Corridor Vc - Doboj Bypass

Location:

Bosnia and Herzegovina

Project number:

50603

Business sector:

Transport

Notice type:

Public

Environmental category:

A

Approval date:

25 Apr 2019

Status:

Signed

PSD disclosed:

18 Feb 2019

Translated version of this PSD: Bosnian

Project Description

The transaction consists of two loans of up to EUR 210 million in total. One sovereign loan to Bosnia and Herzegovina ("BiH") of EUR 60 million which will be on-lent via the Federation of Bosnia and Herzegovina ("FBH") to the Motorways of the Federation of Bosnia and Herzegovina ("FBHM") and a second loan of up to EUR 150 million to the Motorways of Republika Srpska ("RSM") backed-up by a sovereign guarantee.

The Project will finance the construction of approximately 14 km long section of Corridor Vc to full motorway standard with dual carriageway. The section starts with a bridge over River Bosnia just south of the Rudanka interchange in Republika Srpska ("RS") in the north and continues southbound, bypassing the town of Doboj, towards the FBiH via Usora to Medakovo. The section in RS is 6 km long and includes two tunnels and a viaduct. At the end of the second tunnel (Putnikovo brdo 2) the alignment crosses into the FBH, continues for another 8 km and it includes a short bridge over river Usora and two interchanges, Karuse/Usora and Medakovo.

Project Objectives

The Project is a follow on operation to the Bank's previous projects for the construction of key motorway sections on Corridor Vc in BiH which connects the Port of Ploce in Croatia with Budapest and is part of the Trans-European Transport Network (TEN-T) and South-East European Transport Observatory (SEETO).

Transition Impact

The Project will support BiH's national economic development and contribute to the regional integration of BiH by improving connectivity of its main cities with the neighbouring countries.

The Project will materially improve mobility and traffic safety, which will be verified on the back of transport data. Additionally, the Project will support the two motorway companies with the improvement of their planning and execution of maintenance activities as well as the enhancement of road safety through asset and inventory management.

Client Information

BOSNIA AND HERZEGOVINA SOVEREIGN

The clients are FBHM and RSM. FBHM is a limited liability company fully owned by the Government of FBH. RSM is a public company wholly owned by the Government of RS. The companies are responsible for the development, operation and maintenance of motorways and expressways in FBH and RS respectively.

EBRD Finance Summary

EUR 210,000,000.00

  • EUR 150 million loan to the RSM with a sovereign guarantee
  • EUR 60 million to BiH, on lent via the FBH to the FBHM

Total Project Cost

EUR 255,900,000.00

Environmental and Social Summary

Categorised A (ESP 2014). The Project involves the construction of a new motorway section approximately 14km in length with four lanes and several interchanges, tunnels and bridges, including a crossing of the River Bosna. The motorway section starts in the RS municipality of Doboj and ends in the FBiH municipality of Tesanj. Environmental and social due diligence (ESDD) was carried out by an independent consultant which included a review of the EIAs prepared to meet national requirements in FBiH and RS. A disclosure package has been made public and comprises an overarching Non-Technical Summary (NTS) covering all components of the Project, Environmental Impact Assessments, Environmental and Social Action Plan (ESAP), Stakeholder Engagement Plan (SEP), Land Acquisition and Resettlement (LARF).

The national requirements for environmental assessment have been met through the conducting of environmental impact assessments for the Project at the entity level. The E&S effects of the section Rudanka Interchange i Inter-entity border in RS were assessed in 2006 as part of the whole Corridor Vc EIA and then in 2011 to follow the RS EIA procedure and approved by the RS. In FBiH, the northern road stretch from the inter-entity border to Doboj South (Karuse) had been assessed as part of the EIA for Lot 1: Svilaj i Doboj South in 2007. The southern stretch from Doboj South (Karuse) to Medakovo had been analysed as part of the EIA for Lot 2: Doboj South (Karuse) to Sarajevo South (Tarcin) in 2007. Both EIAs were approved in 2007 by the Competent Ministry. During the main design stage for the northern section, a supplemental environmental elaborate was produced in 2010 to inform the Main Design on effects of a micro-alignment change and determine environmental mitigation measures that have to be considered by the Main Design. The Elaborate is subject to approval by the Competent Ministry. ESDD assessed the project development to be compliant with national environmental requirements and included consideration of technically and financially viable alternatives with active participation of local communities.

For Rudanka Interchange i Inter-entity border in RS, an Ecological Permit, valid for 5 years was awarded by the Competent Ministry, in 2014. In FBiH, an Environmental Permit for the southern stretch (Karuse - Medakovo) was awarded in 2015 and is valid for 5 years. The Environmental Permit for the northern stretch (Inter-entity border i Karuse) was issued in 2009 for the whole Lot and prior to the final agreement on a micro-alignment. It expired in 2014 and is the process of being renewed.

JPAC has an established environmental management system (EMS). The system was re-certified to ISO 14001 in 2018 and applies to the management of motorway construction and the management, maintenance and protection of motorway operation. JPAC is working to establish an OHS system in line with OHSAS 18001. RSM has not developed a formal (ESMS), either for the organization itself, or for projects. It has established certain processes and formal procedures which are primarily
as a result of compliance with legal requirements to manage risks during road construction and operation. Both companies have an established Human Resources system but will be required to adopt a formalised grievance mechanism for workers. EBRD's requirements on labour and working conditions during construction will be included in Construction Tender Documents for the Project.

The Project will implement pollution prevention and control measures in line with national and EU standards. Environmental Management Plans for construction and operation will include defined requirements for monitoring, in-water and near-water works, waste management, spoil disposal, borrow sites, spill response, groundwater protection.

Land acquisition, predominantly of forested or privately-owned cultivated land, will be needed which will give rise to some economic displacement. The alignment has largely avoided residential structures, though approximately 10 houses will need to be expropriated. A Land Acquisition and Resettlement Framework (LARF) has been developed and disclosed in line with EBRD PR 5 requirements. The Project's land acquisition process is not progressed enough to develop a Land Acquisition & Resettlement Plan, which needs to be prepared ahead of actual implementation of the resettlement and construction activities for the Project.

The Project area is not under consideration for designation as a nature conservation area and no critical habitats are affected. The EIAs desktop identification of ecological resources did not identify any significant effects on biodiversity in the Project area. However, there may be potential for priority biodiversity feature impacts given that the bridge construction works and river regulation works could impact the river bank habitats at the River Usora and the River Tešanjka and the
Project construction works may also impact areas of woodland vegetation. The River Bosna is not a designated nature conservation area and has not been formally proposed as such by the authorities.

An additional Biodiversity Screening exercise will be conducted by the an independent expert prior to construction to establish whether any priority biodiversity features may be at risk from the Project, and to determine whether a comprehensive Biodiversity Management Plan (BMP) should be developed to address any additional biodiversity risks not previously identified in the EIA. At a minimum, the project will however be required to develop a revegetation plan for anticipated impacts related to willow-poplar vegetation and related riparian habitats.

The Project designs are based on 100-year flood calculations and have not considered the effects of the 2014 flood which occurred after a 120-year rainfall event. The design flood studies are therefore required to be reviewed by experts in conjunction with the river basin authority and revised where necessary, based on the updated flood studies.

A formal Road Safety Audit has not been conducted to-date though for the Project and is proposed in the ESAP. The nature of the design suggests that there is not in this case a significant risk of community members trying to access/cross the road on foot in the Project section during operation as the design is largely isolated from local land users.

There has been public consultation carried out during the development of the Project both in FBIH and RS and a Stakeholder Engagement Plan (SEP) has been prepared for the project and includes requirements for public engagement during the pre-construction and construction period, including awareness raising activities with the local communities on community health and safety and the grievance mechanism for the Project.

An Environmental and Social Action Plan has been disclosed and includes requirements for a Construction Environmental and Social Management Plan (CESMP) and an Operation Environmental and Social Management Plan (OESMP), Traffic Management Plan, Biodiversity Screening Assessment, Chance finds procedures, grievance mechanisms and implementation of the SEP.

The Bank will evaluate the Project's environmental and social performance in accordance with the Bank's Performance Requirements through review of reports and monitoring visits.

Technical Cooperation

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

Pre-signing

(i) environmental and social due diligence (completed); (ii) climate change adaptation measures (ongoing); and (iii) road safety audit (ongoing).

Post-signing

(i) support for development and implementation of inclusive procurement practices; and
(ii) asset and inventory management assistance.

Company Contact Information

Adnan Terzic (FBHM), Dusan Topic (RSM)
t.adnan@jpautoceste.ba (FBHM), dtopic@autoputevirs.com (RSM)
+38733277900 +38751233680
+38733277901 +38751233700
www.jpautoceste.ba (FBHM), www.autoputevirs.com (RSM)
Sarajevo Office Dubrovacka 6 71000 Sarajevo Bosnia and Herzegovina (FBHM), Vase Pelagica 10
78000 Banja Luka Bosnia and Herzegovina (RSM)

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