The World Bank Transport Corridors Project (P131550) REPORT NO.: RES39849 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF TRANSPORT CORRIDORS PROJECT APPROVED ON DECEMBER 19, 2013 TO THE REPUBLIC OF IRAQ TRANSPORT MIDDLE EAST AND NORTH AFRICA Regional Vice President: Ferid Belhaj Country Director: Saroj Kumar Jha Regional Director: Paul Noumba Um Practice Manager/Manager: Olivier P. Le Ber Task Team Leaders: Ibrahim Khalil Zaki Dajani, Soran Hama Tahir Ali The World Bank Transport Corridors Project (P131550) ABBREVIATIONS AND ACRONYMS ESIA Environmental and Social Impact Assessment GDRB General Directorate for Roads and Bridges IBRD International Bank for Reconstruction and Development km Kilometer KRG Kurdistan Regional Government OHS Occupational Health and Safety PAP Project Affected People PMT Project Management Team RAP Resettlement Action Plan TCP Transport Corridors Project The World Bank Transport Corridors Project (P131550) BASIC DATA Product Information Project ID Financing Instrument P131550 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 19-Dec-2013 30-Jun-2021 Organizations Borrower Responsible Agency Ministry of Construction, Housing, Municipalities and Public Works,KRG Ministry of Construction and The Republic of Iraq Housing,Roads and Bridges Directorate - Project Management Team Project Development Objective (PDO) Original PDO The Project Development Objective is to improve road transport connectivity and safety on selected road sections along Expressway 1and the North-South transport corridor in Iraq. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-83220 19-Dec-2013 02-Mar-2014 30-Mar-2015 30-Jun-2021 355.00 228.90 126.10 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Transport Corridors Project (P131550) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. PROJECT STATUS: 1. The Transport Corridor Project (TCP) progress towards achievement of the project development objective and overall implementation progress are rated satisfactory. Commitment reached US$310 million (87 percent of loan proceeds) and disbursement US$228.90 million (64.5 percent of loan proceeds). 2. In terms of financed activities: a. Component A: Transport Corridors Improvements: (a) one major green field works contract (US$55 million) to construct 22 kilometer (km) segment of the North - South corridor in Kurdistan Regional Government (KRG) (between Girsheen and Suhaila intersection) has been completed and open to traffic improving with it traffic safety which is predominantly trade between Iraq and Turkey; (b) one of the two segments of Expressway No. 1 rehabilitation works contracts (US$200 million) have been completed (segment R8A (between Rumaila - Expressway No. 1 / Basra Juncture towards Basra - 50 km)) while the second substantially completed (segment R7 (between Nasiriya and Rumaila – 145 km)) towards improving traffic safety; and (c) a third contract (US$37.5 million) has been recently awarded towards the rehabilitation of segment R8B towards Safwan (near Iraqi borders with Kuwait) and at contractor's mobilization stage. Due to savings acquired from the competitive bidding process, a fourth works contract along segment R9A Expressway No. 1 (from Abu Ghraib towards Ramadi) is currently under preparation. b. Component B: Institutional Strengthening and Capacity Building in the Road Sector: several important technical assistance contracts to improve the capacity of Roads and Bridges Directorate in Baghdad and the General Directorate for Roads and Bridges in Dohuk (KRG) to plan, manage and execute road development and maintenance program are under implementation with others in the procurement stages. c. Key Achievements: The key achievements thus far have been in terms of improving road safety along the corridors to be rehabilitated under TCP and creating much needed local employment opportunities. To date, safety has improved, and the number of fatalities has reduced: 25 fatalities along these corridors have occurred since works started in 2016 (4.5 years of implementation) compared to the baseline of 113 fatalities annually (or projected 482 fatalities during the same period). There were no fatalities on the road in KRG. This demonstrates that the rehabilitation activities including new pavement, marking, guardrails and fences are contributing to saving Iraqi lives. d. Another achievement has been in terms of creating much needed employment opportunities. The rehabilitation works along segments R7 and R8 of Expressway No. 1 are being implemented in Al- Muthana governorate (one of the poorest and highest unemployment in Iraq) and has already generated over 700,000 labor-days in direct and in-direct and for skilled and shops with safe access has been completed as well as the construction of safe access to some of the old shops. e. Social Safeguards from Resettlement Action Plan (RAP): Relocation of some Project Affected People (PAP) of R8 to the new shops has been completed. The relocation of the PAPs of R7 and some of R8 PAPs who chose to be relocated to the resettlement area is expected to start soon. This has been delayed due to the retirement of several members of the original resettlement committee which was The World Bank Transport Corridors Project (P131550) finally been re-established in May 2020 by the Thi-Qar Governor. The handing over of the shops to eligible PAPs is expected to be completed by end July 2020. f. Occupational Health and Safety Performance: TCP has been saving lives (25 unfortunate fatalities compared with appraisal stage estimates of 482 over a period of 4.5 years); following each of the 5 severe accidents which occurred on segment R7, several measures were taken: (a) task team prepared ESIRTs to report to management on the nature of accidents and what actions have been taken; (b) the Project Management Team (PMT) conducted Root Cause Analyses and Occupational Health and Safety (OHS) Audit for R7 and R8 and improvement measures are being implemented; and (c) task team held two follow up special meetings with the clients on traffic safety one in Amman attended by Road Safety specialist and OHS specialist and another in Baghdad with senior Iraqi officials. An important measure for improving safety has been the elimination of cross-over detours, a measure that will be adopted in future contracts. II. DESCRIPTION OF PROPOSED CHANGES A. PROPOSED CHANGE 1. The Ministry of Finance in its letter to the Bank on May 17, 2020, has requested the following: (a) reallocating remaining uncommitted funds (US$1,079,347) from Category 3 related to technical assistance to Category 2 related to transport corridors improvements both related to KRG; and (b) extending closing date by 24 months. This restructuring would also amend the Loan Agreement to include the rehabilitation of segment R9A of Expressway No. 1. 2. Reallocation: the first request is related to the reallocation of uncommitted funds under the technical assistance category related to KRG would compensate for overdrawn funds from Category 2 related to the corridor improvement and towards the works contract along Girsheen - Suheila Intersection. The uncommitted funds is a result of savings from competitive selection process of consultants. 3. Closing Date: The second request to extend the loan closing date for an additional 24 months to allow for the completion of the two remaining works contracts along Expressway No. 1 and to utilize the remaining funds. This is the second extension of the closing date the first of which was approved on May 4, 2019 for a duration of 18 months (June 30, 2021) to compensate for the 15 months lost from loan approval till effectiveness. This new request would extend the closing date till June 30, 2023. The extension would allow for the completion of the recently signed US$37 million works contract which is expected to be completed by end of 2021, the completion of the last works contract of US$40 million that is planned to be awarded by end of 2020, and the successful execution of the technical assistance activities. While this request is for 24 months, only 18 months would be needed to complete the last works contract but the conditions in Iraq is extremely unpredictable and location of the works in Anbar governorate, the government’s request is factoring such uncertainties. 4. All requirements of Bank Policy and Bank Directive on Investment Project Financing for closing date extension have been met: (a) the PDO remains achievable; (b) the performance of the Borrower remains satisfactory; (c) the World Bank and the Borrower agree on actions that will be undertaken to complete the project on time; (d) the project is not subject to suspension of disbursements; and (e) there are no The World Bank Transport Corridors Project (P131550) outstanding audit reports and the audit reports are satisfactory to the World Bank. Updated project implementation timeline and action plan is as below 5. Amending Part A of Schedule 1 of the Loan Agreement: This proposed restructuring would allow the financing of the rehabilitation, maintenance and road safety improvement of about 63 km of segment R9A1 of Expressway No. 1 (Abu Ghraib – Ramadi) and the design and construction of service lay-bys along the section utilizing the savings achieved as mentioned above. The estimated cost is about US$40 million. During the war with ISIS, several segments of the western leg of Expressway No. 1 were damaged and in need for repair to facilitate movement of people between Baghdad and the communities in Al-Anbar governorate as well as trade between Iraq and Jordan. It is worth noting that other segments are currently being repaired through the ongoing World Bank financed Emergency Operation for Development Project. The uncommitted funds are from savings generated from savings of competitive bidding process, savings from implementing segments R7 and R8, and the drop in oil prices compared to that during appraisal in 2013 since bitumen is a major items that influences the project cost. In terms of savings, the estimated implementation cost at appraisal for segments R7 and R8 was US$265 million (average oil prices in 2013 were US$97 per barrel) while the final cost US$228 million (average oil prices in 2016 during bidding process were US$43 per barrel) freeing up US$37 million. Additionally, lay-bys in segment R6 will be removed from the loan agreement as the cost is being covered from the national budget. 6. Results Framework. Some indicators and their targets are proposed to be updated to reflect the addition of segment R9A and positive progress of the project (see the results framework for details). End target dates have been also adjusted to reflect the proposed closing date. 7. Project implementation timeline/action plan: The ongoing works contract related to segment R7 of Expressway No. 1 is expected to be completed by end July 2020 while the recently signed contract related to segment R8B will be completed by December 2021. Segment 9A is expected to be awarded in December 2020 and completed by June 2022. In terms of action plan, the updated Environmental and Social Impact Assessment (ESIA) and RAP for segment R9A will be completed and disclosed by August 2020. 8. Procurement Arrangements. There are no changes to Procurement Arrangements. The procurement transactions will continue to use the Systematic Tracking of Exchanges in Procurement to plan, record and track procurement transactions. 9. Financial Management. The Borrower will have audited financial statements prepared by an independent auditor contracted in accordance with World Bank selection of consultants' procedures and based on a Terms of Reference cleared by the Bank. Acceptable audit reports, audited financial statements and, management letters for the year ended December 31, 2018 were received for both Baghdad and Dohuk based PMTs. The next audit report for the year ending December 31, 2019 was originally due for submission no later than June 30, 2020 which was officially revised to September 30, 2020 to accommodate government imposed lockdowns and COVID-19 work environment. Thus, there are currently no qualified or overdue audits and the audit reports are satisfactory to the World Bank. 1 R9A (Baghdad West – Habbaniya) and also referred to as R9A (Abu Ghraib - Ramadi) is a segment of section R9 of Expressway No. 1 included in the ESIA and RAP prepared and disclosed in August 2013. The World Bank Transport Corridors Project (P131550) 10. Safeguards. The EA Category of the Project is “A”. A Bank-cleared and disclosed ESIA and RAP were prepared and disclosed to public prior to appraisal in August 20132 that covered the entire Expressway No. 1 including segments that were to be financed through the national budget and initially through another loan from the Islamic Development Bank. As for the new contract related to segment R9 along Expressway No. 1, while the existing ESIA and the RAP cover this segment, the Roads and Bridges Directorate will update them to verify the current baseline conditions and disclose to the public in accordance with the World Bank safeguards policies. A site specific Environmental and Social Management Plan will also be prepared by the contractor and included in the procurement documents. No change in the Project EA Category will take place and no land acquisition is anticipated as a result of the restructuring. No new safeguards policies will be triggered by this restructuring. 2 The RAP was revised and redisclosed in November 2013. The World Bank Transport Corridors Project (P131550) III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Loan Closing Date(s) ✔ Reallocation between Disbursement Categories ✔ Disbursement Estimates ✔ Implementation Schedule ✔ Other Change(s) ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ PBCs ✔ Components and Cost ✔ Cancellations Proposed ✔ Disbursements Arrangements ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE The World Bank Transport Corridors Project (P131550) LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IBRD-83220 Effective 31-Dec-2019 30-Jun-2021 30-Jun-2023 30-Oct-2023 OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IBRD-83220-001 | Currency: USD iLap Category Sequence No: 1 Current Expenditure Category: G,W,TR,OC,nonCS,CS PtA1-5,B1,3,4,C1 293,772,500.00 162,904,084.28 293,772,500.00 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: W Part A6 55,500,000.00 55,931,255.77 56,579,346.72 100.00 100.00 iLap Category Sequence No: 3 Current Expenditure Category: G,TR,OC,non-CS,CS,Parts A7,B2,C2 4,840,000.00 2,840,934.28 3,760,653.28 100.00 100.00 Total 354,112,500.00 221,676,274.33 354,112,500.00 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2014 3,177,960.00 3,177,960.00 2015 14,282,715.00 14,282,715.00 2016 28,800,825.00 28,800,825.00 2017 21,156,347.30 21,156,347.30 The World Bank Transport Corridors Project (P131550) 2018 63,734,422.00 63,734,422.00 2019 42,059,770.33 42,056,770.33 2020 74,983,810.00 60,000,000.00 2021 72,319,805.37 30,000,000.00 2022 34,484,345.00 60,000,000.00 2023 0.00 31,790,960.37 2024 0.00 0.00 . The World Bank Transport Corridors Project (P131550) . Results framework COUNTRY: Iraq Transport Corridors Project Project Development Objectives(s) The Project Development Objective is to improve road transport connectivity and safety on selected road sections along Expressway 1and the North-South transport corridor in Iraq. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 To improve road transport connectivity and safety Direct project 66,000.00 66,000.00 66,000.00 66,000.00 66,000.00 80,000.00 80,000.00 90,000.00 beneficiaries (Number) Action: This indicator has been Revised Female beneficiaries 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 (Percentage) Action: This indicator has been Revised Roads in good and fair condition as a share of 70.00 70.00 70.00 80.00 85.00 90.00 90.00 95.00 total classified roads (Percentage) Action: This indicator has been Revised The World Bank Transport Corridors Project (P131550) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Size of the total classified network 280.00 280.00 280.00 280.00 280.00 280.00 280.00 340.00 (Kilometers) Action: This indicator has been Revised Travel Time (Hours) 4.00 4.00 4.00 3.15 3.15 3.15 3.15 3.15 Action: This indicator has been Revised Travel time between Semel and Ibrahim El Khalil along the North- 0.75 0.75 0.50 0.50 0.50 0.50 0.50 0.50 South transport corridor (Hours) Action: This indicator has been Revised Travel time between Nasiriya-Rumalia 1.75 1.75 1.75 1.50 1.50 1.50 1.50 1.50 along Expressway 1 (Hours) Action: This indicator has been Revised Travel time between Rumalia and 1.00 1.00 1.00 1.00 0.75 0.75 0.75 0.75 Expressway 1@Basra Interchange (Hours) The World Bank Transport Corridors Project (P131550) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Action: This indicator has been Revised Travel time between Basra Interchange 0.50 0.50 0.50 0.50 0.50 0.50 0.40 0.40 along Expressway 1 and Sefwan (Hours) Action: This indicator has been Revised Traffic Fatalities 113.00 113.00 113.00 100.00 87.00 87.00 87.00 87.00 (Number) Action: This indicator has been Revised Traffic Fatalities between Semel and Ibrahim El Khalil along 18.00 18.00 18.00 16.00 12.00 12.00 12.00 12.00 the North-South transport corridor (Number) Action: This indicator has been Revised Traffic Fatalities between Nasiriya- Rumaila along 48.00 48.00 48.00 42.00 38.00 38.00 38.00 38.00 Expressway 1 (Number) The World Bank Transport Corridors Project (P131550) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Action: This indicator has been Revised Traffic Fatalities between Rumaila and Basra/Safwan along 47.00 47.00 47.00 42.00 37.00 37.00 37.00 37.00 Expressway 1 (Number) Action: This indicator has been Revised PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Transport Corridors Improvements Roads constructed, non- 23.00 23.00 23.00 23.00 22.00 22.00 22.00 22.00 rural (Kilometers) Action: This indicator has been Revised Roads rehabilitated, Non- 0.00 90.00 120.00 120.00 120.00 180.00 180.00 230.00 rural (Kilometers) Action: This indicator has been Revised Fiber optics ducts installed underground 0.00 0.00 0.00 0.00 0.00 0.00 0.00 81.00 (Kilometers) The World Bank Transport Corridors Project (P131550) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Action: This indicator has been Revised Institutional Strengthening and Capacity Building in the Road Sector Number of SCRB and GDRB Staff trained on the usage of the Operations Manual and on Bank 32.00 32.00 32.00 50.00 60.00 75.00 75.00 75.00 procurement guidelines and safeguard policies and other technical training (Number) Action: This indicator has been Revised Person-days of employment created 0.00 100,000.00 250,000.00 400,000.00 500,000.00 700,000.00 1,000,000.00 1,200,000.00 (Days) Action: This indicator has been Revised Road sector organizational structure with clear mandates and No No No Yes Yes Yes Yes Yes responsibilities developed and implemented (Yes/No) Action: This indicator has been Revised A road asset No No No No No No Yes Yes management system in The World Bank Transport Corridors Project (P131550) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 the GDRB updated and implemented (Yes/No) Action: This indicator has been Revised Number of service lay- bys fitted with disability 0.00 0.00 5.00 5.00 8.00 8.00 8.00 9.00 ramps (R7, R8 and R9A ) (Number) Action: This indicator has been Revised Project Implementation and Monitoring New public access Citizens' Roadway Reporting System No No No No No No Yes Yes established and operational (Yes/No) Action: This indicator has been Revised IO Table SPACE The World Bank Transport Corridors Project (P131550)