OFFICIAL DOCUMENTS Supplemental Letter to the Program Agreement PUBLIC ENTERPRISE ROADS OF SERBIA OY\GM 2017 International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Re: Loan No. 1)-YF (Enhancing Infrastructure Efficiency and Sustainability Program) Performance and Monitoring Indicators Dear Sirs and Mesdames: This refers to Section HI.A of the Schedule to the Program Agreement between the Public Enterprise Roads of Serbia (Program Implementing Entity) and the International Bank for Reconstruction and Development (the Bank) for the above-captioned Program. The Program Implementing Entity hereby confirms to the Bank that the indicators set out in the attachment to this letter shall serve as a basis for the Program Implementing Entity to monitor and evaluate the progress of the Program and the achievement of the objectives thereof. Very truly yours, PUBLIC ENTE SE ROADS OF SERBIA By orized Representative Attachment Attachment to Supplemental Letter to the Program Agreement Results Framework and Monitoring Matrix Program Development Objective: to improve the management and sustainability of select public infrastructure by strengthening government capacity and systems, upgrading assets and increasing expenditure efficiency. PDO Level Results Indicators Unit of Baseline Cumulative Target Values Frequency Data Source/ Responsibility E Measure By Nov 30 Methodology for Data 2017 By 2018 By 2019 2020 Collection PDO Indicator 1: IRI < 2.5 IRI <2.5 PERS' Report Enhanced motorist satisfaction through X IRI TBD (200Okm) (7000 Annual to the Bank and PERS better pavement condition km) Annual Reports PDO Indicator 2: Implementation of PERS' Report the Service Level Agreement X Yes Biannually to the Bank and PERS Annual Reports Intermediate Results: Intermediate Results (IR) Indicator 1 X km TBD 1000 2000 8000 Biannually Length of national roads maintained I Intermediate Results (IR) Indicator 2 PERS' Report Completion of road asset survey Km 3,755 14,894 to the Bank and PERS Annual Reports Intermediate Results (IR) Indicator 3 PERS' 3- Completion of PERS' 3-year year Performance-Based Maintenance Plan No 3-year Performance using SLA Perfor- -Based Peanor- Maintenance PERS' Report X mance- Plan based Biannually to the Bank and PERS Based on SLA Annual Reports Mainten- adopted by ance Plan PERS supervisory board IR Indicator 4: Completion of PERS' PERS asset management (AM) plan AM plan PERS' Report X No AM adopted Biannually to the Bank and PERS plan and Annual Reports approved by MCTI IR Indicator 5: Road safety inspection PERS' Report carried out and safety measure X Km TBD 5000 Annually to the Bank and PERS implemented Annual Reports