FYR Macedonia: Railway Corridor VIII - Phase I

Location:

FYR Macedonia

Project number:

42921

Business sector:

Transport

Notice type:

Public

Environmental category:

A

Approval date:

24 Jul 2012

Status:

Repaying

PSD disclosed:

30 Mar 2012

Project Description

The EBRD is considering providing a €46.4 million financing for the rehabilitation of Section 1 of the FYR Macedonia Railway Corridor VIII - Eastern Section.

The Eastern Section of Corridor VIII is 88.2 kilometres long and is divided into three sections:
Section 1: Kumanovo to Beljakovce
Section 2: Beljakovce to Kriva Palanka
Section 3: Kriva Palanka to Deve Bair, which is located on the Macedonian/Bulgarian border.

The EBRD financing would be used to finance the upgrades on the Section 1 - Kumanovo to Beljakovce, which has a length of 30.8 kilometres.

Once the Corridor is operational, it will significantly enhance FYR Macedonia’s transport system, by providing a shorter route to Istanbul, as compared to the current route via Greece. It will also greatly facilitate regional integration among the countries involved, facilitating transportation flows and stimulating the regional economy.

Transition Impact

Building on the initiatives of previous Bank projects in the rail sector, the project will facilitate further reform in the flowing areas:

  • Track Access Charges: revised track access methodology in line with the EU rail sector guidelines, which will enable third party access to the network in a transparent manner;
  • Sector Reform: the commercialisation of non-core assets across the company. A list of non-core assets to be divested through sale will be prepared looking at opportunities across rail infrastructure operations.
  • Energy Efficiency: specific areas will be identified for improving energy efficiency aspects in the Company along with definition of an Energy Efficiency Priority Investment Programme to be implemented as part of the Project.

The Client

The Beneficiary of this project is the Public Company for Railway Infrastructure (PERI), which is responsible for the provision and maintenance of the railway infrastructure.

EBRD Finance

€48.2 million senior loan to the government of FYR Macedonia, represented by the Ministry of Finance (‘MOF’).

Project Cost

The total project cost is €60.7 million.

Environmental Impact

Categorisation and justification

The Project has been categorised A, as Section 1 is an integral part of the whole of Corridor VIII which will be used for long distance railway traffic. An ESIA is required in accordance with Appendix 1 of the 2008 EBRD Environmental and Social Policy. In addition, the Ministry of Environment and Physical Planning (MoEPP) issued an EIA Scoping Decision (17 June 2011) requiring an EIA for the whole project, including the rehabilitation works in Section 1.

Information reviewed

Independent consultants prepared an Environmental and Social Impact Assessment (ESIA), Stakeholder Engagement Plan, Resettlement Compensation Framework and other documents to meet applicable Macedonian laws and regulations as well as Lender requirements. These documents were reviewed by the MoEPP, Lenders and Lender consultants prior to their disclosure for public comment.

Environmental and Social Issues

The potential environmental and social impacts of the rehabilitation and operation of Section 1 of the Railway Corridor VIII Eastern Section have been assessed within the ESIA for the whole corridor.

The main impacts identified in the ESIA of particular relevance to Section 1 of the railway are:

  • Localised effects on noise and vibration levels;
  • Construction transport - haulage routes and traffic management;
  • Worker and community health and safety risks – during construction and operation; and
  • Impacts on vulnerable local communities.

In Sections 2 and 3 additional impacts include:

  • Land acquisition and possible resettlement;
  • Soil management and sediment control due site clearance and the removal of top soil;
  • Air quality impacts during construction; and
  • Biodiversity.

Furthermore, once the line is electrified there will be associated safety risks.

Land has already been acquired for the first 65 kilometres of the Corridor, so no further land acquisition will be required for Section 1. However, there may be some temporary land take required for construction compounds and space for storage of plant, materials and the location site offices.

Within Section 1 the Roma Peri Cico community includes up to 20 families living 7- 8 m from the railway track, who will be directly affected by noise, vibration as well as by loss of access as a result of the Project. These vulnerable residents will lose an area where children currently play and also sheds where they store plastic bottles for recycling to earn an income. Vulnerable residents could also be affected in Section 3 where it is estimated that a minimum of 25 families will lose their homes and land due to land acquisition required for the Project. A Resettlement Action Plan for each Section will be prepared to meet PR 5.

Although there are no significant biodiversity concerns relating to Section 1, the ESIA has identified that there are two Emerald sites in the North- Eastern region of Macedonia; Pchinja-German (MK0000029) and Osogovo (MK0000026); both are intersected by the Section 3 of the Project, near the Bulgarian Border. Both sites were designated as areas important for birds, other species and/or habitats. These sites are still not officially approved by the Council of Europe. In Bulgaria, there are the two Natura 2000 sites (Osogovo, BG0002079 (Birds Directive Site, Special Protection Area (SPA) and Osogovska Planina BG0001011 and Special Area for Conservation (SAC) which are contiguous with the Macedonian Osogovo Emerald site. The tunnel into Bulgaria is approximately 1.7 kilometres from the Natura 2000 sites. The operation of the railway may pose a risk to animals and from fragmentation of sites as the railway bisects sensitive habitats. Further studies will be prepared to ensure the integrity and conservation objectives of the sites.
A Stakeholder Engagement Plan has been prepared for the project. In line with ESPOO requirements Bulgarian Authorities have been formally notified about the ESIA, due to the trans-boundary nature of the Project.

Environmental or social opportunities

The Project is expected to reduce travel time and provide positive, long-term and significant benefits to local, national and regional economies in addition to improving access locally and across the region. Business opportunities may also potentially increase for local contractors and subcontractors during the construction works. Economic benefits should provide improvements to the quality of life of some communities along the route. The project will allow the completion of the route, and complete a substantial amount of preparatory works that were undertaken between 1994 and 2004 in Section 1 and 2.

Environmental and Social Management & Monitoring Plan (ESMMP)

An ESMMP has been prepared and publicly disclosed. The Plan includes the requirements for:

  • The development of a Construction Environmental and Social Management System;
  • Implementation of a Stakeholder Engagement Plan;
  • A Resettlement Action Plan for each Section of the railway track;
  • Community Health and Safety Educational Programmes;
  • Noise abatement measures to be installed at defined settlements;
  • The Peri Cico community to be provided with assistance which will include measures to strengthen structurally unstable houses near the track and installation of noise and safety barrier; The community is also to be provided with a replacement play area for children and alternative access where necessary.
  • A Biodiversity Management Plan will be prepared and publicly disclosed prior to any works in Section 2 and 3. It will be completed in consultation with the National Nature Conservation Authority and other relevant stakeholders and include the necessary assessments needed to fully comply with Article 6 of the Habitats Directive; and
  • Safety plans for construction and electrical safety.

PERI will be responsible for ensuring that the appointed contractors implement the ESMMP.

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

Technical Cooperation

The following technical co-operation funds are envisaged as part of this project:

1. Supervision services and project implementation unit assistance to assist the Client in project implementation in compliance with the EBRD Procurement Rules as well as to conduct supervision of the construction site in accordance with FIDIC terms,

2. Institutional Strengthening to assist the Client in review and adoption of the improved track access methodology

 

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

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requestors’ identities may be kept confidential, upon request.

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