Translated version of this PSD: Georgian
The EBRD is providing an extention to a sovereign loan of up to EUR 27 million to Georgia to be on-lent to the City of Tbilisi (the "City") for the benefit of the Tbilisi Transport Company Ltd (the "Company"), a municipal company, which operates buses and the metro in Tbilisi.
The project will be co-financed by a capital grant of EUR 7 million from the Eastern Europe Energy Efficiency and Environment Partnership ("E5P").
The project will improve and modernise the bus operations in Tbilisi through the purchase of a new bus fleet of up to 175 low floor buses for the City.
In addition, the project will promote a transparent contractual framework through the preparation and signing of a Public Service Contract ("PSC"), as well as support the City in development of a Bus Route Restructuring Study to optimise the interface of different modes of transport.
Transition Impact of the project would be:
- Establishment of transparent contractual arrangements for municipal service provision;
- Improved commercialisation through corporate development; and
- Promotion of equal opportunities to access employment and relevant skills training for both women and men.
The Government of Georgia, the City and the Company
EUR 27 million sovereign loan to Georgia to be co-financed by a capital grant of up to EUR 7 million provided by an international donor(s). Funds will be transferred to the Company.
The total project cost is EUR 39 million including co-financing provided by an international donor(s).
The project will also benefit from technical cooperation assignments to support project preparation
Categorised B (ESP 2014). Environmental and social impacts associated with the purchase and operation of the new CNG buses are deemed to be mainly beneficial. Any potential adverse environmental and social impacts are likely to be site-specific and manageable through implementation of an ESAP. The project will contribute to improving accessibility and mobility for all user groups, air quality in the City, fuel efficiency and overall quality, safety and efficiency of urban transportation.
The environmental and social due diligence has been undertaken in-house and included a review of the Company's existing management systems, relevant documentation, facilities and operations. As under the previous projects with the Tbilisi Public Transport Company under different management there were shortcomings with health and safety performance, specific attention was paid to EHS practices at the depots and maintenance facilities, the labour conditions, road and driving safety, hazardous materials management, safety issues associated with the introduction of CNG buses as well as handling and storage facilities. Assessment also included an analysis of environmental and social impacts and benefits associated with the project in order to ensure the proposed specification for the buses will meet EU requirements. GHG assessment has been undertaken by an external Consultant as part of the technical due diligence.
The due diligence has indicated that current environmental, occupational health and safety, and stakeholder engagement practices and management systems required further improvements to meet the EBRD's Performance Requirements (PRs). Main issues identified include insufficient enforcement of safe labour practices, traffic safety and inadequate company-level management of the ESHS issues. Some improvements to waste and hazardous materials management and water use were also required. As a Condition Precedent for Effectiveness, the Company has been required to appoint a representative of the Company’s Senior Management with the overall responsibility for co-ordination of Environmental, Health and Safety matters across the Company.
It was confirmed that the project can be structured to meet EBRD PRs. All identified gaps will be addressed via the implementation of a targeted Environmental and Social Action Plan (ESAP). Main items included in the ESAP are: a) appointment of a qualified ESHS person responsible for the implementation of the ESAP and overall supervision of the environmental, health and safety performance and improvements throughout the whole organization, b) proper safety and health risk assessment and corrective actions, c) traffic and driving safety improvements, d) implementation of the formal grievance procedures for internal and external stakeholder, e) improvement of waste and hazardous materials management, f) enforcement of the safe work practices and use of PPEs, g) emergency preparedness, e) contractor management, f) proper stakeholder engagement, j) environmental and safety monitoring and reporting, and others. The Bank will also provide post-signing TCs to help the Company build their corporate EHSS capacity and implement the ESAP. The Company and their activities will be subject to regular monitoring by the Bank’s specialists or appointed consultants.
Georgia is characterised by ‘large’ gender inclusion gaps in relation to labour practices and ‘medium’ gaps in relation to employment opportunities. On average, 56 per cent of women in Georgia participate in the labour force as compared to 75 per cent of men. According to the International Labour Organisation (“ILO”), Georgia presents the lowest number of female employment within Transport, Storage and Communications of the Caucasus countries (10 per cent of women vs 90 per cent for men). These figures are lower than that of the sectoral average for the EU countries where the overall proportion of women’s employment in ‘transportation and storage’ sector is 22 per cent, albeit also low. At present, the Company employs a total of 5,790, of which 1,273 (22 per cent) are women. Out of 1497 staff employed as bus and metro train drivers, there is only one female bus driver – and among its 69 managers, only 8 (11 per cent) are women.
As part of this project, the Company will implement improved HR policies and standards with respect to equal opportunities, in line with the EBRD Strategy for the Promotion of Gender Equality. A TC funded programme will introduce a tailored equal opportunities action plan to create better access to employment and related training opportunities for female candidates and staff; improve internal progression (horizontal as well as vertically), and raise the number of women employed at the companies. The action plan will be designed in line with international best practices. As part of this project, the Client will promote the importance of equal opportunities in the workplace by organising an end-of project national outreach event that will bring together key stakeholders (relevant Ministries, public and private industry players, training providers and experts) to showcase and discuss best practice and lessons learned in the field of equal opportunity and workforce management as well as produce a set of actionable outcomes with a specific focus on the Bank's existing or future clients in the sector.
The following technical co-operation ("TC") assignments are included as part of this project:
TC 1: Identification Study to analyse the existing situation in the bus sector and estimate the potential project costs. EUR 57,285, financed by the Bank's own resources.
TC 2: Support in preparing Technical Specifications to facilitate the timely and effective procurement of CNG buses. EUR 25,000, financed by the E5P allocation of the EBRD Shareholder Special Fund ("SSF").
TC 3: Pre-signing Procurement Support to assist the Company in line with the EBRD PP&Rs, in (i) preparation of tender documents, (ii) evaluation of tenders and preparation of the evaluation report, and (iii) contract signature. EUR 25,000, financed by the E5P allocation of the SSF.
- TC 4: Preparation of Financial Projections to assist the Bank with the financial analysis of the City and the Company for the project. EUR 20,000, financed by the E5P allocation of the SSF.
TC 5: Bus Route Restructuring Study comprising: (i) review of public transport sector and bus operations; (ii) preparation of the new route plan based on updated network and ridership survey; (iii) advice on the institutional and regulatory framework of the Tbilisi public transport sector; and (iv) development of principles and strategy for a new route scheme for (public and private) bus and minibus operators that ensures operational efficiency, full integration of the ticketing system, encourages competitive tendering for future bus routes, while enabling the City to acquire acceptable safety and environmental standards. The estimated cost of the assignment is up to EUR 500,000, proposed to be financed by an international donor or the SSF in the amount of EUR 500,000.
TC 6: Gender Advisory Services programme to include: (i) a review of the HR policies and practices of the Company to identify specific actions as may be appropriate to improve the gender balance in the Company and to support the Company in introducing them in its policies and practices; (ii) training and appropriate support to enable women to become bus drivers leading to their subsequent employment in the Company, and (iii) development of the recommendations for including gender considerations in the design and delivery of transport services and support to the Company with their implementation. The estimated cost of the assignment is up to EUR 200,000, to be supported under the Gender Advisory Services Technical Assistance Programme, financed by the SSF.
- TC 7: Corporate Development and Stakeholder Participation to (i) support institutional development in the form of operational improvements and financial improvements to secure sustainability of the bus operations, including signing of the PSC between the City and the Company, and (ii) implement a Stakeholder Participation Programme. The estimated cost of the assignment is up to EUR 280,000, proposed to be financed by an international donor or the SSF.
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