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  • Closed Compact Report:  Closed Compact Report: Moldova Compact
  • May 2017

Road Rehabilitation Project

  • $132,800,000Original Compact Project Amount
  • $109,749,558Total Disbursed

Estimated Benefits

Estimated Benefits for the Road Rehabilitation Project
Time Estimated Economic Rate of Return (ERR) over 20 years Estimated beneficiaries over 20 years Estimated net benefits over 20 years
At the time of signing 21.1 percent 302,000 $55,600,000
At compact closure Not yet available Not yet available Not yet available

Estimated benefits correspond to $132.8 million of project funds, where cost-benefit analysis was conducted.

Project Description

Moldova’s transportation infrastructure, consisting of significantly deteriorated roads, represented a constraint to economic growth because it raised the costs of internal and external production and trade. The Road Rehabilitation Project (RRP) worked to alleviate this constraint with investments aimed at:

  • increasing the real income of the population by reducing the cost of transport, goods, and services;
  • reducing productivity losses to the national economy that resulted from road conditions; and
  • decreasing the number of road accidents through improved traffic conditions.

The project rebuilt to international standards a 96 km segment of the M2—an arterial highway connecting Chisinau, the capital of Moldova, to Kiev, the capital of Ukraine. This route serves as a significant link between Moldova and Ukraine for passenger and commercial traffic, and Moldova identified it as a priority for rehabilitation during the development process. The compact specifically rebuilt the critical segment of the M2 that connects Sarateni (outside Chisinau) with Soroca, an agricultural hub at the Ukrainian border.

In addition to rebuilding this key commercial artery, the project introduced higher road safety standards in Moldova and invested $2.5 million in small social infrastructure such as schools and access roads in villages impacted by the construction. MCA-Moldova reinvested cost savings into the project and used them to, among other things, rehabilitate an additional 3 km of road, including paving roads to improve access to schools and a fire and rescue station. The project also piloted—for the first time in Moldova—the use of iRAP,[[The International Road Assessment Program, or iRAP, is an organization dedicated to preventing road deaths worldwide. More information is available on their website,]] an internationally recognized assessment program designed to enhance overall road safety. The project employed modern standards for road building, road safety, road maintenance, and community engagement. Road improvements included safety features designed to slow traffic in communities, in order to reduce fatalities in areas like schools, markets, and health posts. Curves on the road were properly banked and other sections were straightened in order to reduce accidents. MCC’s design also provided side-roads for farm equipment to avoid collisions. MCA-Moldova incorporated many of these factors into the design after gathering input from local communities.

Higher standards for consultation and social protection were also introduced as part of the project, including the use of social monitoring committees in communities along the road. These community groups included local leaders and required female representation. The groups allowed local community members to have a strong voice in the design and implementation of the road, and provided a platform for improved community safety and communication with construction contractors. Group members received leadership and project management training, and delivered training to community residents and school children on traffic safety and HIV prevention[[Worker camps during construction are primary channels for transmission of HIV and other sexually transmitted diseases, and STD and HIV prevention programs are therefore a standard part of most of MCC’s construction projects.]] with the help of MCA-Moldova. The groups are expected to play a role in ensuring the sustainability of local road investments.

Finally, the project introduced higher standards for resettlement. Extensive resettlement was required to expand the road right-of-way, affecting 92 plots and 85 landowners who received cash or land as compensation. The resettlement program, conducted in compliance with MCC environmental and social guidelines, cost $850,000 to plan and implement, including all compensation.

A year ahead of the compact’s end, the project was completed with the rebuilding of 96 km of roads—exceeding the originally envisioned 93 km—with roughly $21 million in cost savings.

Evaluation Findings

Evaluation Plans: Road improvement is expected to reduce vehicle operating costs, reduce travel time, decrease maintenance costs, and increase the value of goods moved and the frequency of travel. MCC’s independent evaluation of the this project will (i) determine the post compact ERR using HDM-4 analysis,[[The Highway Development and Maintenance (HDM-4) and Road Economic Decision (RED) models are MCC’s standard tools to evaluate roads. Both models take into account vehicle operating cost savings and time savings as part of a decision making tool for road investments.]] (ii) assess the road maintenance system, (iii) analyze the composition of road users, and (iv) assess the transportation market structure.

Status of the evaluation:

Status of the evaluation
Component Status
Baseline Baseline conditions of the road, such as roughness and traffic, were collected in 2009 during the development of the feasibility and design studies.
Midline None
Endline The evaluation is scheduled for 2017, with a final report to be submitted in 2018.

Key performance indicators and outputs at compact end date

Key performance indicators and outputs at compact end date
Activity/Outcome Key Performance Indicator Baseline End of Compact Target Quarter 1 through Quarter 20 Actuals (as of ) Percent Compact Target Satisfied (as of )
Sarateni-Drochia Junction M2 Activity Average Annual Daily Traffic 3,009 4,270 Pending Pending
International Roughness Index (IRI)
  • The IRI is an internationally recognized measure of pavement roughness. It is measured in meters per kilometer, and represents the vertical movement of a vehicle's suspension as it travels along a road surface. An IRI of 0 indicates a road that is perfectly flat and 20 (or higher) is an extremely rough unpaved road.
12 2.5 Pending Pending
Kilometers of roads completed 0 93 96 103%
Reduced cost for road users (US Dollars) 0 112,000,000 Pending Pending
Road fund allocation (US Dollars 35,800,000 106,000,000 57,199,780 30%

Explanation of Results: An independent evaluator will gather the data needed to determine some indicator results.  The data will also be used to calculate a post-compact ERR.

The Government of Moldova agreed to multi-year road maintenance budget allocations in close cooperation with international financial institutions and the IMF in 2009, and met those obligations consistently from 2010 to 2014. There was a lower final allocation in 2015 that did not meet the commitment. This was the result of the Moldovan currency collapse and the financial and political crisis in Moldova.