SMATSA Upgrade

Location:

Serbia

Project number:

49477

Business sector:

Transport

Notice type:

Public

Environmental category:

B

Target board date:

13 Dec 2017

Status:

Signed

PSD disclosed:

22 Sep 2017

Translated version of this PSD: Serbian

Project Description

Provision of a senior secured loan of up to EUR 35 million to Serbia and Montenegro Air Traffic Services SMATSA Llc to finance components of an upgrade programme which includes the purchase and installation of a system for air traffic management, related equipment and services, civil works for construction of an annex to the existing Air Traffic Control Center (ATCC) Beograd building with Beograd Air Traffic Control (ATC) tower, and new Niš ATC tower with the Beograd Contingency ATCC Centre.

Project Objectives

Assistance to SMATSA in complying with the Single European Sky (SES) programme requirements, improvement of traffic safety, helping SMATSA fulfil regulatory requirements, enhancement of quality of service, satisfaction of customers' needs and creation of a better working environment.

Transition Impact

Investments in upgraded systems entail increase in capacity, and SMATSA ability to handle an increased number of aircraft per hour. This also means that SMATSA can accept aircraft in cases
where neighbouring air traffic control cannot accept traffic, providing a position of 'preferred partner', in line with European level initiatives to encourage clusters to reduce costs and improve operations. The investments achieve interoperability and compatibility with neighbouring systems.

Client Information

SERBIA AND MONTENEGRO AIR TRAFFIC SERVICES AGENCY LIMITED SMATSA was established in 2003 as a limited liability company for Air Navigation Services provision,
thus succeeding the previous Federal Air Traffic Control Authority which was part of the Ministry of Transport. The Company was founded by two states: the Republic of Serbia and the State of
Montenegro, with founding stakes of 92 per cent and 8 per cent, respectively. SMATSA is the Air Navigation Service Provider (ANSP) responsible for (i) provision of Air Traffic
Services (ATS) in the airspace of Serbia, Montenegro and delegated part of airspace of Bosnia and Herzegovina (BiH); as well as (ii) Air Traffic Flow and Capacity Management (ATFCM); (iii)
Airspace Management (ASM), including production of flight procedures (PANS-OPS); (iv) provision of Communication, Navigation and Surveillance services (CNS); (v) provision of Aeronautical
Information Services (AIS) and (vi) provision of Aeronautical Meteorological Services (MET) in the airspace of Serbia and Montenegro.

EBRD Finance Summary

EUR 35,000,000.00

The total project is estimated at EUR 126.5 million and it is envisaged that the EBRD will provide up to EUR 35 million for the priority phase of the investment. The investments are to be made over
the five year period 2017-2021.

Total Project Cost

EUR 126,500,000.00

Environmental and Social Summary

Categorised B (2014 ESP). The Environmental and Social (E&S) risks and impacts associated with the modernisation and upgrade programme for an Air Traffic Management (ATM) system and
construction work to existing Air Traffic Control Centre (ATCC) and new Air Traffic Control (ATC) Towers are expected to be site specific and can be readily assessed and mitigated through good
management practices and targeted E&S actions. The modernisation and upgrade of the ATM systems will also increase safety standards and improve efficiency resulting in reduced aviation
environmental impact.

Environmental and Social Due Diligence (ESDD) was carried out using internal resources and included a review of a completed E&S corporate questionnaire by the company. A review of various
certification associated with the company's operations was also carried out to confirm compliance with relevant international standards and European and national legislation. ESDD was undertaken
across all the company's multisite operations in both Serbia and Montenegro. The operations are predominant Air Navigation Services although additional services offered by the company include Air Traffic Control Officer (ATCO) training, CNS and MER personnel training, pilot training, flight calibration and inspection of ground based navigation equipment as well as aircraft maintenance
services.

ESDD confirmed the company has certified ISO 9001:2008 Quality and ISO 14001:2015 Environmental Management Systems in place and these were last independently verified by SGS
in May 2017. Furthermore the company is also developing ISO 31000:2009 Risk Management system for the whole organisation. Future plans include the development and implementation
of ISO 26000:2010 Social Responsibility and this has been identified as a strategic business objective. The company confirmed that they have systems in place to assess environmental and
social standards and performance of suppliers and contactors and carry out internal audits to monitor their performance.

The new TWR Nis with C-ATCC Beograd is planned to be constructed on state owned land and will not result in any resettlement or economic displacement. The acquisition of the land is yet to be
done. The company is highly regulated and operates in accordance with EU rules and international practices. The company acts as a representative for Serbia and Montenegro with various
international bodies such as the International Civil Aviation Organization (ICAO), the European Civil Aviation Conference (ECAC), Eurocontrol and also has membership with international organisations including the International Air Carrier Association (IACA) and the Civil Air Navigation Services Organisation (CANSO).

A project specific Environmental and Social Action Plan (ESAP) will be developed and implemented by the client will include, inter alia; (1) further develop their occupational health and safety
management system; (2) assess road traffic safety risks; (3) Obtain all necessary environmental and construction permits and consent for all construction work. The project will be monitored through
annual reporting to ensure compliance with the Bank's E&S performance requirements.

Company Contact Information

Ivana Belanovic
ivana.belanovic@smatsa.rs
www.smatsa.rs

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