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Dec 08, 2017 13:45 EEST
SARAJEVO (Bosnia and Herzegovina), December 8 (SeeNews) – The World Bank said on Friday it has approved a 51.3 million euro ($60.2 million) loan to Bosnia's Serb Republic for a railways restructuring project.
The project will support railway sector restructuring, one of the key priorities of the Serb Republic government, by creating a sound framework for public financing, and supporting a more commercial approach to railway management, the World Bank said in a statement.
The aim of the project is to improve the operational efficiency and financial sustainability of the entity's railway operator through financial, workforce and organizational restructuring.
The overall railway restructuring plan will be implemented over the period 2018-2021 with bank loan proceeds supporting all three areas of restructuring, the lender noted.
"We expect that once this process is completed Zeljeznice RS will become financially sustainable and will provide better services," said Antonio Nunez, World Bank senior transport specialist and task team leader of the project.
The restructuring is expected to bring productivity levels closer to regional and EU averages.
For example, labour productivity in the Serb Republic's railway operator, Zeljeznice Republike Srpske, is the second lowest in the region and about a quarter of the EU average; the average train occupancy is less than a tenth of most other countries in the region and less than two percent of the EU average. These issues are expected to be rectified through the restructuring, the World Bank noted, adding that the overall performance of the railway sector should improve.
"We also expect to see positive benefits for the overall RS society", said Emanuel Salinas, World Bank country manager for Bosnia and Herzegovina. "Less money spent on railways, will enable the RS government to focus on priority areas, such as health and education; better railways infrastructure; and better passenger transport."
The project is part of the second phase of the Bosnia's transport sector modernization programme the goal of which is to improve transport connectivity of the country along priority transport links and to support improvements in transport operations and asset management practices.
The World Bank portfolio of active projects in Bosnia and Herzegovina now includes 11 operations, totaling $556.68 million. Areas of support include transportation, employment, energy efficiency, local infrastructure, environment, forestry, and water management.
The Serb Republic is one of two entities that make up Bosnia and Herzegovina. The other is the Federation.
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