Gaziantep CNG Buses Project

Location:

Turkey

Project number:

42939

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

08 Nov 2011

Status:

Repaying

PSD disclosed:

09 Aug 2011

Translated version of this PSD: Turkish

Project Description

On 8 November 2011 the Board approved a senior loan of up to €12 million to the City of Gaziantep to finance up to 50 new low floor compressed natural gas (CNG) buses, a CNG fuelling station and maintenance equipment.

The investment was the City’s current priority in a plan to integrate the public transport system by providing feeder bus lines to the newly launched light rail transit system.

The project enabled further public transport integration through the development of a new transport master plan, revision of the existing route scheme, tariff reform and integration of remaining operators into the ticketing system via robust Public Service Contracts.

The Bank is now proposing a EUR 5 million extension to the existing loan to finance an additional 50 CNG-powered buses to be used in public transport in Gaziantep.  The extension will be considered by the Board on 20 July 2016.

Transition Impact

The proposed Project is expected to result in transition impact in the following areas:

  • Commercialisation of public transport operations: A new contractual framework will be introduced with the signing of a Public Service Contract (PSC) between the City and the CNG bus operator as a separate corporate entity. It will ensure that the municipal transport company will deliver a certain quality of service and cover all costs from tariff revenue and, if necessary, pre-defined annual municipal transfers. Cost coverage will include adequate lease payments from the Company to the City to fully cover the debt service (capital costs) for the CNG buses. The PSC will establish a more transparent arms length basis for commercial public transport operations and increase accountability in the relationship between the City and the municipally owned public transport company.
  • Integration of all public transport modes, operators and tariff system: A common ticketing system, robust PSCs and a new integrated route network will offer users new quality of service. In addition, integration of the tariff system will enable users to interchange without paying fares more than once in order to reach their destination.
  • Framework for Markets: Public Transport Regulation and Restructuring Programme will assist Gaziantep in developing a Transport Master Plan along with new route plan and on-going tendering scheme of bus services under PSCs. This should facilitate separation of planning and transport operations, whereby the City’s Transport Department will focus exclusively on planning, organisation and monitoring of service provision, whereas the dedicated municipal transport company and a multitude of private operators deliver the transport service. This separation of functions and responsibilities under the PSCs will result in increased transparency and accountability between the City and operators and will promote sustainable development of the urban transport market.
  • Investment in alternative fuel technology: the new CNG buses will partially replace the oldest part of the existing fleet of diesel buses. CNG powered urban transport, although not entirely new in Turkey, continue to bring an element of technological novelty.

The Client

Gaziantep Metropolitan Municipality.

EBRD Finance

The EBRD is considering providing a senior loan of up to €12 million.

Project Cost

€12.6 million.

Environmental Impact

The project is categorised B under the 2008 Environment and Social Policy (ESP). The potential adverse environmental and social impacts associated with the project will be site-specific and can be addressed through the identified mitigation measures.

The environmental and social due diligence (ESDD) included a review of the management systems and activities of the Bus Management Department of the Municipality and Gazi Ulas, an environmental and social analysis of the proposed investment programme, and an audit covering the depots and maintenance facilities used for bus services and LRT.

Gazi Ulas will allocate 20 of the 50 CNG buses to five LRT feeder service routes. The other 30 buses will replace old diesel bus fleet operated by Gazi Ulas on urban routes, resulting in improvement of their environmental performance due to the lower air emissions from the new CNG buses. The proposed investment will also contribute to the significant improvement of public transport system for its users and is thus expected to increase the number of users. The new buses will improve mobility of physically challenged passengers.

The results of the management review indicate that there is no Environmental, Health, Safety and Social Management System (EHSSMS) in place for the Bus Management Department and improvements are required. The City does not have any written guidelines, policies or organisational procedures for ESHS management and there are some gaps in their Human Resources policy that will need to be filled, notably in the area of non-discrimination and equal-opportunity. Also the current resources and structure of the Bus Management Department are not adequate to ensure compliance with EBRD PR requirements, and therefore need to be strengthened.

Other issues identified during the ESDD can be summarized as follows:

  • Need for improved environmental, social, health and safety (ESHS) training programmes
  • Need to obtain connection and discharge permits for maintenance facilities.
  • Insufficient monitoring and need for a monitoring programme
  • Improvement of waste management practices

An Environmental and Social Action Plan (ESAP) has been developed to address and  mitigate the dentified E&S issues and impacts during implementation of the project, and to bring the Bus Management Department’s operations into compliance with the EBRD's PRs. ESAP will be agreed with the Client prior to signing and its implementation will be covenanted in the Loan Agreement.

The City will provide the Bank with Annual Environmental and Social Reports and notify on any material accidents or incidents. The Bank will evaluate the Project’s environmental and social performance in accordance with the Bank’s PR’s through reviewing the Client reporting and undertake periodic monitoring visits.

Technical Cooperation

It is envisaged that the technical cooperation support will provide assistance with the following:

1) Technical Due Diligence. Estimated at €50,000
2) Environmental and Social Due Diligence. Estimated at €20,000
3) Public Transport Regulation and Restructuring Programme (“PTRP”). Estimated at EUR 350,000
4) Procurement Support Services. €350,000

 

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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