The World Bank: For Official Use Only

Public Disclosure Authorized
Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: PAD648

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED LOAN
IN THE AMOUNT OF US$355 MILLION
TO THE
REPUBLIC OF IRAQ
FOR A
TRANSPORT CORRIDORS PROJECT
November 21, 2013

Transport and ICT

Sustainable Development Department
This document has a restricted distribution and may be used by recipients only in the
performance of their official duties. Its contents may not otherwise be disclosed without World
Bank authorization.
CURRENCY EQUIVALENTS
(Exchange Rate Effective October 8, 2013)
Currency Unit = Iraqi Dinars (IQD)

0.000858804 IQD US$ 1.00
US$ 1.00 = IQD 1,164.00
FISCAL YEAR
January 1 – December 31
ABBREVIATIONS AND ACRONYMS
ARAP Abbreviated Resettlement Action Plan

BP Bank Procedures
CPS Country Partnership Strategy
DA Designated Account
ERR Economic Rate of Return
ERRP Emergency Road Rehabilitation Project
ESIA Environmental and Social Impact Assessment
ESIAF Environmental and Social Impact Assessment Framework
ESMP Environmental and Social Management Plan
FMA Fiduciary Monitoring Agent
FM Financial Management
FP Financing Partners
GDP Gross Domestic Product
GDRB General Directorate for Roads and Bridges
GOI Government of Iraq
HDM-4 Highway Development and Management Model
IBRD International Bank for Reconstruction and Development
ICA Investment Climate Assessment
ICB International Competitive Bidding
ICT Information and Communication Technology
IEG Independent Evaluation Group
IFC International Finance Corporation
IFI International Financing Institution
IFR Interim unaudited Financial Report
IMF International Monetary Fund
IPSAS International Public Sector Accounting Standards
IQD Iraqi Dinar
IsDB Islamic Development Bank
ITS Information Technology System
km Kilometer
KRG Kurdistan Regional Government
mbd million barrels per day
MDGs Millennium Development Goals
MENA Middle East and North Africa
MHESR Ministry of Higher Education and Scientific Research
MIM Master Implementation Manual
MOCH Ministry of Construction and Housing
MOF Ministry of Finance
MOT Ministry of Transport
NDP National Development Plan
PAP Project Affected People
PCU Project Coordination Unit
PFS Project Financial Statements
PLM People with Limited Mobility
PMT Project Management Team
PP Procurement Plan
PRS Poverty Reduction Strategy
RAMS Road Asset Management System
RAP Resettlement Action Plan
ROW Right-Of-Way
RPF Resettlement Policy Framework
SBA Stand-by Agreement
SCRB State Commission for Roads and Bridges
SOE State-Owned Enterprise
TCP Transport Corridors Project
TOR Terms of Reference
TPM Third Party Monitoring
TSMP Transport Sector Master Plan
WA Withdrawal Applications
WBG World Bank Group
WDR World Development Report
Regional Vice President: Inger Andersen

Country Director: Ferid Belhaj
Sector Director: Junaid Kamal Ahmad
Sector Manager: Patricia Veevers-Carter
Task Team Leader: Ibrahim Khalil Dajani
REPUBLIC OF IRAQ
TABLE OF CONTENTS
Page
PAD DATA SHEET......................................................................... Error! Bookmark not defined.
I. STRATEGIC CONTEXT .................................................................................................1

A. Country Context ............................................................................................................ 1
B. Sectoral and Institutional Context................................................................................. 2
C. Higher Level Objectives to which the Project Contributes .......................................... 7
II. PROJECT DEVELOPMENT OBJECTIVE(S)..............................................................7

A. PDO............................................................................................................................... 7
B. Project Beneficiaries ..................................................................................................... 8
C. PDO Level Results Indicators ....................................................................................... 8
III. PROJECT DESCRIPTION ..............................................................................................9

A. Project Components ...................................................................................................... 9
B. Project Cost and Financing ......................................................................................... 12
C. Lessons Learned and Reflected in the Project Design ................................................ 12
IV. IMPLEMENTATION .....................................................................................................14

A. Institutional and Implementation Arrangements ........................................................ 14
B. Results Monitoring and Evaluation ............................................................................ 15
C. Sustainability............................................................................................................... 15
V. KEY RISKS AND MITIGATION MEASURES ..........................................................15

A. Risk Ratings Summary ............................................................................................... 15
B. Overall Risk Rating Explanation ................................................................................ 16
VI. APPRAISAL SUMMARY ..............................................................................................16

A. Economic Analysis ..................................................................................................... 16
B. Technical ..................................................................................................................... 17
C. Financial Management ................................................................................................ 18
D. Procurement ................................................................................................................ 19
E. Social (including Safeguards) ..................................................................................... 20
F. Environment (including Safeguards) .......................................................................... 21
Annex 1: Results Framework and Monitoring ....................................................................... 23
Annex 2: Detailed Project Description ...................................................................................... 26
Annex 3: Implementation Arrangements ................................................................................. 33
Annex 4: Operational Risk Assessment Framework (ORAF) ................................................ 49
Annex 5: Implementation Support Plan ................................................................................... 54
Annex 6: Map .............................................................................................................................. 58
LIST OF TABLES
Table 1: Transport Corridors Program Financing Matrix .............................................................. 6
Table 2: TCP Project Cost and Financing Plan ........................................................................... 12
Table 3: Risk Ratings Summary .................................................................................................. 15
Table 4: Economic Rate of Return (ERR) and Net Present Value (NPV)................................... 16
Table 5: Project Costing per Components ................................................................................... 26
Table 6: Categories of Eligible Expenditures and the Percentage of Expenditures to be Financed
by the Loan ................................................................................................................................... 40
Table 7: Methods for Procurement of Works and Threshold ...................................................... 41
Table 8: Key Works Contracts to be financed by TCP ................................................................. 42
Table 9: Methods for Selection of Consultants and Thresholds ................................................... 42
Table 10: Key Services Contracts to be financed by TCP ........................................................... 42
Table 11: Expressway 1 Project Impacts and Mitigation Measures ............................................ 45
Table 12: Bank Supervision Plan During first year ...................................................................... 55
Table 13 Bank Supervision Team Skills Mix Required .............................................................. 56
Table 14: Financing Partners ....................................................................................................... 56
Table 15: Bank Staff and Consultants who worked on the Project include: ............................... 56
.
PAD DATA SHEET

Iraq
Transport Corridors Project (P131550)
PROJECT APPRAISAL DOCUMENT
.
MIDDLE EAST AND NORTH AFRICA

MNSTI
Report No.: PAD648

.
Basic Information
Project ID EA Category Team Leader
P131550 A - Full Assessment Ibrahim Khalil Dajani
Lending Instrument Fragile and/or Capacity Constraints [ ]
Investment Project Financing Financial Intermediaries [ ]
Series of Projects [ ]
Project Implementation Start Date Project Implementation End Date
19-Dec-2013 30-Jun-2019
Expected Effectiveness Date Expected Closing Date
03-Feb-2014 30-Dec-2019
Joint IFC
No
Sector Manager Sector Director Country Director Regional Vice President
Patricia Veevers-Carter Junaid Kamal Ahmad Ferid Belhaj Inger Andersen
.
Borrower: Republic of Iraq

Responsible Agency: Iraq Ministry of Construction and Housing
Contact: Isam Al-Rubaye Title: General Director, State Commission for
Roads and Bridges
Telephone (964-770) 471-5011 Email: issam_mh1@yahoo.com
No.:
Responsible Agency: KRG Ministry of Construction and Housing
Contact: Omer Ibrahim Mustafa Title: Director, General Directorate for Roads
and Bridges
Telephone (964-750) 445-2599 Email: dgrbomer@yahoo.com
No.:
i
.
Project Financing Data(in USD Million)

[X] Loan [ ] Grant [ ] Guarantee
[ ] Credit [ ] IDA Grant [ ] Other
Total Project Cost: 385.00 Total Bank Financing: 355.00
Financing Gap: 0.00
.
Financing Source Amount

Borrower 30.00
International Bank for Reconstruction and 355.00
Development
Total 385.00
.
Expected Disbursements (in USD Million)

Fiscal 2014 2015 2016 2017 2018 2019 2020 0000 0000
Year
Annual 20.00 50.00 80.00 80.00 80.00 45.00 0.00 0.00 0.00
Cumulati 20.00 70.00 150.00 230.00 310.00 355.00 0.00 0.00 0.00
ve
.
Proposed Development Objective(s)

The Project Development Objective is to improve road transport connectivity and safety on selected road
sections along Expressway 1 and the North-South transport corridor in Iraq.
.
Components
Component Name Cost (USD Millions)
Transport Corridors Improvements 352.31
Institutional Strengthening and Capacity Building in the Road 20.46
Sector
Project Implementation and Monitoring 11.35
.
Institutional Data
Sector Board
Transport
.
Sectors / Climate Change

Sector (Maximum 5 and total % must equal 100)
Major Sector Sector % Adaptation Mitigation
Co-benefits % Co-benefits %
ii
Transportation Rural and Inter-Urban 70
Roads and Highways
Public Administration, Law, and Public administration- 30
Justice Transportation
Total 100
I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information
applicable to this project.
.
Themes
Theme (Maximum 5 and total % must equal 100)
Major theme Theme %
Human development Injuries and non-communicable diseases 40
Public sector governance Other public sector governance 30
Rural development Rural services and infrastructure 20
Trade and integration Trade facilitation and market access 10
Total 100
.
Compliance
Policy
Does the project depart from the CAS in content or in other significant Yes [ ] No [ X ]
respects?
.
Does the project require any waivers of Bank policies? Yes [ ] No [ X ]

Have these been approved by Bank management? Yes [ ] No [ ]
Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ]
Does the project meet the Regional criteria for readiness for implementation? Yes [ X ] No [ ]
.
Safeguard Policies Triggered by the Project Yes No

Environmental Assessment OP/BP 4.01 X
Natural Habitats OP/BP 4.04 X
Forests OP/BP 4.36 X
Pest Management OP 4.09 X
Physical Cultural Resources OP/BP 4.11 X
Indigenous Peoples OP/BP 4.10 X
Involuntary Resettlement OP/BP 4.12 X
Safety of Dams OP/BP 4.37 X
iii
Projects on International Waterways OP/BP 7.50 X
Projects in Disputed Areas OP/BP 7.60 X
.
Legal Covenants
Name Recurrent Due Date Frequency
Application of World Bank Safeguards X CONTINUOUS
Policies triggered by the Project
Description of Covenant
The Borrower, through the State Commission for Roads and Bridges and the General Directorate for
Roads and Bridges, shall carry out the Project in accordance with the Environmental and Social Impact
Assessment, the Resettlement Action Plan, the Environmental and Social Impact Assessment
Framework and the Resettlement Policy Framework.
Name Recurrent Due Date Frequency
Recruitment of Independent auditors X Yearly
Description of Covenant
The Borrower shall cause the State Commission for Roads and Bridges and the General Directorate for
Roads and Bridges to recruit independent auditors to be responsible for conducting financial and
technical audits of the Project.
.
Conditions
Name Type
Description of Condition
Team Composition
Bank Staff
Name Title Specialization Unit
Azeb Yideru Program Assistant Program Assistant MNSTI
Carolyn Winter Senior Social Senior Social MNSSU
Development Specialist Development Specialist
Nina Bhatt Lead Social Lead Social MNSSU
Development Specialist Development Specialist
Gylfi Palsson Lead Transport Lead Transport LCSTR
Specialist Specialist
Fowzia Hassan Energy Specialist Operations Officer MNSEE
Fatiha Amar Program Assistant Program Assistant MNSTI
iv
Ibrahim Khalil Dajani Senior Operations Team Leader MNSTI
Officer
Africa Eshogba Olojoba Senior Environmental Senior Environmental MNSEE
Evarist F. Baimu Senior Counsel Senior Counsel LEGAM
Nazaneen Ismail Ali Senior Procurement Senior Procurement MNAPC
Hassine Hedda Senior Finance Officer Senior Finance Officer CTRLA
Said Dahdah Transport Specialist Transport Specialist MNSTI
Jad Raji Mazahreh Senior Financial Senior Financial MNAFM
Management Specialist Management Specialist
Soran Hama Tahir Ali Operations Officer Operations Officer MNSTI
Non Bank Staff
Name Title Office Phone City
Dariusz Kobus Environment Specialist 48606912343 Warsaw
Igor Jokanovic Highway Engineer 38163537315 New Belgrade
.
Locations
Country First Location Planned Actual Comments
Administrative
Division
v
I. STRATEGIC CONTEXT
A. Country Context
1. The Republic of Iraq – with an estimated population of about 30 million -- faces

substantial development challenges. Chief among these is the need to build its infrastructure
and supporting institutions after a history of authoritarian rule followed by war and occupation, a
task made difficult by political instability and the excessive dependence on crude oil for its
revenues. As an example of development challenges, the infant mortality rate in Iraq is close to
the rates in the poorest countries in the Middle East and North Africa (MENA) region, namely
Djibouti and Yemen; and school enrollment has declined over the past decades as a result of low
quality of and low returns to education. Iraq’s poverty headcount index is relatively high at 23
percent based on the 2007 household survey1. Preliminary estimates from the 2012 household
survey 2show that headcount poverty was reduced by about 4 percentage points during 2007-
2012, indicating that some benefits of growth have reached the poor.
2. Iraq has been locked in a wave of disputes between political, ethnic, and religious
factions. Iraq’s security situation remains fragile and sectarian violence has markedly increased
in 2013. Provincial elections for most of the governorates took place in April 2013 and elections
in Kurdistan Regional Government (KRG) took place in September 2013 with national elections
due in early 2014.
3. Despite these obstacles, Iraq’s macroeconomic performance over the past few years
has been sound, but downside risks to the 2013 outlook are materializing. GDP grew at 8
percent in 2012 due to increased oil production and high oil prices. The economy was expected
to grow by 9 percent in 2013 driven primarily by rising oil production. However, whereas crude
oil production of 3 million barrels per day (mbd) and exports of 2.3 mbd had been expected as
averages for 2013, these will now at best be attained towards the end of the year and the growth
rate is likely to halve (to around 4 percent). Disruptions have arisen from technical problems and
a major maintenance shutdown of the southern export infrastructure, and terrorist attacks on the
northern export pipeline to Turkey. For the time being, persistently higher oil prices are
mitigating the effects of production shortfalls on the fiscal and current accounts, which will be
close to balanced (as against earlier predictions of surplus), but this is not sustainable in the
medium to long term.
4. Although the 2012 budget outturn was broadly in line with International Monetary
Fund (IMF) parameters, current spending sharply increased, partly due to spending on
government wages, social safety nets, and transfers to state-owned enterprises. According to
the World Bank Group’s Country Partnership Strategy (CPS) for the period of FY2013-2016
Report 73265-IQ, the Iraqi investment budget suffers from chronic under-execution (at best 60
percent execution rate) and poses an important constraint on critical infrastructure delivery.
Significant structural weaknesses in budget practices (such as off-budget operations and direct
1
2007 household survey -- "Confronting Poverty in Iraq: An analytical report on the living standards of the Iraqi population,"
joint publication of the World Bank and the Poverty Reduction Strategy High Committee of the Republic of Iraq
http://go.worldbank.org/6M9ANGOF60
2
2012 household survey -- "Poverty Estimates and Trends In Iraq: 2007-2012", PREM analytical note based on preliminary
results of the 2012 household survey
1
financing from state-owned banks) persist. The projections of modest budget surplus in 2013
face downside risks due to disruptions in the oil sector, but as in the past, high oil prices and
under spending of the capital budget will moderate the impact. Iraq is now entering a new
country surveillance phase with the IMF following the expiration of the Stand-By Agreement
(SBA) in February 2013 3.
5. The Bank’s approach to supporting infrastructure in Iraq aims to help the country
in leveraging its own public resources and building effective transport sector institutions to
create jobs and deliver services. This project supports the Government’s strategy and the CPS
main coverage areas of improving governance, supporting economic diversification for broadly
shared prosperity, and improving social inclusion and reducing poverty. This will be achieved
through facilitating knowledge sharing of best practices to help find practical solutions and move
towards greater strategic support for institutional and infrastructure development. In the transport
sector, this would be achieved through institutional reform and capacity building of the key
transport institutions, such as the Ministry of Construction and Housing (MOCH) and the
Ministry of Transport (MOT), as well as relevant agencies and government bodies. The Bank’s
support will be in an incremental and pragmatic manner considering the fragile and conflict
country context, and anchored in a coherent immediate, medium, and longer term program.
6. Borrowing from the International Bank for Reconstruction and Development

(IBRD) for this investment enables transfer of expertise to Iraq along different dimensions.
IBRD provides global technical and project management expertise and fiduciary controls that
strengthen the country’s own implementation capacity by making better use of public resources
and offering value for money. In addition, given Iraq’s reliance on oil revenues, which are
volatile, international financing provides predictability for financing investments and service
delivery in key sectors. Finally, despite Iraq’s financial resources, IBRD financing offers an
important fiscal additionality given Iraq’s large spending commitments in areas such as security,
public sector financing, civil infrastructure, and the development of the electricity and oil and gas
sectors.
B. Sectoral and Institutional Context
7. Iraq continues to suffer from weak and under-developed infrastructure sectors, and
the roads sector is no exception. The lack of a sectoral strategy, chronic underfunding, weak
institutions, and a complex conflict-affected environment compound the problem. Transport
infrastructure, as the most common enabler of development, lacks capital investments to
maintain basic standards. Similarly, effective transport institutions are needed to translate these
investments into a basic level of service delivery. Beyond investments, however, a fundamental
sectoral transformation is required within a sequenced program which supports the development
of a strategy and vision. The particularly fragile context of Iraq suggests that such a program --
elaborated in paragraph 16 below -- be delivered in a practical and “incremental way” as country
circumstances permit and bringing in international best practice on service delivery systems in
the context of conflict. Supporting the roads sector in Iraq is not only important for increasing
social cohesion and national unity through connectivity but as a critical foundation for future
regional integration and increased trade in the sub-region.
3
http://www.imf.org/external/pubs/ft/scr/2013/cr13217.pdf
2
8. The dire state of the road network is felt at the macro, firm, and household levels. At
the macro level, economic growth is constrained due to the low level of annual capital
investment in infrastructure and roads in particular. In addition, the state of the roads network is
adding to the cost of trade and commerce and impeding the international and inter-regional
mobility of goods and services. Weak economic integration is also contributing to low economic
productivity. At the firm level, access to labor and markets is hindered; and at the household
level, there are fewer employment and economic opportunities, poor access to health and
education services and importantly, high mortality from accidents. Furthermore, in a country
divided by sectarian and other divisions, the ability to leverage a well-functioning road for
political and social integration between regions and communities is weakened.
9. Iraq has one of the highest road accident fatality rates in the world. Iraq used to have
the most comprehensive transportation system in the region, but its transport infrastructure has
suffered from almost a four-decade war, neglect and underinvestment. In addition, poor sector
management and maintenance has resulted in an increase in the number and severity of traffic
accidents; and today the sector lags well behind its international and regional comparators. A
total of 5,708 traffic fatalities were reported in Iraq in 2010 while other sources such as the WHO
estimate fatalities 4 at double that amount. The estimated fatality rate in Iraq per 10,000 vehicles
is 29.4 and ranks 47th in the world, whereas in terms of fatality rate per 100,000 population, it is
31.5 and ranks 8th in the world. As motorization increases as a result of the country’s
development, the road safety situation is expected to worsen even further. Poor performance of
road safety is also contributing to deepening poverty because of its burden on the Government’s
budget to care for injured people, higher transport costs, medical care expenses, disabilities and
reduced labor force participation.
10. Trade, and hence economic growth, has been impeded by the bad condition of
roads. Iraq has three main transport corridors: North-South from Turkey; South-North through
its port of Um Qasr; and East-West through its neighbors’ ports on the Mediterranean and Gulf
of Aqaba. Other corridors link Iraq with Iran in the East and Saudi Arabia in the South-West. 5
Oil exports pass through oil-only ports such as Basra. Iraq’s transport corridors are inefficient
because of institutional weaknesses and infrastructure deficiencies. The traffic along the South-
Center Iraq and East-West Corridors is being served by Expressway 1 that carries between
15,000 and 30,000 Annual Average Daily Traffic, 40 percent of which is trade traffic. The traffic
along the North-South Corridor is being served by the road between Ibrahim El-Khalil and
Duhok. There are about 3,000 heavy trucks entering Iraq daily from Turkey through Ibrahim El
Khalil border crossing and these trucks currently use the mountainous, two-lane, windy and
dangerous road through Zakho to reach Duhok and the rest of Iraq. Addressing the institutional
weaknesses and infrastructure deficiencies along Iraq’s main transport corridors should result in
better service quality along these corridors, which also carry most of the goods for trade.
11. Underfunding is a key issue in the roads sector. Unlike other sectors in Iraq which face
chronic under-execution of capital budgets, in the roads sector, the execution rate is reaching 90
percent and a key issue facing the sector is underfunding. In 2013, for example, the investment
funding needs for Iraq have been estimated to be around US$1.5 billion, which would cover
maintenance and rehabilitation of existing infrastructure assets as well as new construction.
However, the 2013 budget covering both investment and operations (salaries and overhead)
4
Global Status Report on Safety, 2013
5
A new corridor linking the Center with the North is in the planning and design stage led by MOCH.
3
amounts to only US$1.31 billion, of which less than 50 percent is allocated to investments, i.e.
less than US$650 million. Given the chronic underfunding of investment in the road sector, 60
percent of the 48,000 kilometers (km) of expressways, primary and secondary roads in Iraq are
in poor condition.
12. Organizational structure of the transport sector. The Iraqi transport sector is managed
mainly by two ministries: MOT is responsible for operational matters, namely ports, airports,
rail, road and public transport services; MOCH is responsible for road infrastructure
construction, maintenance and rehabilitation. Under MOCH, the State Commission for Roads
and Bridges (SCRB) in Baghdad with its regional offices is in charge of the construction,
maintenance and the rehabilitation of the road network in the central and southern governorates
that comprises about 32,800 km of expressways, primary and secondary roads. Similarly, under
MOCH in KRG, the General Directorate for Roads and Bridges (GDRB) in Erbil with its
regional offices performs the same functions for approximately 15,200 km of roads in the
Kurdistan governorates. All road management duties remain the responsibility of these two road
agencies including design, preparation of studies and supervision of works, and collection of
fees/levies for road usage. These agencies are also responsible for the construction and
operations of the axle-load control. Due to the long years of isolation, these agencies lack human
resources capacity to effectively manage the road network (limited ability to plan, design,
supervise and enforce regulations).
13. Weak contracting and consulting industries in the road sector impact the quality of
road construction and project implementation. The road sector capacity assessment has
brought to light weaknesses in the contracting and consulting industries. The absence of
international companies, due to security problems, has translated into the construction of poor
quality roads and contributed to delays in the execution of important projects. Local contractors
are currently not geared to execute these works effectively, casting doubts on their ability to
successfully implement the country’s ambitious plans. It is essential that the country builds a
healthy and robust contracting industry, which will not only carry out works within the country
but in neighboring countries as well. Currently, MOCH oversees eight State Owned Enterprises
(SOEs) which specialize in the construction of infrastructure and public buildings. Most of these
SOEs are self-financing and generate revenues by implementing government projects. Today,
they are involved in many of the Government's reconstruction programs and are not allowed to
participate in Bank-financed projects because of their governance structure. Considering the
expertise that these companies could make available to the country and the need for their
services, the possible privatization of these SOEs would result in a greater private sector
participation in the reconstruction of Iraq’s infrastructure. It is worth mentioning that the
consulting sector has also suffered from the absence of highly qualified experts, advanced tools,
equipment and machinery, as well as systems and staff with knowledge and experience of
advance technology and know-how. Limited capacity in design and supervision to perform high
standard services is a key factor that contributes to limiting the performance of the local
consulting industry.
14. The Bank’s support to the sector in Iraq, outlined in the CPS (FY13-FY16), seeks to
address such issues through a strategic and incremental program of interventions based on
country circumstances, and anchored in international best practice. The Bank is already
supporting Iraq through the ongoing Emergency Road Rehabilitation Project (ERRP), and the
Transport Corridors Project (TCP) will provide continuity of support with an explicit focus on
4
capacity building of the road agencies and securing immediate gains from investment in road
infrastructure. However, the TCP is one part of a longer-term engagement which supports
immediate, mid-term and long-term actions in a practical and incremental manner appropriate to
the country circumstances. Following this principle, the Bank support comprises investments in
infrastructure to reap immediate gains in services for citizens, and improve economic mobility,
as well as technical assistance that will pave the way toward building more efficient institutions
in the sector. Investments in the sector will also provide the critical foundation for regional
integration and increased trade in the sub-region in the future. Over the next few years, the Bank
will be using a combination of investments in public agencies through Investment Project
Financing (the current strategy), risk management instruments to attract Public Private
Partnerships (PPP) (in the medium term), and Reimbursable Advisory Services (RAS), as
appropriate.
15. The Bank is working in partnership with and leveraging other international and
regional financing institutions. The Bank has been working closely with the Islamic
Development Bank (IsDB) to respond to the Government’s needs in the road sector. Further
cooperation with other regional Arab financing institutions such as the Arab Fund for Economic
and Social Development, Saudi Fund for Development and the Kuwait Fund for Arab Economic
Development, to name a few, is expected to respond to short and longer term development needs
of the Iraq transport sector, the details of which are being identified by the Transport Sector
Master Plan currently being formulated.
16. Overall, the Bank’s program of support to the road sector in Iraq comprises the
following:
a. Supporting the financing of investments in road infrastructure. Already, ERRP is

financing the rehabilitation of some of the highly damaged sections of Iraq’s highway
network and restoring several critical river crossings. The TCP will further finance the
safeguarding and developing of the road network with a focus on Iraq’s main
international and regional transport corridor arteries, Expressway 1 and the North-South
transport corridor, that connect its population living in about ten governorates with each
other and between the governorates and the major Iraq international gateways. The
investments in the road infrastructure will have a major focus on improving road safety,
with crash barriers along the median and shoulder of the highway, which should
significantly reduce fatal head-on and run-off the road crashes.
b. Supporting the evolution of a transport vision and strategy by financing the preparation
of a Transport Sector Master Plan (TSMP) planned to be completed by June 2014, the
objective of which is to develop a structured master plan and an integrated multi-modal
transport system for the next 20 years. A proposal for a 2014-2033 institutional vision
for the road sector is also under preparation, with an anticipated completion date of
December 2013. Both the TSMP and road sector vision are financed by the ERRP.
c. Supporting the building of institutional capacity of the transport agencies, starting with
the road agencies 6 with an immediate focus to adopt international techniques to plan and
6
With the completion of the TSMP, the Bank will also assess areas for intervention to support institutional development of other
transport sector agencies.
5
manage the road network assets 7 as well as applying international standards on
procurement and environmental and social safeguards. SCRB and GDRB are gradually
using Bank’s safeguard policies for investments financed by its own budget. In addition,
SCRB is using Bank standard prequalification and bidding documents with deviation to
align them with the legal framework governing public procurement in the country. A
mid-term plan (5 and more years) to improve the institutional capacity of the road
agencies as well as state owned construction companies will also be formulated, focusing
on corporatizing the road agencies and possibly privatizing the construction companies. 8
A long-term plan (10 and more years) foresees the spinning off of the expressways to an
independent agency, which would be responsible for the construction, operation and
maintenance of the expressways, and would be financed through a combination of
government budget, tolls, and shadow tolls. The operations, maintenance and expansion
of the primary and secondary roads would remain with the corporatized road agencies,
financed through government budget. It is envisaged that the MOCH would be entrusted
with sector regulation.
d. The engagement of the Bank, together with its international financing partners such as the
IsDB, on a program that involves transport corridors, provides a platform to further the
dialogue on regional integration. The two major investments of TCP are part of two
international corridors, connecting Iraq to its western, northern and southern neighbors
and beyond. Furthermore, the TCP activities will be complemented by other Bank
ongoing support towards customs reform in Iraq 9, which should further promote regional
integration.
17. Program Estimated Cost. The Iraq Transport Corridors Program will be financed by
the Government of Iraq (GoI), IBRD and the IsDB (its first project financing in Iraq since
2006). This Program is estimated to cost about US$1.2 billion and will be implemented
over a period of six years. The Program covers about 1,240 km of roads, and involves
both new construction and rehabilitation. The Transport Corridors Project (TCP) will
support part of this Program including 257 km of road rehabilitation and 23 km of new
construction, provide technical assistance to build and strengthen institutional capacity,
while at the same time providing a platform to further the dialogue on regional
integration. TCP will be financed through an IBRD loan of US$355 million 10 and a KRG
contribution of US$30 million. The remainder of the Program will be financed by the GoI
and the IsDB. Additional IBRD financing may be sought during project implementation
should funding from other resources not materialize or should funding be required to
improve trade links to the main corridors. Table 1 below details the cost and financing
source of the Transport Corridors Program.
Table 1: Transport Corridors Program Financing Matrix

7
The ERRP has financed the formulation of a Road Asset Management System (RAMS) to be completed by December 2013,
with expected recommendations to include (i) carefully assessing training needs, (ii) sponsoring selected engineers for training in
the latest technologies/acquiring higher qualifications, and (iii) relying on international consultants for technical assistance in the
areas of maintenance management and project procurement and implementation.
8
Under a more conducive political and security environment, TCP’s support to sector reform could have ventured more swiftly
into supporting the corporatization of the road agencies. It is envisaged that the proposed corporatization will receive collective
support from the IBRD, IFC and MIGA to ensure that a PPP framework is developed in Iraq that would attract private investment
in the transport sector.
9
World Bank - Technical Assistance to the Iraqi Authorities to Modernize Customs Operations (P130504)
10
This figure includes funds allocated to capacity building and project management and monitoring
6
US$
Transport Corridor (Section) Financing Source Length (Km)
million
Expressway No. 1
R4, R5, R6 237 Government of Iraq 105, 78, 145
R7, R8 265* IBRD 145, 112
Islamic Development 128, 130
R10, R12 218 Bank (phase I)
Islamic Development 124, 137, 76
R9, R11, R13 260 (TBC) Bank (phase II)
Sub-total 980 1,180
North – South Road Corridor
No. 1 Semel – Batil 28 KRG 15
No. 2 Batil – Girsheen 62 KRG 8
No. 3 Girsheen – Suhaila IBRD (US$58.5 23
Intersection 87* million)
KRG (US$28.5 million)
No. 4 Suhaila – Ibrahim Al Khalil 29 KRG 14
Sub-total 206 60
GRAND TOTAL 1,186 1,240
* Elements of TCP
C. Higher Level Objectives to which the Project Contributes
18. The Project is consistent with and supports Iraq’s strategy as stipulated in the National
Development Plan as stated in the National Development Plan (NDP) (2010-2014) including the
focus on improving access to essential services. Although Iraq is a resource rich country and
used to have one of the most advanced transport infrastructure in the region, still extreme poverty
exists, with spatial variations, and prosperity is unequally shared. The poor condition of the road
network has significantly affected mobility, particularly for the poor, and especially in rural
areas. Most of the population is inadequately serviced by unpaved roads with the impact falling
disproportionately on certain income groups. For example, poor workers in non-wage agriculture
are more likely than others to live on unpaved roads, or to live more than five kilometers from a
market. This Project will support improving road asset conditions which will considerably
increase access to health services, education and job opportunities, thereby contributing toward
achieving the twin development goals of decreasing extreme poverty and promoting shared
prosperity 11 as well as progress in reaching the education and health the Millennium
Development Goals (MDGs).
II. PROJECT DEVELOPMENT OBJECTIVE(S)
A. PDO
11
The extreme poverty goal aims to decrease the percentage of people living with less than US$1.25 a day to no more than 3
percent by 2030, while the shared prosperity goal aims to increase income growth of the bottom 40 percent of the population.
7
19. The Project Development Objective (PDO) is to improve road transport connectivity and
safety on selected road sections along Expressway 1 and the North-South transport corridor in
Iraq.
B. Project Beneficiaries
20. The Project beneficiaries are road users of both Expressway 1 and Girsheen - Suheila
Intersection along the North-South transport corridor through the provision of improved road
quality and safety and reduced travel time. Also, residents and businesses, and particularly the
many small business entities that have encroached on the right-of-way, will benefit from the
establishment of new, dedicated and serviced vendor lay-bys sited at strategic points along roads
which will concentrate and stimulate business whilst also providing protection from traffic safety
hazards. Furthermore, the Project has been designed to take into account the needs of People
with Limited Mobility (PLM), so that service lay-bys are accessible for people using
wheelchairs 12. Besides the direct beneficiaries along the same road sections, the entire road
users’ community would benefit from improved organization and systems in the road sector and
agencies. Institutionally, SCRB and GDRB will benefit from improved staff capacity and
systems development.
21. The Project is expected to generate about 500,000 person-days at the rate of US$20 per
day over the six-year implementation period. Considering the nature of work, mainly highway
rehabilitation and maintenance, many of the laborers are low-skilled males and are expected to
come from the bottom 40 percent of the population. Moreover, international experience shows
that female participation in this sector is more common in the rural road rehabilitation and
maintenance rather than in highways. It is intended that the project will carry out a simple survey
to understand (a) previous employment/time use and (b) actual employment outcomes following
the project to assess the impact on the low income labor market.
22. This Project is gender informed with careful attention having been paid to the collection
and analysis of gender disaggregated data in the course of preparing the Resettlement Action
Plan (RAP), and with special efforts having been made to ensure good representation of women
in public consultations. Very few women are today engaged in the road-side businesses and
opportunities to increase their involvement are exceptionally limited. Accordingly, agreement
has been reached with the Government that the employment of women will be a priority in the
Citizens’ Roadway Users System to be established in SCRB and GDRB utilizing Information
and Communication Technology (ICT) concepts, which will allow users to provide feedback on
the quality of roads and service areas. Operation of this new system by female employees and
managers has been accepted and will open up a new avenue for employment of women in the
sector. The SCRB and GDRB have agreed that at least 70 percent of the positions created (about
ten in total) in these Centers will be staffed by women, who will be provided with the necessary
training opportunities and provided with a clear career trajectory given good performance.
C. PDO Level Results Indicators
23. The following indicators will be measured to indicate the achievement of the PDO:
12
According to the International Committee of the Red Cross in Iraq (ICRC) due to years of violence and conflict, around
150,000 people were estimated to have been affected physically and have limited mobility due to mines, combat injury and
unexploded ordnance, in 2011.
8
a) Roads in good and fair condition as share of Expressway 1 and Girsheen - Suheila
Intersection section of the North-South transport corridor;
b) Traffic fatalities between Nasiria - Rumaila, Basra Junction – Basra, Rumaila - Safwan
along Expressway 1, and between Girsheen - Suheila Intersection section of the North-
South transport corridor;
c) Travel time between Nasiria – Rumaila, Basra Junction – Basra, Rumaila - Safwan
along Expressway 1, and between Girsheen - Suheila Intersection section of the North-
South transport corridor;
d) Direct project beneficiaries (number), of which female (percentage).
.
III. PROJECT DESCRIPTION
A. Project Components
24. The Project will support a combination of: (i) strategic infrastructure investments, (ii)
institutional strengthening and capacity building, as well as (iii) skills and technology
development. The Project components and their subcomponents are as follows:
Component A: Transport Corridors Improvements (US$352.31, US$323.81 million of

which is IBRD). Through works and services contracts, this component will support activities
that address infrastructure deficiencies that enable the transport of goods and people in a safer
manner and with better services and improved communication system:
• A1. Rehabilitation, maintenance and road safety improvement of select sections of

Expressway 1 road network. The Bank will finance the maintenance and road safety
improvement of sections R7 (Nasiria – Rumaila - 145 km), R8A (Basra Junction - Basra - 31
km), and R8B (Rumaila - Safwan - 81 km). Other Expressway 1 sections are either being
financed or will be financed, in parallel, by the GoI (327 km) and IsDB (257 km in the first
phase).
• A2. Design and construction of service lay-bys along sections R6, R7 and R8 of Expressway
1. Relocated small businesses (encroachers on the right-of-way or businesses adjacent to the
right-of-way which will be adversely affected by installation of road barriers and fencing)
will be re-established in new structures with dedicated parking and basic services (WCs,
waste collection) provision. These lay-bys will be designed to provide for mobility-impaired
and disabled persons in sections R6, R7 and R8 of Expressway 1 (design/build).
• A3. Design and construction on a pilot basis of a fiber optic cable network along section R8B
(Rumaila - Safwan) of Expressway 1. The Bank will finance a pilot project for section R8B
(Rumaila - Safwan - 81 km), covering design and construction of a fiber optic cable network
that will serve as the communications infrastructure for all ICT systems needed for the
Project and will allow for future development of the Iraqi national communications network
backbone and access to it. The system will provide infrastructure and systems to facilitate
reporting and response to emergencies, poor road conditions and complaints by road users
and communities adjacent to the Expressway.
9
• A4. Engineering Supervision for rehabilitation of Expressway 1: Carrying out supervision of
civil works, and environmental and social management associated with the civil works, under
parts A1 and A2 of the Project. The Bank will finance three consulting firms to act as the
Engineer (engineering supervision) for civil works and environmental and social
management under A4, A5, and A7.
• A5. Engineering supervision for installation of fiber optic network for Expressway 1:
Carrying out supervision of civil works, and environmental and social management
associated with the civil works, under part A3 of the Project.
• A6. Construction of the road between Girsheen and Suheila Intersection of the North-South
transport corridor: Upgrading of the existing corridor between Ibrahim El-Khalil and
Duhok, linking KRG and the rest of Iraq with Turkey and Syria. The Bank will finance the
construction of a new road section between Girsheen and Suheila intersection (23 km). The
upgrading of other sections (about 60 km) along this corridor is financed by KRG.
• A7. Engineering supervision services for construction of the road between Girsheen and
Suheila Intersection: Carrying out supervision of civil works, and environmental and social
management associated with the civil works, under part A6 of the Project.
Component B: Institutional Strengthening and Capacity Building in the Road Sector

(US$20.46 million, US$18.96 million of which is IBRD). The component design followed
initial findings and recommendations generated through the ongoing studies on the TSMP and
RAMS. Through services, supply of goods and training contracts, this component would support
activities that will pave the way for SCRB and GDRB to effectively plan and manage corridors,
as public resources in their respective regions and enable the provision of better quality services
alongside them, including better management of road assets, faster response to road users'
emergency calls and reports and monitoring and enforcement of traffic and axle loads
regulations.
This component will support key institutional strengthening and capacity building activities,
including:
• B1. and B2. Support organizational and capacity improvement at MOCH/SCRB (under B1)
and KRG/GDRB (under B2) organizational improvement. Activities to support the strategic
and incremental program of restructuring of the road sector, based on identification of
deficiencies and country circumstances, will be implemented under this sub-component.
Support entails:
(a) Developing an effective road sector organizational structure with clear

responsibilities at all levels, including sector level coordination and regulation;
(b) Enhancement of road sector governance by supporting publication and better
dissemination of information on planned, as well as completed activities to
stakeholders and road users; and updating and completing the road asset management
system of the GDRB road network;
(c) Awareness raising on routine maintenance and improving capacity;
(d) Developing ICT systems that will enhance the effectiveness and efficiency of road
management including, communication and surveillance systems for traffic safety
10
monitoring and axle-load limit enforcement, and a Citizens’ Roadway Reporting
System for public outreach and communications to and from road users and adjacent
communities on road conditions and issues. Operation of the Citizens’ Roadway
Reporting System will directly support women’s employment in operating and
managing the system in SCRB and GDRB. The Citizens’ Roadway Reporting System
will be based on mobile phone and GPS technologies linked with the new fiber optics
network being supported by the Project. It will serve road users and adjacent
communities who wish to report concerns such as pollution, excessive travel speeds,
crashes, etc. and who will benefit from real-time information on travel times, road
conditions, temporary road works, etc. for the Project roads;
(e) Training and study tour(s) for managerial and technical staff of SCRB and GDRB;
including on-the-job training to strengthen SCRB/GRDB’s capacity in strategic
planning, programming, maintenance monitoring and supervision;
(f) Strengthening capacity in procurement, financial and contract management, from the
engineering, legal and financial aspects;
(g) Analysis and development of relevant regulations and standards that apply to all
phases of the road life cycle;
(h) Provision of Training to managerial and technical staff of SCRB and GDRB; and
(i) Provision of technical assistance for highways and roads sector-related studies for
SCRB.
• B3. Organizational improvement of state-owned and MOCH controlled construction

companies. The support will include assessing the institutional structures of the eight SOEs
and proposing options for revising the regulatory framework, introducing options for
restructuring, as well as strengthening their bid capacity, project management and financial
independence, and providing them with the capability to compete with the private sector
for road and bridge construction, rehabilitation and maintenance contracts, whether
financed by the government or by international financing agencies.
• B4. Training of local contractors and consultants: An assessment of the current capacity in
the private sector to prepare and submit quality bids, and the development of a structured
training program will be carried out, to focus on improving understanding of procurement
guidelines and safeguards policies, in addition to the overall Project management, and to
enable delivery of high quality products (studies, designs, structures, roads) on time, thus
supporting successful implementation of the country’s ambitious plans.
Component C: Project Management and Monitoring (US$11.35 million - IBRD). The

Project is expected to be implemented over a six-year period. This component will provide
support to the Project management and implementation entities, and support monitoring
technical and financial aspects through financing a pool of international, regional and local
experts to enable:
• C1. Technical Assistance in Project management and support activities necessary for
effective implementation of the Project by SCRB, including the provision of technical
assistance and Training; and
• C2. Technical Assistance in Project management and support activities necessary for
effective implementation of the Project by GDRB, including the provision of technical
assistance and Training.
11
Project Financing
25. The lending instrument will be an Investment Project Financing. The Variable Spread
Loan has a final maturity of 15 years including grace period of five years with annuity repayment
of principal. The Front-end fee equal to one quarter of one percent (0.25 percent) of the Loan
amount would be financed out of the Loan proceeds.
B. Project Cost and Financing
26. The total Transport Corridors Program cost is estimated at US$1.35 billion and is
expected to be implemented over six years. However, the cost of the sections to be covered by
IBRD is estimated at US$385 million, of which the IBRD Loan will cover US$355 million. The
construction of the road section between Girsheen and Suheila Intersection will be jointly
financed by IBRD and KRG. KRG’s contribution is set at US$30 million.
Table 2: TCP Project Cost and Financing Plan
Project cost KRG IBRD

IBRD
Project components [US$ [US$ share
[US$ million]
million] million] [%]
A. Transport Corridors Improvements 352.31 323.81 28.50 91.91
B. Institutional Strengthening, Capacity 20.46 18.96 1.50 92.66
Building in the Road Sector
C. Project Management and Monitoring 11.35 11.35 0 100
Sub-Total Project Costs 384.12 354.12 30 92.19
Front End Fee 0.8875 0.8875 0 100
Total Project Costs* 385 355 30 92.2
27. Retroactive Financing will be available up to US$ 70,000,000 for eligible activities
carried out under Component A above and procured in accordance with the applicable Bank
procurement procedures. Payments against these activities will be made by the Borrower no
more than 12 months before the date of the Loan Agreement.
C. Lessons Learned and Reflected in the Project Design
28. The lessons learned from implementing operations in fragile and conflict states were
taken into account while preparing the TCP:
a. The World Development Report 2011 13: Conflict, Security and Development, which
cautions not to let perfection be the enemy of progress—embrace pragmatic, best-fit
options to address immediate challenges, has guided the design of the Iraq TCP. In
insecure situations, it is generally impossible to achieve technical perfection in
approaches to security, justice, or development. There is a need to be pragmatic, to
address immediate challenges within political realities, with approaches that can improve
13
WDR 2011 Report #62255
12
over time. Transport corridor operations typically involve infrastructure investments,
trade, customs/border post, and could involve corporatization of road agencies. Given the
fragile country circumstances and complex political economy context, the Bank has
chosen an incremental and practical approach accounting for country realities but
anchored in a coherent program of immediate, medium, and longer term support. For
example, the initial focus is on developing road asset management systems and adopting
international standards and practices for procurement, financial management and
environmental and social safeguards, while the medium to long-term actions will focus on
institution building and reform, including corporatization. In parallel, the Bank is also
providing the GoI with technical assistance towards customs reform, which may lead to
an investment in customs/border posts development.
b. The importance of convening partnerships is critical to deliver infrastructure

services in fragile environments. The Bank has worked closely with IsDB, for example
in the Helwan South Power Plant Project in Egypt, which demonstrated the importance of
working with regional International Financing Institutions (IFIs) on large infrastructure
operations, both in terms of attracting regional funding and regional buy-in to work in
challenging environments alongside the World Bank. Given that positive experience, the
Bank approached the IsDB as a potential financing partner for the Iraq TCP. As a result,
the IsDB is engaging in Iraq for the first time since 2006. Its parallel funding is expected
to amount to reach US$478 million (in two phases) and will finance various sections of
Expressway 1 west of Baghdad.
c. The World Bank Group (WBG) should be realistic about its role and potential for
impact in a resource-rich country with a difficult operating environment. There is a
natural preoccupation with domestic political and security issues and a history of isolation
from international best practice. The situation in Iraq requires intensive, on-the-ground
implementation support by World Bank task teams. However, this approach is not always
possible due to the difficult security situation and the limited ability of WBG staff to work
directly with counterparts on the ground. The use of the Bank’s agent on the ground, the
Fiduciary Monitoring Agent (FMA), is a solution that offsets the difficulties in access by
Bank staff and provides a good level of fiduciary oversight. Over the past few years, the
Bank was able to increase its presence on the ground and bring the dialogue closer to the
client. Although Bank-financed projects have made accomplishments under challenging
circumstances, achieving satisfactory outcomes is made more difficult due to the
operating environment. If the security situation were to deteriorate again in a significant
way, lessons learned indicate the need for an appropriate level of expectations on results
that can be achieved and careful consideration by management as to the degree of WBG
engagement.
d. The Bank should ensure that its interventions are responsive to client demand and
receptivity to reform. In fragile and conflict states, Government engagement and
commitment are imperative to increase the likelihood of satisfactory project outcomes. In
Iraq, in some areas, client engagement, capacity and ability to carry out reforms have
been low. However, in the roads sector, the MOCH has been a committed partner willing
to carry out reforms. The following recommendations from the IEG Improving
Institutional Capacity and Financial Viability to Sustain Transport - An Evaluation of
13
World Bank Group Support since 2002. 14, have been taken into account in the Project
design: "For the subsectors and transport modes that rely on operations and maintenance
funds from public sources or earmarked funds such as intercity highways and rural roads:
engage with the client where high-level policy decisions related to maintenance funding
can be taken" and "Where complex reforms are planned, encourage continuous and
sequential engagement and support appropriate government-led reform programs in a
realistic time frame, taking into account the capacity of the government to carry out the
reforms".
e. Cost estimates should take into consideration additional insurance and costs of
private security. There are weaknesses in the contracting and consulting industries in the
country associated with the fragile country environment, security and local capacity
issues. These weaknesses represent a significant challenge to the quality of construction
in Iraq and the implementation prospects of this Project. To attract qualified international
contractors, procurement packaging planning was introduced; joint ventures with local
contractors are encouraged; cost estimates have taken into consideration additional
insurance and costs of private security. The same applies for consulting firms that will be
considered for the supervision of works. Due to the weak capacity of the local firms,
attracting international reputable firms is critical to guarantee close monitoring of
subprojects’ implementation and reporting on any deviations from Project design and
contract terms.
f. Advance procurement is key to ensure good disbursement indicators. To avoid

delays in Project implementation, advance procurement including pre-qualification of
contracting firms and preparation of bidding documents were undertaken during the
Project’s preparation to ensure Project’s readiness to implement, with first disbursements
expected soon after the loan becomes effective. Retroactive financing up to US$
70,000,000 commitments will also be available to the GoI.
IV. IMPLEMENTATION
A. Institutional and Implementation Arrangements
29. The overall responsibility for Project implementation lies with the MOCH, with
Project Management Teams (PMTs) established within SCRB in Baghdad and GDRB in
Erbil. They will be responsible for the implementation of activities pertaining to their
jurisdiction and the day-to-day follow up which includes procurement, financial and safeguards
management, and reporting. The PMTs will prepare monthly and quarterly reports to be
submitted to a Project Coordination Unit (PCU) under the MOCH. The PCU will monitor the
overall implementation progress and report to the Minister and senior MOCH and SCRB and
GDRB officials on any substantial delays and areas that require their intervention.
30. This Project will build on the existing PMTs established to implement ERRP. Both
PMTs are staffed with qualified specialists to oversee the Project implementation. Technical
advisors/consultants will be contracted to develop the technical and managerial capacities of the
SCRB and GDRB staff seconded to the PMTs and provide them with support, guidance and
14
IEG Improving Institutional Capacity and Financial Viability to Sustain Transport - An Evaluation of World Bank Group
Support since 2002, March 2013, Report Number 77092
14
training during project implementation. Similarly, construction supervision consulting firms will
be contracted by SCRB and GDRB to supervise contractors’ compliance with all contractual
obligations as well as compliance with safeguards requirements.
B. Results Monitoring and Evaluation
31. Through their respective PMTs, SCRB and GDRB will be responsible for the
overall Project implementation and for the preparation of technical and financial progress
reports. The PMTs will be responsible for data aggregation and periodic reporting on progress,
and will ensure that the PDO is met. The PMTs will also maintain Monitoring and Evaluation
(M&E) arrangements. Component C of the Project will support the PMTs by hiring a term
consultant to assist and train their staff on results monitoring and evaluation. This exercise will
help build staff capacity and sustainable M&E systems in SCRB and GDRB.
C. Sustainability
32. The TCP forms part of a longer-term engagement which supports immediate, mid-
term and long-term actions in a practical and incremental manner appropriate to the
country circumstances. Using such an incremental approach increases the likelihood that the
Project is sustainable, given the context of fragility and conflict. Technical assistance currently
being provided under ERRP will result in a vision and strategy for the road sector by December
2013, which will underline the importance of sufficient funding to be made available for
maintenance, rehabilitation and new construction of roads. Furthermore, the technical assistance
under both ERRP and TCP should also result in the reform of the road transport institutions to
align more closely with international best practice, accompanied by capacity building of their
staff.
V. KEY RISKS AND MITIGATION MEASURES
A. Risk Ratings Summary
Table 3: Risk Ratings Summary
Risk Category Rating

Stakeholder Risk High
Implementing Agency Risk High
- Capacity High
- Governance High
Project Risk High
- Design High
- Social and Environmental High
- Program and Donor Moderate
- Delivery Monitoring and Sustainability High
Overall Implementation Risk High
15
B. Overall Risk Rating Explanation
33. The implementation risk is high due to the following: (a) security situation, (b) low
response from international contractors and consultants, (c) low capacity and difficulty in
complying with the Bank’s fiduciary and safeguards that might influence the Project
implementation, and (d) procurement and financial management delays.
VI. APPRAISAL SUMMARY
A. Economic Analysis
34. Project’s development impact. Economic analysis was carried out for the entire length
of Expressway 1 (1,180 km - mostly three lanes in each direction), based on the road condition
and traffic data available per section. 15 The Highway Development and Management Model
(HDM-4) was used to predict future deteriorations of the road sections (with and without
maintenance), increase in vehicle operating costs without maintenance and loss of road assets
over 20 years. The detailed calculations are available in the Project files. It shows that the Net
Present Values (NPV) for all road sections are above zero. Below is a summary of the estimated
Economic Rate of Return (ERR) for all sections. The ERR of the Project roads ranges from 81 to
151 percent, while having positive and very high NPV (>US$1.6 million).
Table 4: Economic Rate of Return (ERR) and Net Present Value (NPV)
Section ERR [%] NPV (US$ million)

R4 147 5.30
R5 119.8 3.38
R7 103.1 5.42
R8 87.5 3.22
R9 151.8 5.68
R10 136.8 5.29
R11 122,1 4.93
R12 106.7 3.79
R13 81.2 1.62
35. Sensitivity tests showed that the project would be economically robust. All sections
included in the tests will be still feasible, if the benefits were to decrease by 20 percent and
capital costs increase by 20 percent, as well as if the costs were to increase by 20 percent or
traffic were to decrease by 20 percent or even if both scenarios were to take place. It also
revealed that the Project is more sensitive to variations in traffic. The main impact of the Project
is the enhancement of safety conditions. Equally, there are numerous benefits that cannot be
quantified and presented within the economic study, such as access to market areas along the
Expressway, provision of legalized areas along the road where small traders can move and
15
Section R6 is currently under construction with Government funding and was not included in the original economic analysis.
Rehabilitation of works proposed for each contract are considered minimal, including unavoidable expenditures to preserve the
pavement in a decent condition and avoid the loss of road assets, and restore traffic safety conditions to an acceptable level.
16
continue or restart their works, easier travel and access to pilgrimage sites, and access to
archeological sites.
36. Design of the Girsheen - Suheila Intersection section of the North-South transport
corridor is still under consideration, as well as the economic analysis. The final alignment is
expected to be finalized by the end December 2013.
37. Rationale for public involvement. Given the current security concerns in Iraq, it is
difficult to attract private investment into most sectors, including the road sector. Furthermore,
since roads in Iraq are not being tolled at this time, it is difficult to develop a PPP for the sector.
However, as part of the vision for the sector, PPP opportunities should arise within the next ten
years with the proposed spinning off of the expressways into a separate agency, partly funded by
tolls.
38. Benefit from the World Bank’s contribution. After years of isolation due to conflict
and embargoes, institutional reform of the road sector has not kept pace with international best
practices, and local expertise in Iraq is scarce and not sufficiently developed. The WBG, as a
global institution, with years of experience in providing support to countries who have
experienced conflict, is in a unique position to design a programmatic engagement in the sector
that takes into account the challenges that countries such as Iraq face. The program is based on a
series of strategic and incremental interventions based on country circumstances, and anchored
in international best practice. These include immediate actions in developing road asset
management systems and adopting international standards and practices for procurement,
financial management and environmental and social safeguards, and medium to long-term
actions on institution building, areas that are well addressed through Investment Project
Financing. Furthermore, the Bank has the convening power to bring partners, such as IsDB,
together to support the program.
B. Technical
39. The Project comprises four types of work: the rehabilitation for the Expressway 1,
improving lay-bys to meet PLM needs on four sections (R6, R7, R8A and R8B), installing fiber
optic ducts on R8A, and construction of the Girsheen - Suheila Intersection section of the North-
South transport corridor. The survey of road condition and maintenance needs for the
Expressway 1 was carried out and prepared by international consultants. The TCP will finance
works only on three existing sections of Expressway 1 (mainly R7, R8A and R8B in the southern
branch). Road condition surveys showed relatively fair to poor pavement condition and
significant deficiencies in the road safety aspect. Detailed design, prepared for each of the
sections, resulted in a proposal of pavement treatments. In addition, numerous interventions to
enhance the road safety condition are foreseen. The international consultant developed technical
criteria to select pavement repair measures and traffic safety improvements. This resulted in the
selection of several pavement treatment measures depending on the condition (crack filling,
patching, milling and repaving, overlay or reconstruction). Pavement works will cover
approximately 145 km at section R7 and 112 km at section R8, and according to the estimate the
average cost will be 0.8 million US$/km. Rehabilitation works will be paid on a quantity basis
upon completion of works. Traffic safety improvements will concentrate on guardrail re-
installment, signing and marking and fencing of the road to restrict the access. Damages to works
carried out will be repaired free of charge during the defect liability period. Because of their
17
nature, most works will necessarily be focused on labor intensive activities. All work activities
will have to be undertaken to the satisfaction of the Engineer and certified before payment is
made. Once the works have been addressed, the section will be delivered back to the SCRB for
further routine maintenance on an annual basis.
40. The upgrade of the Girsheen - Suheila section of the North-South transport corridor is the
result of a detailed analysis of traffic capacity deficiencies and obstacles in heavy traffic through
the Zakho region. High volume of heavy trucks, low capacity of the existing link (1x1 lanes) and
dangerous conditions along the road, especially during the winter season, led to a proposal to
construct the new six-lane link along the foot of mountain North-East of the existing road. This
section is part of the Semel-Ibrahim El Khalil portion of the North-South road transport corridor
that is being upgraded to serve the traffic coming from Turkey to KRG and the rest of Iraq.
Preparation of a preliminary design and feasibility study was contracted with an international
consultant. So far, the consultant prepared a route selection report and is advancing in
elaborating the preliminary design, which will be completed, with the finalization of the
feasibility study. The route selection report concluded with a proposal for a preferred alternative
based on a multi-criteria analysis and taking into consideration several aspects. The new road,
with a length of approximately 23 km, will be located between the existing junctions Girsheen
and Suheila, and these will be reconstructed to intersections in order to enable safe and
unobstructed flow.
C. Financial Management
41. The Bank team undertook an assessment of the Financial Management (FM) systems
within SCRB and GDRB, during the preparation of the ongoing “ERRP”. This financial
management assessment was updated for the purpose of this Project. The assessment concluded
that with the implementation of agreed-upon actions, the proposed FM arrangements will satisfy
the minimum requirements under OP/BP10.00. Annex 3 provides additional information on the
FM assessment and the recommended mitigation measures. The detailed financial management
capacity assessment and arrangements are available in the Project file.
42. This Project draws on the same financial management arrangements as ERRP’s,
including: i) using the same implementation arrangements at the two already established PMTs,
one at SCRB and the other one at GDRB; ii) seconding Financial Officers, Accountants, and
Internal Auditors from SCRB and GDRB own staff and dedicated fully to the Project; iii) using
the same financial reporting, and external auditing arrangements, and iv) documenting all
controls and procedures in a financial management manual. One major addition to the latter is
that the Project will finance the purchasing of an accounting system which will be governed by a
chart of account specifically developed for the Project. This will enable the PMTs to report on
the Project’s activities and to record expenditures.
43. To ensure that funds are readily available for project implementation, two U.S. Dollar
Designated Accounts (DAs) will be opened at banks, acceptable to the World Bank, managed
separately by SCRB and GDRB. Each PMT will be responsible for preparing quarterly Interim
unaudited Financial Reports (IFRs) and annual project financial statements in format and content
acceptable to the Bank. The IFRs will be submitted separately by each PMT to the World Bank
through the PCU within 45 days after the end of the concerned period. Independent external
auditors, acceptable to the Bank, will be engaged to carry out project audits and issue
18
independent opinions on the project’s financial statements. The audit reports will be sent to the
Bank no later than six months following the end of the Project’s fiscal year. Each PMT will be
responsible for preparing the Terms of Reference (TORs) for the auditors and submitting them to
the Bank for clearance. Besides the financial audit, the Project will finance technical audit of
construction work performed under signed civil construction contracts.
D. Procurement
44. The Bank conducted a procurement assessment through ERRP implementation support
missions and exchange of correspondence between the Bank and counterpart representatives of
the SCRB and GDRB. The procurement implementation arrangements will follow the same
design as the ERRP’s to be carried out by the two road agencies that implemented ERRP
successfully, using the Bank procedures and documentation, and will continue to do so for this
Project as well.
45. SCRB is a government agency under MOCH within Iraq responsible for carrying out all
project activities in the central and southern parts of the country. Among SCRB’s responsibilities
is to oversee the design and supervision of all types of public road projects, as well as
maintenance and procurement of works. SCRB has a workforce of around 1,300 people; most of
them are fully trained engineers. The SCRB-PMT will be responsible for carrying out all
procurement activities financed by TCP and within its jurisdiction. GDRB is a government
department within the MOCH in KRG, Iraq and is responsible for implementing all Project
activities in KRG. GDRB’s activities include overseeing the design and the supervision of all
types of public road projects, as well as maintenance and procurement of works. GDRB has a
workforce of 36 in Erbil, of which 22 are fully trained engineers. Large projects were
implemented by the GDRB during the previous years. The GDRB-PMT will be responsible for
all procurement activities financed by TCP and within its jurisdiction. SCRB and GDRB PMT
staff are familiar with Bank’s procurement procedures, as they have, over the past few years,
attended several training workshops on procurement, contract management and anti-corruption
organized by the Bank in Amman and Baghdad under the Capacity Building II Project to build
their capacity and promote fiduciary awareness. To expedite the implementation of the Project,
the selection of consultants for both the design and the environmental impact analysis of the
main activities financed by the Loan, was launched under the ERRP.
46. Procurement of works. The Project will finance the following civil works: Rehabilitation
of Expressway 1 between cities of (i) R7 (Nasiria - Rumaila - 145 km); (ii) R8 (Rumaila -
Safwan and Basra Junction - Basra - 112 km); and (iii) the construction of 23 km section
between Girsheen - Suheila Intersection. “Guidelines On Preventing and Combating Fraud and
Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants” dated October 15,
2006 and revised in January 2011, “Guidelines: Procurement of Goods, Works and Non
consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers”
dated January 2011, and “Guidelines: Selection and Employment of Consultants under IBRD
Loans and IDA Credits and Grants by World Bank Borrowers” dated January 2011, shall apply
to the Project.
47. The procurement method will be International Competitive Bidding (ICB) and Bank’s
procurement standard documents will be used. To ensure Project’s readiness to implement,
advance procurement and pre-qualification and bidding documents for R7 and R8 above were
19
commenced during the Project preparation by SCRB-PMT. Any other related procurement forms
for National Competitive Bidding (NCB) will follow Iraq’s Master Implementation Manual
(MIM). The Project will finance relatively small quantities of goods. For procurement carried out
through NCB or shopping procedures, relevant procurement forms are included in the MIM.
Consultant services selected under this Project will mainly cover: (i) institutional arrangements
and capacity building, (ii) design and supervision consulting firms, (iii) individual consultants to
strengthen the capacity of the PMTs, and (iv) any additional consulting services required during
Project implementation. The procurement packages planned during the first 18 months of Project
effectiveness are reflected in Annex 3.
E. Social (including Safeguards)
48. The Project will have broad socio-economic benefits since it supports the improvement of
main trucking and freight transport routes across the country; the roads will greatly facilitate
trade and transportation of goods both into and out of Iraq, and the time and costs of
transportation will be substantially reduced. Furthermore, PLM will be able to use the transport
routes more easily, as service lay-bys will take into account their needs, such as ramps and
accessible lavatories. Beyond that, local communities along the roads will benefit, and will have
quicker access to larger markets. Additionally, improved roads will significantly reduce the high
accident rate. Shorter term benefits for communities along the roads will be employment
opportunities (500,000 person-days) on the road construction crews most of whom are amongst
the bottom 40% of the population, considering the low skill labor requirements. However, the
experience gained by these temporary workers may lead to other job opportunities in both
construction and maintenance. It will also involve the construction of a new primary road section
traversing rural areas. This Project will, on the basis of available current information and site
visits, trigger OP 4.12, Involuntary Resettlement.
49. The GoI has committed to applying the Bank’s safeguards policies to the entire transport
corridors under the Iraq Transport Corridors Program, and will be responsible for
implementation of safeguards policies for all Program segments irrespective of source of
financing. As such, the environmental and social due diligence of these road sections include the
preparation and disclosure of Environmental and Social Impact Assessments (ESIA) and
Environmental and Social Management Plans (ESMP) and Resettlement Action Plans (RAP).
The GoI, with Bank support, will ensure that any required mitigations identified under the
ESIAs, ESMPs, and RAPs will be rigorously applied. The Bank will monitor the overall
compliance with its safeguard policies for both non-Bank and Bank funded road sections during
Project implementation however, day-to-day compliance monitoring will be the responsibility of
the construction supervision consultants contracted by the respective financier for each section of
the Expressway and North-South corridor.
50. In the case of the Expressway 1 road works which support rehabilitation of the
country’s major transport route running from south to north and east to west across the country,
OP 4.12 is triggered because there is a need to relocate small businesses which have encroached
on the right-of-way. Land acquisition is not required for this relocation as Project Affected
People (PAPs) will be relocated to dedicated vendor lay-bys which will be established on State-
owned land. Consultations with PAPs have revealed widespread support for the relocation to
new lay-bys which will be provided with services and which will concentrate the businesses
around a “magnet” gas station; PAPs recognize the economic benefits that will accrue to their
20
businesses from such relocation. The draft final ESIA and accompanying ESMP and RAP were
reviewed and cleared by the Bank and disclosed on August 21, 2013. 16
51. An easily accessible and transparent Grievance Redress Mechanism (GRM) will be
established prior to commencement of road construction. It will operate through the end of the
first year of operation of each section of the Expressway. PAPs will be able to access it to gain
information and/or lodge complaints about road construction and operation activities. The
establishment and operation of the GRM system will be widely publicized, including through
public postings at each road works site.
52. In the case of the road section between Girsheen and Suheila intersection in KRG,
the situation is somewhat more complex. This section is part of the Semel - Ibrahim El-Khalil
corridor, and road works are being undertaken for this corridor in a phased way over four
sections, three of which are being financed by KRG. Works are already underway on two of the
three KRG-financed sections, and the third section is under tendering. All three KRG-supported
road sections follow an existing road alignment (upgrading) but the Bank-financed section will
involve construction of a new alignment to be determined by the feasibility study which requires
strips of land acquisition of both state-leased agricultural land and private agricultural land. This
new section, which will serve significant numbers of freight trucks, as well as private traffic, is
not expected to require relocation of PAPs because it is expected to traverse a very sparsely
populated area dominated by large scale agriculture. OP 4.12 will, however, be triggered for this
section because of the likely need for land acquisition.
53. Since the alignment of the new road section between Girsheen and Suheila intersection is
not determined yet, an Environmental and Social Impact Assessment Framework (ESIAF) and a
Resettlement Policy Framework (RPF) have been prepared, cleared by the Bank and disclosed on
August 21, 2013. During the Project implementation, when the alignment will be finalized, an
ESIA with a detailed Environmental and Social Management Plan (ESMP) and an Abbreviated
Resettlement Action Plan (ARAP) (or RAP if necessary) will be prepared and disclosed before
commencement of civil works.
F. Environment (including Safeguards)
54. This Project is assigned a Category A based on the nature of the activities that will be
financed during the construction of a new 2x3 lane highway section in Kurdistan Region, and the
rehabilitation of existing 2x3 lane Expressway 1. These activities may likely produce adverse
environmental impacts. The Environmental Assessment (OP/BP 4.01) and the Involuntary
Resettlement (OP/BP 4.12) policies were triggered; accordingly, the following safeguards
instruments were prepared: ESIA (with a comprehensive ESMP) and RAP for Expressway 1;
and ESIAF and RPF for the KRG corridor.
55. The choice of an ESIAF and RPF for the KRG section was informed by the fact that the
road alignment to be financed was not known at appraisal. For sections known prior to appraisal,
environment and social audits were undertaken to complement the Bank safeguards instruments.
The ESIA (with its comprehensive ESMP) for rehabilitation of Expressway 1 and the ESIAF
were prepared, reviewed, approved and disclosed in-country and at the InfoShop on August 21
16
. An updated RAP was finalized and cleared by the Bank and disclosed on November 15, 2013.
21
2013. The environmental safeguards instruments (ESIA and ESIAF) revealed a number of
negative environmental impacts such as: dust emissions, elevated noise levels, diversion and
construction of access points, installation of fencing on both sides of the road, installation of
ducts for fiber optics cable, restoration of road surface, rehabilitation of bridges and underpasses,
generation and disposal of construction waste, and operation of the contractors’ camps. These
negative impacts have detailed and defined mitigation measures contained in these instruments.
56. It is expected the Project Management Teams housed in the SCRB and GDRB will have
designated environmental and social specialists who will follow up on the implementation of the
safeguards instruments and ensure that the civil works contractors and their supervising
consultants abide by the mitigation measures and guidance contained in the respective ESMPs.
The Project will support capacity building of the designated PMT staff and concerned local
consultants and contractors with respect to the Bank safeguards policies and application of the
safeguards instruments.
22
Annex 1: Results Framework and Monitoring
IRAQ: TRANSPORT CORRIDORS PROJECT (P131550)
Project Development Objectives

PDO Statement
The Project Development Objective is to improve road transport connectivity and safety on selected road sections along Expressway 1 and the North-South transport
corridor in Iraq.
These results are at Project Level
Project Development Objective Indicators
Cumulative Target Values Data Source/ Responsibility for
Unit of Baseline End Target Methodology Data Collection
Indicator Name Core 2015 2016 2017 2018 Frequency
Measure (2014) (2019)
1. Direct project
Number
beneficiaries 0 57000 60000 62000 64000 66000 Ministry of PMT
(percentage) Annual
(number), of which (0) (15%) (15%) (15%) (15%) (15%) Planning
female (percentage)
2. Roads in good and
fair condition as a
share of total Supervision
Percentage 70.00 70.00 70.00 80.00 85.00 90.00 Annual PMT
classified roads ( size Consultants
of the classified
network is 280 km)
Annual
Ministry of
( reported
3. Traffic Fatalities Number 113 113 113 100 87 87 interior (Traffic GDRB and SCRB (PMT)
as 3-year
police)
average)
• Traffic Fatalities
between Semel and Annual
Number Ministry of
Ibrahim El Khalil (reported
Sub-Type 18 18 18 16 12 12 interior (Traffic GDRB (PMT)
along the North- as 3-year
Breakdown police)
South transport average)
corridor
• Traffic Fatalities Number Annual Ministry of
between Nasiriya- Sub-Type 48 48 48 42 38 38 (reported interior (Traffic SCRB (PMT)
Rumaila along Breakdown as 3-year police)
23
Expressway 1(R7) average)
• Traffic Fatalities Annual
Number Ministry of
between Rumaila and (reported
Sub-Type 47 47 47 42 37 37 interior (Traffic SCRB (PMT)
Basra/Safwan along as 3-year
Breakdown police)
Expressway 1(R8) average)
On
contract GDRB and
4. Travel Time Hours 4.00 4.00 4.00 3.15 3.15 3.15 GDRB and SCRB (PMT)
completio SCRB (PMT)
n
On
• Travel time between
contract
Semel and Ibrahim Hours
and
El Khalil along the Sub-Type 0.75 0.75 0.75 0.50 0.50 0.50 GDRB (PMT) GDRB (PMT)
project
North-South Breakdown
completio
transport corridor
n
On
• Travel time between contract
Hours
Nasiriya-Rumalia and
Sub-Type 1.75 1.75 1.75 1.50 1.50 1.50 SCRB (PMT) SCRB (PMT)
along Expressway project
Breakdown
1(R7) completio
n
On
Hours
Basra Junction and and
Basra along project
Breakdown
Expressway 1 (R8A) completio
n
On
Hours
Rumaila and Safwan and
along Expressway project
Breakdown
1(R8B) completio
n
24
Intermediate Results Indicators
Cumulative Target Values
Unit of Data Source/ Responsibility for Data
Indicator Name Core End Target Frequency
Measure 2014 2015 2016 2017 2018 Methodology Collection
(2019)
1. Roads constructed, Non- Contract
Kilometers 0.00 0.00 0.00 23.00 23.00 23.00 GDRB (PMT) GDRB (PMT)
rural Completion
2. Roads rehabilitated, Non- Contract
Kilometers 0.00 0.00 0.00 145.00 257.00 257.00 SCRB (PMT) SCRB (PMT)
rural Completion
3. No. of SCRB and GDRB
Staff trained on the usage
of the Operations Manual
SCRB/GDRB
and on Bank procurement Number 32 32 32 50 60 75 Annual SCRB/GDRB (PMTs)
(PMTs)
guidelines and safeguard
policies and other
technical training.
4. New public access
Citizens' Roadway
On SCRB/GDRB
Reporting System Yes/No No No No Yes Yes Yes SCRB/GDRB (PMTs)
completion (PMTs)
established and
operational
5. Person-days of
Days 0 100,000 250,000 400,000 500,000 500,000 Annual SCRB/GDRB SCRB/GDRB (PMTs)
employment created
6. Fiber optics ducts Contract
Kilometers 0.00 0.00 0.00 81 81 81 SCRB (PMT) SCRB (PMT)
installed underground Completion
7. Road sector
organizational structure
with clear mandates and Yes/No No No No Yes Yes Yes Annual SCRB/GDRB SCRB/GDRB (PMTs)
responsibilities developed
and implemented
8. A road asset management
On
system in the GDRB Yes/No No No Yes Yes Yes Yes GDRB GDRB
completion
updated and implemented
9. No. of service lay-bys
fitted with disability Number 0 0 5 8 10 10 Annual SCRB (PMT) SCRB (PMT)
ramps (R6, R7, and R8 )
25
Annex 2: Detailed Project Description
IRAQ: TRANSPORT CORRIDORS PROJECT
1. This Project has three components which are described in details in the following table.
The total cost is estimated at US$385 million (net of taxes and duties but including Front End
Fee), of which the IBRD Loan will finance 92.2 percent (US$355 million) and KRG will finance
7.8 percent (US$30 million).
Table 5: Project Costing per Components
Component IBRD KRG IBRD
Total Cost
funding funding funding
[US$
[US$ [US$ [%]
million]
million] million]
Component A: 352.31 323.81 28.50 91.91
Transport Corridors Improvement
A1. Rehabilitation, Maintenance and road safety 215.00 215.00 0.00 100.00
improvement of select sections of Expressway 1
road network
A2. Design and construction of service lay-bys 7.50 7.50 0.00 100.00
along sections R6, R7 and R8 of Expressway 1
A3. Design and construction on a pilot basis of a 5.00 5.00 0.00 100.00
fiber optic cable network along section R8B
(Rumaila - Safwan) of Expressway 1
A4. Engineering supervision services for 8.52 8.52 0.00 100.00
rehabilitation of Expressway 1
A5. Engineering supervision for installation of fiber 0.40 0.40 0.00 100.00
optics network for Expressway 1
A6. Construction of the road between Girsheen and 81.00 56.00 25.00 69.14
Suheila Intersection
A7. Engineering supervision services for 3.50 0.00 3.50 0.00
construction of the road between Girsheen and
Suheila Intersection
Contingencies for SCRB 28.89 28.89 0.00 100.00
Contingencies for GDRB 2.50 2.50 0.00 100.00
Component B: 20.46 18.96 1.50 92.66
Institutional Strengthening and Capacity
Building in the Road Sector
B1 (a) Technical assistance in SCRB organizational 4.00 4.00 0.00 100.00
structure and capacity improvement
B1 (b) Technical assistance in enhancement of the 1.00 1.00 0.00 100.00
road sector governance for SCRB
B1 (c) Awareness raising on routine maintenance
and improving capacity
B1 (d) Technical assistance in development of ICT 3.10 3.10 0.00 100.00
including citizens’ roadway reporting system,
establishment of call center(s), surveillance system,
and axle-load limit enforcement for SCRB
B1 (e and h) Training and study tour(s) for 1.80 1.80 0.00 100.00
managerial and technical staff for SCRB including
on-the-job training to strengthen SCRB’s capacity
in strategic planning, programming, maintenance
monitoring
B1 (f) Strengthening capacity in procurement,
26
Total Cost
[US$
[US$ [US$ [%]
million]
million] million]
financial and contract management
B1 (g) Analysis and development of relevant 3.00 3.00 0.00 100.00
regulations and standards that apply to all phases of
the road life cycle. Technical assistance in analysis
and improvement/development of relevant
regulations and standards, including development of
a bitumen enhancement study
B1 (i) Transport Sector Related Studies for SCRB. 0.93 0.93 0.00 100.00
B2 (a) and (c) Technical assistance in GDRB 0.10 0.10 0.00 100.00
organizational and capacity improvement
B2 (b) Technical assistance in enhancement of the
road sector governance for GDRB
B2 (d) Technical assistance in development of ICT 0.10 0.10 0.00 100.00
including citizens’ roadway reporting system,
establishment of call center, surveillance system,
and axle-load limit enforcement for GDRB
B2 (d.2) Technical assistance to update and 1.50 0.00 1.50 0.00
complete the road asset management system of the
GDRB road network
B2 (e and h) Training and study tour(s) for 0.10 0.10 0.00 100.00
managerial and technical staff for GDRB
B2 (f) Strengthening capacity in procurement,
financial and contract management
B2 (g) Analysis and development of relevant
regulations and standards that apply to all phases of
the road life cycle
B3. Technical assistance in organizational 1.80 1.80 0.00 100.00
improvement of MOCH state-owned construction
companies
B4 (a) Training of local contractors and consultants 1.30 1.30 0.00 100.00
for SCRB
B4 (b) Training of local contractors and consultants 0.10 0.10 0.00 100.00
for GDRB
Component C : 11.35 11.35 0.00 100.00
Project Implementation and Monitoring
C1 (a) Technical audit for SCRB 1.50 1.50 0.00 100.00
C1 (b) Financial audit for SCRB 0.30 0.30 0.00 100.00
C1 (c) Individual technical experts for SCRB 3.00 3.00 0.00 100.00
(environment, social, engineering, procurement,
etc.)
C1 (d) Operational costs, monitoring, etc. for SCRB 3.70 3.70 0.00 100.00
C1 (e) Contract management specialist for SCRB 0.70 0.70 0.00 100.00
C2 (a) Technical audit for GDRB 0.50 0.50 0.00 100.00
C2 (b) Financial audit for GDRB 0.15 0.15 0.00 100.00
C2 (c) Individual technical experts for GDRB 0.30 0.30 0.00 100.00
(environment, social, engineering, procurement,
etc.)
27
Total Cost
[US$
[US$ [US$ [%]
million]
million] million]
C2 (d) Operational costs, monitoring, etc. for 0.20 0.20 0.00 100.00
GDRB
Front End Fee 0.8875 0.8875 0.00 100.00
Total cost (including contingencies) 385 355 30.00 92.20
2. Component A: Transport Corridors Improvement (Estimated cost: US$352.31 million,

of which US$323.81 million from IBRD). This component will lay the ground for improving
transport, road safety and trade through supporting key investments in infrastructure
improvement. This component will improve the condition of the road network and enhance
capacity and traffic safety conditions.
3. Subcomponent A1. Rehabilitation, maintenance and road safety improvement of select

sections of Expressway 1 road network. This sub-component involves the rehabilitation of two
sections of the Expressway 1 which is the main road axis in Iraq. The total length of those two
sections is 257 km, which will be divided into three contracts, as follows: Section R7: Nasiria -
Rumaila with approximate length 145 km; Sections R8A and R8B with approximate total length
112 km (R8A: Basra Junction - Basra with approximate length 31 km) and (R8B: Rumaila -
Safwan with approximate length 81 km).
4. The scope-of-works comprises of rehabilitation of the existing road, and all parking
areas, service lay-bys, airstrip (parts of expressway carriageway made, by paving the central
reserve, to serve as an emergency take-off and landing for planes, approximately 3 km in length),
bridges and interchanges existing through the expressway, and include but are limited to:
• repair and improvement of traffic safety measures (steel guardrail with different types,
shapes, sizes and location, traffic signs, pavement marking, lighting, road furniture);
• repair of pavement distresses (crack sealing, potholes, resurfacing, overlays);
• replacement of bearings, expansion joints and handrail on bridges;
• construction of new check points including acceleration and deceleration lanes, flexible
pavement, side walk, street lighting and road furniture, etc.;
• rehabilitation of service lay-bys including acceleration and deceleration lanes, flexible
pavement, side walk, street lighting and road furniture, etc.
5. Subcomponent A2. Design and construction of service lay-bys along sections R6, R7 and
R8 of Expressway 1. in which relocated small businesses (encroachers on the right-of-way or
businesses adjacent to the right-of-way which will be adversely affected by installation of road
barriers and fencing) will be re-established in new structures with dedicated parking and basic
services (WCs, waste collection) provision. These lay-bys will be designed to provide for
mobility-impaired and disabled persons in sections R6, R7 and R8 of Expressway 1
(design/build).
28
6. Subcomponent A3. Design and construction on a pilot basis of a fiber optic cable
network along section R8B (Rumaila - Safwan) of Expressway 1. This sub-component covers
procurement of the contractor to prepare design and implement the works on the fiber optics
network along R8B section of the Expressway 1. Increasing access to broadband connectivity is
emerging as a high priority for policy makers across the region and proposed improvement of the
main road axis should serve as the onset of the multi-purpose corridor. However, at the
beginning the network will serve as an infrastructure for the communication and surveillance
support, as well as the element of the traffic safety monitoring and enforcement. The system
shall comprise of fiber optics cable network, including necessary terminals/connection points
along the road to allow for future development of the Iraqi national communications network
backbone and access to it.
7. Subcomponent A4, A5 and A7. Engineering supervision. This sub-component will include
procurement of three consulting firms to act as the Engineer (engineering supervision) for civil
works and environmental and social management during rehabilitation of Expressway 1,
construction of the new road between Girsheen - Suheila intersections of the North-South
transport corridor and implementation of fiber optics network along section R8B of the
Expressway 1, including pre- and post-construction services (design review, procurement of
works, project indicators monitoring). Association with local consulting firms would be
encouraged as per provisions of Bank’s Consultant Guidelines that allow (i) association between
Consultants to strengthen technical responsiveness of their proposals and to offer lower prices
and (ii) assignment of up to 10 points to the weights in technical evaluation for participation by
nationals among the proposed key staff. The consultants would also provide training to the
SCRB/GDRB staff.
8. Subcomponent A6. Construction of the road between Girsheen and Suheila intersections
of the North-South transport corridor. This sub-component involves the construction of the new
road link between the existing Suheila intersection and new Girsheen intersection, approximately
2 km North-West from the existing Girsheen intersection, running at the foot of the mountain,
North-East of the existing road. The design and current condition of the existing road between
Girsheen and Suheila do not meet design standards for such roads to carry about 3,000 heavy
trucks entering Iraq daily from Turkey through Ibrahim El Khalil. This is part of a larger parallel
KRG financed operation to improve traffic and safety conditions on main transport links in the
region. Two other sections are already close to completion and will not be part of the Project,
although Bank safeguards will be applied retroactively to these sections. Cross section of the
new link consists of three lanes, each 3.65 m in width, 4.0 m median and shoulders of 3.0 m
(right) and 1.20 m (left) in width, and all the elements will be prepared for a design speed of 100
km/h. The road alignment for the Bank-supported section (3) will be selected to minimize the
negative environmental and social impacts of the Project. Any land acquisition and road design
costs will be financed by the KRG’s own funds.
9. Component B: Institutional Strengthening and Capacity Building in the Road Sector

(US$20.46 million, US$18.96 million of which is IBRD). The component design followed
initial findings and recommendations generated through the ongoing studies on the TSMP and
RAMS. Through services, supply of goods and training contracts, this component would support
activities that will pave the way for SCRB and GDRB to effectively plan and manage corridors,
as public resources in their respective regions and enable the provision of better quality services
alongside them, including better management of road assets, faster response to road users'
29
emergency calls and reports and monitoring and enforcement of traffic and axle loads
regulations.
10. This component will support key institutional strengthening and capacity building
activities, including:
• Subcomponent B1. Support organizational and capacity improvement at MOCH/SCRB.
Activities to support the strategic and incremental program of restructuring of the road
sector, based on identification of deficiencies and country circumstances, will be
implemented under this sub-component. Support entails:

stakeholders and road users; Raising awareness on routine maintenance and
improving capacity;
(c) Awareness raising on routine maintenance and improving capacity
(d) Developing ICT systems that will enhance the effectiveness and efficiency of
road management including, communication and surveillance systems for traffic
safety monitoring and axle-load limit enforcement, and a Citizens’ Roadway
Reporting System for public outreach and communications to and from road users
and adjacent communities on road conditions and issues. Operation of the
Citizens’ Roadway Reporting System will directly support women’s employment
in operating and managing the system in SCRB. The Citizens’ Roadway
Reporting System will be based on mobile phone and GPS technologies linked
with the new fiber optics network being supported by the Project. It will serve
road users and adjacent communities who wish to report concerns such as
pollution, excessive travel speeds, crashes, etc. and who will benefit from real-
time information on travel times, road conditions, temporary road works, etc. for
the Project roads;
(e) Training and study tour(s) for managerial and technical staff of SCRB; including
strengthening SCRB’s capacity in strategic planning, programming, maintenance
monitoring and supervision;
(f) Strengthening capacity in procurement, financial and contract management, from
the engineering, legal and financial aspects;
phases of the road life cycle; including development of a bitumen enhancement
study;
(h) Provision of Training to managerial and technical staff of SCRB; andProvision of
technical assistance for highways and roads sector-related studies for SCRB.
• Subcomponent B2. Support organizational and capacity improvement KRG/GDRB

organizational improvement. Activities to support the strategic and incremental program of
restructuring of the road sector, based on identification of deficiencies and country
circumstances, will be implemented under this sub-component. Support entails:

30
stakeholders and road users;
(c) Awareness raising on routine maintenance and improving capacity;
(d) Developing ICT systems that will enhance the effectiveness and efficiency of
road management including, communication and surveillance systems for traffic
safety monitoring and axle-load limit enforcement, and a Citizens’ Roadway
Reporting System for public outreach and communications to and from road users
and adjacent communities on road conditions and issues. Operation of the
Citizens’ Roadway Reporting System will directly support women’s employment
in operating and managing the system in GDRB. The Citizens’ Roadway
Reporting System will be based on mobile phone and GPS technologies linked
with the new fiber optics network being supported by the Project. It will serve
road users and adjacent communities who wish to report concerns such as
pollution, excessive travel speeds, crashes, etc. and who will benefit from real-
time information on travel times, road conditions, temporary road works, etc. for
the Project roads; updating and completing the road asset management system of
the GDRB road network;
(e) Training and study tour(s) for managerial and technical staff of GDRB; including
strengthening GDRB’s capacity in strategic planning, programming, maintenance
monitoring and supervision;
(f) Strengthening capacity in procurement, financial and contract management, from
the engineering, legal and financial aspects;
phases of the road life cycle;
(h) Training and study tour(s) for managerial and technical staff of GDRB;
• Subcomponent B3. Organizational improvement of state-owned and MOCH controlled

construction companies. The support will include assessing the institutional structures of
the eight SOEs and proposing options for revising the regulatory framework, introducing
options for restructuring, as well as strengthening their bid capacity, project management
and financial independence, and providing them with the capability to compete with the
private sector for road and bridge construction, rehabilitation and maintenance contracts,
whether financed by the government or by international financing agencies.
• Subcomponent B4. Training of local contractors and consultants: An assessment of the

current capacity in the private sector to prepare and submit quality bids, and the
development of a structured training program will be carried out, to focus on improving
understanding of procurement guidelines and safeguards policies, in addition to the overall
Project management, and to enable delivery of high quality products (studies, designs,
structures, roads) on time, thus supporting successful implementation of the country’s
ambitious plans.
11. Component C: Project Management and Monitoring (Estimated cost: US$11.35

million from IBRD). This component will provide support to the PCU and the two PMTs in the
project implementation and monitoring. It will provide assistance to the PCU and the two PMTs
to follow the implementation of the procurement and safeguard mitigation plans, assist in the
review of technical documents and works implementation, and contract management.
31
Contracting with several individual term consultants is foreseen over a period of three to four
years to build a system by training the SCRB and GDRB staff throughout the Project
implementation period. Technical and financial audit of the Project activities will be supported
through this sub-component. This sub-component will also support operating expenses for the
PCU and the two PMTs as agreed with the Bank.
• Subcomponent C1 Technical Assistance in Project management and support activities

necessary for effective implementation of the Project by SCRB, including the provision of
technical assistance and Training; and
• Subcomponent C2 Technical Assistance in Project management and support activities

necessary for effective implementation of the Project by GDRB, including the provision of
technical assistance and Training.
32
Annex 3: Implementation Arrangements
Project Institutional and Implementation Arrangements
1. The TCP implementation would follow the implementation of the ongoing ERRP with
minor enhancements. Project activities in the central and southern Governorates of Iraq would
be implemented by the SCRB; and Project activities in the KRG will be implemented by the
GDRB.
2. Two PMTs will oversee the project implementation, building on the ones already
established under ERRP. PMT staff from various departments within the implementing SCRB
and GDRB would continue to be seconded on a full-time and/or on a part-time basis to work in
the PMT. Others could also be invited to join as needed. The PMTs would also be supported by
national and international consultants and advisors as needed. The PMT model would provide
the opportunity for on-the-job training and capacity building to staff that will be reintegrated
into their respective agency structures at project completion. However, in addition to the PMT
staff, formal and on-the-job training will be provided to other members of the SCRB and GDRB
who are involved in the carrying out of relevant tasks comprising the TCP. The PMTs staff
would include project managers, senior technical staff (highway engineers), procurement
specialists, financial management specialists, accountants, environmental and social safeguards
specialists, and administrative support staff.
3. A PCU has been established under MOCH to coordinate with other Ministries and IFIs,
consolidate the reporting from the two PMTs and report to the Minister of Construction and
Housing on a monthly basis and to the IFIs on a quarterly basis.
33
Figure 1: TCP Project Implementation Arrangements
Ministry of Construction and Housing
• Report to MOCH senior officials

• Coordinate with International Financing
Institutions (IFIs)
• Coordinate with other Iraqi ministries and
Project Coordination Unit stakeholders
(PCU) • Report to the JPOC
• Consolidate PMTs regular reports and submit
consolidated progress reports to IFIs.
• Participating in supervision missions
• Coordinate training activities and study tours
Project Management Team (SCRB) Project Management Team (GDRB)
Project Implementation Project Implementation

• Engineering Design Review • Engineering Design Review
• Procurement • Procurement
• Financial Management • Financial Management
• Safeguards Monitoring & Reporting • Safeguards Monitoring & Reporting
• Outreach • Outreach
• Progress Reporting • Progress Reporting
Institutional Building Institutional Building

Consultants & Training Consultants & Training
Technical, Financial and Technical, Financial and

Safeguard Consultants Safeguard Consultants
Contractors and Suppliers Contractors and Suppliers
Financial Management, Disbursements and Procurement

4. The Project will be implemented by the two PMTs established under ERRP, one at the
SCRB - the Ministry of Construction and Housing, and the other one at and the GDRB-Ministry
of Construction and Housing (MOCH) – KRG region. Each PMT will be responsible for
planning and coordinating specific activities, including FM (payment authorization,
disbursement, accounting, reporting and audit), procurement of construction companies, and
consulting services (and related contract management), and monitoring and evaluation. Qualified
Financial Officers, Accountants, and Internal Controllers will be provided from SCRB and
GDRB-KRG own staff and will be dedicated fully for the Project. The same FM staff of the
ongoing ERRP project will be working on this Project. The FM team has built a good knowledge
about the World Bank FM and disbursement procedures during the implementation of the
ongoing ERRP.
5. Project FM risk. Based on the results of the preliminary assessment, the overall FM risk
is “High”. With mitigation measures in place, the project will have acceptable project FM
34
arrangements and its FM risk rating will be “Substantial”. The FM risk is assessed as “High”
before mitigation mainly due to: i) limited capacity at both SCRB and GDRB to meet the
Project’s financial management requirements, ii) security conditions that do not allow visits by
the Bank team to perform physical verification, iii) overall weaknesses and shortcomings in the
control environment, and iv) limited accounting and reporting systems to provide timely and
comprehensive information.
6. The following measures are proposed to mitigate FM-related risks: (i) implementation
arrangements will be used by sustaining the two PMTs established under ERRP, one equipped
by qualified Financial Officers, Accountants, and Internal Auditors seconded from SCRB and
GDRB-KRG own staff and will be dedicated fully to the Project; ii) a construction supervision
firm will be hired to monitor the physical progress of each construction contract and the scope of
the external auditor will be extended to perform technical audit in addition to the annual financial
audit, iii) specific controls and procedures will be followed by the PMTs and will be documented
in a financial management manual, and iv) accounting system that is able to record expenditures
made by implementing entity, financier, components and category will be purchased.
Financial Management
7. Budgeting and Flow of Funds. The PMTs will maintain a detailed disbursement plan
per quarter. This plan will be developed based on the initial procurement plan, or based on the
schedule of outputs as defined in the implementation schedule and estimated payments cycles,
and revised upon need. It will be used as a monitoring tool to analyze budget variances and
manage cash and will feed into the quarterly IFRs. Similar to the ongoing ERRP Project, the loan
amount will not be included in the Federal Budget of Iraq and therefore; loan proceeds will
follow directly from the Bank to the PMTs. To ensure that funds are readily available for project
implementation, two US Dollar Designated Accounts (DAs) will be opened for SCRB and
GDRB. The names of authorized signatories and corresponding specimens of their signatures
will be submitted to the Bank prior to the receipt of the first Withdrawal Application. SCRB and
GDRB will be responsible for submitting monthly replenishment applications with appropriate
supporting documentation.
8. Flow of Documentation and flow of funds. The flowchart below depicts the flow of
documentation and flow of funds:
35
Figure 2: TCP Financial Management Arrangements
Document flow Cash & Documents flow

Cash flow
Iinterim Un- Accounting

- Entry Construction
PMT Internal PMT Finance
Audited Project system Controllers Team Company
Financial
Reports
(IFRs)
submit invoices & supporting documents
Project Check or Bank transfer PMT Finance Legal Council

DA Team
Supervision
Firm
Bank replenishes DA
Payment sends WA to WB Follow up
Engineers
Consultants /
Direct payment
Suppliers World Bank PMT PMT Manager
IBRD Procurement
9. Accounting and Financial Reporting. The project will follow the cash basis accounting
and key accounting policies and procedures will be documented in the financial procedure
manual which will be finalized before negotiations. To be able to report on the project’s
activities and to record expenditures made by implementing entity, financier, components and
category, the project will purchase an accounting system which will be governed by a chart of
account specifically developed for the project. Access to the system will be given to the finance
officers and Accountants; other user’s profiles will be determined according to the Project’s
needs. The system will include a contracts screen to record and report the Project’s
commitments. This activity will be completed within three months after effectiveness. The
Islamic Development Bank’s and the World Bank’s contributions will be provided through
parallel financing towards the Program’s activities. The civil work category under GDRB will be
co-financed by the World Bank and the KRG. The accounting system will include separate costs
centers for each financier.
10. The PMTs will be responsible for preparing the following:
(a) Quarterly Interim un-audited Financial Reports (IFRs) and submitting them to the
Bank within 45 days from the end of the quarter. The format of the reports has been
agreed upon during the negotiations. These reports will consist of Statement of Cash
Receipts and Payments by each financier and by each category and accounting policies
and explanatory notes, including a footnote disclosure on schedules: (i) “the list of all
signed Contracts per category” showing Contract amounts committed, paid, and unpaid
under each contract, and physical progress against financial progress of each contract, (ii)
Reconciliation Statement for the balance of the Designated Account, and iii) list of assets
(goods and equipment).
36
(b) Annual Project Financial Statements (PFS) which will be audited by an independent
external auditor. The audit report should be submitted to the Bank not later than six
months after the end of each fiscal year. The PFS include: Statement of Cash Receipts
and Payments by category and accounting policies and explanatory notes, including a
footnote disclosure on schedules: (i) “the list of all signed Contracts per category”
showing Contract amounts committed, paid, and unpaid under each contract, (ii)
Reconciliation Statement for the balance of the Designated Account, and iii) list of assets
(goods and equipment).
11. Internal controls: The Project will be implemented using arrangements with specific
controls and procedures documented in the financial management manual. Due to similarity of
this Project with the ongoing ERRP, each PMT will be using the same financial management
manual developed for ERRP Project. This manual will be subject to updating for this project.
The financial management manual documents the Project’s implementation of internal control
functions and processes and describes the responsibilities of PMT staff which are summarized in
terms of authorization and execution processes. The expenditure cycle will specify the following
steps: (i) technical approvals for civil work and deliverables by consultants, (ii) administrative
approval by each PMT Manager, (iii) issuance of payments will be made upon receipt of
supportive documentation and written requests signed by authorized officials, and (iv)
verification by the financial officer of the accuracy and compliance of the payment requests with
the loan agreement. Figure 2 above demonstrates the flow of funds and documentation. The bulk
of the Project’s expenditures will finance the following:
(a) About 5-6 civil work contracts will be signed, mainly for: (i) Rehabilitating three sections
of Expressway 1 including maintenance, partial rehabilitation and road safety
improvement and (ii) construction of 23 km of Girsheen – Suheila Intersection (co-
financed with KRG)
(b) Consultant services covering: (i) Institutional arrangements and capacity building, (ii)
Design and Supervision consulting firms; (iii) Individual consultants to strengthen the
capacity of the PMTs, and (iv) any other consulting services required during the
implementation of the project
(c) Relatively small quantities of goods such as: laboratory equipment, IT equipment and
office equipment and office furniture.
12. Civil work contracts will be financed mainly through direct payments. Independent
private consulting firms, financed from the Loan, will be contracted to perform construction
supervision on the ground. All claims will be verified (technically) by the consultancy firm
before being processed further for payment by the PMT. On a monthly basis, the Financial
Officers will reconcile the Project account bank statement with the account book balance.
Reconciliations should be prepared by the Financial Officers and checked by an independent
person. All reconciling items (if any) should be listed, explained and followed up on. Copies of
the reconciliation together with the account bank statement should be kept in the Project files and
should be attached to the IFRs.
13. Financial Audit: The Project’s financial statements will be audited annually by an
independent auditor acceptable to the Bank, in accordance with internationally accepted auditing
37
standards and terms of reference cleared by the Bank. The PMTs will be responsible for
preparing the TORs for the auditor and will submit them to the Bank for clearance. The SCRB
and GDRB should recruit the independent auditors no later than six months after loan
effectiveness. The audit report will be sent to the Bank no later than six months following the
end of the Project’s fiscal year. The report shall include an opinion on the Project’s financial
statement. The auditor will also be requested to provide an opinion on the Project’s effectiveness
of internal control system. Finally, a management letter shall accompany the audit report,
identifying any deficiencies in the control system the auditor finds pertinent, including
recommendations for their improvement.
14. Technical Audit. The Project will finance technical audit of construction work
performed under signed civil construction contracts. This can be part of/or separate of the
financial audit mentioned above. The PMTs will be responsible for the drafting of the TORs for
the auditor and for submitting them to the Bank for clearance. The main purpose of the technical
audit is to express opinions on: i) whether works were carried out in accordance with the
specifications as per the signed contracts, and ii) whether works undertaken were part of an
approved expenditure program.
Disbursements
15. Designated Accounts (DAs). To ensure that funds are readily available for project
implementation, two US Dollar DAs will be opened for SCRB (category 1) and GDRB (category
2 and 3). The names of authorized signatories and corresponding specimens of their signatures
would be submitted to the Bank prior to the receipt of the first Withdrawal Application. The
Ceiling of the Designated Accounts would be US$ 5,000,000.00 for each DA. SCRB and GDRB
will be responsible for submitting monthly replenishment applications with appropriate
supporting documentation.
16. Parallel Financing by Financing Partners: The Islamic Development Bank’s and the
World Bank’s contribution to the Program will be provided through parallel financing towards
the Program’s activities. The Bank will disburse its funds through DAs as explained above. Also,
the Islamic Development Bank and the World Bank will each finance specific activities without
any co-financing arrangements of same activities. The civil work category under GDRB will be
co-financed by the World Bank and KRG.
17. The proceeds of the Loan will be disbursed in accordance with the World Bank's
Disbursements Guidelines dated May1, 2006 that will be outlined in the Disbursement Letter and
forwarded to the Bank after the signing of the Loan Agreement. Transaction-based disbursement
will be used under this Project. Accordingly, requests for payments from the Loan will be
initiated through the use of Withdrawal Applications (WAs) either for direct payments,
reimbursements and replenishments to the DA. All WAs will include appropriate supporting
documentation, including detailed Statement of Expenditures (SOEs) for reimbursements and
replenishments to the DA. The category of Eligible Expenditures that may be financed out of the
proceeds of the Loan and the percentage of expenditures to be financed for Eligible Expenditures
is spelled out in the Loan Agreement.
18. E-Disbursement. The World Bank has introduced e-disbursement for all projects in Iraq.
Under e-Disbursement, all transactions will be conducted and associated supporting documents
and IFRs scanned and transmitted online through the World Bank’s Client connection system.
38
The use of e-Disbursement functionality will streamline online payment processing to (i) avoid
common mistakes in filling out WAs; (ii) reduce the time and the cost of sending WAs to the
Bank; and (iii) expedite the Bank processing of disbursement requests.
19. Statements of Expenditures (SOEs). All Reimbursement and DA Replenishment

Applications for withdrawal of proceeds from the loan account will be fully documented, while
(a) expenditures under contracts with an estimated value of US$ 500,000 or less for Works, (b)
under contracts with an estimated of US$ 300,000 or less for Goods; (c) under contracts with an
estimated value of US$ 100,000 or less for and Consulting Firms; and (d) under contracts with
an estimated value or less of US$ 50,000 for Individual Consultants, Incremental Operating
Costs, Training, and Workshops will be claimed on the basis of SOEs. The documentation
supporting expenditures will be retained at Project Management Teams and will be readily
accessible for review by the external auditors and Bank implementation support missions.
39
Table 6: Categories of Eligible Expenditures and the Percentage of Expenditures to be Financed
by the Loan
Percentage of
Amount of the Expenditures to
Category Loan Allocated be Financed
(expressed in US$) (inclusive of
taxes)
(1) Goods, Works , Training, Operating Costs, non-
Consulting Services and Consultants’ Services for
293,772,500 100%
Components A.1, A.2, A.3, A.4, A.5, B.1, B.3, B.4, and
C.1 of the Project
(2) Works for Component A6 of the Project 58,500,000 69%
(3) Goods, Training, Operating Costs, non-Consulting
Services and Consultants’ Services for Components A.7, 1,840,000 100%
B.2, and C.2 of the Project
Amount payable
pursuant to
Section 2.03 of
the Loan
(4) Front End fee 887,500 Agreement in
accordance with
Section 2.07 (b)
of the General
Conditions
TOTAL AMOUNT 355,000,000
20. “Incremental Operating Costs” means Project related incremental costs incurred by the
PMTs on account of communication, translation and interpretation, printing, procurement-related
advertising, office supplies, banking charges, Project related travel including per diem
accommodation and transportation, vehicle rental and fuel, postal fee, and other miscellaneous
costs directly associated with Project implementation subject to prior approval by the World
Bank.
21. Supervision and Independent Verification: The Project will require close supervision
during the start-up phase to ensure that the PMTs’ fiduciary requirements are completed in a
timely manner, minimizing project fiduciary risk. Throughout Project implementation,
supervision will be conducted every quarter to ensure compliance with Bank requirements and to
develop internally generated Project risks. For at least part of the project, the Bank will use the
services of the already hired a FMA to perform the following:
a. Verifying and validating to the Bank the projects’ FM and procurement arrangements and
internal controls agreed upon with the implementing agencies.
b. Monitoring the physical progress of Project activities.
c. Providing advisory services and technical support to the PMTs related to the Project’s
FM and procurement arrangements and the generation of periodic and reliable financial
reports.
22. To perform their responsibilities, the FMA will be granted access to the Project
documents at the PMTs.
40
Procurement
23. Procurement for this project will be carried out in accordance with the World Bank’s
Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD
Loans and IDA Credits and Grants” dated October 15, 2006 and revised in January 2011,
“Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and
IDA Credits and Grants by World Bank Borrowers” dated January 2011 (Procurement
Guidelines); and “Guidelines: Selection and Employment of Consultants under IBRD Loans and
IDA Credits and Grants by World Bank Borrowers” dated January 2011 (Consultant Guidelines),
and the provisions stipulated in the Loan Agreement. For each contract to be financed by the
Loan, the procurement methods or consultant selection methods, estimated costs, prior review
requirements, and time frame are agreed between the Borrower and the Bank team in the
Procurement Plan (PP). The PP will be updated at least annually or as required to reflect the
actual project implementation needs and improvement in institutional capacity. In addition
procurement procedures for National Bidding documents and sample bidding documents can be
found in the Master Implementation Manual (MIM).
24. Summarized Procurement Plan: below are the summarized procurement activities to be
carried out during the first 18 months of project effectiveness and the prior review threshold.
25. Goods, Works, and Non-consulting services.

(a) Procurement Method and Prior Review Threshold: Procurement Decisions subject to
Prior Review by the Bank as stated in Appendix 1 to the Procurement Guidelines:
Table 7: Methods for Procurement of Works and Threshold
Procurement Method
Procurement Method Threshold (US$)
ICB and LIB (Goods) > 500,000
NCB (Goods) ≤ 500,000
Shopping (Goods) ≤ 100,000
ICB (Works) > 5 million
NCB (Works) ≤ 5 million
Shopping (Works) ≤ 200,000
(b) Prequalification. Bidders for R7 and R8 shall be prequalified in accordance with the
provisions of paragraphs 2.9 and 2.10 of the Procurement Guidelines.
(c) Any Other Special Procurement Arrangements: Three ICB works packages will be
financed under retroactive financing and advance procurement.
(d) Summary of the Procurement Packages planned during the first 18 months after project
effectiveness (including those that are subject to retroactive financing and advance
procurement)
41
Table 8: Key Works Contracts to be financed by TCP
Estimated Review Invitation
Procurement
Ref. No. Description Cost by Bank to Bid
Method
US$M (Prior/Post) Date
TCP.W.A1.EW.1.R7 Rehabilitation of
Oct 20,
Expressway 1 R7 (Nasiria- 104 ICB Prior
2013
Rumaila, 145 km)
TCP.W.A1.EW.1.R8 Rehabilitation of
Expressway 1 R8 (Rumaila - Oct 20,
107 ICB Prior
Safwan and Basra Junction – 2013
Basra, 112 km)
TCP.W.B.1 Construction of a new road
Jun 30,
section between Girshen - 81.0 ICB Prior
2014
Suheila Intersection, (23 km).
26. Selection of Consultants

Prior Review Threshold: Selection decisions subject to Prior Review by Bank as stated in
Appendix 1 to the Consultant Guidelines:
Table 9: Methods for Selection of Consultants and Thresholds

Selection Method Prior Review Threshold
1. Competitive Methods (Firms) ≥ 0.2 million
2. Single Source (Firms) ≥ 0.1 million
3 Individual Consultant ≥ 0.1 million
(e) Short list comprising entirely of national consultants: Short list of consultants for
services, estimated to cost less than US$300,000 equivalent per contract, may comprise
entirely of national consultants in accordance with the provisions of paragraph 2.7 of the
Consultant Guidelines.
(f) Any Other Special Selection Arrangements: Two QCBS for selection of supervision
consultants will be financed under retroactive financing and advance procurement.
(g) Consultancy Assignments with Selection Methods and Time Schedule
Table 10: Key Services Contracts to be financed by TCP

Estimated Review
Ref. No. Description of Selection Issue RFP
Cost by Bank
Assignment Method date
US$M (Prior/Post)
TCP.CON.QCBS.R7&R8 Supervision Consultant 8.52 QCBS prior Oct 23, 2013
TCP.CON.QCBS.KRG Supervision consultant 3.50 QCBS prior Jun 10, 2014
27. Procurement risks are in particular inherent to the following: (i) a clear legal framework
is lacking; the legal framework for procurement in Iraq does not as a practical matter have a
procurement law. CPA Order 87 17, imposed by the transitional authority, is not generally
17
http://www.iraqcoalition.org/regulations/20040516_CPAORD_87_Public_Contracts.pdf
42
regarded as applicable and is for the most part ignored by practitioners leaving the system
without the pinnacle hierarchical legislative instrument found in a normal legal framework for
public procurement, (ii) standard bidding documentation not used by procurement practitioners,
(iii) limited opportunity for Bank staff to supervise the project in the field; (iv) weak capacity of
PMT in procurement and management of large contracts; (v) high risk and weak control
environment, Iraq’s ability to manage public resources is undermined by security issues and
outdated practices, moreover; Iraq has a low ranking in Transparency International’s Corruption
Perception Index 18, (vi) weak capacity of local construction companies and lack of interest of
international contracting companies to participate for some areas in the country due to security
restrictions, and (vii) delays in implementation due to the lack of experience in procurement
planning and the security conditions in Iraq.
28. Based on the overall assessment of the two implementing agencies and the information
available on the procurement environment in Iraq, the overall procurement risk is judged to be
High. This rating therefore requires the assignment of dedicated and qualified procurement
manager to handle the project, as well as the provision of formal and on–the-job training to the
project team on procurement and project management both before and during project
implementation.
29. Mitigating Measures: The following measures, corresponding to the risks identified
above, are expected to be implemented: (i) Bank procurement guidelines and the Iraq Master
Implementation Manual (MIM) will be followed; (ii) a Bank local consultant based in Iraq will
assist in the supervision and spot physical inspections; (iii) assignment of dedicated and qualified
procurement manager to handle the project; (iv) hiring international or regional consulting firms
to support the PMT in the pre award stage and supervision of the large civil works contracts; (v)
project design kept simple and procurement will be carefully packaged to encourage qualified
contractors to participate in bids, (vi) introduce flexibility in the pre-qualification and bidding
documents to encourage international companies to enter into joint-ventures with locals as well
as allow bidders to take extra insurance as well as factor in the costs of security, (vii) close
supervision of the Bank staff and the local consultant from the field, as well as (viii) frequent and
on–the-job training to the project team on procurement and project management during project
implementation will be provided.
Environmental and Social (including safeguards)

30. The Project will support two key road works in Iraq, the rehabilitation of Expressway 1
which runs from south to west across central-southern Iraq, and the widening and partial
realignment (including construction of new 2x3 lanes road section) of the Girsheen - Suheila
section of the North-South transport corridor in KRG which connects to the Turkey and Syria
borders. The work on both roads is expected to result in significant economic and socio-
economic benefits for the Iraqi population at large. Both roads are vital freight, travel and
tourism corridors. More than 3,000 trucks travel the KRG corridor daily transporting supplies
such as food, machinery and oil-related products. The roads are important contributors to the
economy and are central in rebuilding the country. Beyond the economic benefits, the Project
will greatly improve road safety by installing median strips with barriers, improving camber and
road surface, improving delineation of Right-Of-Ways (ROWs) and installing fencing to prevent
animals and people crossing roads with fast-moving traffic. Currently, the accident rate on both
18
Transparency International 2012- http://www.transparency.org/cpi2012/results
43
roads is unacceptably high. The Project will also support the relocation of small business entities
which have encroached on the right-of-way or whose operation will be adversely affected by the
installation of road barriers and/or roadside fencing. These entities will be relocated to dedicated
lay-bys where the businesses will be clustered around a “magnet” gas station. Replacement
business structures will be either equivalent or improved in quality and will also benefit from
dedicated parking areas and provision of basic services (W.C.s, waste collection).
31. Environmental and Social implications. The negative environmental impacts of the
Expressway 1 road works are expected to be minor, temporary, and site-specific in nature. The
negative social implications of these road works involve the relocation of 125 small business and
vending entities which have encroached on the right-of-way or which are located immediately
adjacent to the right-of-way and will be adversely affected by the installation of road barriers and
fencing; and the rehabilitation of existing underpasses which facilitate the movement of people,
farm machinery and animals from one side of the Expressway to the other. These negative
environmental and social impacts will be mitigated by implementation of the ESMP mitigation
provisions as disclosed on August 21, 2013.
32. Potential negative impacts resulting from project activities on the Expressway and
corresponding mitigation measures, as identified by the ESIA, ESMP and RAP are summarized
in Table 11 below.
44
Table 11: Expressway 1 Project Impacts and Mitigation Measures
Impacts Mitigation Measures
Impacts on air quality and noise from road (i) Covering waste disposal trucks with tarpaulins
rehabilitation, mainly from road stripping, vehicle during transportation and limiting travel speed; (ii)
loading and unloading, heavy machinery usage and ensuring that vehicles and machinery comply with
other construction-related activities. emissions standards; (iii) maintaining construction
activity noise levels at acceptable levels; (iv)
respecting ambient air quality limits; (v) providing
personnel and workers operating on site with
hearing and breathing protection gear.
Fragmentation of habitats and communities on Rehabilitation and clearing of existing under-passes
either side of the Expressway due to installation of along the Expressway which are appropriate for
road fencing. farm machinery, herder, animal and human traffic.
Occupational and health safety risks from the road (i) Complying with Iraqi rules and regulations on
rehabilitation works, including eye and respiratory occupational health and safety; (ii) providing
risks, physical injuries, and over-exposure of protective gear for workers, including helmets,
workers to sunlight, heat, dust and noise. boots, gloves, masks, and earplugs; (iii) providing
first aid kits at work sites and necessary
information and training on rescue and emergency
response procedures; (iv) prohibiting admission of
dependents of employees, underage workers, and
members of the public to the construction sites.
Impacts on soils and sand from the road works and (i) Using existing paths and roads for transportation
travel of heavy trucks and machinery, including and avoiding creation of new tracks off the existing
soil/sand compaction, destruction of vegetation, road alignment that would compact soils or disrupt
deposits of construction materials and waste, and vegetation; (ii) removing waste materials from
sewage water. construction immediately; (iii) ensuring proper
location and covering by tarpaulin of construction
waste remaining temporarily on site; (iv)
designating a suitable location for safe storage of
construction waste onsite (void of vegetation and
natural habitats and outside depressions and surface
water drainage; and (v) preparing and
implementing a construction waste management
disposal plan for the road.
Production and disposal of construction waste (i) Designating a suitable location for safe storage
generated by road rehabilitation of construction waste onsite; (ii) covering onsite
waste with tarpaulin; (iii) carting waste away from
onsite storage location to an outside location
identified for disposal purposes; (iv) preparing and
implementing a waste disposal management plan
for the site.
Relocation of small businesses and vendors which Relocation of small businesses and vendors to
have encroached on the existing ROW or which are equivalent or improved structures located in
located immediately adjacent to the ROW such that dedicated lay-bys with parking and basic services
their operation will be adversely affected by the (W.C.s, waste management) clustered around a
installation of road barriers and roadside fencing. “magnet” gas station.
33. The negative environmental and social impacts of the Semel-Ibrahim El-Khalil road
works are expected to be more significant than those for Expressway 1, given that the road will
be widened from two to six lanes with the addition of a median barrier strip and newly delineated
45
ROWs. The road work is being phased across four separate sections. The alignment of the
section (3) to be supported by the Bank is still under consideration, construction of two KRG-
supported sections (1 and 4) is already underway, and tendering for one other section (2) is about
to commence. Improved public consultation and safeguards measures will need to be applied to
the KRG-supported sections of the road. Given this, and that alignment of the Bank-supported
section is still to be determined, the client has prepared an ESIAF and RPF during Project
preparation, and will have a full ESIA and RAP prepared immediately following project
effectiveness and prior to commencement of work on the Bank-supported road section.
34. Environmental and Social safeguard policies. Based on the nature of the investments,
and Bank management’s decision that application of the Environmental and Social Safeguards
Assessment Framework (ESSAF) was no longer appropriate in Iraq, the Project has been
assigned a Category A rating (full assessment), with the safeguards policies on Environmental
Assessment (OP 4.01) and Involuntary Resettlement (OP 4.12) being triggered. With regards to
Expressway 1, the client has complied by contracting the services of an independent third-party
consultant who has worked under terms of reference approved by the World Bank, and prepared
an ESIA, ESMP, and RAP. The ESIA includes an assessment of potential environmental and
social impacts of project activities related to the rehabilitation of Expressway 1, assesses the
likely significant of such impacts, and recommends mitigation measures.
35. The ESMP prepared for Expressway 1 aims to ensure that project activities relating to
Expressway 1 comply with national legal requirements and World Bank’s environmental and
social policies. In particular, the ESMP:
(a) Recommends mitigation measures for all potentially adverse environmental and social
impacts;
(b) Includes details on the structure and operation of an accessible and transparent Grievance
Redress Mechanism (GRM) which citizens can use to obtain information on the project
and/or lodge complaints relating to project activities;
(c) Includes options to increase the positive impacts of financed investments;
(d) Provides an assessment of training and capacity building needs for project stakeholders
and the PMTs, together with recommended frequency and cost estimates; and,
(e) Describes the procedures and responsibilities for monitoring the impacts of Expressway
1, implementing mitigation measures, and reporting to the World Bank.
36. For the North-South transport corridor in KRG, the client selected an independent
consultant who prepared and ESIAF and RPF for sections 2 (Batel – Girsheen intersection) and 3
(Girsheen - Suheila intersection) which were cleared and then disclosed on August 21, 2013.
Once the alignment of section 3 is determined, the client will prepare and ESIA, ESMP and
RAP/ARAP for sections 2 and 3 (acceptable to the Bank), and disclose them prior to
commencement of road works.
37. Capacity for safeguards implementation, monitoring and reporting. The level of
expertise within the PMT of the MOCH in Baghdad and the PMT of GDRB in Erbil regarding
environmental and social safeguards is considered limited. A series of environmental and social
safeguards training for the PMTs was initiated in June 2013 and will be continued. Additional
training to deepen and further strengthen both environmental and social safeguards knowledge
46
and capacities of PMT staff and other stakeholders will be undertaken during Project
implementation.
38. The GDRB-PMT under the current conditions does not have the capacity to implement
the ESMP. Therefore, it is recommended to build the capacity of the PMT at GDRB as follows:
(a) Recruitment of environmental and social safeguards specialists at the PMT, either as
staff members or as external consultants who have the required experience to
implement and monitor the ESMP implementation and monitor and assess the
effective operation of project GRMs.
(b) Carry out a training program, as proposed in the ESIAF, for the PMT members,
including Project manager and site engineers in order to enhance the ESMP
implementation and ensure that the proposed environmental and social mitigation
measures are executed fully and effectively during the life of the project.
39. PMT at GDRB shall ensure optimal connection and coordination between the GDRB and
the Environmental Protection and Improvement Board (EPIB) which replaced the Ministry of
Environment in KRG through the establishment of a proper reporting mechanism that enables
EPIB to audit and review the implementation of the ESMP during various project activities.
Consequently, it is recommended to include members for the EPIB in the capacity building
program proposed for PMT members, in order to guarantee and build common understanding
between members and create the required synergies between both institutions to obtain the best
possible results from ESMP implementation.
40. The SCRB-PMT in Baghdad also lacks the internal capacity to effectively monitor the
implementation of the ESIA and RAP for Expressway 1. It is recommended that experienced
environmental and social safeguards individual consultants or a firm is hired on a term basis to
assist the PMT during project implementation. The implementation of the ESMP for all sections
whether financed by the GoI, IsDB or the IBRD, will be carefully monitored by the PMT and its
technical/safeguards staff and consultants and a dedicated section describing progress will be
included in all progress reports submitted to the World Bank.
41. The Environmental and Social specialists within the SCRB-PMT will be responsible for
monitoring compliance with the ESMP, and will work in close collaboration with the Ministry of
Environment. Their responsibility is to follow up and monitor periodically the contractor, the
consultant and the sub-project officer and review monthly reports on contractor compliance.
They will also be responsible for monitoring the effective operation and responsiveness of
project GRMs. The Ministry of Environment has nominated a focal point to work closely with
SCRB-PMT to monitor the air quality aspects during construction and operation/maintenance
phases of this project.
42. Consultations and disclosure. Stakeholder consultations and disclosure of information

were carried out during the preparation of the ESIA/ESMP and RAP for the Expressway 1 and
ESIAF and RPF for the Girsheen - Suheila section of the North-South transport corridor in KRG.
For Expressway 1, Consultations were held with all small business and vending entities which
have encroached on the ROW, with communities located near the ROW, with municipal and
public sector entities along the route, and with larger public groups in town hall meetings held in
locations towards the western and eastern ends of the Expressway. All stakeholders and
47
interested parties were given the opportunity to express their views on how the rehabilitation of
the Expressway might affect their livelihoods, were informed of their rights if they are to be
adversely affected by project activities, were informed of the grievance redress mechanism, and
were engaged in discussion about the suitability of possible mitigation measures. The structure
and operating parameters of the Grievance Redress Mechanisms are clearly outlined in the
ESIAs, ESMPs and RAPs.
43. Stakeholders expressed strong support for the Project given the expected socio-economic
and safety benefits Small business operators and vendors who will be relocated to the new
service lay-bys have expressed strong support for the proposed mitigation measures, favoring
relocation to new and improved structures in lay-bys with dedicated parking and basic services.
They view these mitigations as strongly advantageous to their business operations. PAPs also
appreciated the possibility of temporary engagement as workers in the road
construction/rehabilitation crews.
44. For the Semel - Ibrahim El-Khalil transport corridor, public consultations on Project
activities for Sections 2 and 3 were initiated in July 2013. Interviews and discussions were held
with individual PAPs and small groups of PAPs in informal settings along Section 2 and along
the four alternative alignments for Section 3. These informal interviews and discussions revealed
widespread support for the improvement and upgrading of the transport corridor. A larger town-
hall type public consultation was also held in July 2013 in Dohuk which was attended by
municipal officials, community representatives, and farmers. Additionally, a strong contingent
of women from several women’s NGOs and different communities participated. Some concerns
were expressed about the possible bifurcation of communities by the road if Road Alignment 1
(existing road) is selected and it was agreed that further and deeper consultations would be held
in the event that Road Alignment 1 emerged as the likely alignment. It was acknowledged
though that the stronger social safeguards concerned associated with Alignment 1 meant that it is
unlikely to be selected. Once the alignment has been finalized for Section 3, and during the
preparation of the ESIA and RAP/ARAP, another round of public consultations will take place
before finalizing these documents.
Monitoring and Evaluation

45. A Project Coordination Unit has been established under MOCH and among its
responsibilities is the follow up on the results framework of the project and report on progress
and compliance with the agreed procurement and safeguards guidelines and policies.
48
Annex 4: Operational Risk Assessment Framework (ORAF)
Iraq: Transport Corridors Project
Project Stakeholder Risks

Stakeholder Risk Rating High
Risk Description: Risk Management:
The Minister of Construction and Housing (MOCH) is The Bank will maintain close communication with senior MOCH officials to sustain
leading the agenda of improving the efficiency and the their commitment to achieve the Project Development Objectives, especially in the area
governance of the road sector. Yet, there is a possibility of of institutional building and transport sector governance. If changes to the MOCH were
a change in leadership and priorities which could affect to be introduced after the elections, the Bank will maintain its engagement with the
the project implementation. newly appointed MOCH officials and corroborate commitment to the PDO and Project
components, building on the strong foundation and capacity resulting from the ERRP
implementation.
Resp: Status: Stage: Recurrent: Due Date: Frequency:
Client In Progress Both Continuous
Implementing Agency (IA) Risks (including Fiduciary Risks)
Capacity Rating High
- Procurement
The Project will be implemented by two PMTs, one at • Assignment of dedicated and qualified procurement manager, provision of
SCRB within the Ministry of Construction and Housing in training to the project team.
Baghdad, and the other one at the GDRB KRG. Each • Procurement packages have been prepared and reviewed during appraisal, and
PMT will be responsible for planning and coordinating will be cleared by the Bank before Board presentation.
specific activities, including FM (payment authorization,
disbursement, accounting, reporting and audit), Resp: Status: Stage: Recurrent: Due Date: Frequency:
procurement of construction companies, and consulting Client In Progress Both Continuous
services (and related contract management), and
Risk Management:
49
monitoring and evaluation. - Financial Management
• Seconding two full-time financial officers (FO). On-field supervision up to four
- Procurement risks are inherent to the following: times a year. On field training on World Bank FM & disbursement arrangements.
(i) a clear legal framework is lacking; the legal framework • Streamlining arrangements through the PMT to process contract approvals and
for procurement in Iraq does not as a practical matter have authorize payments
a procurement law. CPA Order 87, imposed by the
transitional authority, is not generally regarded as
applicable and is for the most part ignored by practitioners Client In Progress Both Continuous
leaving the system without the pinnacle hierarchical
legislative instrument found in a normal legal framework
for public procurement, (ii) standard bidding
documentation not used by procurement practitioners, (iii)
limited opportunity for Bank staff to supervise the Project
in the field; (iv) weak capacity of PMT in procurement
and management of large contracts; (v) high risk and weak
control environment, Iraq’s ability to manage public
resources is undermined by security issues and outdated
practices, moreover; Iraq has a low ranking in
Transparency International’s Corruption Perception Index;
(vi) lack of interest of international contracting companies
to participate for some areas in the country due to security
restrictions, and (vii) delays in implementation due to the
lack of experience in procurement planning and the
security conditions in Iraq.
- Financial Management
Based on the results of the preliminary assessment, the
overall FM risk is “High”. With mitigation measures in
place, the project will have acceptable project FM
arrangements; its FM risk rating will be “High”. The FM
risk is assessed as “High” mainly due to: i) limited
capacity at both SCRB and GDRB to meet the Project’s
financial management requirements, ii) security conditions
50
that do not allow visits by the Bank team to perform
physical verification, iii) overall weaknesses and
shortcomings in the control environment, and iv) limited
accounting and reporting systems to provide timely and
comprehensive information.
Governance Rating High
Throughout project preparation SCRB and GDRB Should there be a change in the SCRB and GDRB and PMTs leadership, the Bank will
directors and PMT leaders have engaged in the project follow-up closely with the new representatives and PMT leaders to ensure their full
design and their comments and suggestions have been understanding of the project objectives and supported activities towards building
incorporated to ensure full ownership. The change in the commitment and ownership of the these objectives.
leadership of these two agencies may result in temporary
disruption during project implementation.
Bank In Progress Both Continuous
Risk Management:
• Governance dialog; Supporting Governance Action Plan
• Capacity building in Board of Supreme Audit; Inspectors General
• Use of Fiduciary Monitoring Agent
Bank In Progress Both 3–6
monthly
Project Risks
Design Rating High
Design of the physical components is relatively The Bank has reviewed and commented on the detailed design for Expressway 1 using
straightforward, but greater attention should be given to several experts in this field, assessment of procurement and FM capacities have been
safety measures and the design of rest areas. However carried out and mitigation measures proposed.
with two PMTs, procurement and FM being High risk,
51
the design is also considered to be a high risk Bank Completed Preparation
Social and Environmental Rating High

The negative environmental impacts of the Expressway 1 These negative environmental and social impacts will be mitigated by the
road works are expected to be minor, temporary, and site- implementation of the ESIA, ESMP and RAP. Close monitoring of compliance with the
specific in nature. The negative social implications of measures stipulated in these documents will be carried out by the Bank, the PMTs and
these road works involve the relocation of 125 small their consultants.
business and vending entities which have encroached on
the exiting ROW, and the rehabilitation of existing
underpasses which facilitate movement of people, farm Both In Progress Both Continuous
machinery and animals from one side of the Expressway
to the other.
Program and Donor Rating Moderate
In addition to the Bank resources, substantial The Islamic Development Bank (IsDB) has confirmed its participation in financing this
Government's and donors’ resources would be required to project (Expressway 1). IsDB confirmed to the World Bank and MOCH the amount of
rehabilitate a large portion of Expressway 1 in order to financing and next steps. The Government of Iraq has allocated funds to start the
realize the overall project benefits. In addition, the rehabilitation of a section of Expressway 1 and KRG confirmed the availably of
construction of the section between Girsheen and Suheila counterpart funding to co-finance the construction of the section between Girsheen and
Intersection would also require substantial funds from the Suheila intersection.
Kurdish Regional Government. Risk of a shortfall in
Government (Baghdad and KRG) and donor funding
would cause delays or prevent activities from being Client Completed Negotiations
undertaken.
Delivery Monitoring and Sustainability Rating High
MOCH in Baghdad and Erbil lack the experience in At appraisal, the parties agreed on a set of monitoring and evaluation framework that are
project monitoring and evaluation, despite their measurable and attributable to the project activities including contracting of consultant
involvement in ERRP. The maintenance of existing assets to conduct technical and financial audits. A capacity building program will be designed
52
is falling behind and this poses the risk of not maintaining to ensure that the institutional capacity is there to review, monitor and report on project
the assets that are being created or rehabilitated under this progress. Component C of the Project will provide necessary assistance in monitoring
Project. and evaluation.
Component B includes the development and implementation of a five-year maintenance
program which will include the Project assets.
Both In Progress Implementation Continuous
Overall Risk
Overall Implementation Risk: Rating High
Risk Description:
(i) security situation,
(ii) low response from international contractors and consultants
(iii) Not complying fully with the Bank’s fiduciary and safeguard requirements might influence the project implementation.
(iv) procurement and FM delays if new implementation arrangements will be designed for this project.
The Bank team will allocate adequate resources during project implementation for technical assistance as well as fiduciary and safeguard training
and supervision, to address the quality and compliance issues. The Bank’s Fiduciary Monitoring Agent (FMA) will provide support to the team
through physical verification and monitoring of procurement and financial management. A term-based, social and environment consultant will be
hired to assist both PMTs in implementing the mitigation plans.
53
Annex 5: Implementation Support Plan
A. Strategy and Approach for Implementation Support
1. Joint Supervision Missions: The World Bank and the Financing Partners (FPs) including
IsDB will carry out joint structured supervision missions at least every six months. The joint
supervision missions will monitor the progress on the World Bank financing, the parallel
financing from the FPs. The Statement of Mission Objectives (SMO) and the timing of the
missions will be agreed in advance with all parties. At the end of each mission a draft Aide
Memoire will be presented at the wrap-up meeting where all stakeholders will be invited. The
final joint Aide Memoire including recommendations for a way forward, list of agreed actions,
changes and amendments to the work program etc. will be agreed by all parties.
2. The joint supervisions missions would also allow for required policy dialogue with the
Iraqi governmental institutions to be conducted jointly with the FPs.
3. Skills for Supervision: The following skills are required for the adequate supervision of
the project:
(i) Task Team Leader (TTL): In addition, to ensuring adequate implementation support,
the TTL will ensure a sound relationship with the FPs and ensure continuous dialogue
with the stakeholders.
(ii) Transport Specialist: will support the supervision of tasks related primarily to traffic
safety improvement.
(iii) Highway Engineering Expert: will primarily oversee the implementation of the
Expressway 1 and highway improvement as well as following up on institutional
restructuring and development.
(iv) Operations Officer: will follow up on key operations aspects including on-the-ground
communication with the parties.
(v) Environmental Safeguards Specialist: will be required for the duration of the project.
Tasks related primarily to the monitoring of compliance with the safeguards policy
that may be triggered by the Project and the mitigation measures that were put in
place.
(vi) Social Safeguards Specialist: will be required for the duration of the project. Tasks
primarily relate to the monitoring compliance with the ESMPs and the social
mitigation measures specified therein. Additionally, monitoring the effective and
transparent operation of project GRMs will be important. Furthermore, monitoring of
female employment and training agreements in the management and operations units
of the Citizens’ Roadway Reporting System will be required.
54
(vii) Procurement Specialist: will ensure compliance with World Bank procurement
guidelines.
(viii) Financial Management Specialist: will ensure compliance with World Bank FM
guidelines.
(ix) M & E Specialist: will be required primarily at the start of the project to comment on
the project M & E systems setup and the design and implementation of Public
Satisfaction Surveys.
(x) FMA representatives: will also participate in the mission providing feedback from
their field investigations and reflection on PMT’s capacity through their routine visits
to the PMT offices.
Other: The FPs will provide additional experts for project supervision and monitoring as
needed.
B. Implementation Support Plan
Table 12: Bank Supervision Plan During first year

Time Focus Skills Needed Resource Partner Role
Estimate (MFA)
April 2014 Project Launch TTL, Procurement, US$35,000
FM, M&E, Social and
Environment
Safeguards
Quarterly Safeguards Site Safeguards US$30,000
Visits Specialists/Consultants
Semi-annual Project Supervision TTL, Procurement, US$40,000 per
FM, M&E, Social mission
Safeguards, SWM
Specialist,
Environment
Engineering Expert,
Institutional
Development
Specialist
June 2016 Mid-term Review TTL, Procurement, US$50,000
Supervision FM, M&E, Social
Safeguards, SWM
Specialist,
Environment
Engineering Expert,
Institutional
Development
Specialist,
Environmental
Economist
55
Table 13 Bank Supervision Team Skills Mix Required
Skills Needed Number of Number of Trips Comments
Staff Weeks
Task Team Leader 6 4 Based in the Region
Transport Specialist 4 2 HQ Based
Operations Officer 4 2 Country Office Based
Highway Engineer 4 2 Consultant
Institutional Development Specialist 4 2 Consultant
Environmental Safeguards Specialist 4 2 Consultant
Social Safeguards Specialist 4 2 HQ Based
M & E Specialist 4 2 Country Office Based
Procurement Specialist 4 2 Country Office Based
Financial Management Specialist 4 2 Country Office Based
ICT Specialist 3 1 Based in the Region
Table 14: Financing Partners

Title Institution/Country Role
Sector Manager Islamic Development Bank Leading Dialogue with
Government and IBRD
Transport Economist Islamic Development Bank Transport Economic Analysis
Procurement Officer Islamic Development Bank Procurement Review
Table 15: Bank Staff and Consultants who worked on the Project include:
Name Title Unit
Ibrahim Dajani Senior Operations Officer - Task Team Leader (MNSTI)
Said Dahdah Transport Specialist (MNSTI)
Nazaneen Ali Senior Procurement Specialist (MNAPC)
Jad Mazahreh Senior Financial Management Specialist (MNAFM)
Soran Ali Operations Officer (MNSTI)
Fowzia Hassan Operations Officer (MNSEE)
Carolyn Winter Senior Social Development Specialist (MNSSU)
Nina Bhatt Lead Social Development Specialist (MNSSU)
Africa Eshogba-Olojoba Senior Environmental Specialist (MNSEE)
Dariusz Kobus Environmental Safeguards – Consultant (MNSSD)
Igor Jakanovic Highway Engineer – Consultant (MNSTI)
56
Name Title Unit
Gylfi Palsson Lead Transport Specialist – Team Advisor (LCSTR)
Evarist Baimu Senior Counsel (LEGAM)
Hassine Hedda Sr. Finance Officer (CRTLA)
AzebYideru Program Assistant (MNSTI)
57
Annex 6: Map
Map No. IBRD 40249
58
IRAQ
POPULATION CENTERS WITHIN AIRPORTS SECONDARY ROADS
EXPRESSWAY 1 2 KM OF EXPRESSWAY 1
FINANCING ARRANGEMENTS: PORT MAIN ROADS
Government of Iraq (GoI) NORTH–SOUTH ROAD CORRIDOR
FINANCING ARRANGEMENTS: SELECTED TOWNS EXPRESSWAYS
World Bank (IBRD)
Kurdistan Regional Government GOVERNORATE CAPITALS
Islamic Development Bank ( IsDB) GOVERNORATE BOUNDARIES
World Bank (IBRD) +
To Be Determined ( TBD) Kurdistan Regional Government NATIONAL CAPITALS INTERNATIONAL BOUNDARIES
38° 40° 42° 44° 46° 48°

TURKEY Darkar
- -
Zakhu
For detail, see SYRIAN
T UR K EY inset right. ARAB Derabun Rizgari
REP.
-
To Batman
DAHUK
Tig
ris
- - R.
Zakhu
- Batil
-
- -
To Al Qamishli DAHUK -
To Tabriz North–South Dahuk
Semel
- road corridor
Tig
Dahuk
R. 'Aqrah -
ris
- -
Rayat
NINAWÁ
-
-
Sinjar Mosul ERBIL 0 10 20 30 Kilometers
Erbil
-
36° 36°
Euphr To Dayr az Zawr
ates
R . N I N AW Á Dukan
As
- -
Sulaymaniyah
Al Hadr -
Kirkuk
- -
AT AS SULAYMANIYAH
SYRIA
S YRIA N -
TA'MIM ISLAMIC
A RA B To Dayr
az Zawr Beji
REP UBLIC
RE P. OF IRAN
Buhayrat al
-
Qadisiyah
-
Tikrit
SALAH AD
-
-
Al Qa'im
- -
'Anah DIN
- -
Samarra' - -
To Kermanshah
34° -
Al Hadithah -
Tharthar
DIYALÁ - -
34°
Al Miqdadiyah
Lake Al Khalis
-
Ba'qubah
To Hims
- -
'Akashat Expressway 1 Hitt Habbaniyah lluj-ah ma Kena'an
- -
Ar Ramadi a ar
l F l-K A A Al Hussainia
- - BAGHDAD
Habbaniyah BAGHDAD
Lake Abu Ghraib
Tullaiha
Rutba Razzaza -
Trebil Lake Al-Mahaweel WA S I T
To Amman Trebil Al Mahaweel
- -
Al Kut Tigris R
JO R D AN AL ANBAR Karbala' .
Al Hillah
- Nahr Al Qaryan -
To Dezful
KARBALA' -
BABIL Wasit
-
Qal’at Shakhir Al Hayy
32°
MAYSAN 32°
An Najaf - - -
Ad Diwaniyah
Nukhayb
-
Al 'Amarah Majar
Gham’mas - - Al Fajer
Eu
p
AL QADISIYAH Al Maimona
hra Al Naser
te s R.
- -
DHI QAR Al 'Uzayr
S A U D I AR ABI A
-
Al-Samawa - -
Ash Shatrah
An Nasiriyah
R8A: 31 km
To Al Jawf
AN NAJAF -
To Ahvaz
Manazil Alhajannah
40° Sidra Rumaylah Al Basrah (Basra)
ROMANIA UKRAINE -
As Salman
30° 40° RUSSIAN 50° 60°
Az Zubayr To -Bandar-e
R7: 145 km UmmQasr Mah Shahr
FEDERATION KAZAKHSTAN
BULGARIA Black Sea UZBEKISTAN AL
GEORGIA
Caspian
Sea
BASRAH Safwan Um Qasr
UmmQasr
30°
40°
GREECE
TURKEY
ARMENIA AZERBAIJAN
40°
TURKMENISTAN
30°
R8B: 81 km
-
To Ha'il
AL MUTHANNÁ KUWAIT
SYRIAN
CYPRUS ARAB
Mediterranean LEBANON REP.
Baghdad
ISLAMIC KUWAIT
Sea ISRAEL REP. OF
30°
West Bank
and Gaza
IRAQ IRAN
30°
S A U DI A R A BI A
JORDAN
KUWAIT
ARAB REP.
OF EGYPT BAHRAIN
-
To Hafar al Batin
-
To Ad Damman
SAUDI QATAR
ARABIA S AUD I ARABIA

UNITED ARAB
OMAN IRAQ
Red
20° EMIRATES
20° 28°
Sea
0 25 50 75 100 Kilometers
SUDAN
0 25 50 75 100 Miles
ERITREA REP. OF YEMEN
0 300 Kilometers This map was produced by the Map Design Unit of The World Bank.
The boundaries, colors, denominations and any other information
0 300 Miles
OCTOBER 2013
IBRD 40249
shown on this map do not imply, on the part of The World Bank
Group, any judgment on the legal status of any territory, or any
DJIBOUTI
10° Arabian endorsement or acceptance of such boundaries.
ETHIOPIA 10°
SOMALIA Sea
SOUTH SUDAN 40° 50° 44° 46° 48°
30°

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Report No: PAD648

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

PROJECT APPRAISAL DOCUMENT

IN THE AMOUNT OF US$355 MILLION

TRANSPORT CORRIDORS PROJECT

November 21, 2013

Transport and ICT

(Exchange Rate Effective October 8, 2013)

Currency Unit = Iraqi Dinars (IQD)

ABBREVIATIONS AND ACRONYMS

ARAP Abbreviated Resettlement Action Plan

Regional Vice President: Inger Andersen

PAD DATA SHEET......................................................................... Error! Bookmark not defined.

I. STRATEGIC CONTEXT .................................................................................................1

II. PROJECT DEVELOPMENT OBJECTIVE(S)..............................................................7

III. PROJECT DESCRIPTION ..............................................................................................9

IV. IMPLEMENTATION .....................................................................................................14

V. KEY RISKS AND MITIGATION MEASURES ..........................................................15

VI. APPRAISAL SUMMARY ..............................................................................................16

Table 2: TCP Project Cost and Financing Plan ........................................................................... 12

Table 3: Risk Ratings Summary .................................................................................................. 15

Table 5: Project Costing per Components ................................................................................... 26

Table 6: Categories of Eligible Expenditures and the Percentage of Expenditures to be Financed

by the Loan ................................................................................................................................... 40

Table 7: Methods for Procurement of Works and Threshold ...................................................... 41

Table 8: Key Works Contracts to be financed by TCP ................................................................. 42

Table 9: Methods for Selection of Consultants and Thresholds ................................................... 42

Table 10: Key Services Contracts to be financed by TCP ........................................................... 42

Table 11: Expressway 1 Project Impacts and Mitigation Measures ............................................ 45

Table 12: Bank Supervision Plan During first year ...................................................................... 55

Table 13 Bank Supervision Team Skills Mix Required .............................................................. 56

Table 14: Financing Partners ....................................................................................................... 56

PAD DATA SHEET

MIDDLE EAST AND NORTH AFRICA

Report No.: PAD648

Borrower: Republic of Iraq

Project Financing Data(in USD Million)

Financing Source Amount

Expected Disbursements (in USD Million)

Proposed Development Objective(s)

Sectors / Climate Change

Does the project require any waivers of Bank policies? Yes [ ] No [ X ]

Safeguard Policies Triggered by the Project Yes No

1. The Republic of Iraq – with an estimated population of about 30 million -- faces

6. Borrowing from the International Bank for Reconstruction and Development

B. Sectoral and Institutional Context

a. Supporting the financing of investments in road infrastructure. Already, ERRP is

Table 1: Transport Corridors Program Financing Matrix

C. Higher Level Objectives to which the Project Contributes

II. PROJECT DEVELOPMENT OBJECTIVE(S)

C. PDO Level Results Indicators

Component A: Transport Corridors Improvements (US$352.31, US$323.81 million of

• A1. Rehabilitation, maintenance and road safety improvement of select sections of

Component B: Institutional Strengthening and Capacity Building in the Road Sector

(a) Developing an effective road sector organizational structure with clear

• B3. Organizational improvement of state-owned and MOCH controlled construction

Component C: Project Management and Monitoring (US$11.35 million - IBRD). The

B. Project Cost and Financing

Table 2: TCP Project Cost and Financing Plan

Project cost KRG IBRD