The EBRD is considering providing a senior loan of up to €100 million (equivalent in Swiss Francs) to co-finance the construction of a new railway route bypassing the central area of the city of Tbilisi. The project’s aim is ultimately to improve the efficiency and safety of rail operations within the city of Tbilisi enabling relocation and consolidation of the existing rail facilities located in the centre of the urban area. This project will also provide an impetus for the redevelopment of freed up territories and reintegration of the city.
The project will contribute to transition in the following ways:
- Enhancement of the competitiveness of the railway and greater focus on the core business activity.
- Positive employment impact and Tbilisi city reintegration and development.
- Enhancement of Environmental and Safety Standards.
- Financing of a state-owned company with no financial recourse to the sovereign.
Georgian Railway LLC, the Georgian state-owned railway company.
EBRD will provide a senior loan of, equivalent in Swiss Francs of, up to EUR 100 million.
The estimated project cost is up to EUR 300 million.
Georgian Railway LLC has requested the European Investment Bank to co-finance the Project and will complement the banks' loans with their own funds.
Categorisation and process
The Project is categorised as “A” (EBRD’s 2008 Environmental and Social Policy) requiring a full Environmental and Social Impact Assessment (ESIA). The ESIA has been finalised and disclosed on 16 October 2009. A Stakeholder Engagement Plan and a Resettlement Framework have also been prepared. EBRD (with German Technical Cooperation funds) provided a consultant to assist GR and the local consultants in developing the ESIA.
The detailed design of the Project has included a detailed alternative analysis in the early phase of design development, which is reflected in the ESIA. A preferred route has been selected by Georgian Railway, which minimises environmental impacts and costs. Scoping stage consultation took place in July 2009 and allowed stakeholders to receive preliminary information and provide comments, including on the various routing options being considered at the time. Further public consultation took place at the end of November and early December 2009 within the framework of the Georgian regulatory process and in compliance with EBRD requirements. An Environmental and Social Action Plan (ESAP) describing all mitigation measures with deadlines and responsibilities was agreed with Georgian Railway and will be covenanted in the Project legal documentation.
Main Environmental and Social Issues
Main issues include the following
Land acquisition, including physical displacement of about 50 to 60 residential houses – a resettlement framework has been developed and a resettlement action plan is being developed. Mitigations include compensation and resettlement packages in conformance with Georgian law and EBRD PR5. The acceptability to the Bank of the final Resettlement Action Plan is a condition precedent to first disbursement.
Impacts on designated protected areas – the route intersects the Tbilisi National Park. Impacts on areas of biodiversity interest or conservation significance are limited, this particular area of the park (categorised as “traditional use”) being of lower conservation status and mainly intended for traditional agricultural use and recreational purposes. Specific compensation and/or mitigation measures are required under EBRD PR6. Such measures will be agreed in the form of a specific Mitigation Action Plan for the National Park to be agreed upon between the Ministry of Environment and Georgian Railway. This is covenanted in the ESAP.
Impacts of construction, operations and emergency situations (derailment and spills) on the Tbilisi “Sea”, a lake that is used for recreation and drinking water, with the new line intersecting its catchment area at about 900m distance. Mitigations, also covenanted in the ESAP, include the development of emergency response measures and adequate emergency preparedness during construction and operations, to be funded by the EU Neighbourhood Investment Facility grant.
- Environmental and social issues typical of railways (noise, vibration, potential construction social impacts, health and safety) – an Environmental and Social Action Plan (ESAP) has been prepared to manage these issues at all phases of the Project cycle. Mitigation measures include noise screens, to be funded by the EU Neighbourhood Investment Facility grant, traffic management, avoidance of level crossings in the design, fencing the new line in the vicinity of inhabited areas.
Removal of the old line in Tbilisi centre
About 22 families of Internally Displaced People are currently living in facilities belonging to Georgian Railway in central Tbilisi that are intended for demolition as a result of the bypass construction. This is to be addressed in the Resettlement Action Plan mentioned above.
About 24 commercial companies currently located in the centre of Tbilisi are using sidings connected to the line that is to be dismantled. However the volume of freight involved is relatively minor and it is anticipated that alternatives can be found. Consultation with affected companies is on-going and solutions acceptable to all parties will be sought.
- The removal of existing stations may entail limited impacts on neighbouring businesses. This is currently being investigated and any mitigations that may be needed will be included in the RAP.
Consultation and disclosure
The draft ESIA was disclosed for 120 days on 16 October 2009 in both English and Georgian. A Stakeholder Engagement Plan was prepared as part of the ESIA. In line with the Georgian regulatory permitting process and EBRD requirements, scoping took place in July 2009, and four public consultation meetings took place from 30 November to 4 December 2009, and direct engagement also took place with Non Governmental Organisations and with people affected by potential relocation.
Assistance to GR in the development of the ESIA and associated capacity building. Germany. About EUR 50,000.
Grant to finance environmental mitigation measures scope and technical assistance to finance the preparation of environmental ‘clean-up’ investigation study and the master plan land development. EU Neighbourhood Investment Facility. EUR 8.5 million.
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