Almaty Development of Electric Transport

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Translated version of this PSD: Russian The EBRD is considering providing a senior loan of up to US$ 37 million under a sovereign guarantee to KGP Almatyelectrotrans (the Company), a municipal tram and trolleybus company. The proposed project, part of the Bank’s Integrated Approach, would further support the City of Almaty in implementing urban transport sector reform and addressing the remaining challenges in the sector. The proposed loan would finance the purchase of up to 200 new energy efficient low-floor trolleybuses for the Company, allowing to replace the existing worn-out trolleybus fleet. Additionally, the Project will provide a sector benchmark to the private sector and will complement the EBRD’s previous loan in trolleybus infrastructure signed in 2009. The Project aims at increasing the capacity and standards of public transport services as an alternative to car usage and to provide an overall balanced approach to urban mobility with viable travel choices for users through integrating various transport modes into one properly functioning City transport system. The transition impact of the project comes from (i) further commercialisation of a municipal transport company; (ii) tariff reforms and the establishment of sound regulatory framework; and (iii) private sector participation in the integrated ticketing system. The Project will promote commercialisation of the municipal transport company through improved operating efficiency and business standards. The modernised trolleybus fleet, in combination with refurbishment of traction power substations, will enable the Company to provide more frequent operations on routes, thus resulting in better service to the customers. The project will bring significant energy savings to the operator in the provision of transportation services, as modern trolleybuses are up to 30 per cent more energy efficient compared with the existing outdated fleet. The transition will also come from the tariff reform which will result in (i) the introduction of sector-wide tariff system with users able to interchange route and mode without paying additional fares; (ii) access for private operators to a compensation mechanism for carrying concessionary passengers; and (iii) establishment of a greater variety of tariffs. The Project will also facilitate further private sector involvement in the provision of public transportation services in Almaty. It will be achieved by delegating the installation, maintenance and operations of the new integrated electronic ticketing system to a private operator. Almaty Electrotrans, a municipal tram and trolleybus company, owned by the City of Almaty. A sovereign guaranteed loan of up to US$ 37 million. Up to US$ 44.6 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 the new low-floor energy efficient trolleybuses will contribute to the reduction of electricity consumption by 20 per cent and to further improvement of environmental conditions in Almaty. It will also improve accessibility of public transport for disabled people and people with pushchairs. The due diligence established that renewal of the old trolleybus fleet will be gradual, and the associated arrangements on reuse of the fleet in other towns and recycling or disposal of the spare parts has been put in place. Anticipated social benefits also include creation of new jobs for trolleybus operators and maintenance workers. 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 (SEP). 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 Support (up to €70,000) to assist the Company to procure new low floor trolleybuses according to EBRD’s PP & R. Visit EBRD Procurement Enquiries: Tel: +44 20 7338 6794; Fax: +44 20 7338 7472, Email: procurement@ebrd.com