The government of Armenia, a landlocked country that depends on cross-border transport for trade, has been strengthening its economic linkages with neighboring countries to increase trade, investment opportunities, and jobs. The 550-kilometer (km) north‒south road corridor, which runs from Agarak at the southern end of the country to Bavra at the border with Georgia, plays an important role because it connects to Georgia’s east–west highway that leads to the port cities of Poti and Batumi on the Black Sea coast.   Rehabilitation, reconstruction, and expansion of the road corridor has gone on since the Asian Development Bank (ADB) approved a multitranche financing facility (MFF) not to exceed $500 million for Armenia’s North–South Road Corridor Investment Program in September 2009. 

Tranche 1 of the MFF, the focus of this report, was approved by ADB for a loan of $60 million equivalent in October 2009. As with the MFF, the tranche 1 project envisaged increased subregional trade and accelerated economic growth in Armenia, as impact.  Its expected outcome was improved sections of the north-south road corridor from Yerevan to Gyumri. It was originally planned to cover two sections of the north-south corridor that carry the heaviest traffic loads. However, as during project preparation, it was found that one of the road sections would need more time to complete the resettlement plan and environmental assessment activities required by ADB, the scope was reduced to only the Yerevan–Ashtarak section, which is a part of the M1 national road from Yerevan north to Bavra at the Georgian border.  Besides reconstructing an 18.4-km four-lane section between Yerevan and Ashtarak to meet 100 km/hour design standards, it also intended to support the due diligence, detailed design, and preparation of tender and procurement documents of the subsequent tranche 2 and tranche 3 projects and strengthen the implementation of the road subsector component of the country’s transport strategy.

During implementation, further changes in scope occurred due to unforeseen changes in circumstances, including inter alia, a bidding failure, government financial constraints, and changes in government plans for the north-south road corridor.  These changes led to an overall increase in the length of the reconstructed road output.  Specifically, against the 18.4 km target output specified in the Report and Recommendation of the ADB President to the Board of Directors, tranche 1 reconstructed a total of 30 km of road ─ about 10 km going north from Yerevan to Ashtarak and 19.6 km going south from Yerevan to Artashat.   The final output on the Yerevan–Ashtarak stretch represented a decline of about 8.7 km from the original plan while that on Yerevan‒Artashat was totally unplanned for and consisted basically of road safety improvements, including reconstruction of the median to provide continuous safety barriers, widening the carriageway, leveling of existing asphalt to overlay with new cement concrete pavement, and construction of additional ramps at three interchanges and rehabilitation of other ramps, among others.  Works on the Yerevan–Ashtarak stretch included pavement reconstruction, improved drainage and shoulders, repair of bridges and other support structures, and replacement of an overpass. Changes in the project scope also included the transfer to tranche 3 of the preparation of an updated road subsector plan and the procurement of traffic management and monitoring equipment.

Both the reconstructed road sections, Yerevan–Ashtarak and Yerevan‒Artashat, are operating with strongly increased traffic volume, and in a safe and efficient manner.  The enhancements strengthened the road safety features and brought more benefits to the road users, neighboring communities, and residents.  However, project completion was postponed three times, and was delayed for a total of about 30 months.  The project’s performance in relation to its planned outcome and contribution to achieving the MFF’s overall envisaged impact cannot be determined at this time because the works on the Yerevan–Gyumri road are still ongoing.

The project had the Ministry of Transport, Communication, and Information Technologies (MTCIT) as executing agency.  In February 2010, the Foreign Financing Projects Management Center of the Ministry of Finance acted as the temporary implementing agency.  A month later, it was replaced by the newly established project management unit, the North‒South Road Corridor Investment Program Implementation Organization.  Following the restructuring of the MTCIT in December 2016, the Transport Projects Implementation Organization was created and became in-charge of all the investment program activities.