Ukraine Public Transport Framework

Location:

Ukraine

Project number:

47901

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

14 Oct 2015

Status:

Board Approved

PSD disclosed:

13 Aug 2015

Sub-projects signed under this framework

Translated version of this PSD: Ukranian

Project Description

The EBRD is considering a € 100 million Ukraine Public Transport Framework consisting of municipal-guaranteed loans to public transport companies in Ukraine to facilitate critical improvements in public transport infrastructure in Odessa, Chernihiv, Chernivtsi and several other cities across Ukraine, with prime focus on transport renewal and associated efficiency gains.

EBRD will sign a Loan Agreement with a respective company and a Guarantee and Project Support Agreement with a respective city in each case. Each loan will be guaranteed by the respective municipality. TC funds will be mobilised to support project preparation, project implementation and institutional support.

Transition Impact

Framework for Markets: Transition impact will derive from establishing contractual arrangements in the form of a Public Service Contract (“PSC”) between transport companies and municipalities. The PSC will enable service support payments based on a price per vehicle-kilometre or passenger-kilometre and the implementation of an agreed service plan. In addition, new route tendering rules will be adopted by each municipality, somewhat reducing the discrimination between public and private operators. Tariff reforms will be discussed with each client to target improvements in financial sustainability from fare revenues.

Demonstration of Successful Restructuring: Under the proposed framework, participating companies are expected to implement restructuring measures supported by TC-financed Corporate Development Programmes. These measures are supposed to result in improvements in financial management; investment planning, organisational efficiency, customer relations management and most importantly cost reductions and improved financial sustainability.

Setting standards for corporate governance and business conduct: the participating companies will improve the disclosure standards, disclosing information on financial and operating performance, including, inter alia, publication on the website of annual IFRS financials, investment summary and performance summary against targets specified in the PSC.

The Client

Information on each participating company is provided separately for each project

EBRD Finance

€ 100 million

Project Cost

€ 107.7 million

Environmental and social categorisation, impact, and mitigation

The Framework is not categorised; however, each project under the Framework will be categorised at concept review stage and will undergo separate Environmental and Social Due Diligence (“ESDD”). The Framework will include municipal projects that will facilitate critical improvements in public transport infrastructure in several cities across Ukraine, with prime focus on improving quality of services and efficiency of operations. The projects under the Framework will contribute to improving accessibility and mobility for all user groups, improve air quality in the participating municipalities and improve overall quality, safety and efficiency of urban transportation. The ESDD for each project will be carried out by an independent consultants as part of the Feasibility Study and will include an assessment of potential Environmental and Social (“E&S”) impacts – both adverse and beneficial - and an E&S audit of the management systems, existing operations and facilities of each participating Client with specific attention to the maintenance depot, labour practices, road safety and driver training, including electrical safety issues. Environmental and Social Action Plans and Stakeholder Engagement Plans, including a grievance mechanism, will be developed to structure the projects to meet EBRD PRs. If any of the sub-projects are categorised "A" requiring an ESIA, they will be submitted to Board for approval regardless of size of the loan.

Technical Cooperation

Pre-Signing:

  • TC 1: Project due diligence to include: (i) a technical review of the proposed operations to improve the public transport services in the City, demand, revenue and operational cost projections and competition in the market; (ii)  preparation of technical and functional specifications of the project components; (iii) financial and economic analysis of the proposed investments, including cost estimates and the preparation of the financial model; and (iv) environmental and social assessment in line with EBRD’s 2014 E&S Policy and Performance Requirements. The estimated total cost of this TC support is up to € 2 million, proposed to be financed by a bilateral or multilateral donor or the EBRD Shareholder Special Fund (“SSF”). The average cost of individual assignment is expected to be up to € 200,000.
  • TC 2: Audit and restatement of the companies’ accounts in accordance with IFRS. The estimated total cost of this TC support is up to € 200,000, to be financed by the Bank’s own resources. The average cost of individual assignments is expected to be up to € 20,000.

Post-Signing:

  • TC 3: Project Implementation Support. The TC will support the PIU with procurement, preparation and evaluation of tenders, contract award and administration, financial control, project management and reporting including assistance to each company in implementation of ESAP and preparation of annual E&S reporting. The estimated total cost of this TC support is up to € 2.5 million, proposed to be financed by a bilateral or multilateral donor or the SSF. The average cost of individual assignments is expected to be up to € 250,000.
  • TC 4: Corporate Development and Stakeholder Participation Programme. The TC will (i) support institutional development in the form of operational improvements and financial improvements through development of Corporate Development Plan / Financial and Operational Performance Improvement Plan and (ii) implement a Stakeholder Participation Programme.  The estimated total cost of this TC support is up to € 1.5 million, proposed to be financed by a bilateral or multilateral donor or the SSF. The average cost of individual assignments is expected to be up to € 150,000.
  • TC 5: Strengthening of the Public Transport Local Regulatory Framework. The TC will cover preparation of: (i) PSCs between the City and municipal as well as private minibus operators; (ii) AFC implementation strategy; (iii) Parking Strategy; (iv) Tender strategy and documentation for private minibus operators, including financial model of city’s passenger transport system; and (v) Public Transport Development Strategy. The estimated total cost of this TC support is up to € 1.5 million, proposed to be financed by a bilateral or multilateral donor or the SSF. The average cost of individual assignments is expected to be up to € 150,000.

 

Company Contact

Information on each participating company is provided separately for each project under the framework.

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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