Batumi Public Transport Project

Location:

Georgia

Project number:

37547

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

04 Sep 2007

Status:

Completed

PSD disclosed:

19 Apr 2007

Project Description

The proposed project would comprise the purchase of up to 100 buses, equipment, spare parts, depot rehabilitation and technical co-operation to restructure the public transport sector in the City of Batumi.

Transition Impact

Commercialisation
The proposed project will support the City and the Company in developing a Public Service Contract (PSC). The introduction of a PSC will:

(a) establish standards and a transparent structure for the provision of public transport services

(b) establish a transparent public service payment mechanism; and, make the company responsible for investment planning and financing. 

The project includes the provision of consultancy services to the Company to operate on a commercial basis with full cost recovery at operational level from fares and other own-revenues. It will also help it to prepare a Business Plan to:

(a) increase revenues and reduce operational costs,

(b) develop a sustainable investment programme,

(c) improve reporting, including adoption of IFRS, and

(d) improve management skills.

Private sector participation
The project will support the development of the private transport sector by clarifying the roles of public and private sector operators and by setting out long term public transport objectives for the city as well as clear regulatory structures. 

Framework for markets
Introducing the principles of a PSC, for the second time in the Georgian urban transport sector, will further establish a clear basis for commercial public transport operations and increase transparency and accountability in the relationship between the City and urban transport company.

Standards
Procurement standards will be improved through application of the Bank’s Procurement Policies and Rules in relation to the purchase of both the new and used buses, the PSC will improve corporate governance since it clearly defines and allocates responsibilities for service delivery, finances, safety, tariff setting, passenger control, traffic control, marketing, ticketing, fare evasion and handling customer complaints.

By reorganizing both public and low quality minibus services the entire offer of public transport will improve providing better services overall. The Public Service Contract provides the necessary commercial pressure for the client to perform.

In addition to the transition impact the ultimate goal is to improve the daily lives of the citizens of Batumi through the provision of infrastructure supply, in this case clean and reliable bus serviced which has an immediate impact on ordinary people’s welfare.

 

The Client

The Client is the city of Batumi and the Beneficiary is the Batumi Bus Company Adjaris Avtotransporti Ltd.

EBRD Finance

A loan to the City of Batumi of EUR 2.5 million. Batumi City will purchase 100 buses and make an in kind contribution to the Bus Company.

Project Cost

EUR 3.4 million (including related TCs)

Environmental Impact

The project has been screened as B/1, requiring an environmental audit and an environmental analysis of the proposed investment. A purchase of new buses involves limited environmental issues. Some limited and localised environmental issues may be associated with existing bus depots and workshops as well as with the disposal of old buses. These issues include potential soil and groundwater pollution from leaking oil tanks, indoor air quality and air emissions, waste disposal issues and worker and public health and safety.  The replacement of old buses with new ones will improve public transport reliability and efficiency as well as reduce air emissions and noise. It is expected that the new buses will meet Euro 2 standards at least. An Environmental Action Plan will also be prepared for mitigating potential environmental risks and liabilities related to the Company’s bus depot/workshops and for developing sustainable public transport systems.

In line with the EBRD requirements for public disclosure and consultation on B-level projects, the Client will release a summary of the proposed project, containing a description of identified environmental risks along with an outline of the required mitigation measures, locally to affected stakeholders in an appropriate language, prior to the Final Review of the Project by the Bank.

Technical Cooperation

Pre-signing

  • TC 1: Assistance to the Company to prepare a Business Plan (EUR 35,000)

  • TC 2: Credit Analysis of Batumi City (EUR 44,500)

  • TC 3: Environmental Audit (Cost estimate EUR 10,000)

  • TC 4: Audit of the accounts of Batumi Bus Company “Adjaris Avtotransporti” (EUR 24,000)

  • TC 5: Tender for the supply of up to 100 buses (Cost estimate EUR 30,000),

Post loan signing:

  • Public Transport Restructuring: (i) advising on the negotiation and signing of the Public Service Contract and regulatory framework for the minibus sector. (Cost estimate EUR 100,000 )

  • Company Management Assistance: to assist the Company to strengthen its planning, accounting, management, operations and procurement capacity. (Cost estimate EUR 200,000 including computers and software).

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

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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