Belgrade Bus Renewal Programme

Location:

Serbia

Project number:

44014

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

18 Sep 2012

Status:

Repaying

PSD disclosed:

16 Jul 2012

Translated version of this PSD: Serbian

Project Description

The EBRD is considering providing a senior loan of up to €65 million to Gradsko Saobracajno Preduzece Beograd (“GSP”) for the modernisation of part of its bus fleet. The project would include the purchase of 280 low-floor articulated (18 metre) buses and 120 Compressed Natural Gas (“CNG”) single (12 meter) buses. The Bank’s loan will part-finance GSP’s bus modernisation programme, which is expected to be co-financed by the City of Belgrade, GSP, and/or other commercial bank loans.

The sustainability goals of the project are to increase energy efficiency of urban transport systems by achieving the following physical indicators: 1) reduction in CO2 (by an estimated 35,000 tonnes of CO2 per year); and 2) the maintenance of public transport mode share in Belgrade at a minimum of 55 per cent, despite a continued rise in private car ownership.

Transition Impact

The project forms part of the Bank’s Integrated Approach, which calls for an increase in “the capacity and standards of public transport services as an alternative to car usage and to provide an overall balanced approach to mobility”. The transition impact of this specific project will be achieved through:

1. The successful restructuring of a public transport company.
2. Improved Framework and Regulatory Approach to the Public Service Contract.
3. Demonstration of New Ways of Finance through the introduction of Carbon Emission Monetisation.

The Client

Gradsko Saobracajno Preduzece Beograd

EBRD Finance

A senior loan of €65 million to GSP to be co-financed with the City of Belgrade, the Company, and/or other commercial banks (as either B-lenders or co-financiers), supported by a Municipal Support Guarantee (“MSA”) from the City of Belgrade.

Project Cost

Total project costs are estimated at €130.5 million.

Environmental Impact

Categorised B. Environmental and social due diligence entailed an audit of GSP and an appraisal of the new buses by independent consultants, and included a review of corporate policies and procedures and visits to several GSP sites and facilities. The conclusion of this work is that the modernisation of the bus fleet in Belgrade is expected to improve customer service, increase fuel efficiency and reduce GHG emissions. The new buses will meet Euro V environmental standards and will have lower CO2 emissions by around 21 per cent for the CNG buses and 5 per cent for the articulated low-floor buses compared with the existing fleet. Both types will lower particulate emissions by more than 90 per cent. The low-floor buses will also increase mobility for disabled people.

The environmental and social audit found that GSP is operating with a reasonable degree of compliance with EBRD Performance Requirements. Specific issues that need to be addressed include improvements to occupational health and safety management, waste water discharges and indoor air quality within the maintenance depot. A draft Environmental and Social Action Plan (ESAP) has been developed to address these non-compliances and this will need to be agreed with the client prior to EBRD Board approval for this project.

GSP’s labour policies and procedure are in line with EBRD requirements. There is a negotiated Collective Agreement, active Trades Unions and a grievance mechanism that allows employees to raise disputes and complaints. The client is undertaking a programme of redundancies and will be required to develop and implement a retrenchment plan, in line with PR2 and best practice. This retrenchment plan will include a justification for the planned job losses, the timescale, details of consultation with workers, criteria for selecting people and support for retraining and re-employment. EBRD’s social consultants have prepared a draft Terms of Reference for the development of the full retrenchment plan and this will need to be agreed with the client. Implementation of the Plan will be a requirement of the ESAP.

Technical Cooperation

Pre-signing

  • Technical Scoping, Procurement Support and other Due Diligence of the bus fleet purchase. This will include:

    (i) review of the technical specifications;
    (ii) scoping of the institutional and corporate change needs at the GSP and the Public Transport Directorate in the city administration;
    (iii) definition of the new regulatory structure for the Public Service Contract (“PSC”) related to buses;
    (iv) preparation of the economic appraisal of proposed investments; and
    (v) preparation of tender documentation and tender support ( €73,610 – funded from the Bank’s own resources).
  • Environmental and social due diligence to include an environmental and social analysis of the Project. ( €15,000 – funded from the Bank’s own resources).

Post-signing

  • Preparation of the GSP Restructuring Plan. This will also include implementation support for a period of up to 12 months once the Plan is officially adopted. The restructuring of the Company will focus on a business strategy, the transformation to a holding structure by mode of transport (tram, trolleybus and bus), mode specific PSC contracting, staffing and operational efficiency improvements, retraining/retooling, a partnering with the private sector (€300,000 – to be funded by an international donor).
  • Carbon monetisation of bus fleet modernisation. The carbon reductions due to the replacement of 400 out-dated diesel buses with the total of 280 new EURO-5 compliant buses and 120 CNG buses, will be determined, validated and monetised, via the most appropriate carbon trading platform. (€100,000 – to be funded by an international donor).
 

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

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