Corridor Vc 2

Location:

Bosnia and Herzegovina

Project number:

47372

Business sector:

Transport

Notice type:

Public

Environmental category:

A

Approval date:

28 Oct 2015

Status:

Repaying

PSD disclosed:

30 Jul 2015

Translated version of this PSD: Bosnian

Project Description

The European Bank for Reconstruction and Development is considering a sovereign loan to BiH of up to EUR 156 million for on-lending to the Federation of Bosnia and Herzegovina (“FBH”) and further to the FBH Motorways.

The proceeds of the loan will be used for the construction of four 4-lane motorway sections to international standard as follows:

(i) an approximately 7.2 km motorway  section  between Buna and Pocitelj, and

(ii) an approximately 3.9 km motorway section  between Donja Gracanica and Zenica Tunnel;

(iii) an approximately 5.8 km motorway section between Donja Gracanica and Klopce; and

(iv) an approximately 10.4 km motorway section between Svilaj and Odzak.

The Project is part of Trans-European Corridor Vc which connects Port of Ploce in Croatia with Budapest and is part of Route 2 of the South-East Europe Transport Observatory’s (SEETO) Comprehensive Network.

Transition Impact

The Project will include sector reform and institutional strengthening measures in the following areas:

  • Road Traffic Safety: as part of the Project, the Bank will support the future Road Safety Unit of FBH.
  • Development of road PPPs: the FBH government is currently considering a Public-Private Partnership (‘PPP’) concession for the Karuse-Poprikuse section of Corridor Vc which has been prepared with the assistance of the IFC Advisory. The Bank is interested to consider providing further support for developing this PPP, if required.
  • Procurement: FBH Motorways has expressed its willingness to work with the Bank and its consultant to enhance its procurement procedures with a view to achieving certification by internationally recognized institutions such as the Chartered Institute of Procurement and Supply (CIPS).
  • Fuel levy increase for motorways which will provide the FBH Motorways with sufficient revenues and enable it to continue servicing its debt obligations going forward.
  • Legal support for the implementation of the Law on debt, debt issuance and guarantees in the FBIH – The FBIH Government is planning significant investments in the road infrastructure in the coming years and Corridor Vc. A Technical Cooperation project will provide recommendations for the improvement and development of the procedures and mechanisms for issuing guarantees in line with the best practices in the EU countries.
  • The expected transition impact rating is ‘good’.

The Client

The State of Bosnia and Herzegovina (the “State”, or “BiH) together with the Government of the Federation of Bosnia and Herzegovina (“FBH”), one of the two Entities comprising the State,   and the Motorways of the Federation of Bosnia and Herzegovina Public Company (“FBH Motorways” or “JP Autoceste”).

EBRD Finance

A sovereign loan to BiH of up to EUR 80 million, with on lending to the FBH and further to the FBH Motorways.

Project Cost

The total Project cost is estimated at approximately EUR 118.2 million.

Environmental and social categorisation, impact, and mitigation

Categorised A in accordance with the EBRD’s 2014 Environmental and Social Policy (ESP).  

The project involves construction of two new separate 3.9 km and 7.2 km long four-lane road sections of the Corridor Vc has the potential to result in significant adverse environmental and social impacts. Environmental Impact Assessments (“EIAs”) for the entire road Corridor Vc (DTM ID 38716) were subject to the Bank’s Environmental and Social Due Diligence (“ESDD”) prepared and disclosed to public in 2008 to meet national requirements and the Bank’s Environmental Policy 2003. This follow-on project largely utilises the existing EIAs which demonstrated that the project would not have significant environmental and social impacts provided that appropriate mitigation measures are implemented.

Environmental and social due diligence (ESDD) was undertaken by independent consultants  for this follow-on project, which included reviews of the revised alignment for potentially significant site-specific impacts and to identify any measures or changes that may be needed to structure the project to meet the 2014 Environmental and Social Policy (ESP 2014).  ESDD showed that detailed alignments for both road sections have been developed to avoid densely populated areas, reduce land acquisition impacts and in response to stakeholder requests. The realignment had not resulted in material changes that would require the preparation of new ESIAs. The ESDD concluded that the project preparation to date is overall adequate to meet the Bank’s PRs, EU and national requirements and that the impacts associated with the two road sections under this project were adequately assessed in the 2008 EIAs, with the exception of biodiversity and road safety, for which additional surveys and updated project-specific mitigation and management plans will need to be developed. Some of the existing documents also need to be updated and additional mitigation measures developed to structure the Project to comply with the Bank’s 2014 ESP and PRs.        

Whilst impacts to critical habitats are not anticipated, additional site-specific biodiversity surveys will be carried out prior to construction to confirm ESDD findings and, where necessary develop and/or refine specific mitigation measures. These surveys have not yet been carried out and, therefore, a requirement to complete these surveys in a form and substance satisfactory to the EBRD and disclose them to public prior to construction works has been included in the Environmental and Social Action Plan (“ESAP”).

No formal independent road safety audit in line with the Road Safety Infrastructure Management Directive (2008/96/EC) has been carried out on the project designs to date. A review of the current road designs as part of the ESDD has resulted in a number of proposals to improve design of the road in terms of road layout, use of guard rails and crash cushions and siting of warning signage.  The ESAP includes the requirement for a Road Safety Audit to be conducted by an independent certified auditor to develop further recommendations to be addressed in the project design.

The Bank’s ESDD further identified the need for minor updates to the 2009 Compensation and Resettlement Framework (CRF) prepared for the existing Corridor Vc project.  These changes are needed to reflect amendments in national legislation, particularly the Expropriation Law, and EBRD’s 2014 Environmental and Social Policy and PR 5 requirements.  ESDD findings indicate that efforts have been made to minimise land acquisition impacts on each road section. The ESAP has specified that the updated CRF be publicly disclosed and individual Resettlement Action Plans prepared for each road section.

A stakeholder engagement plan (SEP) has been developed to replace the previous Public Consultation & Disclosure Plan.  The SEP requires updated information on the project and specific mitigation measures to be disclosed and additional consultation meetings be held in directly affected communities and with land owners and users to discuss the micro-realignment, access and land acquisition issues.

The Client will provide the Bank with annual environmental and social reports. The Project will be monitored by the Bank in line with the commitments in the ESIA, ESAP, regulatory requirements and the EBRD’s Performance Requirements. The Bank will conduct monitoring visits, as required, during the construction phase.

Non-technical summary: English | Bosnian
ESAP: English | Bosnian
Stakeholder Engagement PlanEnglish | Bosnian

There is an Environmental and Social Impact Assessment available for this project.

2017 update

The Client is progressing with the implementation of the ESAP.  This has included progress in relation to the following:

  • the Preliminary  Design has been developed for both sections.
     
  • the Main Design  for the section Donja Gračanica-tunnel Zenica will be developed after the conclusion of contract with Contractor (the contract with Contractor will be based on FIDIC Yellow Book- Design & Build).
     
  • The Main design  for section Buna-Počitelj has been developed, and assessed using the iRAP methodology.  For the section Donja Gračanica-tunnel Zenica it shall be assessed using the iRAP methodology upon completion of procurement procedure and selection the contractor.
     
  • The star rating assessment by independent consultants reported a 3-star road along the entire road sections length (both north and southbound carriageways) for vehicle occupants at an 130km/h.
     
  • Some further public consultations have been undertaken in relation to Donja Gračanica-tunnel Zenica and no objections were raised. 
     
  • The application for Urban Permits has been submitted to the Federal Ministry of Physical Planning, but the permit is still pending.
     
  • The Resettlement and Compensation Framework from March 2009 was updated in March 2017 and published on the PC Motorways web site.
     
  • The potential impact on the small cemetery in the village of Donja Gračanica has been avoided through a realigning the corridor.

Technical Cooperation

The following Technical Co-operation assignments are envisaged as part of this project:

1. Legal support for the implementation of the Law on debt, debt issuance and guarantees in the FBIH;

2. Environmental and Social Appraisal;

3. Road Traffic Safety Management assistance to the Ministry of Transport and Communications of FBH;

4. Procurement certification by internationally recognized institutions such as the Chartered Institute of Procurement and Supply (CIPS).

Company Contact

Mr. Jasmin Buco, Acting Chief Executive Officer

JP Autoceste Federacije BiH d.o.o. Mostar

Tel: +387 33 277 900; +387 36 512 300

e-mail: b.jasmin@jpautoceste.ba

www.jpautoceste.ba

 

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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