BTS

Location:

Russia

Project number:

34558

Business sector:

Transport

Notice type:

Private

Environmental category:

C

Target board date:

21 Sep 2004

Status:

Completed

PSD disclosed:

13 Jul 2004

Project Description

The proposed project consists of a loan to finance the acquisition of railway tank wagons and freight locomotives to enable the borrower to expand its freight forwarding business and start railway carrier services.

Transition Impact

The proposed project:
  • Provides support for a key sector reform in the Russian Federation 
    Financing of tank wagons acquisitions is consistent with the Russian Railroad Ministry’s strategy of mobilising private investment into the railroad sector - the acquisition of wagons by privatised transport companies is in line with the strategy of the Russian Government, which has launched a major reform in the railway industry. According to the announced structure of the reform the vast majority of the wagon fleet will belong to private companies.
     
  • Supports private ownership in the Russian railway sector 
    The Government has launched a reform programme that aims to shift the freight forwarding operations from MPS to the private sector. Currently, independent forwarders own less than 20% of the total freight cars in operation in Russia.  The railway reform aims to increase the share owned by private operators to 50% by 2010. 
     
  • Aims to enhance competition 
    Supporting an independent transport company would enhance the competition among the other players, since currently many transportation companies belong to major oil companies and mainly transport the parent company’s cargo. Having an independent transportation alternative would create value via outsourcing opportunities, as some companies start switching to independent operators rather than invest their money in their own captive transport subsidiaries.
 

The Client

BTS owns and leases a fleet of tank wagons and locomotives. It manages train movements of oil and petroleum products between refinery/pipeline terminus points and ports on the Baltic, Black and White Seas.  The client was established in 1997 and currently employs 129 people.

EBRD Finance

A 6-year senior loan of up to € 40 million.

Project Cost

US$ 57.1 million.

Environmental Impact

Screened C/1. Technical specifications of the tender documents will ensure that the new railway tank-cars will meet applicable Russian environmental, health and safety standards and good international oil industry practice. The environmental review of the Company’s environmental management, procedures and performance showed that, as owner and operator of tank wagons, its environmental responsibility is limited to ensuring wagons are well maintained and in serviceable condition. The Company has a good safety record because of close inspection and frequent depot repair preventive maintenance schedule. Independent consultants reviewed one of the Company's tank washing facilities near Rayzan, which has capacity to wash about 200 wagons per day with hot water and steam. The washing facility is enclosed and wash waters are captured at the washing facility and diverted to retention tanks, then through an oil-water separator and then recycled in a closed loop. Recovered oils are stored and used to fire local boilers (to generate steam and hot water for the washing process) or sold to re-claimers. The area around the washing facility was found clean and tidy.
The Bank will evaluate the project's compliance with the applicable environmental, health and safety requirements during its the lifetime of the project by reviewing annual environmental reports (AERs) on ongoing performance of project-specific environmental, health and safety issues prepared by the Company. The Bank’s representatives will also conduct periodic site supervision visits when deemed appropriate.

Technical Cooperation

None.

Company Contact

Sergei Ivashkin
Deputy General Director
BaltTransService
Bolshaya Pushkarskaya st., 41
St Petersburg
197101, Russia
Tel: +7 812 326 5010
 

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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