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Georgia: Support to Rail Passenger Services Contracting

Sovereign (Public) Project | 54458-001 Status: Active

The small-scale knowledge and support technical assistance will support Georgian Railway and the government in the formulation of a long-term business development strategy for rail passenger services and assist in the finalization of a fair and transparent public service contract.

Project Details

Project Officer
Sluijter, Jurgen Central and West Asia Department Request for information
Country
  • Georgia
Sector
  • Transport
 
Project Name Support to Rail Passenger Services Contracting
Project Number 54458-001
Country Georgia
Project Status Active
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 6684-GEO: Support to Rail Passenger Services Contracting
Technical Assistance Special Fund US$ 225,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Private sector development
Sector / Subsector

Transport / Rail transport (non-urban)

Gender Equity and Mainstreaming Some gender elements
Description

The small-scale knowledge and support technical assistance will support Georgian Railway and the government in the formulation of a long-term business development strategy for rail passenger services and assist in the finalization of a fair and transparent public service contract.

To establish a public service contract with the government in-depth analyses are required of (i) rail passenger demand assessment, including competition from other modes of transportation (buses, private cars); (ii) cost pricing of passenger services; (iii) timetabling and interconnectivity with other public transport modes; (iv) staffing; (v) infrastructure charging; (vi) fare schemes and integrated ticketing; (vii) rolling stock investment; (viii) marketing; and (ix) the required compensation (subsidy) for a longer-term contract with the government for the provision of a determined package of passenger services. Although Georgian Railway has already spent significant time and resources in preparing such a contract, further refinement of contracting details is required, for which experts' assistance is needed.

Project Rationale and Linkage to Country/Regional Strategy

Georgian Railway is a state-owned joint stock company (JSC) responsible for the management and maintenance of railway infrastructure and the operation of railway passenger and freight services. It has about 13,000 staff, making it Georgia's largest employer. It has three strategic business units (SBUs): (i) the Freight Transportation SBU; (ii) the Passenger Transportation SBU; and (iii) the Infrastructure SBU. These function as separate profit centers and produce separate financial statements. In 2019, Georgian Railway transported 10.6 million tons, with a turnover of 2,640 million ton-kilometers, and 2.8 million passengers of which 96.4% were domestic passengers.

The Georgian railway network is almost entirely broad gauge (1,520 millimeters). The total network length is 1,443 kilometers, almost fully electrified, and connects 51 passenger and

100 goods stations. In 2019, Georgian Railway transported 10.6 million tons, with a turnover of 2,640 million ton-kilometers, and 2.8 million passengers of which 96.4% were domestic passengers. In 2019, the total revenues were GEL491 million (an increase of 16% compared to 2018) with a result of operating activities of GEL108 million and a net loss of GEL5 million. In the first 9 months of 2020, revenues were equal to the same period in 2019, with an increase of 4% in the operational result

The sole shareholder of Georgian Railway is the government's JSC Partnership Fund which is overseen by the Enterprise Management Agency of the Ministry of Economy and Sustainable Development. The government expects Georgian Railway to operate on a self-financing basis, without capital or operating subsidies. Revenues from freight are Georgian Railway's main source of income, providing 57% of revenues, and more than 90% when associated services are considered (e.g., handling, forwarding, freight car rentals). Passenger services are loss-making, where losses are covered by profits from freight transportation. Under recently adopted regulation, this cross-subsidization will no longer be allowed. Georgian Railway will have to close a contract with the government by the end of 2021 to agree on the provision of a package of loss-making, yet socio-economically desired passenger rail services against a well-determined contribution (subsidy).

Impact Efficient, modern, demand-driven and affordable railway passenger transport developed
Project Outcome
Description of Outcome Long-term (minimum x year) provision of a determined package of rail passenger services for a specified amount of subsidy
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Rail passenger service business development strategy and implementation plan developed

Draft public service obligation contract finalized

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services Individual consultants will be recruited to provide specialized support to Georgian Railway in the areas of passenger demand assessment, economics, marketing, timetabling and PSO contracting. ADB will engage the consultants and procure goods following the ADB Procurement Policy (2017, as amended from time to time) and its associated project administration instructions and/or staff instructions.
Responsible ADB Officer Sluijter, Jurgen
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Transport and Communications Division, CWRD
Timetable
Concept Clearance -
Fact Finding 26 Nov 2020 to 26 Nov 2020
MRM -
Approval 14 Dec 2020
Last Review Mission -
Last PDS Update 18 Dec 2020

TA 6684-GEO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
14 Dec 2020 - 14 Dec 2020 30 Jun 2022 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
225,000.00 0.00 0.00 0.00 0.00 0.00 225,000.00 14 Dec 2020 0.00

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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Tenders

No tenders for this project were found.

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.