Shtip-Radovish Road Section

Location:

FYR Macedonia

Project number:

47829

Business sector:

Transport

Notice type:

Public

Environmental category:

B

Target board date:

11 Nov 2015

Status:

Signed

PSD disclosed:

03 Sep 2015

Translated version of this PSD: Macedonian

Project Description

The EBRD is providing a senior loan of up to EUR 64 million to the Public Enterprise for State Roads (“PESR”, the “Company”). The loan will be sovereign guaranteed by FYR of Macedonia (the “Guarantor”, or “State”).

The transaction will enable the Company to finance the improvement of a 37 km single carriageway section on the A4 highway in FYR Macedonia (the “Project”). The proposed road improvement works will include reconstruction and widening of the road pavement to provide a single carriageway road with two 3.5 m wide traffic lanes and two 2.2 m wide hard shoulders.

Transition Impact

The transition impact of the project is based on the following:

  • More widespread private ownership and entrepreneurship by tendering the maintenance of part of the project road sections together with the construction work;
  • Setting standards for corporate governance and business conduct: the project will help PESR to strengthen its capacity to manage its assets and operations effectively by supporting an establishment of a new Motorway Management Unit (MMU). The new Unit will ensure that PESR can effectively manage its assets which have been permanently growing in the last 5 years. Additionally PESR will also purse the CIPS (Chartered Institute of Procurement and Supply) certification further enhancing its procurement and implementation capabilities.
  • The expected transition impact rating is ‘good’.

The Client

The Borrower is the state-owned Public Enterprise for State Roads (“PESR”). PESR is responsible for the operation and maintenance of the national and regional road network in FYR Macedonia (“the State”). It was established in December 2012 as legal successor to the Agency for State Roads.

EBRD Finance

A senior loan of up to EUR 64 million to PESR.

Project Cost

€78.4 million.

Environmental and social categorisation, impact, and mitigation

Category B (2014). The Project involves the improvement of approximately 40 km of single carriageway road which is part of the A4 national highway between the towns of Shtip and Radovish.  The improved road is part of a programme of upgrading Macedonia’s national road network, and will connect with the Miladinovci – Shtip motorway presently under construction. The Project is also consistent with the overall plan for the improvement of the national road network, outlined in the Republic of Macedonia’s National Transport Strategy (2007-2017), and is part of the overall plans to upgrade the A4 national road which runs from the Kosovo border at Blace via Skopje, Petrovec, Miladinovci, Shtip, Radovish and Strumica to the border with Bulgaria at Novo Selo.

The Bank’s environmental and social due diligence (ESDD), which was supplemented with an assessment by an independent environmental and social consultant, concluded that the project has been structured in accordance with relevant national environmental standards, the substantive environmental standards of the EU, as well as the Bank’s Performance Requirements. 

The ESDD confirmed that some land will need to be expropriated along the route of the Expressway. The land acquisition process is in its early stages; however, it appears that very limited (if any) cases of physical displacement of ‘residential’ structures will be required.  To address this issue, a Land Acquisition & Resettlement Framework (LARF) has been prepared to support compliance with applicable Macedonian legislation and EBRD’s Performance Requirement 5.

A Road Safety Review has been undertaken on the Project, which noted that the proposed Expressway has an improved alignment and design that will improve the safety and efficiency of traffic flow along the corridor. The Environmental and Social Action Plan (ESAP) includes a requirement for a full Road Safety Audit to be undertaken once the detailed design is complete and at relevant points in the future in line with national requirements and the EU Directive 2008/96/EC.

Overall, the Project is expected to deliver a number of benefits, including improved connectivity, reduced journey times, and improved road safety along the road, as well as improving access to community services to the settlements along the route.  Some short-term local employment opportunities may be seen during construction, and the improved connectivity will potentially contribute to stimulating growth and investment in the area in the long-term.
 
An ESAP has been prepared and agreed with PESR. Actions addressed in the ESAP, include but are not limited to: (i) development and implementation of construction/operations environmental and social management plans, (ii) implementation of a road safety audit (to supplement the road safety review completed by EBRD), (iii)development and implementation of a resettlement action plan, (iv) implementation of construction good practices to avoid/minimise impacts to biodiversity, (v) implementation of the stakeholder engagement plan, including a grievance mechanism for projected affected persons, and (vi) establishment of an internal mechanism by PESR to monitor the EHSS performance of its contractors.

A disclosure package (in both English and Macedonian) to structure the project to meet the Bank’s PR’s has been prepared and is disclosed on PESR’s website and includes: an overarching Non-Technical Summary (NTS) covering all five sections of the Shtip Radovish Expressway, an ESAP, Stakeholder Engagement Plan (SEP) and LARF.

The Bank will evaluate the Project's ongoing environmental and social performance in accordance with the Bank's PRs through the review of annual reports and undertaking periodic monitoring visits. 

Technical Cooperation

  • Project Implementation Assistance. The estimated cost of the assignment is EUR 250,000.
  • Capacity building for the company to establish the Motorway Management Unit with an estimated cost of EUR 300,000;
  • Certification assistance  including carrying out a gap analysis and drafting an improvement action plan. with an estimated cost of EUR 75,000.

Company Contact

Aleksandar Stojanov,  Public Enterprise for State Roads
Assistant Director of Investment Sector
Dame Gruev str. 14
1000 Skopje

Tel: +389 2 3118044

E-mail: a.stojanov@roads.org.mk

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

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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.