Component Category: Local Road Connectivity Project

This component will finance infrastructure investments in municipal roads and streets and related consultative and preparatory processes. It will be implemented through two subcomponents.

This subcomponent will finance rehabilitation of municipal roads and streets to improve their quality, safety, and resilience. The project will finance about 450 km of roads (with empty ducts installed along the roads to support the country’s digitalization agenda and North Macedonia Digital Economy Project (P170993), or 7 percent of the local roads in the country. No greenfield construction will be financed. The loan will also finance supervision consulting services. The technical designs could be prepared by municipalities, through MSIP technical assistance, or by consultants financed through the loan. Project designs will address vulnerability to climate change and other natural relevant hazard risks and undergo road safety audits. Loan proceeds will be allocated among 80 municipalities on a grant basis according to a criterion agreed among the MoTC, the municipalities, and the World Bank. The funds allocation criterion has been agreed that provides for a minimum allocation per municipality with the remaining funds allocated based on a modified European Investment Bank (EIB) Project formula previously agreed with municipalities, which considers the size of the population, the number of settlements, the area of the municipality, and the number of registered vehicles. The EIB formula assigns 50 percent weight to the size of the population, 30 percent weightage to the number of settlements, and 20 percent weight to the area of the municipality. Municipalities are familiar with the amounts of financing based on the EIB approach and the structure of the EIB formula, which was a result of long discussions in the Government and Parliament Sessions. The project enhanced the EIB formula by introducing the number of registered vehicles in the municipality to consider road usage with an 80 percent weight on the EIB formula and 20 percent weight on the number of registered vehicles. Although the MoTC requested official data on the length of local roads from each of the municipalities, very few municipalities could provide the requested data and the MoTC opted not to include those variables in the final formula. The formula provides transparency, technical soundness, and good geographic coverage throughout the country. To accelerate project implementation, the first-year road rehabilitation works were selected from a pool of existing high-priority road rehabilitation designs prepared by municipalities. The MoTC gave to municipalities clear guidance to prioritize roads that link to services, for example, schools and hospitals, and markets. Municipalities submitted stamped engineering designs and statements describing the social and economic rationale for selection of each road section. The MoTC screened these proposals to verify technical adequacy of the civil works designs and readiness for implementation, eventually narrowing the list of first-year works to 83 kms, at an estimate cost of EUR 14 million. For subsequent phases, municipalities will use a systematic planning process, when readily available, or a participatory needs assessment that engages all groups in the community to identify the remaining local roads to be supported by the project. As municipalities develop their capacity to use simple asset management methods, they will be expected to use the RAMS to aid in identification of project roads, subject to public participation and feedback. In addition to identifying project roads, the municipalities will use a participatory process to identify the specific challenges to be addressed in civil works designs (for example, sidewalk is missing). These proposed interventions will be subject to the MoTC’s and World Bank’s oversight and economic cost-benefit analysis. Municipalities will be encouraged to select roads that connect to other World Bank projects, including buildings benefitting from the Public Sector Energy Efficiency Project (P149990) and agricultural value chain facilities developed under the Agriculture Modernization Project (P168014).

Under this subcomponent, financing will be provided to selected municipalities to pilot and support priority investments identified by the communities to enhance their mobility and road safety. This will help ensure that the road investments (financed under Subcomponent 2.1) optimize local mobility. As the projects will be demand driven, it is not known what the specific supplemental investment will support but, in conjunction with the communities, mobility plans will be developed to prioritize interventions. The mobility plans will identify solutions for the community’s broader mobility needs in relation to public transport services, active mobility, resilience, security, and safety. Specific measures may include measures to improve safety such as sidewalks, bike paths, supplementary street lighting, bus shelters, junction improvement, road calming, and pedestrian crossings; to improve climate resilience such as slope stabilization and spot drainage works; and for improved public transportation and school bus services. Some funding will be dedicated to vulnerable groups including Roma. Municipalities selected to participate in the pilot will have a demonstrated need for, and commitment to, community-driven projects that serve the needs of vulnerable groups. The findings of the ongoing Roma and Gender Assessment will inform interventions needed in this subcomponent to better serve Roma and women’s mobility needs.

This subcomponent will finance a municipal capacity assessment to assess the strengths and weaknesses of the current system and propose a program for enhancing capacity, where appropriate. It will also finance development of a range of simple road maintenance contracts that could be adapted to municipalities’ diverse needs and encourage adoption of these contracts to improve utilization of their maintenance expenditures; assess how smaller municipalities can benefit from the economies of scale afforded by larger contracts, such as area-based maintenance contracts; and develop a simple Excel-based RAMS for maintenance and rehabilitation planning and support some of its data collection needs. Capacity building will be geared toward the existing capacity and human resources in municipalities and will focus on (a) collecting road inventory data, (b) using the simple RAMS to monitor road conditions and program road maintenance and rehabilitation, (c) redressing citizen grievances, (d) promoting transparency in decision making, and (e) executing road maintenance activities more efficiently through the improved contracting methods and inter-municipal cooperation where appropriate. The support will be streamlined by establishing working groups based on each municipality’s willingness to implement the institutional reforms suggested in this project. Specific activities financed under this subcomponent include trainings, technical assistance consultancies, and establishment and financing of routine outreach to municipalities.

This subcomponent will finance technical assistance and capacity building to help the MoTC assume a stronger role in overseeing the development and quality of local roads. This subcomponent will provide technical assistance support for (a) developing a central government policy for municipal roads; (b) defining a sustainable source of financing for both capital investment and maintenance; (c) reviewing and or updating the allocation formula used to transfer funding to municipalities through PESR; (d) developing a central government mechanism for monitoring municipal road conditions; (e) conducting road safety capacity review and providing recommendations for institutional change; (f) developing of climate-resilient design guidelines for local and low-volume roads; and (g) coordinating with other stakeholders, including ZELS and regional development agencies.