The World Bank SECOND ROAD AND SAFETY IMPROVEMENT PROJECT (P127156) REPORT NO.: RES41105 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SECOND ROAD AND SAFETY IMPROVEMENT PROJECT APPROVED ON SEPTEMBER 20, 2012 TO UKRAINE TRANSPORT EUROPE AND CENTRAL ASIA Regional Vice President: Cyril E Muller Country Director: Alexander Kremer Regional Director: Lucio Monari Practice Manager/Manager: Karla Gonzalez Carvajal Task Team Leader(s): Fiona J Collin, Yevhen Bulakh The World Bank SECOND ROAD AND SAFETY IMPROVEMENT PROJECT (P127156) I. BASIC DATA Product Information Project ID Financing Instrument P127156 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 20-Sep-2012 30-Jun-2020 Organizations Borrower Responsible Agency Ukraine State Road Agency of Ukraine (Ukravtodor) Project Development Objective (PDO) Original PDO The objectives of the Project are an improved condition and quality of sections of the M-03 road and increased safety on roads in Ukraine. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-81950 20-Sep-2012 11-Oct-2012 24-Dec-2012 30-Jun-2020 450.00 392.70 57.30 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The World Bank SECOND ROAD AND SAFETY IMPROVEMENT PROJECT (P127156) The project comprises upgrading and rehabilitation of the Motorway M-03 between Lubny and Poltava, connecting industrial and agricultural areas in eastern Ukraine to Kyiv. It includes 33 km of 4-lane widening improvement; construction of three bypasses totaling 24 km; and a strategic program for road sector development to support the Government’s efforts to reform the road sector management. The US$450 million Loan for the project was approved on 20 September 2012 with an original closing date of 31 December 2016. The project was restructured on 3 November 2016 when its Closing Date was extended to 31 December 2018; and again in July 2018 when the Closing Date was extended to 30 June 2020. Current disbursements amount to US$392.7 million (87.3%). There are no overdue audits, and the Borrower and Implementing Agency performance is Satisfactory including Financial Management status. However, due to anticipated delays caused by the COVID-19 pandemic, remaining works on the M-03 require additional time to complete and to fully achieve the Project Development Objective (PDO). Progress towards achievement of the PDO and Implementation Progress have both been Moderately Satisfactory since June 2018. Development of the strategic reform program is complete, and the status of ongoing works is described below. All works contracts and Technical Assistance have been awarded. While two contracts have been completed, the three incomplete works contracts were all expected to be completed before the current Loan Closing Date (LCD) of 30 June 2020, but this will not be achieved due to delays caused by the COVID-19 pandemic. The ongoing works contracts are being impacted by domestic travel restrictions and international border closures, preventing contractors from fully returning to construction sites for the Spring construction season. Contractors (and Supervising Engineers) may not be able to mobilize core staff or import materials/construction equipment due to closure of most normal supply chains. Works on-site are also being impacted by lock-down and social distancing requirements. This will impact disbursements and progress, and the remaining works contract will not be finished, as was previously expected, before the current LCD of 30 June 2020. A twelve month extension of the LCD is requested by the Borrower, as the 2020 construction season will be partially or completely lost, and part of the 2021 construction season will be needed to complete the remaining works. If the LCD is not extended, Government would need to finance the ongoing works from their own budget, whereas it would be preferable for Government to prioritise budget resources for various COVID-19 related responses. Current status of works components is as follows:- * M-03, Lot 2.1 (10.78 km). Awarded with contractual completion by 30 June 2020. This will not be achieved due to delays caused by the pandemic. * M-03, Lot 2.5 (22.45 km). Awarded with contractual completion by 30 June 2020. This will not be achieved due to delays caused by the pandemic. * M-03, Lot 2.7 Pokrovska Bagachka Bypass (7.22km). Works completed. * M-03, Lot 2.8 Krasnogorivka Bypass (11.32 km). Works completed. * M-03, Lot 2.9 Poltava Bypass (5.5 km). Works about 84% physically complete. Expected completion before 30 June 2020, but this may not be achieved due to delays caused by the pandemic. II. DETAILED CHANGES LOAN CLOSING DATE(S) The World Bank SECOND ROAD AND SAFETY IMPROVEMENT PROJECT (P127156) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications 31-Dec-2018, 30-Jun- IBRD-81950 Effective 31-Dec-2016 30-Jun-2021 30-Oct-2021 2020