Corridor Vc - Motorway Completion

Location:

Croatia

Project number:

50712

Business sector:

Transport

Notice type:

Public

Environmental category:

A

Target board date:

13 Nov 2019

Status:

Concept Reviewed

PSD disclosed:

08 Jul 2019

Translated version of this PSD: Croatian

Project Description

A sovereign guaranteed loan to Hrvatske Autoceste d.o.o., consisting of two tranches as follows:

Tranche A: a committed tranche in the amount of up to EUR 35 million to finance construction of the 17.5 km section on Corridor Vc between the town of Beli Manastir and Halasica Bridge, as well as purchase and installation of the relevant motorway equipment;

Tranche B: an uncommitted tranche in the amount of up to EUR 17 million to finance construction of the 5 km motorway section between the town of Beli Manastir and the Hungarian border. The commitment of the Tranche B will be at the Bank's sole discretion.

Project Objectives

Construction of the remaining sections on the Corridor Vc in Croatia, including: (i) a motorway section between Halasica Bridge and town of Beli Manastir, and (ii) a motorway section between the town of Beli Manastir and the Hungarian Border. The project will support regional integration and encourage introduction of inclusive procurement practices.

The project is complementing the Bank's ongoing financing of the sections of the Corridor Vc in Bosnia and Herzegovina, earlier financing of the Corridor Vc in Croatia as well as Croatian Port of Ploce, the maritime gateway for the Corridor Vc.

Transition Impact

Good.

The transition impact for the Project is expected to come from (a) an improved regional integration and connectivity, through facilitation of material improvements in the infrastructure connecting Croatia (including its Slavonia and Baranja county) with the other countries in the region, and (b) introduction of inclusive procurement practices to open up work-based learning opportunities for young people.

Client Information

HRVATSKE AUTOCESTE DOO

Hrvatske autoceste d.o.o. is a Croatian state-owned limited liability company in charge of management, construction and maintenance of the motorways.

EBRD Finance Summary

EUR 52,000,000.00

Sovereign guaranteed loan of up to EUR 52 million.

Total Project Cost

EUR 163 million.

Environmental and Social Summary

Categorised A (ESP 2014). The project involves the construction of a new 22.5 km motorway section between the border with Hungary and Halasica Bridge (over Karasica River) on Motorway A5 inclusive of road crossings, roadside service facilities (RSF), interchanges, toll gates and parallel roads. The motorway is divided into two lots: the 17.5 km long section Beli Manastir - Osijek and the 5km long section Hungarian Border - Beli Manastir. The project will be implemented by the Highways Agency (HAC).  Environmental and social due diligence (ESDD) was carried out by an independent consultant which included a review of the EIA prepared to meet national requirements in Croatia. The following documents were disclosed in May 2019: an overarching Non-Technical Summary (NTS) covering all components of the Project, a national corridor-level Environmental Impact Assessment (EIA) originally disclosed in 2016, Environmental and Social Action Plan (ESAP), Stakeholder Engagement Plan (SEP), Land Acquisition and Resettlement Framework (LARF), Supplementary Lenders Information Package (SLIP), Framework Environmental and Social Management Plan (F-ESMP) and Health and Safety Management Plan (F-HSMP).

The project was subject to the national EIA process for each respective lot in 2003 and 2004, which was supplemented by an updated Environmental Impact Study (EIS) in 2016 and received a positive decision from the Ministry of Environmental Protection and Energy in 2017. ESDD confirmed that the project is compliant with the national environmental requirements and the project preparation activities included consideration of technically and financially viable alternatives with active participation of local communities.

HAC has implemented an integrated management system certified to ISO 9001, ISO 14001 and OHSAS 18001:2017 (and is planning to recertify to ISO 45001). It has a Human Resources Department and relevant policies in place that set out the approach for managing their workforce. Workers have several channels available for raising workplace concerns. Approximately 80% of employees are members of the Labour Union. 18.8% of all employees in HAC are women.  EBRD's requirements in regards to labour management and working conditions during construction will be included in Works Tender Documents and Contracts for the Project.

The Project will implement pollution prevention and control measures in line with national and EU standards. ESMPs and HSMPs, for construction and operation will include defined requirements for monitoring, in-water and near-water works, waste management, spoil disposal, borrow sites, spill response and groundwater protection.

The total land required for the project is circa 260 ha, affecting approximately 560 land parcels, predominantly of privately-owned cultivated land. The land acquisition process, commenced in 2010, is at an advanced stage for section "Halasica Bridge to Beli Manastir and the overall completeness of the process is 90%. Further land acquisition for the Hungarian border - Beli Manastir section, is required"and may result in economic displacement. The alignment has avoided residential structures, and there is no physical displacement. The Land Acquisition and Resettlement Framework (LARF) has been developed and disclosed in line with EBRD PR 5 requirements and it also includes the requirement to assess the land acquisition completed in the past and identify any remedial measures required to achieve compliance with EBRD's PRs. A detailed Land Acquisition and Resettlement Plan will be prepared for the Hungarian border - Beli Manastir" section when the design is developed in sufficient detail and will be covenanted in the Loan Agreement.

The alignment does not cross any protected or biodiversity sensitive areas. Potential biodiversity impacts may be related to large quantities of sand material to be acquired from River Drava for embankment construction. An additional Biodiversity Impact Assessment will be conducted by an independent expert prior to extraction of materials to identify the potential presence of species and/or habitats of conservation importance that may need to be protected in accordance with national and EU requirements. Despite project alignment being located in the flood plain of the Drava River, relevant risk assessments undertaken as part of the 2016 EIS have shown limited risks to the project.  A Road Safety Audit will be undertaken on the detailed design and is captured in the ESAP.

A Stakeholder Engagement Plan (SEP) has been prepared for the project and includes requirements for public engagement during the pre-construction and construction period, including awareness raising activities with the local communities on community health and safety and the grievance mechanism for the project.

An Environmental and Social Action Plan has been disclosed and includes requirements for a project-specific construction and operation Environmental and Social Management Plan and a Health and Safety Management Plan, Traffic Management Plan, additional Biodiversity Impact Assessment, UXO chance finds procedure, chance finds procedures, public grievance mechanism and implementation of the SEP.

The Bank will evaluate the Project's environmental and social performance in accordance with the Bank's Performance Requirements through review of reports and monitoring visits.

There is an Environmental and Social Impact Assessement available for this project.

Technical Cooperation

Technical cooperation to be provided to support the Company and its contractors in design and implementation of the inclusive procurement practices.

Company Contact Information

Mr Igor Guja
igor.guja@hac.hr
Sirolina 4 10 000 Zagreb

Business opportunities

For business opportunities or procurement, contact the client company.

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