Almaty Bus Sector Reform

complete

The EBRD is considering assisting the City of Almaty in reforming the regulatory framework for bus service provision. The Project will focus on the improvement of bus service standards through the establishment of a new tender regime which will equalise the operating environment revenue-wise for all operators. This will be achieved through the award of Public Service Contracts (PSC) and the development of ticketing system integration. As the first stage of the Project EBRD will consider a senior loan to Almaty Electrotrans, a municipal tram and trolleybus company, of up to KZT 5,100 million (equivalent to up to $34.8 million) under a project support agreement with the City of Almaty. The proposed loan would finance the purchase of up to 200 new low floor Compressed Natural Gas (CNG) fuelled buses in Almaty. Additionally, the Project aims at setting standards for service quality in public transport and integrating private operators into one client-oriented system with significantly improved service standards. The Project will establish a sound and transparent regime for the tendering of bus services to the private sector with a view to introducing effective competition between private transport operators. The Bank’s project will create solid financial and operational conditions for the private operators and will facilitate much-needed efficiency improvements in the provision of public transport services. It will also promote long-term, non-recourse private financing of investments, and introduce incentive-based Public Service Contracts. The Project will introduce CNG buses which should significantly reduce CO2 emissions and will significantly improve urban transport services in terms of increasing reliability of service, providing more capacity and integrating different urban transport modes, operators and ticketing. The transaction will promote commercialisation of the municipal transport company through improved operating efficiency and business standards. Almaty Electrotrans, a municipal tram and trolleybus company, owned by the City of Almaty. A senior loan of up to KZT 5,100 million (equivalent: to up to $34.8 million). Up to KZT 6,000 million (or up to $40.6 million). Categorised B in accordance with EBRD's 2008 Environmental and Social Policy. The environmental and social due diligence (ESDD) is complete and has included a review of the Company’s environmental and social management systems, facilities and operations, as well as investments envisaged under the Project. ESDD indicated that the Project will bring substantial environmental and social benefits. Purchase of new low-floor compressed natural gas (CNG)-fuelled buses of EURO-4 standard or higher will contribute to reduction of particulate emissions by 2 to 3 times in comparison with the buses using carburettor, diesel and injector engines. Emissions of greenhouse gases are expected to be reduced by 60-80 per cent, and noise levels will also be very significantly reduced. Anticipated social benefits include creation of new jobs for drivers, maintenance workers, engineers and supervisors. The Project will also improve accessibility of public transport for disabled people and people with pushchairs. Main environmental and social issues identified are related to absence of a robust corporate management systems for environmental, health and safety issues; some limited non-compliances with the national labour laws; contractor EHS management; vehicle disposal practices; safety of storage of hazardous materials on site, observed soil contamination in depots, obtaining the necessary approvals for Sanitary Protection Zone (SPZ) at the boundaries of AET sites, and absence of a formal grievance mechanism for stakeholders. The Company’s existing Environmental and Social Action Plan (ESAP) originally agreed for the previous loan in 2009 has been amended and agreed with the Company for implementation during this Project. The ESAP includes a variety of actions on enhancing the Company's corporate environmental, health and safety and social management practices and systems to manage E&S issues and impacts associated with their activities in line with EBRD's requirements. Specifically, the Company will: (i) develop an Environmental Management System in line with good international practice (ii) improve its labour practices to ensure compliance with legislative requirements (iii) develop effective contractor management practices to also ensure contractors are compliant with the Bank's E&S requirements (iv) develop a vehicle disposal programme (v) ensure that hazardous materials are correctly stored and contamination is eliminated, and (vi) introduce a formal grievance mechanism for stakeholders as part of a Stakeholder Engagement Plan. The Company will also be required to conduct monitoring of pollutant concentrations and noise levels at the boundaries of AET’s sites to justify the size of the reduced SPZ and obtain the necessary approvals from the authorities. Procurement and Implementation Support (up to $145,000) to assist the Company to procure new low floor CNG buses according to EBRD’s PP&R. Bus Sector Reform (up to $360,000), including: Talgat Abdrahmanov General Director AlmatyElectrotrans Almaty, Ul. Auezova 64 Tel.: +7 727 3752980 E-mail: almaty-trans@mail.ru