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EBRD lends €75 million for Bosnian roads
Loan to improve important links in primary road network in the country
The EBRD is lending €75 million to the state of Bosnia-Herzegovina for the
rehabilitation and reconstruction of key sections of the primary road network
across the country. The loan will increase the efficiency of the road
transport services by improving important links in the road network and by
upgrading maintenance operations through the introduction of pilot contracting
methods and better business and financial planning practices.
The facility will be on-lent to the two Bosnian entities and their relevant
road authorities – the Federation of Bosnia-Herzegovina will receive €45
million and Republika Srpska €30 million.
The project consists of a comprehensive five-year maintenance and
rehabilitation programme for the road companies in the two entities, which
would bring the road network to maintainable standards. In total, it includes
110 road sections in the Federation with a total length of 1,200km and 55 road
sections in Republika Srpska with a total length of 1,100km.
In addition, the loan will be used to introduce an innovative procurement
practice – performance-based road maintenance contracts – which are aimed at
improving road conditions on a more sustainable basis and reducing maintenance
costs. The long-term goal of this new practice is to assist the road companies
in the introduction of good quality business planning and road management
systems developed to international standards.
Signing the project, EBRD President Jean Lemierre said that development of
better road infrastructure plays a key role in supporting the transition
process towards a better economy. As well as connecting towns and cities, they
support trade and tourism and make the region more attractive for investment,
Mr Lemierre said.
Bozo Ljubic, Bosnia-Herzegovina Minister of Communications and Transport,
stated that this loan will not only help upgrade important links of the road
network, but will also improve the quality of service to road users.
Bosnia-Herzegovina welcomes EBRD’s assistance with implementation of transport
sector reforms, which would ultimately bring the country in line with best EU
practices.
This project follows on from the Bank’s $32.7 million loan in 1996 for
emergency road reconstruction in Bosnia, which was part of the large
international campaign responding to post-war emergency reconstruction needs.
Another 70 million were provided in 2004 for the development of the regional
network in the country, including construction of the Sarajevo bypass and a
new road from Banja Luka to Gradiska on the Croatian border.
The overall project – whose total cost is €231 million – is being co-financed
and implemented in parallel with the European Investment Bank and the World
Bank. An additional €500,000 of technical cooperation funds from by the
EBRD-Western Balkans Fund* will be provided for assistance with effective
financial planning and reporting.
The project will not only prevent further deterioration of the road
infrastructure but would improve the quality, including much needed safety of
traffic. Roads are the preferred mode of transport for citizens in
Bosnia-Herzegovina. In 2005, about 24.8 million passengers travelled the
roads, amounting to 1.6 billion passenger kilometres.
The EBRD is the largest institutional investor in Bosnia-Herzegovina, having
invested €594 million in 56 projects in a number of important sectors,
including national and municipal infrastructure, the financial sector and the
private corporate sector, especially small and medium size enterprises.
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