Montenegro CGCO (Port of Bar) Pre-privatisation Project

complete

Translated version of this PSD: Montenegrin The EBRD is considering providing a €8.5 million sovereign loan to the Republic of Montenegro to finance priority capital expenditure of the AD Container Terminal and General Cargo Operator (the “Company”) at the Port of Bar. The proceeds of the loan will be used to purchase cranes and cargo handling equipment and to and to support the Company’s voluntary redundancy programme. The Company is majority state-owned and the proposed investments will be made with a view to facilitating the Company’s privatisation. Supporting the privatisation process of the container and general cargo operator would enhance the overall competitive advantage of the Port of Bar and increase its efficiency, thus allowing the Port to: a) fulfil its strategic role for the country; b) ensure its long-term viability and financial self-sustainability; and c) attract new business for the country. Having a strategic private investor operating the key terminal facilities at the Port would also foster competition and create value via enhanced transparency and increased efficiency in both operational and financial performance of the Port as a whole. Republic of Montenegro/Ministry of Maritime Affairs and Transport; €8.5 million sovereign loan. €10.7 million. The project has been categorised B in accordance with the EBRD Environmental and Social Policy 2008. The priority investment programme to purchase cranes and cargo handling equipment and financing of a voluntary redundancy programme will result in some adverse environmental and social impacts that can be addressed through mitigation measures. The due diligence is still on-going. As part of the due diligence for the project a recent Environmental Audit by an independent consultant was reviewed and a site visit was also undertaken. A review of the Collective Agreement and draft programme for the voluntary redundancies was undertaken and discussions were held with union representatives. The Collective Agreement includes detailed provisions for employee rights in the case of collective redundancies. The Company has only recently been established so maintenance and port operational controls and procedures are based on pre-existing procedures. Emergency response arrangements are in place through a contract and plans have been approved by the regulatory authorities. Permits are in place for the handling of dangerous materials. Due diligence has confirmed that a dedicated team will be established to develop and implement the Projects Retrenchment Plan compliant with the Collective Agreement and Banks requirements. A draft Environmental and Social Action Plan (ESAP) has been prepared for the project to address the Bank’s PRs. The ESAP includes requirements for: a Retrenchment Plan that meets EBRD PR 2 requirements; implementation of an Integrated Management System; provision of a Stakeholder Engagement Plan; occupational health and safety audit and the review and update of emergency response procedures. The Company will be required to carry out the Project in compliance with National, EU environmental regulations and standards and the Bank’s PR’s as well as to provide the Bank with annual environmental and social reports, including updates on the ESAP, and notification on any material accidents of incidents. None.