MAV - Railcar Modernisation and Marketing Project

complete

To provide long-term finance for rehabilitation of freight and passenger rolling stock and for investments in revenue collection systems. Project objectives: To improve services and financial performance of railway services in Hungary by: (a) improving vehicle standards for customers; (b) reducing vehicle operating and revenue collection costs; and (c) improving market information for train service planning and marketing. Better-quality domestic and international freight and passenger rail services provided at reduced operating cost levels will contribute to Hungarian international trade, better national transport services, reduced budgetary support and higher safety levels. The borrower will be MÁV Rt., the Hungarian State Railway Company. A sovereign guarantee will be sought from the Hungarian Government. EBRD loan of ECU 40 million equivalent (currency to be agreed). The project is part of an ECU 220 million asset modernisation and management programme to be co-financed by the European Investment Bank, with possible contributions from EU-Phare, MÁV and the Government of Hungary. ECU 50 million equivalent (of which ECU 40 million are foreign costs to be financed by the EBRD; ECU 10 million are local costs to be financed by the Government of Hungary/MÁV) in currencies to be agreed. This operation involves the rehabilitation of open freight wagons and suburban passenger coaches which are owned and operated by MAV, the Hungarian national railway company. The project would also involve the introduction of a computerised freight accounting system and an automatic ticketing system. There are no significant environmental issues associated with this project. Safety in rail cargo transport would increase through the provision of railcars built to international technical and safety standards. The project was screened B/0, requiring an environmental analysis. That analysis, in the form of a technical annex to the Hungarian Railways Investment Study (August 1996), was carried out by the project sponsor and dealt primarily with the environmental issues associated with the improvements to be made to modernising rail infrastructure in the country, a component of the loan which is being financed by the European Investment Bank (EIB). The railcars financed under the project will follow international standards, which include requirements for wagon construction and use, securing loads, door and window closures, cleaning and disinfecting, labelling and notification. The status of certification with international standards will be confirmed to the Bank in routine monitoring reports. The project may require services in technical specifications, procurement and contract management.