Investing in railway infrastructure in Montenegro

Donors to the EBRD supported an institutional strengthening programme for Montenegro’s state-owned passenger train operator.

The EBRD has been involved in the ongoing renewal of the railway system in Montenegro, with a series of three investment loans that have provided much-needed funds for the rehabilitation of the rail infrastructure to improve its operational safety.

Independent railways

After the break-up of Yugoslavia, Montenegro established its own independent railway system. This was further reformed in 2009 with the creation of Zeljeznicki prevoz Crne Gore (ZPCG), the state-owned company responsible for passenger transport.

The railway network is relatively small in Montenegro, incorporating fewer than 250 km of track, but managing the service is still a challenge. Years of under-investment have taken a toll on the condition of the railway system and the old train fleet. The low availability of electromotor train units and frequent train delays have led to a steady decline in passenger volume.

Strengthening institutional capacity

More recently, in 2011 the Montenegrin government requested the Bank to consider financing the priority purchase of new “electric multiple units” to renew ZPCG’s train fleet. In preparation for the loan, and with donor funding from Germany, the company has worked with a consultant to strengthen its institutional capacity and to draw up a five-year formal business plan.

The business plan, which incorporates traffic expectations, resource constraints and opportunities to improve productivity levels, is now being implemented and will help ZPCG to meet its financial and operational performance targets.