Serbian Railways: Rollingstock

complete

The proposed project consists of financing a programme of works which will cover infrastructure (to be financed by EIB) and the purchase of rolling stock (to be financed by EBRD). EIB and EBRD contracts will be financed on a parallel basis. The objective of the project is to maintain the railway’s capacity and increase its operating efficiency to enable it to handle current and projected demand as economically as possible. The proceeds of the EBRD loan would finance purchase of freight wagons and a wheel lathe. The restructuring of the state owned companies has been on the top of the agenda of the IMF and the WB in Serbia. The government has been successful in launching the reform through concrete actions, such as the adoption of the Railway Law and establishment of a special unit responsible for a restructuring programme which is a key element of this Act. The transitional impact will be achieved through the following aspects of the project: (a) a programme of labour severance; (b) the divestiture of non-core activities; (c) network rationalisation; (d) the formal separation of infrastructure from operations; and (e) the establishment of a Public Service Obligation (PSO). Serbian Railways is responsible for railway operations in Serbia. The EBRD is considering a loan of EUR 60 million. In addition, grant funding from EAR has been obtained for the project implementation support. Grant funding is also being sought for the assistance in restructuring of Serbian Railways. The EIB financing will be in the form of a loan of EUR 80 million. EUR 162 million. The environmental impacts associated with this investment are not considered to be significant and will, most likely, be limited to ensuring the environmental soundness of the freight wagons. Environmental due diligence will be undertaken in accordance with the Bank’s revised Environmental Policy and Procedures (July 2003) and in line with the Environmental Performance Standards and Good Practices related to Railway Modernisation. A representative from the Environmental Department will visit the site to determine the level of the environmental work and consultation, if any, required. TC funds from EAR in an amount of EUR 1.3 million to assist with the implementation of this project. TC funding is being sought for the assistance in restructuring of Serbian Railways with an estimated cost of EUR 0.75 million.