Corridor Vc in RS - Part 1

Location:

Bosnia and Herzegovina

Project number:

49053

Business sector:

Transport

Notice type:

Public

Environmental category:

A

Target board date:

16 Nov 2017

Status:

Disbursing

PSD disclosed:

31 Jul 2017

Translated version of this PSD: Bosnian

Project Description

Provision of a sovereign-guaranteed loan of up to EUR 70 million to the Motorways of Republika Srpska (the "Company" or the "RSM") in Bosnia and Herzegovina (BiH) to construct two motorway interchanges at Johovac and Rudanka and a motorway section, approximately 6 km in length, between these interchanges (the "Project").

This motorway section is the first section of Corridor Vc to be constructed within the territory of Republika Srpska (RS). The total length of Corridor Vc within RS is approximately 45 km.

Corridor Vc is part of the Western Balkans Core Network and has been established as an indicative extension of the Trans-European Transport Networks (TEN-T). Corridor Vc is the key motorway which connects the BiH to the EU markets in the north and the Port of Ploce on the Adriatic coast in Croatia in the south.

Project Objectives

Support of BiH's economic development and contribution to BiH's regional and European integration by improving connectivity between its main cities and between BiH and neighbouring Croatia.

Transition Impact

he Project will facilitate BiH's internal and regional integration by improving its key transport infrastructure. The Project will assist the Company to improve its procurement and business practices by obtaining certifications from the Chartered Institute of Procurement and Supply (CIPS) and Quality Management System ISO 9001. It will further promote inclusion through the introduction of apprenticeships and work-based learning programmes for young engineers/students to be employed during construction either as permanent employees or as interns.

Client Information

MOTORWAYS OF REPUBLIKA SRPSKA

The Client is Motorways of Republika Srpska (RSM), a public company wholly owned by the Government of Republika Srpska.

EBRD Finance Summary

EUR 70,000,000.00

A sovereign-guaranteed loan of up to EUR 70 million to RSM with a back-to-back guarantee from the RS.

Total Project Cost

EUR 85,300,000.00

The total Project cost is estimated at approximately EUR 85.4 million. Investment grant co-financing is expected to be provided by the Western Balkans Investment Framework (WBIF).

Environmental and Social Summary

Categorised A (ESP 2014). The Project involves the construction of two motorway interchanges, Johovac (Tovira) and Rudanka (Kostajnica), and a 6.1 km long motorway section between the interchanges, plus a two lane connecting road of around 1 km to link to the existing trunk road including a crossing of the River Bosna. The Project is situated in the north-east part of BiH about 100 km east of the town of Banja Luka. The Project will improve the level of service, reduce congestion and will provide short term local employment during the construction phase where up to 500 workers are predicted to be hired during the construction phase. The Project will also deliver improvements in road safety as the new motorway will remove the heavy traffic passing through local villages and built up areas thus will help reduce community and road safety risks.

Assessment of alternatives and route selection were considered based on four key criteria (spatial, environmental, traffic and economic) and ensured that environmental and social impacts were avoided and minimised while providing for technical feasibility of the Project. Construction is planned to start early 2018 with construction completion in 2021.

The Project obtained the ecological permit from the Ministry of Physical Planning, Construction and Ecology in 2014 which is valid till 2019, based on the locally conducted EIA approved by the same body in 2011.

The linear nature of the Project will result in acquisition of land, the majority of which is privately owned and predominantly used for agriculture. Impacts on buildings have been minimised, however, a few houses will be directly affected. To mitigate these impacts, RSM developed a Land Acquisition and Livelihood Restoration Framework that defines impacted persons and entitlements for each type of impact.

The Project could have potential impacts of biodiversity mainly on River Bosna and the riparian vegetation along the river banks. A supplemental Biodiversity Screening Study was conducted within the Project area which identified the need to implement additional mitigation measures to ensure adequate protection to both species and habitats of conservation value in accordance with EU and EBRD requirements. These will be captured in the Project's Biodiversity Management Plan.

As part of the EBRD's environmental and social due diligence, an independent consultant was retained to supplement the Bank's internal review to ensure that the project is developed in accordance the Bank's Performance Requirements (2014). The due diligence identified a number of areas that RSM need to address prior to seeking EBRD financing.

An Environmental and Social Action Plan (ESAP) has been agreed with RSM and is disclosed on the Bank's website. Actions addressed in the ESAP include but are not limited to: (i) Construction related environmental and social issues and impacts to be appropriately addressed in the Tender Documents for the construction contractor who will be required to develop a full construction environmental and social management plan (CESMP) that is in compliance with EBRD PRs, (ii) A road safety audit to be conducted in line with EU Directive including the delivery of a community
and staff road safety awareness program (iii) Risks to Project infrastructure from flooding to be assessed prior to final design which will be revised if necessary, (iv) A detailed Land Acquisition and Resettlement Plan (LALRP) to be prepared outlining compensation and assistance to project affected people, (v) A biodiversity management plan (BMP) will be developed and implemented to ensure no net loss of Priority Biodiversity Features.

Finally, a disclosure package has been made public and comprises an overarching Non-Technical Summary (NTS) covering all components of the Project, Environmental and Social Action Plan (ESAP), Stakeholder Engagement Plan (SEP), supplemental Biodiversity Screening Study, Land Acquisition and Resettlement Framework (LARF), as well as the original Environmental Impact Assessment (EIA) that was conducted in 2011.

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

2017 Update

The project was signed in December 2017 and work is underway on the implementation of the ESAP.  The tender document is being reviewed by the Bank and is expected to be published in early April. A Road Safety Audit has been completed and recommendations have been shared with the designers to review and confirm acceptance of measures to improve safety.

Technical Cooperation

The following Technical Co-operation assignment is envisaged as part of this project:
- Introduction of quality management systems and obtaining of ISO standards; and
- Adoption of internationally recognised procurement standards and obtaining CIPS certificate.
For consultant opportunities for projects financed by technical cooperation funds, visit procurement of
consultants.

Company Contact Information

Dusan Topic
dtopic@autoputevirs.com
+38751233680
+38751233700
autoputevirs.com
Vase Pelagica 10 78000 Banja Luka Bosnia and Herzegovina

Business opportunities

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