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Getting the buses back on the road
EBRD lends €3.1m to Georgia’s Tbilisi Bus Company to upgrade public transport
The EBRD is lending €3.1 million to the Tbilisi Bus Company to help Georgia
restore basic municipal bus services in its capital and give the residents of
Tbilisi access to affordable transport. The company, owned by the City of
Tbilisi, will use the funds to buy 150 new and second-hand buses and parts.
Georgia’s transport networks were hamstrung by the conflicts and
underinvestment that followed independence in 1991. The Tbilisi Bus Company
had 1,200 buses at that time for the city’s 1.4 million people. But by 2004
the fleet was down to 80 buses, with only half working on an average day.
City authorities rebuilding the fleet have already bought 182 second-hand
buses, which cost €15,000 each, one-tenth of their value when new. The saving
has enabled the company to offer good service with affordable fares despite
low incomes in Tbilisi. With the 100 new extra buses bought by open tender and
50 second-hand buses bought by a direct contract, the company plans to expand
the number of routes from 42 to 80, allowing buses to carry 18 per cent of
Tbilisi’s passengers by 2007 against just 10 per cent today. As the official
bus service improves, fewer minibuses will be needed and can be regulated more
effectively thereby improving safety, traffic conditions and service quality.
The deal marks the first time an international finance organisation has
financed the purchase of second-hand buses, said Nikolay Hadjiyski the EBRD’s
Director, Municipal and Environmental Infrastructure. It is also the first
non-sovereign loan for a municipal utility made to the Bank’s seven
lowest-income countries of operation, the Early Transition Countries (ETC).
The ETC initiative was launched in 2004 to stimulate market activity in
Armenia, Azerbaijan, Georgia, the Kyrgyz Republic, Moldova, Tajikistan and
Uzbekistan. It aims to stimulate market activity in these countries by using a
streamlined approach to financing more and smaller projects, mobilising more
investment, and encouraging economic reform. The initiative is part of an
international effort to address poverty in these members of the Commonwealth
of Independent States. The Bank will accept higher risk in the projects it
finances in these countries, while still respecting the principles of sound
banking.
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