Pavlodar Tram Project

Location:

Kazakhstan

Project number:

45645

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

10 Dec 2014

Status:

Repaying

PSD disclosed:

29 Aug 2014

Translated version of this PSD: Russian

Project Description

EBRD is considering assisting the city of Pavlodar in Kazakhstan (the “City”) in the rehabilitation of tram public transport through modernisation of the City’s tram fleet and selected tram infrastructure.

An EBRD senior loan will be extended to the state owned Joint-Stock Company Pavlodar Tram Management Company (the “Company”), of up to EUR 10.0 million (KZT 2.46 billion)under the Project Support Agreement with the Akimat of Pavlodar Oblast and the Joint-Stock Company National Company Social-Entrepreneurial Corporation Pavlodar (“SPK”), owner of the Company.

The operation will enable the Company to improve the quality of the tram services and establish an improved regulatory framework through implementation of a Public Service Contract between the City and the Company. The Priority Investment Programme (the “PIP”) financed under the Project will include the following: (i) procurement of up to 25 new units of modern energy efficient trams, (ii) rehabilitation of the selected tram infrastructure, and (iii) procurement of a computer-aided dispatching system. In addition, the Project aims at setting higher standards for service quality in public transport sector.

Transition Impact

The project will reform the City’s tram services via introduction of a Public Service Contract (the “PSC”) between the Company, as the service provider, and the City, as the service customer. It will focus on the commercialisation and transparency of relationship between the City and the Company and facilitate enhanced service planning at the City level. The PSC will focus the Company on becoming a more client-oriented, reliable and cost efficient provider of passenger transportation services. Successful implementation of the Project will allow the City to test a new regulatory approach, balance tariff level and ensure sustainable public transport service provision on key corridors.

In addition, the Project will achieve sizable reduction in CO2 emissions and will improve the City’s urban transport services in terms of increased reliability, punctuality and comfort of the service.

The transaction will include Corporate Development Programme (CDP) for the Company to introduce appropriate corporate governance standards and transparent long term Business Plan, with setting of measurable targets and key performance indicators. It will set up a new concept of accountability for performance of the Company as well as formalize the system of institutional, accounting and managerial control in the sector.

The Client

Joint-Stock Company Pavlodar Tram Management Company wholly owned by the Pavlodar Oblast Akimat through its asset management company Joint-Stock Company National Company Social-Entrepreneurial Corporation Pavlodar (“SPK”).

EBRD Finance

A senior loan of up to EUR 10.0 million (KZT 2.46 billion).

Project Cost

Up to EUR 16.0 million.

Environmental Impact

Environmental and social due diligence (ESDD) has been undertaken by the independent consultants based on a review of the Company’s corporate management systems; relevant information provided by the Company, site visit and discussions with the Company’s personnel to evaluate the current operational performance and the risk management plans for the planned investment programme.

The investigation showed that the potential future adverse impacts of the project will be site specific and addressed through appropriate mitigation measures. The transaction will enable City to begin implementation of a public transport rehabilitation programme and, hence, improve quality of public transport services. The project implementation is limited to urban area within the boundaries of the City and no sensitive ecological receptors or protected zones are affected. It is confirmed that the project will not have adverse social impacts to local communities or other project affected parties, while a number of very tangible environmental and social benefits are likely to arise.

The due diligence confirmed that the Company has efficient public communication, consultation and disclosure policy that in general meets the EBRD's requirements. In order to avoid, minimise and mitigate the potential adverse E and S impacts of the project and ensure full compliance with national regulations and EBRD's PRs an Environmental and Social Action Plan (ESAP) has been developed to address the necessary improvements in the Company's E and S management systems.

The project will be monitored in terms of its environmental and social performance and implementation of the ESAP through annual E and S reports and site visits when deemed necessary.

Technical Cooperation

Pre-Signing
 
TC 1: Technical, Legal and Environmental and Social Due Diligence. EUR 175,000, financed by the Government of Spain EBRD-ICEX Technical Cooperation Fund.
 
Post-Signing
 
TC 2: Project Implementation Support for the project management, design, procurement according to EBRD’s PP&R, engineering, supervision work and staff training. The estimated cost of the assignment is up to EUR 350,000, to be financed by multi- or bi-lateral international donor or the SSF.
 
TC 3: Corporate Development and Capacity Building Programme for the Company. The estimated cost of the assignment is up to EUR 200,000, to be financed by multi- or bi-lateral international donor or the SSF.
 
TC 4: Development of Public Transport Strategy for the City, to assist the City in the preparation of a comprehensive PTS. The estimated cost of the assignment is up to EUR 450,000, proposed to be financed by multi- or bi-lateral international donor or the SSF.
 

Business opportunities

For business opportunities or procurement, contact the client company.

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Text of the PIP

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