RIJEKA GATEWAY PROJECT CROATIA. M. Audigé Program Team Leader ECSIE
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1 RIJEKA GATEWAY PROJECT CROATIA M. Audigé Program Team Leader ECSIE Transport Forum & Learning Week - Washington DC 2006
2 Transport Forum & Learning Week
3 Historical Reminder Initially two separated Second Road and Rijeka Port projects Integrated as one single Rijeka Gateway project (a) Identification Appraisal [16 months] (i) Identification September 2001 (ii) Pre-Appraisal September 2002 (iii) Appraisal March 2003 (b) Negotiations Board Approval [3[ 3 months] (i) Negotiations May 2003 (ii) Board Approval July 2003 (c) Effectiveness Launching [2[ 2 months] (i) September 2003 Transport Forum & Learning Week
4 Project Preparation PHRD (Japan) grant to PRA US$1.0 m for: Concession advisor Rehabilitation of the Port Function & Development Study (RMG) Project Preparation Facility (PPF) to PRA US$1.5 m for: Designs for civil works Study for port/urban redevelopment Restructuring plan for Luka Rijeka d.d. TA to the Project Implementation Unit (PIU) Environmental improvement study Transport Forum & Learning Week
5 Project components Total cost US$265 m of which US$157 m (59%) financed by the World Bank A - Port Restructuring and Modernization (US$75.1 m) m B Port/City Interface Redevelopment (US$43.2 m) m C International Road Improvements (US$144.8 m) m D Project Preparation Facility (US$1.5 m) m Three Borrowers: 1. Port Rijeka Authority (PRA) & Luka Rijeka (LR)* 2. Hrvatska Ceste (HC) 3. Hrvatska Auto Ceste (HAC) (*) Subsidiary Borrower Transport Forum & Learning Week
6 Location Map Transport Forum & Learning Week
7 Project Map Transport Forum & Learning Week
8 Development Objectives Increase Croatia s s trade competitiveness through improved transportation chain for both freight and passengers traffic. (a) improve efficiency at Rijeka Port by: (i) assisting in privatization of port operations, (ii) rehabilitating infrastructure and replacing equipment, (iii) improving financial performance and gradually reducing Government contributions; (b) Improve land connections by: (i) constructing Western section of the Rijeka Bypass + port connector road; (ii) rehabilitating the Krk bridge; Transport Forum & Learning Week
9 Development Objectives (cont d) (c) Improve the port/urban interface by: (i) redeveloping a port area for urban purposes, (ii) new road connection with Rijeka By Pass (D404) (iii) improving port and marine environmental conditions; (d) Increase the administrative efficiency of the road sector by: b (i) assisting HAC in obtaining an ISO 9001 certification; (ii) assisting HC to implement the pavement and bridge management systems (PBMS) Transport Forum & Learning Week
10 Project Cost table Transport Forum & Learning Week
11 Structure of the Legal Agreements World Bank Republic of Croatia PRA HC HAC LR Loan Agreements Subsidiary Loan Agreement Project Agreement Guarantee Agreement Transport Forum & Learning Week
12 Project Financing Loans to PRA, HC, HAC with Government Guarantee and Project Agreement with LR Lending terms: Standard IBRD terms (PRA in US$, other in Euros) Single-currency, variable spread LIBOR-based Years to maturity: 15 years Grace period: 5 years Global duration of project: 6 years (September ) 2009) Transport Forum & Learning Week
13 A - Port Restructuring and Modernization (1) Civil Works: Construction of a new passenger terminal Demolition of old Warehouses (but #12 & #17 preserved for their architectural value), Rehabilitation of Prasko and Becko Piers, Construction of a multi-purpose terminal behind a new Zagrebacko Berth, Rehabilitation of port infrastructure and superstructure Transport Forum & Learning Week
14 Picture of the future Zagrebacko berth Transport Forum & Learning Week
15 B Port/City Interface Redevelopment Civil Works: Clearing of Delta Porto Barros Area (17 ha.) Construction of a new Passenger Terminal, Connecting road D404 Draga Brajdica Consultants services: Assistance for PPP for redevelopment of Delta Porto Barros Area Supervision of works. Transport Forum & Learning Week
16 Transport Forum & Learning Week
17 C International Roads Improvement (1) Civil Works: Rijeka bypass Orehovica Sv. Kuzam Rehabilitation of Krk bridge Black spot elimination Equipment: PMS/BMS software upgrade Management software Weighting equipment Transport Forum & Learning Week
18 D8 or Rijeka by-pass 3 Lots: Orehovica 2 km + Draga 1 km + Sv Kuzam 3.5 km Transport Forum & Learning Week
19 Transport Forum & Learning Week
20 Project cost details Pareto Law (late 1880 s) 80% of wealth in Italy is owned by 20% of population Rule 80/20 20% of items in any list represents 80% of its total (millions US$) Total cost estimate World Bank $ By-Pass D Zagrebacko berth Connector D Total Project (PAD) % 40.5% Rule 80/20 7/34 items in following list represents 70% of its total Transport Forum & Learning Week
21 Transport Forum & Learning Week
22 Procurement Plan Transport Forum & Learning Week
23 Procurement Plan Contract sequencing and packaging was done by each of the implementing agencies with different time frames; HAC: two years; HC: Four years; and PRA: six years One crucial point for the port is to allow for port operations during works,, implying a close coordination with the port operator and transitory phases Procurement design was decided by the clients, with a classic Unit-price/Quantities for civil works For the redevelopment of the port-city interface, we made use of a success fee based contract. Transport Forum & Learning Week
24 Procurement Plan The snapshot is from SAP (Bank staff only) The Client can update the plan through the Client Connection. The TTL can use Project Portal. All three systems are linked. Transport Forum & Learning Week
25 Procurement Process Requires implementing of the key Guidelines principles (transparency, equal opportunities, development of domestic industry and efficiency) The starting level of knowledge of HC, HAC and PRA at the time of project differed, but this is a learning curve Strong partnership and open dialog with our clients are key to effective implementation Good preparation results in good response from the market, e.g., 8 (out of 9) contractors pre-qualified for the D8, 3 bids submitted for the Zagrebacko berth, and 6 (out of 30) consulting firms for port-city redevelopment Transport Forum & Learning Week
26 Procurement Process (continued) Prequalification proved to be useful for large and complex works (>US$10 million in our case) and ensures e that invitations to bid are extended only to those who have adequate capabilities and resources. The RPM office and Operations Procurement Review Committee (OPRC) plays major role in Bank s procurement process for large value contracts. OPRC clears documents for contracts for procurement of goods, works and services (other than consulting services) costing $25M or more Transport Forum & Learning Week
27 Procurement Guiding Principles Review of procurement documentation requires various professional skills, it requires a real team work from: Procurement specialist obviously, but also Experienced engineer to check: Clarity of work description Technical specifications Adequacy of the Bill of Quantity etc Environmental specialist in our case. Transport Forum & Learning Week
28 Quarterly Progress Reports Useful periodic review of the project Detailed project and cost monitoring Pictures of the works Base document for supervisions One of the best example so far A best practice in Croatia! Transport Forum & Learning Week
29 Lessons to be learned One project with many different components, but all are contributing to the same development objective Balanced mix of institutional reform (staff reduction and privatization of port activities) and significant physical investments The more complex the project, the more relevant is the 80/20 rule Procurement plan is one the most useful tool to implement the project. Procurement process requires effective cooperation from all parties involved (Borrower and the Bank) The OPRC review is essential to implement a zero tolerance approach in term of transparency, and it protects the Task Team Leader from possible external pressures Transport Forum & Learning Week
30 The Rijeka Gateway project Fluctuat nec mergitur Transport Forum & Learning Week
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