Walbrzych urban regeneration programme

Location:

Poland

Project number:

51552

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

21 Oct 2020

Status:

Passed Final Review, Pending Approval

PSD disclosed:

07 Jul 2020

Project Description

Provision of a loan of up to PLN 96.6 million (EUR 21.5 million) to finance Walbrzych's urban regeneration programme involving the economic development and reintegration of several underdeveloped parts of the city through better interconnectivity both within the city and the region through the construction of a new bypass, co-financed with EU structural funds. In addition, the Bank is also working with the city of Walbrzych to improve energy efficiency in buildings under the Green Cities Framework Thermo-Modernisation project.

Project Objectives

The project will be part of a new transportation hub, which will create an integrated and smooth transportation system in Walbrzych and help create closer links between Walbrzych and Wroclaw, the major city in western Poland.

 

Transition Impact

ETI score: 46

Integrated:

1.1. The project will provide substantial economic benefits to Walbrzych and its wider region through the construction of a road bypass. The bypass will improve transport connectivity and relieve a traffic bottleneck on the existing road through the city, which is currently operating well beyond its design capacity with average annual daily traffic flow of up to 36,000 vehicles. 

The project will also enable and support wider regeneration projects within the City centre including a new rail station, shopping centre and park and ride site which will provide wider benefits to the City.

The cost benefit ratio of the project is around 4 representing a strong economic case. Walbrzych and its surrounding region is also one of the most deprived areas of Poland due to its historic reliance on the declining coal industry. The population of the City has declined from around 140,000 in 1995 to under 115,000 in 2018 and average incomes in the City are around 50% of the EU average.

Inclusive:

2.1. The planned bypass is expected to reduce daily commuting time for the local population living in the southern part of Walbrzych from 40 to 10 minutes during peak hours (30 minute time savings per way). Assuming a 40 hour work week with a twice daily commute, this equals to 5 hours per week or 12.5 per cent of productive time saved as a result of better transportation connection. This will affect the users of an estimated number of approx. 59,000 vehicles travelling from the southern to the northern city parts on a weekly basis, including to Walbrzych Special Economic Zone. The 30 minute reduction in commuting times is expected to have a positive impact on Walbrzych's inhabitants both in terms of economic status and well-being, as demonstrated by research.

2.2. As a result of the project, the city of Walbrzych will adopt new regulation to make participative land use planning a compulsory component of future urban planning processes. Community-based land planning and participatory design for public urban spaces is a collaborative approach between urban planners, government authorities, businesses and the local community. The approach goes beyond traditional stakeholder consultation and instead invites members of the local community to actively propose solutions and new ideas. The use of participatory land planning and design is expected to ensure that there is improved liveability in city areas, and that it can improve the public acceptability of development proposals by demonstrating transparency in the design approach, and ensuring greater inclusivity and community ownership of the final design. While Walbrzych has already experimented with one-off initiatives to increase citizen's participation in urban planning, there is no formal regulation in place to make this a standard component of future planning processes.

Client Information

CITY OF WALBRZYCH

The city of Walbrzych is the second largest city in the Lower Silesian Voivoidship with ca. 112,000 inhabitants. It is located in southwest Poland in the central part of the Sudeten Mountains, near the border with the Czech Republic and Germany. Its administrative borders encompass the area of 85 km2.

EBRD Finance Summary

PLN 54,200,000.00

The Bank's loan will co-finace the construction of the city's bypass road.

Total Project Cost

PLN 397,514,112.00

The project will be co-finaced by the EU Cohesion Fund and by Poland's General Directorate for National Roads and Highways.

Additionality

The Bank's additionality stems from:

Financing Structure: The Bank's additionality stems from providing funding which is unavailable in the current market environment.

Risk mitigation: The city has limited opportunities in securing long-term financing necessary to carry out the project. Unavailability of external financing for project and contract termination/delays in project delivery may trigger penalties for mismanaging of EU regional funds. Hence, the EBRD's role in providing tailored financing is critical in risk mitigation.

Standard-setting helping projects and clients achieve higher standards: EBRD credit, transition impact, procurement and environmental standards go beyond what commercial funding sources would require, promoting performance improvements and greater transparency.

Environmental and Social Summary

Categorized B under the 2014 ESP and low-medium risk due to physical resettlement caused by the construction of the bypass. The Project, which involves changing the course of the national road No 35 via a new 6 km long, dual-carriageway road, will move existing transit traffic through Waibrzych outside the old town and the city centre. Construction works are underway and commissioning is planned in June 2021. Environmental and social due diligence ("ESDD") comprised of review of existing environmental and social ("E&S") studies, an audit carried out by independent consultants and included a site visit by the Bank's E&S specialists. The findings of ESDD were that the municipality and contractor have some elements of E&S management in place, follow national legislation and that the project is generally structured to meet EBRD's Performance Requirements ("PRs"). The consulting team are in the process of finalising a disclosure package that will include a Non-Technical Summary ("NTS"), Stakeholder Engagement Plan ("SEP") and a Remedial Action Plan ("RAP") to address minor gaps between the resettlement approach implemented on the project and the requirements of EBRD PR5. A National Environmental Impact Assessment ("EIA") was completed for the project and an Environmental Decision as well as Development Consent Decision were granted well in advance of the initiation of construction activities. Overall, the Client is addressing E&S issues, in line with national legislation. However, the municipality does not have a formal E&S Policy, nor operate an Environmental, Health, Safety and Social Management System. The construction contractor is responsible for the management of Environmental, Health, Safety & Social ("EHSS") issues at construction sites and for implementing all EHSS mitigation measures and required by the project EIA. Oversight of construction is being carried out by the Municipal Roads, Transport and City Maintenance Management department. EHSS reports are prepared and revised by Project Engineer and by the Client on a monthly basis. The construction contractor is managing Occupational Health and Safety ("OHS") in line with Polish law and have a functioning OHSAS 18001:2007 OHS management system in place. All workers on site are required to pass an induction and initial health and safety ("H&S") training. Policies and procedures are in place for key OHS risks including working at heights, confined spaces, use of PPE amongst others. ESDD confirmed that workers have been provided with necessary personal protective equipment and are using them. Working conditions are subject to periodic verification and weekly inspections and H&S statistics are reported to the Client on a monthly basis. The construction contractor is also responsible for ensuring that working conditions at the construction sites are in line with Polish law. All subcontractors of the general contractor are hired based on back to back contracts as such their employees also need to be hired in line with Polish labour code. There are a significant number of Ukrainian workers on-site hired by subcontractors. ESDD confirmed that these workers are subject to all the requirements, rights and obligations applicable to Polish workers. An employee grievance mechanism is in place and all employees of the general contractor, as well as subcontractors are informed of the process through a variety of methods, including information boards at all construction sites. However, there is no grievance register and no effective follow up procedure. Workers are either living in the Walbrzych region already or responsible for their own accommodations. ESDD and other internal and external state inspections conducted to date have confirmed that conditions on site meet the requirements of Polish labour law. The project is expected to have benefits for community health and safety by diverting traffic and associated noise, air pollution and risks of accidents away from more densely populated to less densely populated areas of the municipality. Residual impacts of air pollution along the new alignment will be mitigated through the planting of trees along the road alignment. Noise barriers have also been planned for key areas along the road alignment in order to mitigate the risk of noise exceedances at sensitive receptors. Good construction practices are also being followed to minimise air pollution, noise, water and waste management during the construction phase. The road has been designed according to Polish road design standards. The project is taking place in an urban environment and will not affected any Critical Habitat or Natura 2000 sites. The main potential biodiversity impact involves habitat fragmentation which will be mitigated through the provision of animal passages including bridges, underpasses and culverts. Trees in proximity to construction sites are being protected and post-construction revegetation along the road corridor will use native vegetation. The land acquisition and expropriation process was initiated in 2006 and was finalised in 2016. In total, 36 ha of land (329 individual plots) was acquired, of which 25% was in a private hands, with the remainder public land. 62 families were resettled from rental accommodations in 5 municipal and 2 private buildings. All people received replacement dwellings of a higher standard than their original dwellings. While no agricultural land was impacted, one business was expropriated and fully compensated at market value. No complaints were received and there were no court cases related to the compensation process. A RAP has been prepared to assess the approach to resettlement against EBRD requirements and National Law. This assessment concluded that compensations met the standard of full replacement cost and that the resettlement approach was largely in line with these requirements. The RAP includes measures to address identified gaps including in grievance management and monitoring. The project does not affected any cultural heritage elements. However, a Chance Finds Procedure has been developed to identify and protect any unexpected finds. The EIA involved public hearings with local communities in line with the requirements of EU and Polish legislation. These were followed by a series of consultations in 2018-19 regarding the initiation of construction on the bypass and the urban regeneration project more broadly. A SEP is being developed alongside a formal grievance mechanism. An Environmental and Social Action Plan ("ESAP") has been developed for the project and will be agreed with client prior to signing. It includes the requirement to: develop and implement an Environmental and Social Policy as well as Environment Health & Safety Management system at the level of the municipality; enhance ongoing E&S oversight of construction; address gaps in the worker Grievance Mechanism; develop & implement an Emergency Preparedness & Response Plan; develop and implement a COVID-19 risk management and oversight approach; and implement SEP. The Bank will monitor the project through annual environmental and social reports provided by the Client, and site visits if necessary.

 

Technical Cooperation and Grant Financing

TC1: Technical, Economic, Environmental and Social Due Diligence. The Bank has appointed consultant to perform complimentary E&S due diligence, primarily focusing on review of social impacts, including those on vulnerable people and the land acquisition process (including physical resettlement and livelihood impacts from expropriated businesses), occupational and community H&S obligations for the General Contractor in the contract signed with the City adequacy of environmental mitigation measures for construction and operational stages as well as green effect of Project 1. The cost of the assignment was EUR 40,400 and was financed from Infra Europe team budget.

Company Contact Information

Mr Andrzej Piękny
apiekny@zdkium.walbrzych.pl
tel. +48 600 200 311
+48 74 847 74 77
http://www.zdik.walbrzych.pl/
Urzad Miasta Pl. Magistracki 1 58-300 Walbrzych

PSD last updated

17 Sep 2020

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

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Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP 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 following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out how to submit a Request for review through our confidential online form, by emailmail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requesters’ identities may be kept confidential, upon request.

 

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