Gaziantep CNG Buses project

Country:

Turkey

Project number:

48651

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

20 Jul 2016

Status:

Signed

PSD disclosed:

17 Jun 2016

Translated version of this PSD: Turkish

Project Description

Turkey is experiencing significant population growth caused by the refugee influx since the start of civil war in Syria. Based on recent estimates, some 2.5 million refugees live in Turkey, placing a huge toll on host communities which are struggling to provide needed services given the dramatic short term population growth. This is particularly true in areas close to the conflict zone such as Gaziantep, which is frequently the first point of settlement.

The refugee influx has strained key municipal services in the areas of water, waste water, urban transport and solid waste operations in Gaziantep. Although Turkish Government have established refugee camps, the majority of the refugees live in Gaziantep city centre with host community; 50 per cent of the refugees are female and estimated to be under the age of 18, with many being vulnerable.

Gaziantep Metropolitan Municipality and its entities' do not have the capacity to meet increased demand for services, and face increasingly strained budgets.

In response, the Bank is considering a refugee response programme, which identifies municipal and environmental infrastructure as one of the main pillars, focusing on the refugee afflicted zones.

EBRD signed a EUR 10 million loan agreement with Gaziantep Metropolitan Municipality on 17 November 2011 to finance the acquisition of 50 low floor buses, essential maintenance equipment and a CNG filling station. The Bank is considering EUR 5 million extension of the Bank's existing loan amount in order to finance an additional 30 Compressed Natural Gas ("CNG") buses to be used in public transport and 20 CNG buses to be used to transport Syrian refugee students in Gaziantep to schools. The Project is a refugee response focused in terms of expanding the quantity of municipal services to cope with the sudden population rise.

Transition Impact

Response to Refugee Crisis: The Project will contribute to sustainable urban transport on a commercialized footing in Gaziantep within the context of rapid response to Refugee crisis in the city. The investment will reduce the pressure on municipal services and improve the access to local infrastructure services.

Development of Key performance-Indictors for urban bus service delivery: The Bank proposes to develop a robust set of KPIs for the City. This effort will be carried out in lieu of a Public Service Contract. This will improve the service orientation of the City, target efficiency gains (including costside improvements), and help establish an improved farebox recovery ratio. Thus it will support the overall operational and financial sustainability of the City's transport operations.

Reduction of emissions: Modern CNG Buses replacing other public and private means of transport powered by diesel fuel will bring energy efficiency gains and significant emissions reduction. The Project will also serve as a demonstration case of the GET applied to urban transport, particularly by promoting the sustainable cities concept. The project will contribute to sustainable transport through the transfer of passenger trips from minibuses, taxis and passenger cars, significantly contributing to the reduction of air pollutants and GHG emissions.

Commercialisation of bus stops and tram stations: The Bank will support exploring commercialisation of bus stops and tram stations (e.g. through retailers such as coffee shops, kiosks, etc.) to enhance the service quality and increase non-fare revenues of the City.

Client Information

CITY OF GAZIANTEP

Gaziantep Metropolitan Municipality

EBRD Finance Summary

EUR 5,000,000.00

The EBRD is considering providing a senior loan of up to €5 million.

Total Project Cost

EUR 5,000,000.00

Environmental and Social Summary

The Project is categorised B under the 2014 Environmental and Social Policy. Most potential adverse environmental and/or social (E&S) impacts associated with the project will be similar to those of the original project, which can be addressed through adequate mitigation measures. The only additional issue that has to be considered is the health and safety of refugee children during their transport and further measures to be taken in that respect. These measures will be identified and addressed in the amended Environmental and Social Action Plan (ESAP).

The results of the management review for the original project which was carried out in 2011 had indicated that there were no Environmental, Health, Safety and Social Management System (EHSSMS) in place for the Bus Management Department operational units of the City and improvements were required. The City did not have any written guidelines, policies or organisational procedures for ESHS management and there were some gaps in their Human Resources policy that would need to be filled. Also the resources and structure of the Bus Management Department Company needed to be strengthened. The due diligence had also identified need for improvement in E&S trainings, emergency response procedures, monitoring, waste management, and permits.

An ESAP had been developed to address the identified issues and to bring the Bus Management Department's operations into compliance with the EBRD's PRs. The annual E&S reports which are timely submitted by the Client indicates good progress with the implementation of the ESAP with most action items already implemented.

The Company City will continue providing the Bank with Annual Environmental and Social Reports and notify on any material accidents or incidents.

Technical Cooperation

It is envisaged that the technical cooperation support will provide assistance with the following:

1) Procurement and Implementation Support, including a transparent procurement process for the procurement of the buses as well as assistance to the City and the Operator with contract implementation supervision and the application of the EBRD PP&Rs for the contracts proposed for financing by the EBRD. The estimated cost of the assignment is EUR 200,000.

2) Corporate Development Programme, including assistance to the Operator and the City with the development of key performance indicators and the commercialization of bus stops. The estimated cost of the assignment is EUR 200,000.

Company Contact Information

Ahmet Erturk
iletisim@gantep.bel.tr
+90 342 211 12 00
+90 342 211 12 53
http://gantep.bel.tr/
Incilipinar mah. 4 Nolu Cadde Buyuksehir Belediyesi Binasi Sehitkamil / Gaziantep / Turkey

Business opportunities

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