FBIH Roads - Flood Repair and Upgrade

Location:

Bosnia and Herzegovina

Project number:

47461

Business sector:

Transport

Notice type:

Public

Environmental category:

B

Approval date:

08 Jun 2016

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 in the amount of up to EUR 65 million for on-lending to the Federation of Bosnia and Herzegovina (FBH) and further to the Public Company Roads of the Federation of Bosnia and Herzegovina (the “FBIH Roads”) to finance the repair and modernisation of selected road sections and structures in the FBH.

 The proceeds of the loan will be used to repair and upgrade the primary road network in the Federation of Bosnia and Herzegovina (“FBIH”) following the damage caused by the severe floods during the Spring of 2014, In addition, the financing is aiming to improve the level of service and traffic safety on the FBIH primary road 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 FBIH Roads to establish a Road Safety Unit, accident information database and the implementation of the EU Directive 2008/96 with regards to certification of auditors.
     
  • Procurement: FBIH Roads 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).
     
  • Improvement of the system for transfer of the fuel levy to the FBIH Roads and the fuel levy increase. The Ministry of Finance of the FBIH has expressed their interest to consider introducing legal changes that would enable FBIH Roads to receive directly the fuel levies collected on its behalf. The Ministry of Finance of the FBIH has also expressed its willingness to consider an increase in the fuel levies. These two changes would enable FBIH to service its financing obligations.

The Client

The State of Bosnia and Herzegovina (the “State” or the “BiH”) together with the Government of the Federation of Bosnia and Herzegovina (“FBH”), one of the two Entities comprising the State,  and the Public Company Roads of the Federation of Bosnia and Herzegovina (the “FBIH Roads”), a  limited liability company, wholly owned by the FBIH Government. The operating activities of the FBH Roads include the management, construction, reconstruction, maintenance and protection of a network of about 2,000 km of main roads in the FBIH.

EBRD Finance

A sovereign loan to BiH in the amount of up to EUR 65 million, with on lending to the FBH and further to the FBIH Roads to finance part of the FBH Roads’ investment programme for the repair and modernisation of selected road sections and structures in the FBH.

Parallel financing for other road sections under this investment programme is expected to be provided by the EIB and World Bank in the amount of EUR 50 million each.

Project Cost

The total Project cost is estimated at approximately EUR 93.25 million.

Environmental and social categorisation, impact, and mitigation

Categorised B in accordance with the EBRD’s 2014 Environmental and Social Policy (ESP).   The environmental and social impacts associated with the rehabilitation of existing road sections, repairs to bridges and tunnels and construction of two-lane bypasses can readily be assessed and mitigated. The Project is expected to have an overall positive impact through the improvement of the quality and safety of the infrastructure.‎

Environmental and social due diligence (ESDD) was carried out by independent consultants to assess the Clients capacity to comply with the Banks PRs during project implementation. The ESDD included a corporate environment and social review and environmental and social analysis of the proposed project including the various road components, tunnel, bridges and by-passes. This analysis included a review of background information and project documentation as well as site visits to assess the existing environmental and social conditions of the existing operational sites included within the proposed projects.  The results of the ESDD indicate that the Company is compliant with national legislative requirements and with the implementation of the Environmental and Social Action Plan (ESAP) the Project will be structured to meet the Bank’s Performance Requirements (PR).

Individual works projects will be required to prepare site specific Environmental and Social Management Plans incorporating generic and site specific mitigation measures, monitoring and reporting requirements to enable the works to be structured to meet the Bank’s PRs

Road safety is expected to improve as a result of the Project, especially on those road sections that were impacted during the May 2014 floods.  However, road safety audits and inspections will need to be undertaken for certain road sections in line with EU Road Infrastructure Safety Management Directive 2008/96/EC and this requirement has been included in the ESAP.

Efforts are being undertaken by the Company to avoid and minimise the need for land acquisition. Currently, the precise land needs for the project are not known, however some of the road projects are expected to result in some land acquisition. As a result a Land Acquisition and Resettlement Framework has been prepared in line with PR 5 and will be publicly disclosed.

The ESAP includes the requirements for the preparation of Environmental and Social Management Plans to more fully address the Bank’s PRs during the implementation of projects, particularly to cover labour and stakeholder engagement issues.  In addition, the Company will be required to develop an environmental policy, worker grievance mechanism and formalised stakeholder engagement plan.

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 ESAP, regulatory requirements and the EBRD’s Performance Requirements. The Bank may also conduct monitoring visits.

Non-technical summary

Technical Cooperation

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

1. Road Traffic Safety Management assistance to the FBH;

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

3. Quality Management Systems and obtaining ISO 9001 Certification

4. Institutional Strengthening related to Climate Change Resilience.

Company Contact

Mr. Ljubo Pravdic, Director

Javno preduzeće Ceste Federacije BiH
Terezija 54
71000 Sarajevo, Bosnia and Herzegovina

Tel: +387 33 250 391
e-mail:  pljubo@jpcfbih.ba

www.jpcfbih.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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