Ukraine Road Safety Project: Analysis of $500M Infrastructure Development Case Study

Strategic Implementation of M-03 Road Rehabilitation and Safety Measures

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Introduction

Road safety and management indicate the process of detecting and identifying safety issues, ruminating the potential strategies to confront those issues, and implementing the strategies to improve road safety. The efficient and effective management or stakeholders involved in road safety must be proactive in detecting the issues related to road safety and eliminating the problems before they even arise. The quality of the road must be a high priority, and the nature of the safety determination for the road must be identified and tackled with the best course of action. As implied, the most transparent and easily available data for improvement is the “crash data”. These data can help to identify the issue and help to eradicate it in every scale of road safety and improvement. Ukraine is a country of Eastern Europe which is considered as a second largest continent. The country is known for its beaches, orthodox tradition and historical cathedrals.

The seminal and secondary stakeholders involved in road safety are “users” or “customers” which include the drivers, passengers, and the “customers receiving the shipments. The stakeholders involved in road improvement are the “internal stakeholders”, are the clients, personnel sites, contractors, consultants, project team members, financial sectors, and technicians. At the core, the responsibilities of the stakeholders incorporate goals and formulate the plans that help them to attain those goals. Formulation of plans and allocating financial aid with the evaluation of risk management, elaboration of change control, and milestone invigilating. Authority to direct people, strife, distress, and issues and communicate the status of the project is key derivatives that describe the responsibilities of stakeholders.

As economics come on along the different circumstances of development, their death rate mainly decreases with time, countries grow to become better at instrumenting the issues. However, this situation is different when it comes to road safety and improvement. As the countries get more developed the rate of death due to unsafe roads increases. For a developing country like Ukraine, the cost of developing the road safety project cost has been proposed to be $500 million. The financial allocation for the project is a bank loan of $400 million. The road safety and improvement project in Ukraine consists of three main components (i) 120 KM road recovery of Kyiv- Kharkiv – Dobzhansky road with the estimation of $298.5 million in budget. (ii) Introduction of a $99 million budget for road safety and improvement measures. (iii) Based on the outline of the international practices of road safety measures special training, new provision services, and improved equipment to extend road management with a budget of $1.5 million.

Political leadership, longwise the justifiable financing from the government and international community, to promote road safety and its improvement. As for Ukraine, its gain in the share market in Europe and other different sectors of markets has successively shifted towards road safety and improvements. The government is formulating and implementing projects to upgrade the main road that will link European countries to Ukraine’s western borders of Kyiv. The inefficiency of the technical and drawback in the safety measures are the main reasons for the high rates of road traffic in Ukraine. In comparison to other European countries, the rate of road traffic has doubled over the six years in Ukraine. The financial loss from such accidents has been estimated to be between 1.5 and 3.5 of the GDP, the reason behind increasing is day-to-day development and the number of vehicle owners increasing in the country. In the year 2005, the death from road accidents was reported to be 10,000 per registered vehicle were 8.0. This was reported to be three to four times higher in 2006.

Project Execution, pre-project, and Post project analysis

1) Pre-project

Study Area in detail- The Economic assessment of roads considers safety parameters to some limit but a more evident approach can add significant value. Therefore, formulating the safety-focused model outlined in the life cycle of measures, this review inquiries into the available models depending on the viewpoint of present knowledge and its snap gaps. The “project development objective” (PDO), is formulated to increase the efficiency and quality of the section of road M-03 and add value to traffic safety on the roads. Based on the reference of Arena et al (2020), the proposed program is the result of a policy developed between the government and the bank ongoing since 2005, for banks acting as financial allocation institutes. The analysis for the execution of the project was conducted between 2005 and 2006 at the government’s request and outlined the details of the scrutiny of the transportation. This survey was put across by the “Ecorys” in 2005 with the aid of the Netherlands. The policy outcome included justifiable finance strategies for the road sectors, deduction on the “maintenance backlog”, and management in the system of the operational value of the roads and their maintenance. Based on the reference Anwer et al (2019), the “Commonwealth of independent states” (CIS), which include countries like Russia had a similar reason for the accidents, the bank project team decided to analyze the Russian situation and extract the values to add to the proposed program in Ukraine. The introduced project is relevant to the Country Partnership Strategy (CPS) for Ukraine for “FY08-118”. The CPS determines justifiable growth and improved pillar that emphasize the infrastructure. The viewpoint of the project remains the same along with the formulating plan related to the “Development Policy Loan” granted by the Ukraine board respectively in December 2007 and December 2008. The plans to improve the strategy of the investment climate in Ukraine that are facing a dire situation, in core to Ukraine’s trading and transporting systems. According to the reference based on the research of Impeablu and Queesh (2020), the primitive motive of the CPS is to unify the measurement to improve the transport sectors with the western borders of the EU, to enhance Ukraine’s epidemic potential, and increase the use of Ukraine’s present transports usage to its fullest. The management aims to support the vanity of the introduced project with significant resources from the public. The authorities also developed the goal to chase private investment by introducing the law to the public partnership along with some other measures. The economic and financial crisis added importance to the program and the investment from the public, in general, increased the “higher multiplier effects”.

Social analysis of pre-project- The project development objectives are to reform and improve the conditions and quality of road safety. During the assessment of the project, the full evaluation of full “environmental impact Assessments” (EIA) was prepared by Ukravtodor, which also counterbalances the social issues. The Primary stakeholders are passengers, divers, and so on, the project will conduct to better riding experience, and improvement in safety measurements. From the core of social point, this project is important for directing the focus on improving road safety and improvement. A contract of employment imposes legal obligations on both the employer and the employee. The part of the M-03 road is in ultra need of reforming the inefficient road safety measurement, eliminating the black spot areas to prevent accidents, and introducing adequate road signs that will help improve the traffic and eliminate the risk of accidents. According to the reference based on the research, of Outay et al (2020), the EIA also incorporated the survey conducted in the various cities, towns, and villages of Ukraine alongside the M-03 road in the project area and impending territories. As per EIA, the communities of these various provinces have possessed a positive viewpoint regarding road reformation. This will enhance road safety by improving road quality, preventing accidents, and better availability of transport systems. However, the mass was also concerned about the discomfort that could incur during the construction period which can lead to an increase if traffic. Indeed, the change can cause some incommodity for the users and clients of the roads. To trail these concerns, the program will introduce the communities before the construction, covering the people of the affected location for deducting the accidents prone caused by the black spots. The steps will be taken to deduct the negative impacts on the communities during the implementation of the program. Failure to comply with these requirements could result in financial penalties, community service, or other legal sanctions. Therefore, regular and close monitoring of the program, with banausic analysis will be conducted along with the implementation of the projects. The issues that will arise during the process will be addressed and the measurement will be formulated to eradicate the issues. Assessment of the issue from the viewpoint of the primary stakeholders is the users of the roads as well as those who are residing and working in the area of M-03 road. The information gathered during the assessment will be evaluated to develop a plan to minimize the negative impacts that were not foreseeable during the project design.

Economic and financial evaluation on pre-project- The introduction of “Cost-benefit analysis” was introduced for the reform of the road safety and improvement programs. The project was estimated to cover the reformation of 120 KM of the four-lane road. The outcome from the CBA indicated an ERR of 22% and the “Net present value” (NPV), was estimated to be $1,050 million with a discount rate of 12% for M-03 roads to be covered under this project. The evaluation of the cost indicated the saving of the vehicle operating cost to reflect the contribution of 50% of the sum of the total benefits and the deduction in the percent of the crashes by 50%. It was analysed that the vehicle operating cost was also saved which indirectly help in economically viable project. Improvements will further, help in reducing the crash rate by 25%, on the other hand, it will also avoid any material damage and lost productivity.

Technical analysis of the Pre-project- The fabrication of the project was outlined on the sound technical parameters and along with the present Ukrainian standards for the project granted by the other “IFIs” Like EBRD, the layout and the reform of the projects are developed with the consideration to the primitive factors that affect the certain conditions such as climate, traffic, surface, structure, and so on. The divisions of roads that reflect the weak structure related to the medium to dire surface danger and rough high value will get “asphalt concrete” from the range of 10 cm to 20 cm. The cost-effective overlays were designed to improve the strength and quality of road safety and improvements. The project will also enhance the safety measures that will include better traffic equipment such as better road signs, improved pavements, lighting, bind spot awareness, crossing structures, and so on. The sections of the roads that are in good and of better quality will only receive routine maintenance under this project. The parameters to check the quality of the roads will be applied to such roads to detect the actual capacity of such roads. The roads with few defects will be analyzed under structural maintenance. The survey will be carried out to analyze the conditions of the bridge of the “Boryspil” to the “Lubny” region to examine the need to carry out the reform of the program in this province. The road safety improvement principles include the steps to eliminate a minimum of 110 accidents from traffic “black spots” The measures will include the steps to eradicate the safety dangers at the low stander’s crossings, the guardrail will be introduced to eliminate the accidents, signs will be installed in the all selected 110 regions that are critically d under the black spot of in the various region of Ukraine.

Fiduciary analysis of the pre-project- The assessment to analyze the financial management allocations in the “Ukarvotoder” (UAD), and the PIU was conducted in December 2008. the program incorporates the financial capacity to examine the capacity of the financial resources that were formulated to meet the minimum financial requirement. The disbursements of the loans to the IBRD loan account will be done on the” transaction-based” model, this implies that traditional advances, direct payment, and SOEs will be implemented for the payment methods. For some payments that will be more than the application size, as maintained in the letter of the disbursements, the borrower will raise the application for withdrawal to the bank for paying suppliers and the consult will be directed to the loan account. The employment contract imposes legal obligations on both the employer and the employee. The disbursement related to the specific situation will be based on the letter of the disbursements such as the goods that cost more than $200000 each will be only issued with the submission of the full documentation of the purchase. The contacts work that is valued at more than $2000000 per consulting firm will be only issued with the full documentation.

The service related to the firm that costs more than $200000 will be disbursement with the submission of the full documentation of the proof of the services. The audit report of the disbursement will be conducted once a year that will be carried out under the local legislation. Based on the reference of Papadoules et al. (2019), the program must formulate the outline for the operational audit by an independent agent as an external auditor in the first year when the program will be implemented. The government is authorized to appoint the internal auditing system to the bank as per necessary. The” TORs” will be addressed to analyze the factors in “UAD and the “PIU”. To eliminate fraud and corruption in the bank operations, the “Country Partnership strategy” (CPS) for Ukraine to implement the program was formed. The CPS is responsible to check and explaining to the bank to regulate the fiduciary controls with the analyses of the government risk. For the bank to follow the government agenda the CPS was assigned to look after the use of the bank resources as per requirements.

Environmental analysis of the pre-project- As per the world bank policies related to safeguarding the program was assigned under the “B” category based on the environmental parameters. According to the Ukraine legislation, this project was not listed as can cause environmental danger or any type of hazards. The outline to examine the factors that this project was causing was analyzed under supervision and was considered safe for the environment. Road reform will have a positive impact as per the analysis. The road that is in or near the area of protected areas of wildlife will not directly affect the habitats of the specific areas. The “environmental management plan” (EMP) was formed within the guideline on 19 November 2007. The result of the EMP will be publicly published on the website of the governments. The monitoring plan was formulated with records for the public. The stakeholders of road safety and improvements were consulted. The minimal negative impact that was affected during the formation of the project was addressed. After the project wraps up, the project will have a positive impact on every aspect. This will improve the quality of the road and the safety of Ukraine’s citizens. The policy and the program that is developed during the project are approved and finalized with the aspect of being fully functional and operational.

2. Execution of the project

Execution is important in any project, without exception everything is a theory, not in a practical way to use it. Therefore, execution must be needed in this given project “ROAD AND SAFETY improvement”. The four-lane road in Ukraine had been in bad condition over the past 20 years, which is why the execution is important, over 20-year road need to maintain

• Quality and critical analysis in terms of economic

In this road safety improvement project in Ukraine, road rehabilitation of about 120 km, this road exiting the four-lane road, suited between Lubny and Boryspil. This four-lane road had been in bad condition over the past 20 years. As per the view of Nair and Bhat, (2021), return maintenance had not sufficient for this four-lane road. This road provides major connectivity in Ukraine. However, this four-lane road is rehabilitation for the purpose of traffic volumes. When one party accepts another's offer, the Contract is created. An offer is a promise with specific conditions made to a third party, such as a statement of one's desire to purchase or sell a good or service. Ukraine's government imposing seep restrictions on this road due to the bad surface of this road. However, they maintain that sudden accidents occur on this road Ukraine’s government increase the IRI about to 7km, and they introduce safety rules, posing a severe safety hazard, particularly in specific conditions like icy conditions. The 120 km long road is tough to maintain it.

The government alignment two different oblasts, for observation of the condition of the road and why the road differs from one other. The two oblasts are Kyiva regional and Poltava regional. The advantage of this road safety implementation on heavy vehicles is to reduce the heavy traffic and maintained the international Santander components. Especially these two regions are important for the Ukraine government.

• Quality and critical analysis in terms of financial or social

The cost of the total project amounting US$500 million, out of this cost the Ukrainian government takes bank loan finance of US$400 million to rehabilitate of 120km road. Moreover, in this project amount to US$500 million, and there has a bifurcation in the total amount, road rehabilitation of $298.50 million, road safety improvements of $99 million, and capacity building of $1.50 million, these three-component s are Baseline costs. The front-end fee accounts for 1 million, all the components are included in the part as a loan amount of $400 million, and the final government co-financing (vat) amounting to $100 million (Boadu et al. 2020).

As per the opinion of Ghosal and Conti, (2020), In terms of finance, the government spends use amount of finance for this development project. One major drawback in this financial source is the bank loan. The loan amount is $400 million and the interest rate is very high, and the government is bound to pay this interest.

• Concept, method, and technique

“Road safety improvement concept”: all over the Ukraine territory there are 110 black spots. There has no safety team and also does not have any authority bodied to observe the fault of this system. At this time authority provide some local authority to invigilation this spot as per the rule and regulations.

Safety of this black spot the government installing guardrails, safer pedestrian crossing, and most important crash barriers. Al the major safety tools are provided by the ruling authority. Use of this tool in all the vehicles gown through the right way and the right speed as mentioned in the rules. Impact of this major increase in the safety of traffic. Contraction of the road is easier by the introduction of this process of safety and the concentration of road management of traffic is planned and carefully handle by this guideline.

As per the view of Ziakopoulos and Yannis, (2020), the capacity building concept: the amount of this project is much high, therefore is a need to be specific planning to complete this project. The government of Ukraine proved rules and regulations for this project first one is for safety purposes and the second one is for construction purposes. In safety, safety hazards, signs marking, lighting at some dangerous spots, installing guardrails, traffic must in a sacrifice manner, and improving horizontal alignment in some spots. All the safety major important tools are provided by the government.

3. Analysis of post-project work

After the completion of the project the Ukraine government face some issue with this project and also enjoy some advantage. The road tarfile is very smooth after the completion of this road safety project.

• Quality and critical analysis in terms of economic

Economical county faces financial issues. Bank and economic sectors need to be a significant improvement in public expenditure. The funding had not been used in the appropriate manner for this project. This project mainly focuses on safety on the road and the effective way of contracting of roads in Ukraine. The economy is the most important part of any country in the world. Although in Ukraine four lain Road will give major support to the economy by providing funds through international track by supplying the goods. This road gives a major impact on the pricing of the transport business in Ukraine. All over the Ukraine territory, there are 110 black spots. There has no safety team and also does not have any authority bodied to observe the fault of this system. At this time authority provide some local authority to invigilation this spot as per the rule and regulations, road traffic is very smooth after the completion of this road safety project. After the completion of this road, the quality of transport is increasing in Ukraine. All the regulations are provided by the given authority of this project and with the help of the government. The cost of this project is much high because of this the government face issue with the payment system in the country. Although face a negative impact on the economy. Payment of loan delay, despite that interest on the loan amount, is increased (Salmon et al. 2019).

• Quality and critical analysis in terms of financial or social

At the time of the audition, auditors found that lack of financial management. The project had been financed with a loan. The government of Ukraine uses some directed method: “direct payment to the special commitment” pays the minimum amount of the loan interest after the completion of this project. The borrower intended to settle the loan amount via the direct method. In this method, the borrower paid $100 million on a one-time and the remaining amount of the loan was $300 million payment on the next installment. In terms of finance, the Ukrainian government takes bank loan finance of US$400 million to rehabilitate of 120km road. Moreover, this project amount to US$500 million, and there has a bifurcation in the total amount, road rehabilitation of $298.50 million, road safety improvements of $99 million, and capacity building of $1.50 million, these three-component s are Baseline costs. Front-end fee accounting for 1 million, all the components are included in the part as a loan amount of $400 million, and final government co-financing (vat) amounting to $100 million.

the government spends use amount of finance for this development project. One major drawback in this financial source is the bank loan. The loan amount is $400 million and the interest rate is very high, and the government is bound to pay this interest (Tohet al. 2020).

“Treasury account of UAD in UAH” As per the need of the project the Ukraine government paid paper documents for the treasury account in the government as the term of foreign currency funds. As per the requirement, the fund is used in local currency. Then the “UAH funds” were paid from the local treasury account of Ukraine.

• Concept, method, and technique

The depart of Finance: This department maintained the financial recorder of the project and all the records must be shared with the government. Government audit all the funding used by the authority of this given project.

“Division of Responsibility” There are some duplications of the accounting system in the accounting system they provide full details about the payment and transaction, and all the balance of the account. In according with Han and Webber, (2020), this division mentions the last month's reconciliation statements of the project. However, it helps reduce duplication will be minimized.

“Project auditing”: after the completion of the project the government of Ukraine audits the financial report of this project and the facial use of this product by the authority bodies of this project, and briefly makes a report about it and publishes it on the social side for the maintained transparency of the government ethics.

“Operational audit” This project also needs to be an operational audit. This type of audit will happen at the request of the bank. In this project, the bank gives a loan amount of $400 million. Therefore, the bank requested the government to get such a type of audit. With the help of this audit public of Ukraine has knowledge about the project money and utilization of the same money for this particular object in the project.

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Conclusion

The report on safety and road improvement will help to understand the key factors of the accidents and allude to the correctional measures the potential strategies. The existing and current designs followed to evaluate road safety and the improvement will be enumerated with the corrective measures. The financial loss along with the way of safety and its management will be discussed in the report as its objectives

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