Tbilisi Public Transport Project

Location:

Georgia

Project number:

35602

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

07 Jun 2005

Status:

Completed

PSD disclosed:

21 Mar 2005

Project Description

The objectives of the proposed project will be to:

(i) finance municipal buses, spare parts and workshop equipment

(ii) reform the regulatory framework for public transport in Tbilisi.

Transition Impact

Transition impact will be achieved in the following way:

  • Commercialisation
    The project will support the City and the Company in developing a Public Service Contract (PSC) to replace the annual city transfer payment to the Company. This will establish transparent standards for the provision of public transport services and shift it from an annual subsidy to a transparent, multi-year “payment-for-service”. Assistance will also be provided to prepare a Business Plan to increase operational efficiency, improve financial reporting by adopting IFRS, and strengthen capital investment planning capacity.
     
  • Private Sector Participation
    The project will support the development of the private transport sector by developing transparent procedures for route tendering.
     
  • Demonstration effect
    The project will demonstrate the added value of renewing an urban bus fleet in the context of a broader sector reform in conjunction with commercialisation of a municipal bus company.
     
  • Standards
    Procurement standards will be improved through application of the Bank’s Procurement Policies and Rules in relation to the purchase of both the new and used buses, the PSC will improve corporate governance since it clearly defines and allocates responsibilities for service delivery, finances, safety, tariff setting, passenger control, traffic control, marketing, ticketing, fare evasion and handling customer complaints.

 

 

The Client

The Tbilisi Bus Company.

EBRD Finance

EUR 5.0 million loan to the Tbilisi Bus Company.

Project Cost

EUR 8.0 million.

Environmental Impact

Project category

B/1: The project involves purchase of 150 new midi buses and 50 second-hand buses replacing some 260 old buses (pre Euro standard) which are reported to be over 20 years old. The environmental impacts associated with the improvement of urban transport can be readily identified and addressed through adequate mitigation measures. The environmental impacts of the project will mainly be positive.

Due diligence Visits by ED staff/consultants

The Environmental Analysis and Audit of the existing facilities were carried out by independent consultants. A specialist from the Environment and Sustainability Department of EBRD also visited the facilities in February 2005 to scope the due diligence and hold initial discussions with the Company.

Outcomes of due diligence and actions required

The Environmental Analysis results indicated that environmental impacts of the project will be mainly beneficial. The new buses have less air emissions, fuel consumption and noise. The investment into buying new workshop equipment would also allow TMBE to monitor and verify exhaust emissions so that the new buses and any upgraded existing fleet buses can meet regulatory standards and be maintained and also assist in improving their performance.

However, there are also environmental risks and potential liabilities associated with the past/current practices at the workshops/depots. The Environmental Audit identified improvements needed in management practises at the existing workshop/depot facilities.

These risks and liabilities can be mitigated by implementing the mitigation measures defined in the Environmental Action Plan, which covers the following issues:

  • Environmental management system
  • Air emissions in work places
  • Management of PCBs
  • Management of asbestos containing materials
  • Site drainage
  • Handling of hazardous materials
  • Waste management
  • Soil and groundwater contamination
  • Housekeeping
  • Health ad safety
  • Accident and incident reporting
  • Health surveillance programme
  • Fire protection and emergency planning
  • Chemical handling and bulk storage

There have been follow-up environmental audits of the project in 2007 and in 2008. The results indicated that while they have taken major steps in refurbishment of the facilities, they have not yet reached full compliance with their commitments in several areas including waste management, soil and groundwater investigations, fire and emergency response planning, and personal protective equipment. The Bank has been working with the Company on making additional progress in its commitments.

Project monitoring and reporting

The Company reports to EBRD annually on the measured environmental impacts and on the implementation of the mitigation measures. The Bank will evaluate the project's compliance with the applicable environmental and social standards during the lifetime of the project by reviewing these reports. EBRD environmental specialists will conduct monitoring visits to the project as appropriate.

Technical Cooperation

Pre-signing:

  • Assistance to prepare:

    (i) an audit and restatement of the Company’s accounts

    (ii) a Business Plan

    (iii) a tender for the supply of buses

    (iv) credit analysis of the City of Tbilisi.

Post-signing:

  • A Public Transport Restructuring Programme which will comprise advice on:

    (i) further restructuring of the public transport sector

    (ii) improving the private sector route-tendering regime

    (iii) negotiation of the Public Service Contract.
     
  • Assistance to the Company to strengthen planning, accounting, management, and operational capacity.
     
  • A Municipal Financial Management and Budget Training Programme to strengthen the City’s MIS and capital planning and budgeting capacity.
 

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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