Port of Brcko

Location:

Bosnia and Herzegovina

Project number:

47546

Business sector:

Transport

Notice type:

Public

Environmental category:

B

Approval date:

30 Nov 2016

Status:

Repaying

PSD disclosed:

19 Sep 2016

Translated version of this PSD: Bosnian

Project Description

A sovereign loan of up to EUR 10 million to the State of Bosnia and Herzegovina. The facility will be on-lent to the District of Brcko and the funds will be used for rehabilitation and upgrade of facilities at the Port of Brcko (the "Port") and optimisation of road and railway access to the Port (the "Project").

Project Objectives

The Project will improve operational efficiency of the Port and increase the cargo handling capacity of the port, which is currently limited by the difficult rail access and outdated infrastructure. The Project is expected to induce a change in transport mode from road to primarily rail for the Port's traffic, providing a cost-effective and environmentally-friendly transport route to local traders of commodities.

In addition, the Project is expected to improve the efficiency and safety of rail operations in the city of Brcko, by enabling the relocation of the existing railway line which currently passes through the central urban area. The Project will also allow for the redevelopment of freed up land.

Transition Impact

Good.

Transition impact is expected to be derived from the following:

Setting standards for corporate governance and business conduct: The Bank will support both the District and J.P. Luka Brcko (the "Company"), the Port operating company, to enhance the commercialisation of the Company's operations and its financial and operational sustainability. The Company is expected to prepare and adopt a corporate development plan (the "CDP"), with focus on areas such as institutional restructuring, strategic development and business planning, technical and operational management, tariff calculation methodology setting and financial management.

The Project is also expected to contribute to the Green Economy Transition targets by facilitating the development of low carbon transport systems in the region.

Institutions, laws and policies that promote market functioning and efficiency: The District of Brcko is expected to enter into an operating contract with the Company, which will focus on (i) establishing clear Key Performance Indicators (the "KPI"s) to assess the Company's performance and (ii) setting up a tariff methodology and financial transfer mechanism.

Client Information

REPUBLIC OF BOSNIA AND HERZEGOVINA

The Borrower is the State of Bosnia and Herzegovina, represented by the Ministry of Finance. The Client for the Project is the District of Brcko, for the benefit of the Port and the city of Brcko.

EBRD Finance Summary

EUR 10,000,000.00

Sovereign loan of up to EUR 10 million to Bosnia and Herzegovina extended in two traches of EUR 7 million and EUR 3 million, to be on-lent to the District of Brcko.

Total Project Cost

EUR 13,180,000.00

Environmental and Social Summary

The project was categorised B in line with the 2014 Environmental and Social Policy. The Project is expected to contribute to urban regeneration, improve community health and safety and decrease in noise emissions with the elimination of rail freight traffic and reduction of road freight traffic through the city centre of Brcko. The Project supports multi modal accessibility of the Port of Brcko and will reduce the cargo transported by road from nearby ports. Potential environmental and social impacts related to all five project components will be temporary and associated mainly with the construction stage.

The EBRD commissioned environmental and social due diligence (ESDD) which was carried out by independent consultants. ESDD reviewed potential environmental and social impacts related to all project components and current environmental and social practices within Brcko District, the Project implementation agency. It also reviewed the current operations, environmental and social practices and capacity of the Port of Brcko, the beneficiary of the Project, through interviews with the Company's management and audit of port activities.

The project components have been subject to planning approval in line with Brcko District legislation, including relevant location permits and environmental permits issued respectively in 2011 and 2012. These were preceded by the preparation of a local EIA including a public hearing meeting.  Construction permits are in the process of being renewed as they have expired, or being sought, as is the case with the new railway line (component B). ESDD confirmed that the company Port of Brcko has been operating in line with the Environmental Permit issued in 2014.

The Project is located within urban and industrial areas of Brcko and the Port.  The project component related to the rehabilitation works of the existing railway line in front of Tus and on Desanka Maksimowic Street and removal of the railway line from city centre to the Railway station (parts of component 2) is located in the city centre, among residential, retail and recreational areas.   The construction of 2.87 km of new railway line from the Brcko Station to Port of Brcko and component 4 the reconstruction of the 900m access road to Port of Brcko are located in the industrial areas at the outskirts of the city.  Component 1, the construction of 263m of railway track to the harbour crane and component 3 the concrete cargo handling plateau with drainage, as well as component 5, the supply and installation of the harbour crane are located within the industrial area of Port of Brcko on the bank of River Sava.  ESDD has confirmed that the Project is not located within proximity of any protected areas and negative impacts of the project are expected to be limited and associated mainly with the construction stage.

The District, which will be responsible for implementation of the Project, has an established Project Implementation Unit, familiar with EBRD PRs from implementation of the Brcko Bypass project and has relevant capacity to implement the project in line with EBRD requirements.

The Port outsources it’s environmental and occupational health and safety management to external consultants, who are responsible for renewal of  relevant operational permits, regular monitoring and reporting on EHS issues. Even though the Port is located in close proximity to residential buildings, there were no formal complaints registered in relation to noise or air pollution from the Port and the above environmental aspects are regularly monitored under the Port Environmental Permit. The Port employs 55 staff (of which 10% are female) and 90% of employees are unionised. There is a functioning, however not formalised, grievance mechanism for employees in place. Discussions in regards to a collective bargaining agreement are underway at the national level between the Union and the Government of Brcko District.

A Land Acquisition and Livelihood Restoration Framework outlining EBRD requirements was agreed with the Client and the ESAP  includes the need to prepare a detailed land acquisition and/or livelihood restoration plan in compliance with PR 5. The final land acquisition needs of the new 4.5km rail link  will be assessed once the detailed design and supporting land expropriation and cadastre data becomes available, however no residential properties will be impacted. Some temporary short term construction related impacts on businesses operating within the city centre may be related to railway upgrade works within the city centre.  

An ESAP to structure the project to meet the Banks PRs is in the process of being finalised and agreed with the Client. The  ESAP includes requirements for Construction Environmental and Social Management Plans to be developed for all projects components; land acquisition to be carried out under a detailed Land Acquisition Plan and in compliance with PR5 and the requirement for access to businesses in the city centre to be maintained during the works. In addition a number of improvements to the Port operations, as the Project associated facility, are required in relation to: Occupational Health and Safety (including appointment of an OHS officer and development of an OHS Plan); waste management (particularly hazardous waste); development and implementation of emergency and spill response procedures; enhancements to traffic management and site security. Currently the Port is not compliant with requirements of the Urban Waste Water Directive; however the Bank is in the process of discussing another project with the Brcko District authorities, which would address the long term waste water treatment for the entire District, including discharges from the Port. A Stakeholder Engagement Plan was developed for the project and will be implemented by the Client.

The TC supporting Brcko District in project implementation will include EHS support. The Bank will monitor implementation of the Project through review of Annual Environmental & Social Reports and monitoring visits as required.

Non-technical summary: English | Bosnian
Stakeholder Engagement Plan: English | Bosnian

Technical Cooperation

TC support for the Project includes assistance with the Project implementation, covering procurement process and the Engineering supervision of works; review of current business practices and institutional set up; preparation of the CDP for the Company and development of the operating contract between the District and the Company.

Economic and climate change assessment of the Project, funded under the Sustainable Transport Technical Assistance Programme, is ongoing.

The TC programme is subject to further amendments and confirmation.

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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