Government of Montenegro

Ministry of Transport and Maritime Affairs

Podgorica, April 20131

I RAIL INFRUSTRUCTURE

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

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

Kosovo4. 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 putinto operation in phases, from 1958 to 1976. The Belgrade-Barrailway line has significant international and regionalimportance, especially for development of business affairswith Italy and South East Europe.

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

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The electrified single line Bar –Vrbnica has a length of 167. 4 kmand was opened to traffic in 1976.The line is designed to supportspeeds ranging from 75 km/h to120 km/h.Railway border crossing station:Bijelo Polje and Prijepolje .

Current SituationCurrent Situation

Technical and Financial Study forthe rehabilitation of theBelgrade – Bar railway line iscompleted (Italferr, November2010)

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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 kmOther Other --landslideslandslides 77 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 theproject and it calculates the rate of return on the investment (IRR) and thenet present value (NPV). The financial analysis focuses on the costs andrevenues from the perspective of: infrastructure manager, operator ofpassenger trains and operator of freight trains. The result was positive forboth countries.

• The economic analysis encompasses more than just the considerations ofthe financial returns of the project, such as user benefits and externalcosts (air pollution, CO2 emissions and accidents). The economic results ofthe 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 theproposed investment is financial viable and economically beneficial.

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MontenegroMontenegro YearYear Million Million €€

ShortShort--term 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

MediumMedium--term to 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

HYDROHYDRO--ENGINEERING WORKSENGINEERING 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 - € 25 mil, EIB - € 34 mil IPA 2007, 2009, 2010 and IPA III component

- € 18,7 mil

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

Main repair (rehabilitation) of Vrbnica – Bar line,the part - Podgorica – Bar line (51,4 km)…

What we haveWhat we have

What we needWhat we need

Railway Link Čapljina – Trebinje - Nikšić

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

• The project was done a preliminary traffic study, preliminary studies onenvironmental impact assessment, preliminary cost estimates, andpreiliminary 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 90mil 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 society13

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 TransportCompanies accordance to the Decision of Council forPrivatization and Capital Projects and GovernmentRestructuring Strategy of the Railway of Montenegro viapublic tender of: “Maintenance of railway infrastructure”,which will be separated from “Railway Infrastructure ofMontenegro Jsc - Podgorica”, by joint investment into regularand investment maintenance of railway infrastructure, or salestate packages of share with the conclusion of many years ofmaintenance contracts, and Awarding the concessions forrailway stations and lands which are integral part of “RailwayInfrastructure of Montenegro Jsc - Podgorica”, Company EgisInternational has been selected as an Advisor for. Tender areplaned to launch in end of 2013. Same procedure are forprivatization of Montecargo

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