Document of
             The World Bank


                                      Report No: 66092-AF




         RESTRUCTURING PAPER

                 ON A

     PROPOSED PROJECT RESTRUCTURING
                   OF
ARTF-KABUL URBAN RECONSTRUCTION PROJECT
                 GRANT
               MAY 13, 2008


                TO THE

    ISLAMIC REPUBLIC OF AFGHANISTAN


           DECEMBER 20, 2011
                  ABBREVIATIONS AND ACRONYMS


ARTF   Afghanistan Reconstruction Trust Fund
KM     Kabul Municipality
KURP   Kabul Urban Reconstruction Project
MUDA   Ministry of Urban Development Affairs
PDO    Project Development Objective




          Regional Vice President:        Isabel M. Guerrero
                 Country Director:        Josephine M. Bassinette
         Sector Manager / Director:       Ming Zhang / John Henry Stein
                Task Team Leader:         Deepali Tewari

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      AFGHANISTAN — ARTF-KABUL URBAN RECONSTRUCTION PROJECT
                              P111825
                             TF092073

                                  Restructuring Paper


1.    The closing date for Afghanistan Kabul Urban Reconstruction Project, TF
092073, P111825, will be extended from December 31, 2011 to April 30, 2012.

2.     The ARTF Grant TF092073-AF was approved by the ARTF Management
Committee and the Grant Agreement was signed on May 13, 2008. The original closing
date was December 31, 2009. The closing date was extended twice, and the current
closing date is December 31, 2011.

         The Grant is linked with the IDA-funded Kabul Urban Reconstruction Project
(P083919, Cr 3967) and provides funding for area upgrading program in the Historic Old
City of Kabul through the improvement of basic tertiary infrastructure and services,
including water supply, sanitation, solid waste management, access roads, drainage and
street lighting for selected communities. Project performance has been rated Moderately
Satisfactory for Development Objectives (DO) and Implementation Progress (IP). To
date, 28 contracts are complete; four contracts have been delayed due to mobility
restrictions caused by the security situation in the Kabul municipality. With the
completion of these four contracts, informal settlements covering about 600 hectares
would have been upgraded, and over 250,000 people would have benefited from access
to basic municipal services.

3.       The proposed extension is necessary to allow for the completion of the four on-
going civil works contracts. Delays in completion is caused by deterioration in the
security situation in Kabul over the last year, which resulted in significant mobility
restrictions in the city and the imposition of the requirement for contractors to acquire
permits to access project sites that are valid for only one week at a time. The Government
has requested an additional four months extension of the Grant closing date from
December 31, 2011 to April 30, 2012 to enable the completion of the four on-going
contracts.

4.     In view of that (i) the factor causing the delay is outside the control of the
implementing line ministry and the contractors; and (ii) the Project’s Development
Objectives remain achievable, we recommend the RVP to approve a four month
extension of the Grant closing date from December 31, 2011 to April 30, 2012.

5.     There are no pending audit reports for the Grant.

6.     This will be the third extension of the project.




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