Railway Rehabilitation Project

Location:

Kosovo

Project number:

45276

Business sector:

Transport

Notice type:

Public

Environmental category:

B

Approval date:

02 Sep 2015

Status:

Repaying

PSD disclosed:

01 Oct 2013

Translated version of this PSD: Albanian

Project Description

Provision of a sovereign loan to the Kosovo, to be on-lent to Kosovo Railways Infrastructure JSC ("InfraKos" or the "Company") to finance the rehabilitation of Kosovo's Rail Route 10, approximately 148 km in length, from the border with Serbia in the north (Leshak station) to the border with FYR Macedonia (Hani i Elezit station) in the south.

The Project will be implemented in three phases and consists of the rehabilitation of the following sections: (i) Fushe Kosove - FYR Macedonia border; (Phase 1); (ii) Fushe Kosove - Mitrovice (Phase
2); and (ii) Mitrovice - Serbian border (Phase 3). This railway line is the only operational railway link connecting Kosovo's national rail network to the international network. The Project is part of the
Western Balkans Core Network and will support Kosovo's regional and European integration.

The Project is co-financed with a loan from the European Investment Bank (EIB) and investment grants from the Western Balkans Investment Framework (WBIF). In addition, WBIF has been
providing grant funds for project preparation and implementation.

Project Objectives

Support Kosovo's national economic development and contribute to its regional integration connecting Kosovo's national railway network to the European network.

Transition Impact

Good

The Project will promote Kosovo's regional integration by improving its key railway infrastructure.

The Project will also help Infrakos develop a track access charges methodology and an asset management plan and improve its accounting and reporting systems.

Client Information

KOSOVO SOVEREIGN

The Borrower is Kosovo represented by the Ministry of Finance. The Client is Infrakos, Kosovo's national railways infrastructure company fully owned by the state.

EBRD Finance Summary

EUR 39,900,000.00

A sovereign loan of up to EUR 39.9 million divided into three tranches.

Total Project Cost

EUR 196,000,000.00

The total estimated project cost is approximately EUR 196 million.

Environmental and Social Summary

Categorised B. The rehabilitation and upgrading of an existing rail route is not associated with significant environmental or social impacts and is expected to have benefits in terms of improved comfort and service reliability.

Environmental and social due diligence (ESDD) undertaken by the Bank comprised a site visit, a review of the Client's existing environmental and social (E&S) management systems and operational practices, an analysis of E&S impacts associated with the proposed work activities against the Bank's Performance Requirements (PRs). For Phase 2 (Fushe Kosove i Mitrovice), this due diligence was supplemented by and an   Environmental & Social Requirements Summary Report prepared by independent consultants. The Ministry of Environment and Spatial Planning of Kosovo (MESP) of Kosovo has reviewed the project concluding that it would not require an Environmental Impact Assessment under national law as it will include no reconstruction or extension and will only involve the rehabilitation of existing railway line as well as partial improvement of existing components. ESDD focused on the works that are part of Phase 1 and Phase 2 and identified that some additional resources and procedures are needed to achieve compliance with EBRD's PRs. An Environmental and Social Action Plan (ESAP) was prepared for Phase 1 and has been updated for Phase 2 to address these.

The original review of company corporate policies, operational procedures and business plans in 2015 showed that safety management arrangements are documented and have been prepared in line with Railway Safety Directive 2004/49/EC, however, improvements were needed in implementation of more formalised occupational health and safety (OHS) requirements and in environmental management arrangements. This issue was partially addressed through a Technical Cooperation (TC) assignment completed in 2017 through which 8 OHS champions were selected and trained.  In addition, some early progress has been made on the development of an integrated management system (IMS) incorporating Safety, Environment, Quality and medical requirements. As part of the IMS development, operational controls will continue to be strengthened in a number of areas particularly in relation to waste management, pollution prevention measures and the control of hazardous substances and are included in the ESAP.

There are no plans to widen the track and during the site visit there was no evidence to suggest that there will be any resettlement or economic displacement impacts in the Phase 1 works. Phase 2, however, involves the demolition of a number of buildings, some of which include inhabited rental accommodations. The Phase 2 ESAP includes a requirement to provide transition support to families renting dwellings in buildings to be demolished in line with PR.  

The Human Resources (HR) Department produces an annual HR Work Plan that identifies the need to adopt equal opportunity practices (specifically gender as currently 293 employees are male and only 14 female) and succession planning due to ageing population of the workforce, which is often typical in the rail sector. It is expected that the Client will continue its efforts in implementing best practices following the successful Gender TC from the first phase of the project.

Significant environmental and social issues associated with Phase  1 and Phase 2 include: (i) management of noise during the construction and operations phase; (ii) the impacts of construction works at water crossings to biodiversity and water quality; (iii) the potential for accidents due to the reduction in rail crossing points and the high potential for continued illegal crossings; (iv) the need to strengthen consultation activities concerning the construction works as well as community health and safety during the operations phase; and (v) the need to provide effective transition support to families renting dwellings in buildings to be demolished.          

An ESAP was developed for Phase 1 and includes requirements for: the implementation of the IMS, the provision of a worker grievance mechanism; measures to protect land contamination through hazardous materials management procedures and the development of a Stakeholder Engagement Plan utilising existing company systems and incorporating communications on trackside and level crossing public safety requirements. Certain aspects of the Phase 1 ESAP implementation   continue, including aspects related to: (i) implementation of an integrated management system for environmental and social (noting that headway has been made on the TC relating to health and safety); (ii) management of labour risks for third parties and contractors; (iii) stakeholder engagement; and (iv) grievance management.

The update of the ESAP for Phase 2 has taken into account implementation of the Phase 1 ESAP to date as well as significant issues associated with Phase 2.  The project implementation support consultant is expected to closely monitor the continued implementation of the ESAP during both phases of the works. The Company will be required to provide annual environmental and social reports to the Bank on operations and compliance with the ESAP and PRs.

Technical Cooperation

The following Technical Co-operation assignments are envisaged or have been initiated as part of the Project:

1. Preparation of detailed design and tender documents;

2. Works supervision;

3. Project implementation support;

4. Institutional strengthening to assist with the preparation of an Asset Management Plan, to review the track access charges in Kosovo and to assist with the implementation of the necessary improvements and harmonisation steps;

5. Capacity building for improvements related to occupational health and safety within the Company's operations (assignment completed in 2017 with 8 OHS Champions selected and trained).

6. Promotion of Human Resources' practices regarding equal opportunities and gender.

Company Contact Information

Zijadin Isufi
zijadin.isufi@kosovorailway.com
+383 38 550 550 ext.227
www.kosovorailway.com
Infrakos Sh.A./Infrakos J.S.C. Rr. Sheshi i Lirisë p.n. Fushë Kosovë 12000-Republic of Kosovo

 

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