ENR - Locomotive Renewal Programme

Location:

Egypt

Project number:

48309

Business sector:

Transport

Notice type:

Public

Environmental category:

B

Target board date:

04 May 2017

Status:

Signed

PSD disclosed:

20 Jul 2016

Translated version of this PSD: Arabic

Project Description

The EBRD is considering a sovereign loan of up to EUR 290 million (or USD equivalent) to the Arab Republic of Egypt, to be on-lent to Egyptian National Railways ("ENR").

The loan will be used to finance the purchase of up to100 new diesel locomotives under a Supply and Maintain contract outsourced to the private sector via competitive tendering.

Project Objectives

The project will support wider sector reform and the purchase of the new diesel locomotives will provide significant benefits to the service offer, in terms of fleet availability, operational efficiencies and reliability.

The operation will support ENR in its freight sector reform and commercialisation and will include the separation of freight operations and the introduction of track-access  charges, which will provide a framework for future private sector involvement in the railway market.

Transition Impact

Strong Good

Transition impact of the project is expected to derive from:

(i) development and implementation of a comprehensive freight reform programme - commercialising freight services by assisting ENR in converting the current freight business unit into a separate subsidiary company, operating with managerial independence and with commercial relationships with the remainder of ENR;

(ii) deeper private sector involvement - the Bank-financed locomotives will be procured under a Supply and Maintain contract which is intended to extend the asset life and demonstrate the benefits of private sector involvement;

(iii) reduction in carbon emissions by replacing 40-year old locomotives which will directly benefit ENR in reducing its energy consumption and achieving operating cost savings; and

(iv) economic inclusion through developing and undertaking a public awareness campaign to combat sexual harassment in railway transport which is essential for women's access to jobs.

Client Information

EGYPTIAN NATIONAL RAILWAYS

ENR is established as a General Authority under the Ministry of Transport and carries out both service operation and infrastructure management, under the 1980 Railway Law.
The railway sector plays a significant role in the Egyptian economy and is an essential mode of transport for low-income Egyptians. ENR operates an extensive network covering all major population centres and concentrations including the Nile Delta and providing a North-South connection for the country and connections to major ports (9,500 km of tracks, running 1,100 trains per day) and is a nationally important transport mode, in particular for passengers.

EBRD Finance Summary

EUR 290,000,000.00

Total Project Cost

EUR 433,000,000.00

Environmental and Social Summary

Categorised B (2014 ESP). The purchase and maintenance of new locomotives is unlikely to be associated with significant environmental and social (E&S) risks. Any potential adverse impacts are likely to be addressed through standard mitigation measures.

Environmental and Social Due Diligence (ESDD) has been carried out by ESD. ESDD included a site visit to assess the planned arrangements for the maintenance of the new locomotives, a review of progress of the implementation of the Environmental and Social Action Plan (ESAP) and a review of the annual environmental and social report from the previous project.

ESDD identified that ENR have limited arrangements in place for managing occupational road risks. In addition the site visit to one of the existing maintenance depots highlighted that there has been limited improvement in environmental, health and safety arrangements (EHS) since the previous ESDD which was carried out in 2013. ENR are currently developing and implementing a safety management system in conjunction with the Ministry of Transport to strengthen railway safety arrangements. In addition the Bank has become aware of a Spanish Twinning project under an EU program which commenced in November 2015 and aims to strengthen the overall capacity of railway safety in Egypt with particular focus on regulatory framework, safety management system and capacity building.

E&S requirements have been included in the tender documents for the previous locomotive supply and maintenance project as required in the existing ESAP and the same requirements will also be included in this new project. The Banks procurement team confirmed new locomotives under this project will meet EU emission standards.

ESD visited the proposed location for the new workshop which is on an existing undeveloped plot owned by ENR and considered that the site poses no significant E&S risks for the planned workshop. Egyptian law requires that an Environmental Impact Assessment (EIA) be prepared for the depot development; however the EIA study has not yet started as the detailed designs have yet to be prepared. It was also confirmed no applications for any permits have yet been made.

Progress with the previous ENR project ESAP is continuing with technical cooperation (TC) support from external consultants funded by the Bank. This TC assignment has developed various environmental and social procedures and plans which now require implementation.

An additional action related to road traffic safety management will be added to the existing ESAP and agreed with the client prior to Board.

Technical Cooperation

The project is expected to benefit from the following Technical Co-operation assignments:

(i) Procurement Implementation Support to facilitate the implementation process and assist ENR in the preparation of tender documents and during the tender process, with an estimated cost of EUR 400,000;

(ii) Development and implementation of a comprehensive freight reform programme(i.e. full separation, track access, commercialisation, etc.) with an estimated cost of EUR 950,000. This TC will support railway reform and pave the way for future private sector participation in the freight sector;

(iii) Development of awareness raising campaigns,with an estimated cost of EUR 250,000; and

(iv) Development of a comprehensive support package to assist in implementation of the ESAP, with an estimated cost of EUR 200,000.

The TC programme is still subject to further confirmation.

Company Contact Information

Eng. Mohamed Amer - Director, Purchases, Stores and Custom Clearance department
enr.pscc@gmail.com
0020225761337
https://enr.gov.eg/

Railways Compound, fifth floor, above Shubra Tunnel, Cairo, Arab Republic of Egypt

Business opportunities

For business opportunities or procurement, contact the client company.

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Text of the PIP

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