Railways Fleet Renewal Project

Location:

FYR Macedonia

Project number:

43997

Business sector:

Transport

Notice type:

Public

Environmental category:

B

Target board date:

18 Sep 2012

Status:

Repaying

PSD disclosed:

07 Jun 2012

 

Translated version of this PSD: Macedonian

Project Description

The EBRD is considering providing a sovereign guaranteed loan of up to €50 million to the Macedonia Rail Operating company (MRT), the national rail operator, to part-finance the Company’s rolling stock modernisation programme. Project components would include the purchase of new passenger and freight rolling stock, rehabilitation of locomotives as well as related consulting services.

The Project’s key objective will be to ensure improvement of MRT’s operating efficiency.

Transition Impact

Building on initiatives implemented under previous Bank-financed projects in the railway sector, the Project will facilitate further the progress of the railway reform in the following areas:

  • separation of the freight and passenger businesses as part of the railway sector reform programme;
  • commercialisation of MRT operations; and introduction of a dedicated energy efficiency policy and related energy efficiency management systems.

The Client

The Beneficiary of this project is the Macedonian Railways Transport Joint Stock Company (‘MRT’) – the national rail operator.

EBRD Finance

A loan of up to €50 million guaranteed by the Former Yugoslav Republic of Macedonia (‘FYR Macedonia’).

Project Cost

€ 59 million.

Environmental Impact

This project has been categorised B under the EBRD’s Environmental and Social Policy. Environmental and social due diligence for this new investment is ongoing and includes a review of MRT’s Environmental, Health and Safety (EHS) policies, system and performance data, meeting with staff and visits to operational sites.

The Company’s compliance with EBRD Policy and Performance Requirements is currently being assessed. Where deficiencies are identified, the EBRD and MRT will agree actions to address them as part of an Environmental and Social Action Plan (ESAP).

Environmental and safety management systems at MRT need to be strengthened in some areas such as measures to prevent pollution and control hazardous substances. A detailed occupational health and safety audit of operations to establish the current status of OHS management is currently underway. An improvement plan with details of actions that are necessary to meet best international practice will be agreed with MRT and included in the ESAP. The EBRD is reviewing MRT's HR policies and plans for reductions in headcount. MRT management is reported to have a good working relationship with the trade unions and Collective Agreements are in place covering pay and conditions, worker rights and grievance mechanisms. Once due diligence is complete, the EBRD will agree any additional actions with MRT that may be necessary to bring the redundancy procedures in line with the Bank’s Performance Requirements.

The rolling stock of MRT was inherited from the former Macedonian Railways and there has been very little investment since the early 1990’s. As a result the average age of the rolling stock is thus comparatively high, at between 30 and 45 years, for both traction units and hauled stock. This project, therefore, will be beneficial as it will seek to modernise the fleet resulting in improved safety and energy efficiency, reduced noise and greenhouse gas emissions and increased reliability. The rolling stock to be purchased under this investment will meet EU standards for safety and noise.

This PSD will be updated when the results of due diligence are known.

Technical Cooperation

The following technical co-operation funds are envisaged as part of this project:

  • Procurement and Implementation Assistance (new equipment) – €300,000
  • Institutional Strengthening Assistance (to cover business segmentation, rolling stock management plan and the preparation and adoption of the safety management systems) –€350,000;
  • Energy Efficiency assistance (to be funded under the existing TC-funded Sustainable Transport Technical Assistance framework) - €30,000
 

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

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.