CORRIDOR 10 MOTORWAY COMPLETION

The proposed project involves upgrading of the final section of Trans-European Corridor 10 in Croatia, between Zupanja and Lipovac, from a 2-lane highway to a standard 4-lane motorway. The project will support regional integration between Western and Eastern Europe, as this is a key transit corridor linking Italy, Germany, Slovenia, Croatia, Serbia and Macedonia with Greece and Turkey. The project will also support reform of motorway tolls by supporting the development of a cost-based tolling system for the motorway network.

The transition impact of the project focuses mainly on the introduction of an electronic tolling system to European standards and the development of a cost-based tolling system for the motorway network in Croatia. In addition, the project will support regional integration which will facilitate economic development of the region.

The client is Hrvatske Autoceste (the Croatian Motorway Company or HAC). HAC is a state-owned limited liability company, which was established in April 2001 to develop and manage the motorway network and other tolled facilities. HAC reports to the Ministry of Public Works, Reconstruction and Construction.

The Bank will provide a loan to HAC in the amount of €45 million, which will be guaranteed by the Republic of Croatia. The project will be co-financed another IFI.

The total project cost is estimated to be €90 million, excluding taxes and duties.

The project has been screened as B/0 in accordance with the Bank's Environmental Policy in force when the project was initially reviewed by the Bank in March 2003. An environmental impact study of the project has been carried out in accordance with Croatian EIA law by Croatian consultants in 2002. The study was commissioned by HAC as part of their process of obtaining the environmental approval of the location of the project. EBRD's Environment Department reviewed the study and concluded that it exceeds the Bank's requirements for B-level Environmental Analysis.

 

The investigations, which had comprehensively identified and assessed potential impacts, showed that the project would not involve any new routing, that there are no protected areas or biodiversity issues and no identified archaeological or social issues associated with the project. The EIA identifies all necessary environmental protection and mitigation measures and provides a detailed monitoring plan, which will form an Environmental Management Plan (EMP) for the project. Discussions are under way to finalise the EMP, the implementation of which will be covenanted in the loan agreement.

 

A summary of relevant environmental issues associated with the project and mitigation measures will be attached to this PSD as soon as the content of the EMP has been agreed between HAC and the Bank.

Technical co-operation funds will be sought to assist the HAC with the development of options and a proposal for introducing cost-based tolling system for the motorway network in Croatia.