The EBRD is considering providing funds to finance priority upgrade of the passenger rail fleet operated by ZPCG – a national passenger rail operator in Montenegro.
In its current condition, the Montenegro passenger rail service is not sustainable beyond the short term since its ageing fleet is in a serous state of disrepair. The quality of service being provided has declined substantially in recent years, and as a result, passenger levels have fallen significantly. As the Government’s policy is that Montenegro should have a modern, viable passenger rail operator, the Government has requested EBRD support for the proposed priority upgrade of the passenger rail fleet.
The proposed Project is expected to result in transition impact in the following areas:
- Preparation and development of a Public Service Obligation (“PSO”) contract, which ensures the transparent and targeted budgetary support for rail operators running loss making passenger services while incentivising ZPCG to improve commercial management of its operations.
- Introduction of adequate business planning and budgeting process to provide for adequate resource and timing allocation for the implementation of the adopted strategy for the rail infrastructure.
- The upgrade of Montenegro’s passenger rail fleet with the emphasis on efficient use of the rolling stock and energy saving benefits of the project.
The Montenegro Railway Passenger Company (ZPCG), majority state owned Railways Passenger Company
Up to EUR 13.55 million sovereign guaranteed
EUR 16 million
The Project has been categorised “B” as per the 2008 Environmental and Social Policy. It will entail significant Health and Safety benefits, as it will contribute to the phasing out of obsolete equipment (a major accident occurred in 2006).
Due diligence was undertaken by the Bank both in respect of the particular activities to be financed by the Bank and at corporate level. Main findings are the following:
- Equipment to be purchased under the Project will comply with all applicable EU standards, including those pertaining to noise protection
- The Company is close to obtaining certification of an integrated quality / environment / Health and Safety management system in line with the requirements of ISO 14000
- An Environmental and Social Action Plan (ESAP) is being drafted to sanction the environmental and social commitments of the Company and its implementation will be monitored by the Bank.
It is envisaged that the technical cooperation support will provide assistance with the following:
1) Procurement and implementation support; and
2) Institutional Strengthening (Business planning and preparation of the PSO contract).
For business opportunities or procurement, contact the client company.
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