ASTANA, April 30, 2009 -The World Bank Board of Directors approved today a US$ 2.125 billion loan for the Kazakhstan South-West Roads Project to help upgrade the trade route linking China to Russia and Western Europe through Kazakhstan, bringing a helpful economic stimulus to some of Kazakhstan’s poorest provinces. The project will boost Kazakhstan’s competitiveness and bring significant economic benefits to the country, as well as to Kyrgyz Republic, Tajikistan and Uzbekistan.
Much of the road network in Kazakhstan was constructed during the Soviet era and has significantly deteriorated since then due to lack of adequate maintenance. Half of the roads in the country’s network need major maintenance or full rehabilitation. Kazakhstan’s road safety record is poor with road accidents and fatality rates increasing in recent years. The current unsatisfactory condition of roads in the country prevents development of international and regional trade and limits access of rural communities to essential public services and work opportunities.
The World Bank will finance and rehabilitate a 1,062 km stretch of road between Shymkent and Aktobe/Kyzylorda Oblast border. This will be part of a US$ 7.5 billion International Transit Corridor development program of the Government of Kazakhstan to upgrade approximately 2,800 km of the CAREC corridors within Kazakhstan linking China (at Khorgos) to Russia (at Zhaisan).
"Upgrading this key road will give a major stimulus to the Kazakh economy because construction of new stretches of the road and rehabilitation of the existing sections will create about 35,000 new jobs and will generate substantial indirect benefits to most of the population in the Kazakh provinces of Kyzylorda and South Kazakhstan Oblasts, which are the poorest parts of the country," said Sergei Shatalov, World Bank Country Manager in Kazakhstan. "The road will improve access to markets for the local communities living along the Corridor, and stands to benefit some three million people living in the neighboring provinces. Such a stimulus is very important at this time of the crisis."
The Project comprises five components:
- Upgrading and reconstructing a road section along the Corridor within Kyzylorda Oblast, excluding Kyzylorda bypass;
- Upgrading and reconstructing road sections along the Corridor within South Kazakhstan Oblast and the Kyzylorda and Shymkent bypasses;
- Project Management Consultants to assist the Committee for Roads with the management of all activities associated with the Project;
- Institutional development and preparation of action plans to improve road safety and road services; and
- Consulting services for supervision of civil works.
The World Bank loan has a maturity of 25 years including 5 year grace period. Implementation of the World Bank funded project will begin in 2009 and will take four years. The main agency responsible for project implementation is the Committee for Roads of the Ministry of Transport and Communication.
The World Bank’s overall mission in Kazakhstan is to improve people’s lives by promoting diversification and competitiveness of the economy and creating more job opportunities. Since July 1992, the Bank has provided 33 loans to Kazakhstan for the total amount of more than 4.2 billion US dollars.