“Serbian Railways” Director General Mr. Milovan Marković and Director of EBRD Infrastructure Business Group, Mr. Thomas Maier have signed today, 8th May, a Loan Agreement in the amount of 100 million EUR.

– Based on this Loan, whereof Guarantor is the Republic of Serbia, Serbian Railways will procure up to thirty EMUs for regional traffic – stated Director General of “Serbian Railways” Mr. Milovan Marković and stressed that the railway will take all the steps to put these units in operation before 30th June, 2013 which is a final deadline for implementation of the entire Project. Marković also stressed that the Guarantor in respect of this Loan is the Republic of Serbia.

– This is a big day for the Railway because it represents a development opportunity for Serbia – pointed out Mr. Milutin Mrkonjić, Infrastructure Minister, after signing of the Agreement. – Railway has to increase transport volumes, and to be able to do so, we should have more contracts like this one. – Mr. Mrkonjić concluded.

In addition, it was envisaged under the Agreement for Serbian Railways to create a Project Implementation Unit (PIU) that would monitor project implementation, i.e. EMUs procurement. For this purpose EBRD has allocated the funds amounting to half-a-million EUR in the form of a donation from the Western Balkans Fund. Additional EUR 490,000 were allocated from the above fund for engagement of the consultant to assist with preparation of the Business Plan. This practically means that in addition to the Loan Agreement, in the scope of entire operation implementation, European Bank for Reconstruction and Development has allocated the grant totalling to EUR 990,000 to assist in implementation of the entire Project.

Procurement of new and modern EMUs will enable Serbian Railways to enhance the quality and volume of passenger service on regional railway network and enable the passengers to continue using the safest and cheapest transport to desired destinations. At the same time, these EMUs will enable a significantly more quality and efficient organization of the entire railway traffic, since more locomotives will be re-directed to other routes in passenger and freight traffic.

Let us remind you that European Bank for Reconstruction and Development is helping the development of railway sector in Serbia for the third time in the past ten years. First Loan Agreement in the amount of 57 million EUR was signed in 2001, within the Railway Rehabilitation Project I, and it was entirely implemented. The loan proceeds were used for implementation of restructuring plan, refurbishment of locomotives, procurement of track machinery and procurement of machinery spare parts.

Part of the Railway Rehabilitation Project II was implemented with the EBRD loan proceeds amounting to 60 million EUR and allocated to Serbian Railways based on the Loan Agreement with EBRD signed in 2006. The Project included procurement of new freight wagons and underfloor wheel lathe in Belgrade Station as well as carrying out of works on reconstruction of the building for accommodation of this lathe. Implementation of this part of the Project is still under way (all 770 freight wagons were delivered), wheel lathe parts have arrived and building reconstruction is under way).