Montenegro:ZPCg Rolling Stock Renewal Project

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The EBRD is considering providing funds to finance priority upgrade of the passenger rail fleet operated by ZPCG – a national passenger rail operator in Montenegro. In its current condition, the Montenegro passenger rail service is not sustainable beyond the short term since its ageing fleet is in a serous state of disrepair. The quality of service being provided has declined substantially in recent years, and as a result, passenger levels have fallen significantly. As the Government’s policy is that Montenegro should have a modern, viable passenger rail operator, the Government has requested EBRD support for the proposed priority upgrade of the passenger rail fleet. The proposed Project is expected to result in transition impact in the following areas: The Montenegro Railway Passenger Company (ZPCG), majority state owned Railways Passenger Company Up to EUR 13.55 million sovereign guaranteed EUR 16 million The Project has been categorised “B” as per the 2008 Environmental and Social Policy. It will entail significant Health and Safety benefits, as it will contribute to the phasing out of obsolete equipment (a major accident occurred in 2006). Due diligence was undertaken by the Bank both in respect of the particular activities to be financed by the Bank and at corporate level. Main findings are the following: It is envisaged that the technical cooperation support will provide assistance with the following: 1) Procurement and implementation support; and 2) Institutional Strengthening (Business planning and preparation of the PSO contract).