Ukraine Third Project "Kiev-Chop M06 Road Rehabilitation"

complete

The proposed project will support the completion of the rehabilitation effort of the M06 Kiev-Chop Highway to European standards, which was started with the first and second EBRD road projects in Ukraine. This third project will finance rehabilitation of the remaining sections of the M06 road, from Kiev to the city of Brody, Lviv region (km 14 – km 441). M06 road forms part of Trans-European Corridor III (Kiev-Lviv-Krakow-Berlin) and Corridor V (Lviv-Chop-Budapest) and links Ukraine with Western Europe. The EBRD loan is planned to be supplemented by additional estimated EUR 200 million to be provided by the European Investment Bank (EIB). Transition impact would stem from further support by the EBRD of the Government of Ukraine and Ukravtodor efforts to reform the road sector started in the framework of the first two EBRD road projects in Ukraine through (i) the restructuring of road network management by separation of ownership, administration and management (policy, legislation and funding) between state and local roads, (ii) improvement of the road sector financing strategy and (iii) increase of the competition in the sector to achieve increased efficiency of works implementation. Furthermore, the project will support the Government of Ukraine and Ukravtodor efforts to encourage greater private sector participation in the road sector in Ukraine by improving the legislative framework and initiating various road projects on a PPP basis. The project include a Technical Cooperation component, which will aim to develop appropriate PPP legislation in accordance with the international best practice, identify a small number of potential PPP projects and carry out detailed due diligence for one pilot project which potentially could be developed in co-operation with the Bank. The Borrower is Ukraine. The proceeds will be on-lent to Ukravtodor, State Road Service of Ukraine. EUR 200 million. Estimated EUR 486 million. Screened B/1. An Initial Environmental Examination (“IEE”) conducted by the Bank’s environmental specialists showed that the project involves the rehabilitation and upgrading of an existing road without realignment or widening and that no new secondary connection roads are planned. All the planned works, including upgrading of the intersections and enlargement of the radius of curves, will take place within the existing corridor and the project is not expected to have any significant adverse environmental impacts. Ukravtodor has commissioned the environmental studies on two separate sections of the road, including an analysis of the environmental impacts of the project and an environmental review of the existing road conditions. The investigations did not identify any significant environmental issues and concluded that the impacts of the project would be limited to temporary noise, safety and air quality (dust) impacts during the construction and that these can be mitigated by adhering to good construction planning and practices. In accordance with Bank's requirements, Ukravtodor disclosed locally a summary of the relevant environmental issues associated with the project and mitigation measures and action plans prior to EBRD Board meeting. Environmental issues associated with the existing road are required to be mitigated through protection measures incorporated in the project and in an Environmental Action Plan (“EAP”). The key measures include noise barriers, new or improved drainage systems and rehabilitation of forest shelter belts along the road. Improved condition of the road and road safety measures included in the project design are expected to improve the currently very poor road safety conditions significantly. The EAP includes measures for preventing landslips and water erosion, improving soil protection and reducing impact on flora and fauna, a Construction Management Plan (waste management, reducing air emissions from construction machinery) and a Community Information Programme as well as an environmental monitoring programme. The Construction Management Plan includes requirements to construct new local pedestrian passages and overbridges, overbridges to connect local roads and passage for agricultural machines, arrangement of bus stops and acceleration-deceleration lanes, provision of lighting at the sections of the road which pass through settlements and introducing a grievance mechanism for any concerns and complaints from the locally affected population and local authorities. The requirement to carry out the project in accordance with applicable national environmental, health and safety requirements, EU environmental standards and the Environmental and Construction Management Plans has been incorporated into the contracting and tender documents. Independent Supervision Engineers are monitoring the contractors’ performance and reports on the project’s progress on semi-annual basis. The Borrower reports to EBRD annually on the measured environmental impacts and on the implementation of the EAP. The Bank will evaluate the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing these reports and by conducting monitoring visits, if and when deemed appropriate. EUR 350,000 provided under EU IPF 2003 facility for development of legislation and a PPP Strategy for the road sector.