client country, project design as reflected in

legal documents needs to consider introducing sufficient flexibility to allow minor changes without

major restructuring and complex approval processes.

83. M & E design. For this project, most of the M & E system relied on data already routinely

collected - the data needed for monitoring the selected indicators was of the type that was normally

collected by the Belarusian government departments and agencies and thus were easily monitored.

84. Sustainable financing of road maintenance. In the case of Belarus, introducing electronic

tolling is a creative and diverse solution for financing the road sector.

85. Streamline the operation of e-tolling and WIM systems. Choice of the operational

mechanism, institutional setup, government commitment and the choice of appropriate technology

and regulatory framework are critical for successful operation of such advanced systems.

86. Procurement of contractors. Experience from Belarus and more widely in the region is that

some contractors present very low prices in the winning bids and afterwards delay the execution of

works through requests for variations. There is also a problem where large international contractors

obtain awards and then sub-contract a significant portion of works to local contractors. It is therefore

important to pay particular attention to prequalification criteria and the past performance of

contractors in the region. Also, it is important to be aware of differences between local legislations

and the Bank’s standard procurement policies.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

(a) Borrower/implementing agencies

87. The Borrower had no specific comments. The overall assessment and rating on the

performance of the project was found acceptable. A summary of the Borrower's ICR is presented in

Annex 7.

(b) Cofinanciers

N/A

(c) Other partners and stakeholders N/A

27

Annex 1. Project Costs and Financing

(a) Project Cost by Component (in USD Million equivalent)

Components Appraisal Estimate

(USD millions)

Actual/Latest

Estimate (USD

millions)

Percentage of

Appraisal

Component 1: Road Upgrading 131.00 134.30 102.51%

Component 2: Axle Load

Monitoring and Control System 18.00 10.38 57.64%

Component 3: Technical

Assistance and Capacity Building 1.00 1.06 106.04%

Front-end Fee 0.375 0.375 100%

Total Project Costs 150.00 146.11 97.40%

(b) Financing

Source of Funds Type of

Cofinancing

Appraisal

Estimate

(USD

millions)

Actual/Latest

Estimate

(USD

millions)

Percentage of

Appraisal

Borrower 0.00 0.00

International Bank for Reconstruction

and Development 150.00 146.11 97.40%

28

Annex 2. Outputs by Component

A. Outputs by Component

Project Activities Outputs Changes and Current

Status

Component 1: Road Upgrading

Upgrade of 52.7 km of the M5

road

Upgraded 52.7 km of the M5 road (km 65-93 and km106-131 from a

2-lane (Category 2) road to a 4-lane (Category 1B) motorway

Completed

Road Safety Wider medians and shoulders in line with EU standards;

Six two-level interchanges, seven overpasses, four bridges, two

pedestrian underpasses and bypasses at the village of Sosnovy

(about 5.7 km long) and at the village of Boyary (about 4.2 km)

were constructed, where the alignment will be shifted in order to

increase the distance between the road and the nearest houses;

Speed limits were adjusted along the alignment at the remaining

level crossings.

Completed

Component 2: Axle Load Monitoring and Control System

Design and implementation of

an automated axle load

monitoring and control system

(WIM)

4 stationary weight control points installed

8 portable weight control stations installed

12 WIM portals installed

Sensors, cameras, computing center, and data links installed for 12

WIM locations

Completed

Component 3: Technical Assistance and Capacity Building Technical Assistance HDM-4 software was purchased for BELGIPRODOR and the

Individual Consultant was hired to provide training on the software

HDM-4 version 2.5 for BELGIPRODOR staff.

Project audited.

Completed

Capacity Building Training provided to staff at PIU.

Loius Berger SAS has been recruited and has been working since

mid-2011, giving practical advice and guidance to local institutions

on the management of the four road rehabilitation contracts

(FIDIC-type civil works contracts) under Component 1.

Completed

29

B. Assessment of the Overall Outcome

Baseline Original Target First

Restructuring

Target

Second

Restructuring

Target

Third

Restructuring

Target

Status at

Closing

Remarks

PDO Indicators

Reduced vehicle operating

costs on upgraded section

of M5 (%)

100 94 94 94 94 86 Completed

Electronic road tolling

system

introduced in Belarus on a

section of the M5 road

No 960 km of

national highway

under e-tolling

Dropped Dropped Dropped Dropped Dropped

Intermediate Outcome Indicators

Component 1: Road Upgrading

Road constructed (km) 0.00 52.70 52.70 52.70 52.70 52.70 Completed

Road roughness 3.30 2.00 2.00 2.00 2.00 1.14 Completed

Traffic fatalities 12 5 5 5 5 5 Completed

Component 2: Axle Load Monitoring and Control System

Axle Load Monitoring and

Control System installed

and operational (Date)

No Yes, 30-Nov-

2014

Yes, 30-Nov-

2014

Yes, 30-Nov-

2015

Yes, 31-Mar-

2016

Yes, 31-Mar-

2016

Completed

Component 3: Technical Assistance and Capacity Building

Capacity to manage FIDIC

type contracts

No Yes Yes Yes Yes Yes Completed

30

C. Description of Weigh-in-Motion System and E-tolling in Belarus

1. As a transit country, Belarus has a large percentage of trucks travelling on its road network.

Recently, the government implemented microwave based e-tolling (see Figure 1) and through this

project have installed WIM to link with existing e-tolling system. In all 12 WIM sites were

equipped throughout the country, and the sites are installed with all required hardware and based

on Beltoll toll roads system control gates.

Figure 1: Location of Beltoll control gates

Source: http://belarusfacts.by/upload/kartaru_en.pdf

2. The systems consist of a set a control gates on the main republican roads that provide

information of overweight vehicles to Transport Inspection, the operators for further inspection of

overloaded trucks. A brief demonstration of the WIM site/gate is showed in Figure 2 below.

31

Figure 2: Belarus WIM diagram.

Source: http://www.kapsch.net/by/ktc/Portfolio/Intelligent-Mobility-Solutions/Safety-

Security/Road-Safety-Enforcement/Weigh-In-Motion

3. The goal of the system is a pre-selection of trucks that should be enforcement weighed.

This goal is reached with a combination of high-speed weigh-in-motion systems, centralized data

center and equipment update at the weight control stations.

4. There are three truck “statuses” in the system: 1) weighed in motion and not overweight;

2) weighed in motion and there’s a possible overweight; 3) did not pass the gate. Inspectors will

check vehicles falling in the last two categories while the first category of vehicles will not be

stopped which minimizes inspector efforts and traffic disruptions.

5. For each single dynamic weighing station, a set of strain-gauge sensors were installed in

the road bed and were connected with the digital block by cables for data transmission to the

camera portal and the computing center. And a set of vehicle license-plate recognition and photo

fixation cameras were installed on the portals above the road directly behind the sensors in the

road. These equipment were connected with the digital block by cables for data transmission to

the computing center.

6. The purpose/function for different units are illustrated in the following Figure 3.

32

Figure 3: Assembly diagram indicating the purpose of units

Source: RUE Minskavtodor-Center

Overall system architecture

7. The overload control system includes 12 WIM sites (Figure 4), 4 fixed heavy vehicle

inspection centers (Figure 5) and 8 mobile stations (Figure 6) with locations strategically

distributed through the network.

Figure 4: WIM site – installation process

Installing video and number plate recognition cameras

33

The electronic systems at road side

Narrow weight measuring sensor to ease installation

Source: World Bank.

8. There are 4 heavy weight and overall dimensions control stations (e.g., heavy vehicle

inspection center) on both sides of roads throughout the republican road network.

34

Figure 5: Belarus heavy vehicle inspection center

Source: World Bank.

9. Additionally, there are 8 mobile stations that are self-contained and can be used flexibly

through the network.

Figure 6: Mobile Stations of WIM

Source: World Bank

35

10. WIM control sites process raw data locally and send information of weighed vehicles to the

central system unit or to the directly connected mobile station / Transport Inspection patrol.

The processed “weighing results” contain all needed information, including weight, vehicle plate

number, vehicle type, air temperature etc.

11. Each mobile station / patrol and the heavy vehicle inspection center may receive information

from the central unit or directly from the configured gates and have access to data collected through

any of the 12 WIM sites/gates (Figure 7 and 8).

Figure 7: Weighing station architecture

Figure 8: Overall system architecture

Source: RUE Minskavtodor-Center

12. It is worth to mention that when an overloaded vehicle was sent to a nearby mobile station

for further measurement, the conversation between the driver and inspection officers will

be recorded to prevent potential bribe/corruption.

36

13. Central processing unit is placed in Beltoll system data center and provides further storage

and analysis for all received information. For example, in Belarus, WIM data has been used

to understand traffic flow patterns that lead to better traffic management.

37

Annex 3. Economic and Financial Analysis

1. At appraisal the World Bank team analyzed the economic feasibility of the upgrading of the

53 km sections of the M-5/E271 road from two-lane to a four lane road using the Highway

Development and Management Model (HDM-4). The economic evaluation compares the economic

costs and benefits of the “Project Scenario” with those of the “Base Case Scenario”, which assumed

that no major capital investment takes place on the road (maintenance only). The economic benefits

were derived from lower maintenance and repair of the upgraded road, lower vehicle operating cost,

travel time savings and accident rate reduction. The evaluation period was set to 30 years from the

planned start of construction in 2010 until 2039 and the discount rate was set to 12 percent.

2. At appraisal the World Bank funded section was estimated to have a length of 52.7 km and the

road works were expected to cost US$120 million, including local and environmental taxes, on a two

years construction period. The 2009 traffic levels on the project road varied between different sections,

with an average of about 8,400 vehicles per day. The average annual traffic growth was expected to

be 5 percent for light vehicles and 3 percent for trucks and buses over the period 2010-2039. Applying

these growth assumptions, the project road traffic was assumed to grow from 8,380 vehicles per day

in 2009 to 10,824 vehicles per day in 2015 and 30,956 vehicles per day by 2039. No generated traffic

was considered in the evaluation.

3. The project road sections were in fair condition in 2009 with an average roughness of about

3.3 IRI, m/km, which was expected to reduce to 2.0 IRI, m/km, after the road upgrading to four lanes.

The ex-ante economic evaluation considered road safety benefits in terms of reduction of road

accidents with fatalities and with injuries. The rate of accident with fatalities was estimated to decrease

from 5 fatality accidents per 100 million vehicle –km on the two lane road to 4 fatality accidents per

100 million vehicle –km on the four lane road, while the rate of accident with injuries was assumed

to decrease from 12 injury accidents per 100 million vehicle –km to 9 injury accidents per 100 million

vehicle –km. The ex-ante economic analysis indicated that the estimated discounted net present value

(NPV) of the project was US$ 159 million with an internal rate of return (EIRR) of 21.1 percent. Since

the economic analysis for Component 2 was more in the nature of feasibility studies, the analysis here

refer to Component 1 of road works only.

4. The project ex-post economic analysis was done also using the HDM-4 model, using the same

road use costs and assumptions adopted on the ex-ante analysis, but the ex-post analysis adopted: (i)

the actual investment costs; (ii) the actual construction period and disbursements profile; (iii) actual

annual traffic growth observed on the project road sections from 2009 to 2015; (iv) actual roughness

of the road sections after the improvement works; and (v) actual accident rates on the project road

sections after the improvement works.

5. The project road was subdivided into four road sections that were upgraded under four

contracts. The table below presents the basic contracts characteristics. The total contracts cost as

signed is US$123.60 million, while after contracts revisions, the actual upgrading cost is US$134.26

million, which is 12 percent higher than the total cost estimated at appraisal (US$120 million).

38

Table 1. Contracts Characteristics

Lot Length

Contract

Cost

Actual

Cost

No Lot Description (km) (US$ M) (US$ M)

1

М-5 Minsk-Gomel road, km 65.18 -

km 82.60 17.42 33.80 36.14

2

М-5 Minsk-Gomel road, km 82.60 -

km 93.00 10.40 31.90 34.15

3

М-5 Minsk-Gomel road, km 106.01

- km 122.60 16.59 30.10 33.30

4

М-5 Minsk-Gomel road, km 122.60

- km 131.00 8.40 27.80 30.66

Total 52.81 123.60 134.26

6. The road works started on November 2011 and were completed on November 2013 (table

below). In 2011 and 2012, 43 percent of the contract costs were disbursed (US$ 53.38 million) and

the rest afterwards. This represents a two year delay in relation to the construction period assumed on

the ex-ante economic evaluation (2010 to 2011)

Table 2. Contracts Dates

Lot Contract Commencement Completion Completion

No Signing of Works (initial) (final)

1 7/19/2011 11/10/2011 8/9/2013 11/15/2013

2 7/20/2011 11/10/2011 8/9/2013 11/15/2013

3 7/21/2011 11/10/2011 8/9/2013 11/15/2013

4 7/22/2011 11/10/2011 8/9/2013 11/15/2013

7. Traffic counts available for 2010 to 2015 show that the average traffic of the project road

sections actually decreased from 2010 from 2015 (table below). At appraisal the average traffic was

estimated to be 8,380 vehicles per day in 2009, in 2010 the average traffic was 8,456 vehicles per day,

while in 2015 the average traffic decreased to 7,593 vehicles per day, representing a decrease of

around 2 percent per year from 2010 to 2015. In contrast, the ex-ante economic analysis considered

the annual traffic growth was expected to be 5 percent for light vehicles and 3 percent for trucks and

buses over this period. Passenger cars represent about 66 percent of the vehicle fleet composition. The

traffic decrease was caused by both internal and external factors:

The decrease in truck freight, that has the largest share (approximately 95 percent) of the entire

freight volume, is due to a reduction of contracted construction, industrial and agricultural

production. According to the National Statistical Committee of the Republic of Belarus, in

2015 construction and installation work was 88.0 percent of that in 2014, industrial production

was 93.4 percent of that in 2014, and agricultural output – 90.5 percent of that in 2014.

Reduction of the volumes of international, inter alia, transit, road freight through the Republic

of Belarus is primarily due to the factors that determine the status of the foreign trade of the

Russian Federation with the European Union. The trade in 2015 between the Russian

Federation and the European Union amounted to USD 230 bln, or 60 percent, as compared to

the year of 2014. It was caused by worsening of the political and economic relations between

39

the Russian Federation and the European Union, EU sanctions against selected sectors of the

Russian economy and retaliatory sanctions by the Russian Federation on import of food from

the countries that have imposed sanctions on Russia. Because of these sanctions, the number

of foreign truck transit trips reduced by 18.5 percent.

Car traffic reduction is due to social, as well as external geopolitical factors. The internal social

factors include the reduction of actual available income, which, according to the National

Statistical Committee of the Republic of Belarus, is 94.1 percent in 2015, as compared to the

year 2014. The external factors are related to the conflict situation in Ukraine, which resulted

to decrease in the number of trips of light vehicles owned by Belarusian citizens to Ukraine

for tourism and recreation.

Table 3. Road Sections Traffic

Lot 2010 2015

No (AADT) (AADT)

1 8,699 6,249

2 8,699 6,249

3 8,185 9,089

4 8,185 9,089

Average 8,456 7,593

8. Roughness measurements done on the project road sections in 2014 and 2015 show that the

average roughness of the road sections after the improvement works is about 1 IRI, m/km, which is

lower than the 2 IRI, m/km, adopted on the ex-ante economic analysis for the roughness after the road

works. This indicates that the upgrading work were of very good construction quality.

9. The table below shows the total fatalities and injuries per year on the project road sections

from 2011 to 2015. The average total fatalities per year from 2011 to 2013 (before the project) is 6.3

fatalities per year and from 2014 to 2015 (after the project) is 3.5 fatalities per year, which represents

a 45 percent reduction in fatalities. The ex-ante economic analysis considered a 20 percent reduction

in the fatality rate. The average total injuries per year from 2011 to 2013 is 17.7 injuries per year and

from 2014 to 2015 is 8.5 injuries per year, which represents a 52 percent reduction in injuries. The

ex-ante economic analysis considered a 25 percent reduction in the injury rate. Therefore, the actual

reduction in road fatalities and injuries with the project were higher than the ones estimated at

appraisal.

Table 4. Road Fatalities and Injuries

Lot Number of Fatalities per Year

No 2011 2012 2013 2014 2015

1 7 1 0 1 1

2 2 3 2 1 0

3 0 1 3 0 3

4 0 0 0 0 1

Total 9 5 5 2 5

Lot Number of Injured per Year

No 2011 2012 2013 2014 2015

1 5 4 3 1 1

2 6 6 3 3 0

3 5 12 8 3 7

40

4 0 0 1 1 1

Total 16 22 15 8 9

10. The World Bank team performed the ex-post economic evaluation of the project adopting all

the actual data available related to the investment costs, timing of the investments, annual traffic

growth rate, and road user benefits due to ride quality and road safety improvements. The ex-post

economic analysis indicates that the actual discounted net present value (NPV) of the project is US$ 36

million with an internal rate of return (EIRR) of 15.9 percent. The increase in the investment costs

and the traffic reduction observed from 2009 to 2015 were in part compensated by the higher than

expected roughness and road safety improvements. The ex-post EIRR of 15.9 percent indicates the

satisfactory economic justification of the project.

41

Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/

Specialty

Lending

Rodrigo Archondo-Callao Sr Highway Engineer GTIDR Highway Engineer

Andreas Schliessler Lead Transport Specialist GTIDR Task Team Leader

Elena Klochan Sr Country Program Officer ECCBY Country Program

Officer

Dmytro Kryshchenko Projects Officer CNGF8 Projects Officer

Alexander Rukavishnikov Sr Procurement Specialist GGODR Procurement

Specialist

Arcadii Capcelea Sr Environmental Specialist GENDR Environmental

Specialist

Bekim Imeri Sr Social Development Specialist GSURR Social Development

Irina Babich Sr Financial Management

Specialist GGODR

Financial

Management

Romain Pison Junior Professional Associate GTIDR Road Engineer

Jukka-Pekka Strand Infrastructure Finance Specialist GEEDR Economist

Svetlana Vukanovic Transport Specialist GTIDR Transport Specialist

Irina Trukhan Team Assistant ECCBY Team Assistant

Supervision/ICR

Andreas Schliessler Lead Transport Specialist GTIDR Team Leader from

2009 to August 2013

Rodrigo Archondo-Callao Sr Highway Engineer GTIDR Highway Engineer

Elena Klochan Sr Country Program Officer ECCBY Country Program

Officer

Simon David Ellis Lead Transport Specialist GTIDR

Team Leader from to

August 2013 to June

2016

Barbara Ziolkowska Procurement Analyst GGODR Procurement Analyst

Arcadii Capcelea Sr Environmental Specialist GENDR Environmental

Specialist

Nijat Valiyev Sr Infrastructure Specialist GTIDR

Co-Team Leader

from November 2015

to June 2016

Bekim Imeri Sr Social Development Specialist GSURR Social Development

Maria L. Amelina Sr Social Development Specialist GGODR Social Development

Sara Gonzalez Flavell Special Assistant IEGDG Special Assistant

Wei Wang Transport Specialist GTIDR Big Data and ICT

Yevhen Bulakh Transport Specialist GTIDR Road Engineer

Juan Navas-Sabater Lead ICT Policy Specialist GTIDR ICT Specialist

http://isearch.worldbank.org/oui?qterm=GEEDR

http://isearch.worldbank.org/oui?qterm=GGODR

http://isearch.worldbank.org/oui?qterm=IEGDG

42

Alexei Slenzak Sr Environmental Specialist GENDR Environmental

Specialist

Irina Trukhan Team Assistant ECCBY Team Assistant

Alexander Rukavishnikov Sr Procurement Specialist GGODR Procurement

Specialist

Funda Canli Program Assistant GTIDR Program Assistant

Hanna Shvanok E T Temporary ECCBY Team Assistant

(b) Staff Time and Cost

Stage of Project Cycle

Staff Time and Cost (Bank Budget Only)

No. of staff weeks USD Thousands (including

travel and consultant costs)

Lending

2010 35.56 157,724.3

2011 18.99 61,179.4

Total 54.55 218,903.70

Supervision/ICR

2012 20.21 111,779.3

2013 20.82 87,365.1

2014 34.83 113,072.8

2015 24.29 97,261.6

2016 24.99 99,458.2

Total: 125.14 508,937.00

43

Annex 5. Beneficiary Survey Results

Not applicable.

44

Annex 6. Stakeholder Workshop Report and Results

1. During project preparation, the RUE Minskavtodor-Center conducted public consultations

with stakeholders such as local authorities, individuals living closely to upgraded roads and etc. There

were no objections from the public. Concerns about the potential environmental impact on the wildlife,

on road safety and roadside services were properly addressed with mitigation measures. The original

minutes are attached here.

2. The Borrower suggested that the following lessons learned from this project will make the

implementation of such projects in the future more efficiently:

Discussion of all designs that would affect public interests at all stages of project preparation

Informing the public in advance with mass media about the objectives and positives impacts

of the project

Analyze public satisfaction after project implementation

45

3. The Borrower plans to conduct a public satisfaction survey after project implementation.

46

47

48

49

Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR

1. On December 29, 2015, MA-C, the Project Implementing Unit submitted to the Bank its final

Project Completion Report. Below is the original from the Recipient’s Report covering project

description, project objectives and results achieved, project implementation management, assessment

of the performance of the Recipient and the Implementing Agency, and of the World Bank, as well as

lessons learned. The Borrower had no specific comments. The overall assessment and rating on the

performance of the project was found acceptable.

Project Description

2. Ministry of Transport and Communication of the Republic of Belarus represented by RUE

“Minskavtodor-Center” (MA-C) is implementing Road Upgrading and Modernization Project

(Project), financed by World Bank. The Borrower is the Republic of Belarus.

3. Road Upgrading and Modernization Project is the first World Bank supported operation in

Belarusian road sector. The Loan Agreement for the amount of 150 mln. USD was signed on

November 19, 2010 and became effective on July 5, 2011.

4. The initial development objective of the project was to reduce transport costs for road users

on the upgraded sections of the M5 road, and introduce electronic tolling in Belarus as an efficient

cost recovery mechanism. On March 18, 2013 the Project was restructured and the objective of the

Project was amended and replaced to read as follows: “The objectives of the Project are to reduce

transport costs for road users on upgraded sections of the M5 road and introduce axle-load control

system as a tool to increase road sector sustainability”.

5. The proposed Road Upgrading and Modernization Project is part of the overall lending

pipeline, which has been identified in the 2009 Belarus Country Partnership Strategy.

6. The section to be upgraded is located between Minsk and Bobrujsk and is part of the 508 km

long Belarusian section of the Trans-European Transport Corridor IXb linking Baltic Sea and Black

Sea ports, between Klaipeda – Vilnius – Minsk – Kiev and Odessa. The Project provides for upgrading

and modernization of a 53 km section of the M-5/E271 road from a two-lane to a four-lane road and

is part of the Government’s road sector investment plan.

7. Initially it was supposed to implement the Project within 4 years, but the closing date was

twice extended and is May 31, 2016.

Project Development Objective

8. The objectives of the Project are to reduce transport costs for road users on the upgraded

sections of the M5 road and introduce a modern axle-load control system in Belarus as a tool to

increase road sector sustainability.

9. The Project consists of three components. The details of each component are indicated below.

10. Component 1 – Upgrading of 53 km section of the M-5 Minsk-Gomel Highway. Estimated

cost was 131 mln USD. The existing road has traffic levels in the order of close to 9,000 vehicles per

day, with traffic growth rates averaging 10 percent. This component includes: (i) reconstruction of the

existing two lanes and the construction of two additional lanes to carry a design axle load of 11.5 tons;

50

(ii) improvement of road safety features in line with EU road standards; (iii) construction of about six

two-level interchanges, seven overpasses, four bridges, two pedestrian underpasses and bypasses at

the village of Sosnovy (about 5.7 km long) and at the 8 village of Boyary (about 4.2 km), where the

alignment will be shifted in order to increase the distance between the road and the nearest houses;

and (iv) implementation of a number of environmental impact management features.

11. Component 2 - Axle-Load Monitoring and Control System. Estimated cost was 18 mln

USD. The Component 2 of the project consists of the design, procurement and implementation of

weighing- motion devices embedded in the pavement of major roads that carry large numbers of

trucks. The system would bring Belarus to the forefront of efficient axle load control and thus protect

its road assets from premature deterioration. The stations will be along the non-tolled portion of the

main road network, since the axle load control along the toll roads will be integrated in the tolling

system.

12. Component 3 - Road Sector Institutional Support. Estimated cost was 1 mln USD. This

component is aimed at strengthening of the institutional capacity of road sector institutions of the

Borrower by providing technical assistance and training, including

(i) support to BELGIPRODOR for updating its economic evaluation tools for road projects, including

training on HDM4 and procurement of software licenses;

(ii) support to improve the capacity of local institutions involved in supervision of road works at a

level to carry out supervision under FIDIC rules;

(iii) support for carrying out the project audits;

(iv) assistance by a specialized consultant firm for development and introduction of Axle-Load

Monitoring and Control System in Belarus and

(vi) other minor project-related technical assistance, training and/or goods to support capacity building

and Government institutions in the road sector.

Project Implementation

13. Component 1 Upgrading of 53 km section of the M-5 Minsk-Gomel Highway. The road

Component was divided into 4 lots. Civil works were performed by Todini Costruzzioni s.p.a. within

4 Contracts, awarded for the total amount of 87,6 mln euro. The actual amount of certified payment

under the Contracts - 73,7 mln euro (the reduction is caused by the depreciation of Byelorussian ruble).

Although the original completion date was stated on August 9, 2013 an extension of Time for the

Contractor was agreed at no cost for the Employer and the total scope of Works provided by the design

documentation was substantially completed by November 15, 2015.

14. The full responsibility for the supervision of the civil works has been with Beldorcenter - a

state owned consultancy company, which undertook the role of Engineer of four civil works contracts

administered by using, as contractual framework, 2005 FIDIC Conditions of Contract for

Construction.

15. Feasibility study, drafting of the project and bidding documents, technical supervision were

financed by the budget and amounted to 48.9 bln Byelorussian rubles.

16. Component 2 Axle-Load Monitoring and Control System. This Component initially

provided for supply and installation of a modern electronic road tolling system based on microwave

technology on a 106 km section of the M5 Road between Minsk and Bobrujsk. As a result of a bid on

July 7, 2011 the Contract was awarded to Zierl Gmbh, which drafted the terms of reference for

51

system’s supply and installation. On February 29, 2012 the Government of the Republic of Belarus

signed the investment agreement with Kapsch TrafficCom AG for the installation of the Electronic

Toll Collection System for the national motorways, covering mentioned M-5 section as well. As a

result, the Contract with Zierl Gmbh was terminated and the Loan agreement was amended on March

18, 2013 as to introduce the Axle-Load Monitoring and Control System in Belarus.

17. The new bid was launched in March 2013 and the Contract for Consulting services for

introduction of a dynamic weighing system at the national roads was signed with SWEROAD Solna

(Sweden) on April 2, 2014. The delay in Contract award took place as the highly-rated Consultant

refused to follow up Contract negotiations and the Employer had to proceed with SWEROAD Solna

as with secondly rated Consultant. On November 26, 2014 the bid for Design, Supply and Installation

of Dynamic Weighing System at the National Roads of Belarus was launched and on April 10, 2015

the Contract with JV Betamont s.r.a (leader) and ITS Bel was signed. As the DWS system is

implemented based on existing Electronic Collection System infrastructure, the integration of these

two systems became necessary and the Contract providing for such an integration was signed with

Kapsch TrafficCom AG.

18. Component 3 - Road Sector Institutional Support. Within this component HDM-4 software

was purchased for BELGIPRODOR and the Individual Consultant was hired to provide training on

the software HDM-4 version 2.5 for BELGIPRODOR staff.

19. On July 7, 2011 the Contract with Loius Berger SAS was signed to provide technical assistance

for support for supervision of FIDIC-type civil works and conduct training for benchmarking and

harmonization of the Byelorussian road construction, repair and maintenance standards and

expenditure levels to European and international standards. Loius Berger SAS worked closely with

the Employer and the Engineer (RUE Beldorcenter) over the period of 3 years, in which practical day-

to-day advices have been given through on-call services, missions to the Republic of Belarus and the

permanent presence on Site of a FIDIC Highway Engineer starting from the second year of

assignment. The Consultant also provided two formal training sessions with the aim to improve The

Employer’s and Engineer’s capacity in supervising contracts under FIDIC Conditions of Contract.

20. The Component also financed the audit of the Project and RUE Minskavtodor-Center for the

period 2012 – 2015 and the training of the Employer’s staff aimed at PIU’s capacity improvement.

Evaluation of the Borrower’s Own Performance during the Project Preparation and

Implementation

21. The performance of the Borrower and Ministry of Transport and Communication in carrying

out the responsibilities assigned to them was satisfactory. RUE Minskavtodor-Centre (MA-C) as the

Project Implementing Agency has sole responsibility for overall project implementation. MA-C was

in charge of day-to-day project operation. The General Director has been appointed to be responsible

for project implementation. The Chief Accountant has been appointed to coordinate fiduciary aspects

of project implementation.

22. The Project Implementing Agency has been working for effective solution of all problems

arisen in the process of project implementation. Safeguard measures were implemented in full in order

to mitigate the negative social and ecological impact of the Project. The Borrower and Implementing

Agency carried out their obligations of full payment of compensation to persons negatively affected

by the Project out of republican budget.

52

23. The capacity of Project Implementing Agency increased from the beginning of the project

implementation.

Evaluation of the Performance of the Bank during the Project Preparation and Implementation

24. The performance of the Bank was considered successful. On a regular basis the World Bank

carried out review missions during the Project Implementation. These missions were focused on

projects inputs and outcomes. The World Bank worked closely with the Ministry of Transport and

Communication and MA-C to resolve issues arisen during the Project implementation and provide

necessary assistance. Form the side of the World Bank there were no delays in payments or review

the inquiries.

Conclusions and Lessons Learned

25. By the December of 2015 the Components 1 and 3 were successfully completed. The weigh-

in-motion system under the Component 2 is planned to be completed by the end of March 2016.

26. The M-5 Minsk-Gomel highway conditions were improved to 4 lanes-dual carriageway

expressway standards on 52.7 km. The project’s original target was met by project closure (see

Attachment 2 Project Development Objective Indicators). The civil works performed were of good

quality, despite significant delays due to the necessity of introduction of modification in origin design

project. The necessity of conducting additional works arose frequently in the process of the project

construction works. Delay in civil works completion also was caused by decision of the Minister of

Transport and Communication to review the project design regarding the possibility of optimization

the costs for engineering structures. In order to minimize risks of significant changes occurrence at

the stage of project implementation in future it is necessary to enhance the designing and detailed

Bidding documentation development.

27. The completion of WIM-system installation under Component 2 is planned to be completed

by the end of March, i.e. the project’s revised target will be achieved before the Closing Date. Delays

in implementation of Component 2 are connected with the project restructuring. Another delays

occurred at the stages of selection of Consultant for Bidding documentation development (the

originally selected Consultant withdrew at the stage of Contract negotiations) and Contract

negotiations with the Contractor for WIM-system supply and installation (long procedure of

harmonization of Bank’s Standard Contract Forms and Belarusian legislation).

28. In order to avoid such delays it is necessary to carefully assess the Bidding and Contract

documentation on discrepancies between Bank’s standard forms and local requirements and ensure

their compliance with the local legislation.

53

Appendix 1. Contracts (initial and final amounts)

№ Company Contract Currency of

Contract

Amount of

signed

Contract,

excluding

VAT

Final Amount

of Contract,

excluding

VAT

Component 1. Upgrading of 53 km section of the M-5 Minsk-Gomel Highway

1 Todini

Costruzioni

Generali S.p.A.

Upgrading of

M-5 Road, km

65,18 – km

82,6. Lot 1

euro 23 962 977,62 27 258 435,11

2 Todini

Costruzioni

Generali S.p.A.

Upgrading of

M-5 Road, km

82,6 – km

93,0. Lot 2

euro 22 643 123,69 25 820 512,31

3 Todini

Costruzioni

Generali S.p.A.

Upgrading of

M-5 Road, km

106,01 – km

122,6. Lot 3

euro 21 304 982,67 25 235 573,60

4 Todini

Costruzioni

Generali S.p.A.

Upgrading of

M-5 Road, km

122,6 – km

131,0. Lot 4

euro 19 732 912,28 23 316 024,03

Component 2. Axle-Load Monitoring and Control System

1 ZIERL Consult Supply and

installation of a

modern

electronic road

tolling system

based on

microwave

technology on

a 106 km

section of the

M5 Road

between Minsk

and Bobrujsk

USD and

Byelorussian

rubles

168 210 USD

and

54 000 000

BYR

168 210 USD

and

54 000 000

BYR

2 Kapsch

TrafficCom

AG

Integration of

the Weigh in

Motion in

Electronic Toll

Collection

euro 496 435

3 JV

«BETAMONT

s.r.o.» and

«ITS-Bel»

Design,

manufacture,

test, deliver,

install,

euro and

Byelorussian

rubles

8 065 162 €

and

54

complete and

commission

Dynamic

Weighing

System at the

National Roads

of Belarus

3 704 186 400

BYR (без

НДС)

Component 3. Road Sector Institutional Support

1 Louis Berger

SAS

Technical

assistance for

support for

supervision of

FIDI-type civil

works and

conduct

training for

benchmarking

and

harmonization

of the

Byelarussian

road

construction,

repair and

maintenance

standards and

expenditure

levels to

European and

international

standards

euro 297 056 595 668,85

2 KPMG Audit of the

Project and

RUE

Minskavtodor-

Center for the

period 2012 –

2015

Byelorussian

rubles

2 284 480 000 2 284 480 000

3 Human

Systems (1C

adaptation)

1C adaptation Byelorussian

rubles

15 660 000 15 660 000

4 Training Byelorussian

rubles

52 201 060 52 201 060

5 TRL Ltd HDM-4 USD 14 640 14 640

55

6 IC Contract

with A.

Spernol

HDM-4

training

euro 4 567, 56 4 567, 56

4 Translation

services

Byelorussian

rubles

13 275 249 19 434 849

Appendix 2. Project Results monitoring

Project Outcome Indicators Baseline

(2010)

2015

Reduced vehicle operating costs on the upgraded

section of the M-5 road

Target value 94%

Actual value 100% 86%

Axle load control system introduced in Belarus n/a n/a

Intermediate Outcome Indicators

Length of the M5 road sections upgraded (km)

Target value 52,7

Actual value 0 52,7

IRI reduced on the upgraded section of the M5

road

Target value <2

Actual value 3,2 1,14

Number of fatalities on the upgraded section of

the M5 road

Target value 5/year

Actual value 12/год 5/ year

Modern axle load monitoring and control system is

installed and operational on non-tolled roads

n/a n/a

Local institutions have food capacity to supervise

FIDIC-based road works.

n/a yes

56

Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders

Not applicable.

57

Annex 9. List of Supporting Documents Documents

Project Information Document (Concept Stage), 10/07/2009

Integrated Safeguards Data Sheet (Concept Stage), 11/03/2009

Project Information Document (Appraisal Stage), 06/17/2010

Integrated Safeguards Data Sheet (Appraisal Stage), 07/15/2010

Project Appraisal Document, 10/13/2010

Loan Agreement, 11/19/2010

Restructuring Project Paper, 02/04/2013

Amendment to Loan Agreement, 09/16/2013

Mission Aide-Memoires and Implementation Status Reports

Implementation Status and Results Report Sequence 1 | Date : 06/13/2011











Other Documents and Reports

Guidelines

Implementation Completion Report Guidelines, OPCS, Aug 2006, last updated July 22, 2014

Guidelines for Reviewing World Bank Implementation Completion and Results Reports, a

Manual for Evaluators, Independent Evaluation Group, last updated Nov 12, 2013

58

Annex 10. Map