Montenegro Rail Infrastructure Emergency Project

repaying

The proposed project will consist of two components: (i) implementation of the priority track rehabilitation programme to ensure adequate rail track safety standards; and (ii) a labour severance programme to support the restructuring programme of Zeljeznica Crne Gore Infrastruktura DOO (ZCG Infrastruktura). The proposed project will contribute to the transition process by: Contribution to market-based conduct and skills/setting business standards. Impacts include: (i) transfer and dispersion of skills in the areas of strategic planning; (ii) transfer of modern rail track maintenance planning and practices; and (iii) setting standards for corporate governance and business conduct. Frameworks for markets: (i) the proposed project will support the implementation of the labour restructuring programme as part of the ongoing rail sector reform; and (ii) the proposed project will support the ensuring of the regulatory framework for achieving the sustainable success of the organisational changes introduced in 2006. The Client is Zeljeznica Crne Gore AD (ZCG AD), the national rail holding company of Montenegro, and the Beneficiary is ZCG Infrastruktura, the fully owned subsidiary of ZCG AD and the manager of the national rail network. The EBRD will provide a sovereign guaranteed loan of EUR 15 million. EUR 15 million. B/1 screened project. The proceeds of the loan will be spent on emergency infrastructure rehabilitation and contribute to improving the safety of Montenegro’s rail transportation system. The loan funding will also be extended to cover part of the labour restructuring programme. The Bank's environmental due diligence confirmed that Montenegro Railways is developing an environmental management system, which is intended to be certified under the ISO 14,001 scheme. The Company's retrenchment policy will be reviewed by an independent consultant and if needed mitigation measures will ensure that the labour severance component of the project is undertaken in accordance with Bank policy and good international practice. These will be covenanted in the loan agreement and monitored by the Bank. In support for the Project, the Bank will provide the TC funds of EUR 250,000 to assist ZCG Infrastruktura in preparation of a medium term Infrastructure Asset Management Plan that will help ZCG Infrastruktura in increasing its operational efficiency and introducing modern rail track maintenance procedures.