MMI Metro Line

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The proposed investment is an IFC A/B loan of up to EUR 110 million to support Metropolitan Municipality of Istanbul (“MMI”) to finance the construction and electromechanical works of the 5.3 km Kabatas-Mecidiyekoy metro line including three stations (at Kabatas, Besiktas and Darphane), the second phase of a new Mahmutbey – Kabatas line. The metro line will be constructed on the European side of Istanbul and will establish an important east-west public transit axis running through eightnorthern districts of Istanbul and interconnecting four existing tram/metro lines. Construction of the metro project would help MMI to reduce road congestion and promote alternative environmentally-friendly modes of public transportation in Istanbul.The project is being procured by MMI using a competitive public tendering process. The project included 3 phases of which IFC will be financing only phase 2;Mahmutbey – Mecidiyekoy (Phase 1): The winning bidder was a Turkish construction consortium Kalyon/Kolin/Gulermak JV. The contract was signed on December 18, 2013, with contractual completion due by the end of 2016;Mecidiyeköy – Kabatas (Phase 2): The winning bidder was the Turkish construction company, Alarko Taahut Grubu (“Alarko”). The contract was signed on May 13, 2015, with contractual completion due by the end of 2017. The construction started at the end of the May 2015. The line will be connected to phase 1 at Mecidiyekoy station platform, which will be constructed as a part of phase 1;300 metro vehicles (Phase 3): The tender was conductedon May 25, 2015, with a bid opening date of July 15, 2015. The tender process is still ongoing in line with Public Procurement regulations..The project sponsor is Metropolitan Municipality of Istanbul, serving a population of nearly 15 million inhabitants. Istanbul is the largest metropolitan municipality in Turkey. It hosts nearly 20% of the national population and has a diversified economic base. The project will be implemented by MMI’s railway systems department and operated by Istanbul Ulasim (“IU”), the municipal enterprise responsible for operating Istanbul’s urban rail network.MMI is an existing client of IFC since 2008 and has been involved in the successful construction of similar underground metro line projects in recent years. As part of a larger financing package arranged by BNP Paribas Fortis, IFC supported the expansion of the metro system by providing a loan for the 22 km long Kadikoy-Kartal metro line (project # 27309, disclosed August 5, 2008) on the Asian side of the city. That line was successfully completed in August 2012 and carried an average weekday ridership of 215,000 passengers during 2014. Ongoing supervision of the existing investment indicates that MMI’s and IU’s environmental and social performance is generally satisfactory.MMI has hired EMAY Uluslararasi Muhendislik ve Musavirlik A.S. (“EMAY”), for the control of the design, and monitoring of the contractors, including environmental, social, occupational health and safety requirements, during construction phase of the proposed project.During the construction of phase 2, tunnel boring machines (TBM) will be used for the majority of the tunneling work. The New Austrian Tunneling Method (NATM), which involves controlled blasting using explosive charges in rock sections, will be used for the last 750 m – 1 km section starting around Gayrettepe to Mecidiyekoy. Stations will be constructed by cut and cover method, where the station locations will be excavated, then it will be built, starting from the foundation upwards and finally the structure will be back-filled. At Kabatas and around Mecidiyekoy, there will be two shaft areas where work equipment, vehicles and TBM will be placedto tunnels by use of cranes. Although most of the project works will occur underground, a total of 2.4 ha of surface land will be used temporarily during the construction period and around 0.24 ha will be required permanently for these facilities. The temporary affected land comprises public recreational spaces which are currently used as green areas near military houses at Darphane and parks, which includes a section of Findikli Park at Kabatas and Besiktas Meydan at Besiktas.