Government of Montenegro

Ministry of Transport and

Maritime Affairs

Podgorica, April 20131

I RAIL INFRUSTRUCTURE

1. Rehabilitation of railway line Bar – Vrbnica, according to the study Italferr: Technical and Financial Study for the rehabilitation of the Belgrade – Bar railway line

2. Railway Link Čapljina – Trebinje - Nikšić3. Railway Link Pljevlje - Bijelo Polje – Berane-border with

Kosovo 4. Restructing of railway system of Montenegro -

Privatization

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Ralway line Bar - Vrbnica• The Belgrade-Bar railway line (Е-79) was constructed and put

into operation in phases, from 1958 to 1976. The Belgrade-Bar railway line has significant international and regional importance, especially for development of business affairs with Italy and South East Europe.

• The line (Route 4) represents direct connection between ports located on the South Adriatic coast, Port of Bar and City of Belgrade – Pan European Corridors X and VII (Danube River) - connecting to TEN-T, as well as connection with all countries of Central and East Europe, considering the strategic position of the Serbian capital city.

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The electrified single line Bar –Vrbnica has a length of 167. 4 km and was opened to traffic in 1976. The line is designed to support speeds ranging from 75 km/h to 120 km/h. Railway border crossing station: Bijelo Polje and Prijepolje .

Current SituationCurrent Situation

Technical and Financial Study for the rehabilitation of the Belgrade – Bar railway line is completed (Italferr, November 2010)

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51,6 km of tunnels and

galleries

15.6 km of bridges and

viaducts

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Project Technical Elements

ObjectObject NumberNumber LengthLength

TunnelTunnel 106106 51,6 km51,6 km

BridgeBridge 107107 15,6 km15,6 km

Other - Other -

landslideslandslides77 1 km1 km

Rock fallsRock falls 2828 4,9 km4,9 km

AvalanchesAvalanches 88 0,9 km0,9 km

Project Justification

EIRR 1,6%, Time savings 5 hours, Decreased costs for ordinary and daily

maintenance by 30% Removed bottlenecks bridges, tunnels, landslides,

rock falls and avalanches, Improved safety and security 35%, Modal shift and intermodality 2 new terminals, Ecology sensitive areas protection - National Park

Skadar lake (9,717 km)

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Project Justification • The financial analysis gives an overview of the financial flows of

investment, the operating costs and the revenues over the lifetime of the project and it calculates the rate of return on the investment (IRR) and the net present value (NPV). The financial analysis focuses on the costs and revenues from the perspective of: infrastructure manager, operator of passenger trains and operator of freight trains. The result was positive for both countries.

• The economic analysis encompasses more than just the considerations of the financial returns of the project, such as user benefits and external costs (air pollution, CO2 emissions and accidents). The economic results of the cost-benefit analysis are presented also in terms of benefit-cost ratio (B/C ratio), and are extremely positive for both countries.

• Following a final sensitivity analisys, the Study demonstrated that the proposed investment is financial viable and economically beneficial.

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MontenegroMontenegro YearYear Million €Million €

Short-term Short-term scenarioscenarioto 2015to 2015

20112011 12.705.31512.705.315

20122012 18.304.64418.304.644

20132013 18.847.11218.847.112

20142014 25.212.94525.212.945

20152015 26.228.70526.228.705

Total 1Total 1 101.298.721101.298.721

Medium-term to Medium-term to 20202020

20162016 11.879.07511.879.075

20172017 7.677.7807.677.780

20182018 6.915.4906.915.490

20192019 6.021.6506.021.650

20202020 5.178.3345.178.334

Total 2Total 2 37.672.32937.672.329

TotalTotal 138.971.050138.971.050

Financial AnalysisFinancial AnalysisTYPE OF WORKSTYPE OF WORKS MONTENEGROMONTENEGRO

CIVIL ENGINEERING INFRASTRUCTURECIVIL ENGINEERING INFRASTRUCTURE

SUBSTRUCTURE AND SUBSTRUCTURE AND PERMANENT WAYPERMANENT WAY 58.310.81058.310.810

BRIDGESBRIDGES 19.328.10019.328.100

TUNNELSTUNNELS 14.101.98014.101.980

LANDSLIDESLANDSLIDESROCKSLOPESROCKSLOPESAVALANCHESAVALANCHES

1.486.8501.486.8506.359.3406.359.3402.506.9002.506.900

HYDRO-ENGINEERING WORKSHYDRO-ENGINEERING WORKS 465.110465.110

STATION BUILDING AND STATION BUILDING AND RELATED FACILITIESRELATED FACILITIES 17.396,88017.396,880

TOTAL 1TOTAL 1 119.955.970119.955.970

ELECTRICAL INFRASTRUCTUREELECTRICAL INFRASTRUCTURE

ELECTRIFICATIONELECTRIFICATION 5.242.9505.242.950

SIGNALINGSIGNALING 13.677.60013.677.600

TELECOMMUNICATIONSTELECOMMUNICATIONS 94.54094.540

TOTAL 2TOTAL 2 19.015.09019.015.090

TOTALTOTAL 138.971,060138.971,060

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Regular maintenance of infrastructure and traffic regulation € 6,8 - 10 mil per year (Budget)

loan from: EBRD – 10 € mil, EIB - € 34 mil

IPA 2007, 2009, 2010 and IPA III component - € 18,7 mil

What we haveWhat we have

What we will do from EBRD (III) in 2013What we will do from EBRD (III) in 2013International tenders lasts till September 2013, and the works

will be carried out in 2014: WORKS – GENERAL REPAIR – Substructure reconstruction

along the sections from Kolašin to Kos, and reconstruction of secondary station tracks in passing point Kos (estimated value: EUR 5m);

WORKS – RECONSTRUCTION OF 5 TUNNELS No. 187, 190, 193, 205 and 206 on the part of railway line Kos –Trebješica – Lutovo (estimated value: € 4 mil);

WORKS - RECONSTRUCTION OF 3 CULVERS and regulation of water in 4 bridge (estimated value: € 500,000.00);

DESIGN DOCUMENTS Preparation of design documentation for reconstruction of 18 tunnels along the railway line Vrbnica – Bar (estimated value: EUR 450,000.00)

REVISION – Technical control of prepared design documentation for reconstruction of 18 tunnels (estimated valu: EUR 50,000.00).

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What we will do from EIB loan

Preparation of tenders for works of bridge Trebaljevo on the railway line Vrbnica –Bar (end of 2013)

Preparation of tenders for works of 15 steel bridges on the railway line Vrbnica –Bar (end of 2014)

What we plan to tender for IPA projects

12 slope repair the railway Vrbnica –Bar (December 2013); Dismantling new substation Trebješica (September 2013).

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Main repair (rehabilitation) of Vrbnica – Bar line, the part - Kolasin – Podgorica line (63,1 km)

Repair Kos Trebješica (6,74 km) - 5.9 mil € Repair Trebješica-Lutovo (9,97 km) - 7.2 mil € Repair Lutovo-Bratonožići – (8,77 km)- 6.3 mil € Repair Bratonožići-Bioče (9,67 km) -7.2 mil € Repair Bioče-Podgorica (14,48 km)- 8.3 mil € Repair of station track in station Podgorica

(1,48 km)- 9.8 mil €

What we needWhat we need

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Main repair (rehabilitation) of Vrbnica – Bar line, the part - Podgorica – Bar line (51,4 km)… Repair-Podgorica-Golubovci -7.2 million € (9,5km) Repair Golubovci Zeta 5.4 million € (7,8 km) Repair Zeta-Virpazar 6.9 million € (8,76 km) Repair Virpazar-Sutomore 8.7 million € (11,07 km) Repair Sutomore-Bar 5.3 million € (7,85 km) Repair station track in station Bar 13.5 million € (1,27 km)

The plan is an arrangement of border stations Bijelo Polje and station Tuzi , decorating stations Bar, with special emphasis on the connection with thePort of Bar.

The estimated value for the station Bijelo Polje 2.5 mil € The estimated value for the station Tuzi 0.5 mill € The estimated value for the station Bar with special emphasis on the connection with the Port of Bar 10 mill €

Railway Link Čapljina – Trebinje - Nikšić

• According to the signed Memorandum of joint actions on development of project-study documentation for the connection of Montenegro and Bosnia and Herzegovina by rail, the Spanish company "Inocsa Ingenieria SL" finished project “Provision of a preliminary decision, and the study of spatial - planning documents for regional Čapljina -Trebinje-Nikšić“

• The project was done a preliminary traffic study, preliminary studies on environmental impact assessment, preliminary cost estimates, and preiliminary design solution

• Line in lenght 249 km in three scenario• I scenario – double track railway line – 1 bil 450 mil EUR • II scenario – one track railway line plus coridor for second track – 1 bil 90

mil EUR• III scenario – one track railway line – 809 mil EUR• Next step: Feasibility study

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Railway Link Čapljina – Trebinje - Nikšić

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Railway Link Pljevlje - Bijelo Polje – Berane-border with Kosovo • In July 2012. year published tender for Feasibility Study for the construction of new

railway Pljevlja-Bijelo Polje-Berane-border with Kosovo• Total cost expected 250 million € for lenght around 60 km for solution Pljevlja – Ravna

Rijeka

Benefits• Socio-economic development of the territory of Montenegro and Kosovo• Increase in capillary network• Economic development of the northern part of Montenegro• Uniform distribution of traffic flows of the respective territories• Division types of traffic flows on road and rail• The creation of new ideas and new international and local trade• Connecting to TEN-T through route 4• Improving the competitiveness of the domestic transport industry• Increase the quality of transport services• Stimulation of economic growth through more efficient and cheaper transport• Improve the safety and security, in order to preserve human lives, values and

preserving state resources• Minimizing negative impacts of development of transport and transport infrastructure

on the environment and society17

Railway Link Pljevlje - Bijelo Polje – Berane-border with Kosovo

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Restructing of railway system of Montenegro

The Tender Commission for privatization of Transport Companies accordance to the Decision of Council for Privatization and Capital Projects and Government Restructuring Strategy of the Railway of Montenegro via public tender of: “Maintenance of railway infrastructure”, which will be separated from “Railway Infrastructure of Montenegro Jsc - Podgorica”, by joint investment into regular and investment maintenance of railway infrastructure, or sale state packages of share with the conclusion of many years of maintenance contracts, and Awarding the concessions for railway stations and lands which are integral part of “Railway Infrastructure of Montenegro Jsc - Podgorica”, Company Egis International has been selected as an Advisor for. Tender are planed to launch in end of 2013. Same procedure are for privatization of Montecargo

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The ownership structure

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