Public Disclosure Copy The World Bank Implementation Status & Results Report RAIL TRADE AND TRANSPORT FACILITATION (P083108) RAIL TRADE AND TRANSPORT FACILITATION (P083108) EUROPE AND CENTRAL ASIA | Azerbaijan | Transport Global Practice | IBRD/IDA | Specific Investment Loan | FY 2008 | Seq No: 17 | ARCHIVED on 24-Jun-2015 | ISR19380 | Implementing Agencies: ADY (Azerbaijan Railways JSC) Key Dates Key Project Dates Board Approval date:27-Mar-2008 Effectiveness Date:15-Mar-2010 Planned Mid Term Review Date:30-Jun-2010 Actual Mid-Term Review Date:10-Dec-2012 Original Closing Date:30-Jun-2012 Revised Closing Date:31-Dec-2017 Project Development Objectives Project Development Objective (from Project Appraisal Document) The main project objective is to improve railway services in Azerbaijan, as well as the competitiveness, financial sustainability, operating and cost efficiency, and capacity of the Azerbaijan Railways (ADDY) in particular along the transport corridor toward Georgia (east-west corridor). The project will support the implementation of the first phase of the Government Program covering components, which are most time-sensitive and will most rapidly lead to cash flow generation. The project will focus on: (i) maintaining and growing the railway business (increase revenue from US$219 million today to about US$283 million by 2015) by providing the profitable freight market segment with proper service, infrastructure and locomotive capacity; (ii) transforming the Azeri Railways into a financially self-sustainable operation in freight transportation, covering all its costs (including infrastructure maintenance and traction) from revenues, while improving its operational efficiency; and (iii) improving the transparency of the Railway sector by introducing International Financial Reporting Standards (IFRS) and profit centers (passenger/freight) and by separating on an accounting basis passenger service that could be self-sustained from others. Other parts of the Government Program are expected to be covered through separate projects once the proper financial and technical due diligence has been completed. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Rehabilitation of Eeast-West railway corridor:(Cost $927.70 M) Locomotives:(Cost $334.00 M) Modernization:(Cost $27.00 M) Project Implementation:(Cost $7.60 M) Overall Ratings 6/24/2015 Page 1 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report RAIL TRADE AND TRANSPORT FACILITATION (P083108) Name Previous Rating Current Rating Progress towards achievement of PDO  Moderately Satisfactory  Moderately Satisfactory Overall Implementation Progress (IP)  Moderately Satisfactory  Moderately Satisfactory Overall Risk Rating  Moderate  Moderate Implementation Status and Key Decisions The implementation of the power conversion and signaling is progressing satisfactorily, although suffering from a lack of adequate supervision which recently generated delays due to the lack of adequate coordination between contracts. The power conversion works are advancing with construction of eight AC traction power substations finalized and four remaining under construction and catenary works and poles replacement advancing at Ganja- Boyuk Kesik section. The signaling contractor has finalised the conceptual design followed by completed cabeling works and signalling premises rehabilitated at Ganja-Boyuk Kesik section. The new management in ADY has recently taken constructive new steps in terms of institutional and financial modernization. Though the Bank is satisifed with the status of physical rehabiltiation of existing infrastructure, there is an urgent need to allign the schedule of delivery of locomotives with on-going power conversion and signalling contracts. The Bank has agreed with Government that the progress with Reform of the Railway Administration should continue with a focus on the development of a business plan, new financial management and asset management systems, and introduction of sector performance benchmarking including the preparation of a financial model. Sector performance benchmarking and financial model are completed, and other activities are being tendered. Based on above, the project development objective (PDO) continues to be achievable within the project closing date of December 31, 2017 and the Bank did not change the PDO nor implementation ratings except for locomotives and institutional modernisation which are donwgraded until Government intensifies institutional activities and ensure timely delivery of new locomotives. Once above issues are resolved and project is disbursed at 40%, the Bank will be in position to upgrade the PDO and project implementation ratings to Satisfactory level. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Moderate  Moderate Macroeconomic  --  Moderate  Moderate Sector Strategies and Policies  --  Moderate  Moderate 6/24/2015 Page 2 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report RAIL TRADE AND TRANSPORT FACILITATION (P083108) Technical Design of Project or Program  --  Moderate  Moderate Institutional Capacity for Implementation and Sustainability  --  Moderate  Moderate Fiduciary  --  Moderate  Moderate Environment and Social  --  Moderate  Moderate Stakeholders  --  Moderate  Moderate Other  --  Moderate  Moderate Overall  --  Moderate  Moderate Results Project Development Objective Indicators PHINDPDOTBL  Client Satisfaction survey for freight services (index 100-2009). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 100 113.7 113.7 125 Date 30-Jun-2009 10-Sep-2014 10-Sep-2014 31-Dec-2017 PHINDPDOTBL  Volume of transport (million tons) - oil and oil products on east-west corridor (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 13,2 9.7 10.5 20.5 Date 31-Dec-2007 10-Sep-2014 19-Jun-2015 31-Dec-2017 PHINDPDOTBL  Volume of transport (million tons) - east-west corridor (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 28.2 21.3 19.9 25 Date 31-Dec-2007 10-Sep-2014 19-Jun-2015 31-Dec-2017 6/24/2015 Page 3 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report RAIL TRADE AND TRANSPORT FACILITATION (P083108) PHINDPDOTBL  Operational cash flow/revenues (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 13% 10% 10% 10% Date 31-Dec-2007 10-Sep-2014 10-Sep-2014 31-Jan-2017 PHINDPDOTBL  ADDY working ratio (Operating expenses (excluding depreciation) divided by total revenues. Based on IFRS reports) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 75% 74% 74% 87% Date 31-Dec-2007 10-Sep-2014 10-Sep-2014 31-Dec-2017 PHINDPDOTBL  Net ton-km per locomotive used on E-W line (in million per year) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 117.1 110 110 150 Date 31-Dec-2007 10-Sep-2014 10-Sep-2014 31-Dec-2017 PHINDPDOTBL  Train transit time E-W (new locos) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 22 hours 23 hours 23 hours 12 hours Date 31-Dec-2007 10-Sep-2014 19-Jun-2015 31-Dec-2017 PHINDPDOTBL  % reduction in operating cost/net ton-km (Real basis, compared to 2007). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0% -40% -40% 2.5% 6/24/2015 Page 4 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report RAIL TRADE AND TRANSPORT FACILITATION (P083108) Date 31-Dec-2007 10-Sep-2014 10-Sep-2014 31-Dec-2017 PHINDPDOTBL  % increase in operating revenues/net ton-km (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0% 21% 21% 5% Date 31-Dec-2007 10-Sep-2014 10-Sep-2014 31-Dec-2017 PHINDPDOTBL  Electric consumption per transport unit (KWh per 10 000 ton or passenger-km) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 180 207 207 170 Date 31-Dec-2007 10-Sep-2014 10-Sep-2014 31-Dec-2017 PHINDPDOTBL  Locomotive availability (Percentage of fleet available for service as measured in hours (currently 110 out of 224 available fleet) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 45% 60% 60% 80% Date 31-Dec-2007 10-Sep-2014 10-Sep-2014 31-Dec-2017 Overall Comments Intermediate Results Indicators 6/24/2015 Page 5 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report RAIL TRADE AND TRANSPORT FACILITATION (P083108) PHINDIRITBL  Percentage of track in critical condition on east west corridor as measured through condition surveys - Track with speed restriction. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 61% 55% 55% 10 Date 31-Dec-2007 10-Sep-2014 10-Sep-2014 31-Dec-2017 PHINDIRITBL  Percentage of track in critical condition on east west corridor as measured through condition surveys - Track in need of renewal. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 35% 20% 20% 20 Date 31-Dec-2007 10-Sep-2014 10-Sep-2014 31-Dec-2017 PHINDIRITBL  Number of locomotives able to cross Azerbaijan reliably (Number of locomotives able to cross 502 km (i.e. E-W corridor) non- stop) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0 0 0 30 Date 31-Dec-2007 10-Sep-2014 19-Jun-2015 31-Dec-2017 PHINDIRITBL  Locomotive reliability (Mean distance in kilometers between operational failures) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 17000 14550 14550 100000 Date 31-Dec-2007 10-Sep-2014 10-Sep-2014 31-Dec-2017 6/24/2015 Page 6 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report RAIL TRADE AND TRANSPORT FACILITATION (P083108) PHINDIRITBL  Follow up of audit qualifications (annual) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target no audit or follow up in audit and follow Value On-going On-going 2007 up each year Date 31-Dec-2007 10-Sep-2014 19-Jun-2015 31-Dec-2017 PHINDIRITBL  Modernization of Railway Company (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target IFRS based computerised ADDY is a state owned Value On-going On-going accounting department system is operational Date 31-Dec-2007 10-Sep-2014 19-Jun-2015 31-Dec-2017 Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P083108 IBRD-75090 Effective USD 450.00 450.00 0.00 255.87 194.13 57% P083108 IBRD-82820 Effective USD 220.00 220.00 0.00 0.55 219.45 0% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P083108 IBRD-75090 Effective 27-Mar-2008 18-Dec-2009 15-Mar-2010 30-Jun-2012 31-Dec-2017 P083108 IBRD-82820 Effective 27-Jun-2013 20-Sep-2013 03-Dec-2013 31-Dec-2017 31-Dec-2017 Cumulative Disbursements 6/24/2015 Page 7 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report RAIL TRADE AND TRANSPORT FACILITATION (P083108) Restructuring History Level Approved on 03-Dec-2009 Related Project(s) P146125-Rail Trade and Transport Facilitation AF 6/24/2015 Page 8 of 8 Public Disclosure Copy