Sofia Public Transport Sector Reform - Urban Mobility Center



Project number:


Business sector:

Municipal and environmental infrastructure

Notice type:


Environmental category:


Approval date:

12 May 2011



PSD disclosed:

17 Jan 2011

Project Description

This transaction is part of the Bank’s Public Transport Reform Project covering essential areas of Sofia’s urban transport system and including 4 loans worth a total €24.96 million to Sofia Municipality, Urban Mobility Centre Ltd (UMC), Sofia Electric Transport Company JSC (SETC) and Metropolitan JSC (Metropolitan). The project IDs for the projects are: 42140, 42559, 42561, 42562.

Under this transaction the Bank is considering providing a loan of €7 million to the Urban Mobility Centre (UMC) to support the expansion of the e-ticketing system. The current system included installation only on the electrical transport modes and was put in place through an earlier Bank project. This loan will be guaranteed by the Municipality.

Through the investment loan to UMC the Bank will support efficiency improvements through introducing the e-ticketing system across all public transport modes. In addition, the new system will allow UMC to further revise and optimise its tariff policy to improve transparency and to maximise revenues.

As part of the Project the Municipality will revise its existing contract with UMC to convert it into a PSC compliant with EU regulation 1370. The contract also will define concrete funding commitments which will ensure that the public transport system is appropriately funded in future.

Transition Impact

It is expected that the combined transition impact potential of the four proposed transactions under the Bank’s Public Transport Reform Project should come from the following factors:

  • Framework for market functioning will be strengthened by the introduction of a new contractual arrangement (Master PSC) between the Municipality and UMC which will provide a transparent division of responsibilities to achieve a sustainable level of public transport services, secure stable funding for operators and establish a clear methodology for managing the demand risk. The Master PSC will effectively create a seamless relationship between the City as owner of public transport assets, UMC as its transport agency and regulator, and public transport operators. This Master PSC will detail the roles and obligations of UMC in respect of regular and substantive reporting to the City Council concerning operational planning, performance indicators, revenues flows (actual versus projected), tariff proposals, ticketing management and management efficiency of the various operators.
  • Private Sector Participation will be increased in the context of the expanded e-ticketing system. TC support will provide the City and UMC with a range of options to introduce an out-sourcing of ticketing control on public transport fleets. This type of measure is expected to be cost effective and also raise revenues over time by reducing fare evasion. By ensuring the main part of fare revenue is distributed and collected with an e-ticketing system through privately operated retail outlets and kiosks, UMC will enter into a contractual arrangement to operate a new ticket distribution network which will be given the right to sell electronic fares to passengers.
  • Commercialisation of services will be furthered by the introduction of a fully integrated electronic ticketing system which will enable much needed tariff reform to be achieved. In contrast to the blanket single fare charge operating today, the new system will allow UMC to introduce various tariff enhancements that allow users to choose between time and distance-based travel options. These enhancements can be fashioned to boost revenues while also facilitating collection of detailed passenger travel information and monitoring, a fact which will allow for future PSC operational plans to be precisely adjusted in line with demand and provide for better inter-modal coordination. Additionally, the real-time passenger information boards at surface public transport stops will provide for a more customer-oriented service overall.
  • Demonstration Effect: The range of enhancements to the public transport system, from the integrated, technology-led investments in traffic management to enhance travel times, to the expansion of the ticketing system and the introduction of a Master PSC arrangement with UMC as transport agency and regulator, provides a strong example to other major cities in the Bank’s region. Strengthening UMC will provide for a better, more predictable commercial platform for private and public companies to provide operationally and financially sustainable services. During an era of fiscal austerity and public sector restrictions, the package of investments and measures supported by the EU and the Bank in Sofia should have a positive demonstration effect to other municipalities as they work through the economic downturn.

The Client

Urban Mobility Centre LTD (UMC), which is wholly owned by Sofia Municipality.
UMC is mandated to be the executive arm of the municipality with responsibility for:

  • Overall planning of services levels and negotiating PSCs with transport companies to meet these objectives;
  • Organisation and operation of the integrated ticketing system for public transport. This includes collecting revenues and distributing them as per the PSCs to the transport operators;
  • Signing (together with the municipality) and controlling the implementation of the PSCs, including monitoring of the delivered service volume and quality;
  • Operation of the City’s on-street paid parking system.

EBRD Finance

The size of the Bank loan to UMC is up to €7 million.

Project Cost

The project cost of the UMC transaction is estimated to €8.4 million.
The total size of all related projects under the Bank’s Public Transport Reform Project is estimated at €94.63 million.

Environmental Impact

As part of the due diligence process the four proposed transactions under the Public Transport Reform Project were reviewed together.

The project has been categorised B in accordance with EBRD's 2008 Environmental and Social Policy. The proposed integrated investment programme is expected to provide improvements to the quality, safety, accessibility and energy efficiency of the public transport system in Sofia.

The due diligence included a corporate review of Sofia Municipality and the Municipality owned transport companies (Centre for Public Mobility CPM/Public Services Contracts (PSC), Sofia Electrical Transport Company and Metropoliten JSC), incorporating an assessment of their current environmental and social management systems, past and current performance against EBRD's Performance Requirements (PRs). An environmental and social analysis of the potential environmental and social impacts and benefits of the integrated investment programme was also completed.

The due diligence has confirmed that the Company and its operations are generally in compliance with the applicable Bulgarian environmental, health and safety and labour requirements. The project and Environmental and Social Action Plan (ESAP) have been structured to meet Bulgarian and EU environmental, social, health and safety standards.

Due diligence identified that some additional resources and procedures are needed to achieve compliance with EBRD’s Performance Requirements (PR’s). Issues to be addressed include:

  • Broader implementation of waste management procedures across the organisation.
  • Improvements to contractor management of environmental, health and safety requirements.
  • Unify health and safety procedures and assign responsibilities for their implementation
  • Implement a public grievance mechanism.

A Stakeholder Engagement Plan for the Transport Reform Project has been disclosed on the web. The Plan includes details of the project, a grievance mechanism and will be used to meet the Bank's public disclosure requirements for B-level projects.

An ESAP has been agreed for the Project to address any environmental and social issues identified during the due diligence to achieve and maintain compliance with the Bank's PRs within a reasonable time-frame. The Company will provide the Bank with regular reporting on the implementation of the ESAP.

Technical Cooperation


  • Assistance to the City to complete a Master Public Service Contract to meet EU regulations. Estimated at €100,000.


  • Public Transport Tariff Regime reform to UMC in order to boost sector revenues. Estimated at €150,000.
  • Project procurement and implementation support to UMC for e-ticketing expansion. Estimated at €290,000. This TC has been approved by the Spanish Government originally under the loan to SETC (OpId 39606), and will be re-oriented now to meet current needs for system expansion to ticketing.

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

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