ESTONIA RAILWAY PROJECT

cancelled

To provide long-term finance for track renewal, rehabilitation and rationalisation of rail yards and to support management development. Project objectives: To improve service and finances by: (a) protecting existing revenue; (b) reducing operating costs and increasing revenue by overcoming capacity constraints; (c) enhancing conditions for successful privatisation of freight train operations; (d) improving safety and working conditions; and (e) reducing pollution. Expansion of the freight transport sector for transit traffic from Russia, strengthening of the commercial basis for providing track access to passenger train operators, and improving market-based skills through management development. The borrower will be Eesti Vabariigi Raudtee (EVR), the principal Estonian Railway company. A sovereign guarantee will be sought from the Estonian Government. EBRD loan of ECU 17.4 million equivalent in currency to be agreed. The proceeds will contribute to the rehabilitation of certain freight yard infrastructure together with rationalisation of tracks and train control systems, and a management development programme, to implement a more efficient and effective train operating strategy offering higher capacity. The project is part of an ECU 70.3 million programme of infrastructure asset renewal jointly financed with the Export Import Bank of Japan with parallel financing by the European Investment Bank and EC Phare, and contributions from EVR and the Government of Estonia. The project has been categorised as B/0, requiring an environmental analysis. The analysis was included as part of the Tallinn - Narva Line Capacity Study, prepared by the Canadian firm Transconsult. It showed that the Estonian railways have contributed to environmental problems and suffered from neglect and the poor practice of others. The Transconsult report describes several oil spillages, grease leakages and other waste deposited in rail yards and on tracks. As a result, it has been agreed that a Waste Management Plan should be included as part of the project. Discussions are currently under way involving EVR and the Estonian Ministry of Environment regarding the findings of the environmental analysis and the need, if any, for further studies. None