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World Bank Document The World Bank Report No: ISR6692 Implementation Status & Results Croatia Rijeka Gateway Project (P043195) Operation Name: Rijeka Gateway Project (P043195) Project Stage: Implementation Seq.No: 21 Status: ARCHIVED Archive Date: 26-Sep-2012 Country: Croatia Approval FY: 2004 Public Disclosure Authorized Product Line:IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Specific Investment Loan Implementing Agency(ies): HAC, HC, Port of Rijeka Authority Key Dates Board Approval Date 08-Jul-2003 Original Closing Date 30-Sep-2009 Planned Mid Term Review Date Last Archived ISR Date 18-Dec-2011 Public Disclosure Copy Effectiveness Date 10-Oct-2003 Revised Closing Date 30-Sep-2012 Actual Mid Term Review Date 28-Sep-2006 Project Development Objectives Project Development Objective (from Project Appraisal Document) Improve the effectiveness of the transport chain through the Rijeka Gateway for both freight and passenger traffic by modernizing the port and road network connections, and privatizing port operations. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Public Disclosure Authorized Component(s) Component Name Component Cost A - PORT RESTRUCTURING AND MODERNIZATION 50.20 B - PORT/CITY INTERFACE REDEVELOPMENT 24.60 C - INTERNATIONAL ROAD IMPROVEMENTS 78.70 D - PROJECT PREPARATION FACILITY 1.50 Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Unsatisfactory Public Disclosure Authorized Overall Implementation Progress (IP) Moderately Satisfactory Moderately Unsatisfactory Overall Risk Rating Implementation Status Overview This is the last status report for the project. Public Disclosure Copy Notable features over the last 9 months of the project: -- The project activities related to roads and motorways were completed since early 2011, implementation was limited to Port of Rijeka Authority (PRA) components (components A Page 1 of 6 Public Disclosure Authorized The World Bank Report No: ISR6692 and B). -- The construction of the additional quay wall for the Brajdica Container Terminal is ongoing according to schedule and will be completed in the first half of 2013. The operations of the Brajdica terminal by Adriatic Gate majority shareholder ICTSI have already led to increased productivity and to the development of container activities. The Zagreb Container Terminal (ZCT) design-build contract and of the associated supervision services were signed in April 2012 instead of end-2011 (review by the new government), and these assignments are now starting, with an end date of construction scheduled for 2016. The contract price is significantly lower than the pre-procurement cost estimate. An amount of 15 million Euros was canceled from the loan to the Port of Rijeka Authority (4715-1 HR) on July 12, 2012 due to overall savings in the procurement of the two container terminals construction compared to the financing plan of the project. -- Regarding the Delta/Port of Baros conversion into an urban area, consultations with interested developers took place early in November 2011 after the advertising campaign and the survey carried out during the summer of 2011, but no activity was carried out since then given the need for consultation with the new government and expected management in the PRA. Re-start of the activities is now scheduled for the second half of 2012 after all parties agreed on a clear process and timetable. -- The status of the environmental activities remains satisfactory. A comprehensive port environment protection plan was prepared in 2011 based on an Eco management and audit system. The system will become operational in several phases. Environmental compliance of the construction activities is also satisfactory. Public Disclosure Copy Results Achieved under the Project: -- The Project started in 2003 with activities linked to (i) connecting the Port of Rijeka and its terminals to the international road network while improving circulation in the city (road components); (ii) Port improvements comprising increase in private sector participation and efficiency improvements, construction of a new container terminal (Zagreb terminal), the construction of a passenger terminal and its link to the city network, and (iii) the improvement of the Port-CityInterface by allowing the redevelopment of the Delta-Porto Baros area into an urban area. -- In terms of road component, the activities were fully achieved: The Croatian Roads (HC) loan is closed and fully disbursed and allowed the construction of a bypass to the city of Rijeka for all transit traffic between Istria, Slovenia, Italy and the rest of Croatia, as well as a direct link through a tunnel between the Port area and the Zagreb Motorway, reducing congestion and pollution in the city center. The road D404, which was the last HC component funded by the project was open to traffic on May 30, 2011 The activities under Croatian Motorways (HAC) were completed in November 2010, and allowed for the reinforcement of the main bridge to the Island of Krk, which hosts the Petroleum activities of the Port. On average, Road activities spanned over 3 years more than initially envisaged. -- Port activities were substantially affected by the need to cancel in 2005 the contract for construction of the Zagreb terminal, which had to be terminated when initial works determined that the geotechnical conditions did not correspond to design hypothesis, making the terminal as designed impossible to build. As a result, the PRA had to re-study the whole terminal and find a temporary solution to increase container capacity (extension of the Brajdica terminal). This led to the approval of an additional financing in 2007 and then, after costs were revised at design stage, to the approval in 2009 of a second Rijeka Gateway Project to complement the financing plan of the two terminals (Zagreb and Brajdica) and enhance the environmental component of the project. The finalization of studies for Brajdica delayed its start to early 2010, and a very long technical process to confirm the viability of the Zagreb terminal, followed by a procurement process for a design-and-build contract that took more than two years, have delayed the start of this contract to 2012. As a result, several key activities are to continue after the project closing date of September 30, 2012 with the financial support of the Rijeka Gateway II Project: finalization of the construction of the Brajdica Terminal (2013), construction of the Zagreb Terminal (2016). -- The activities related to the improvement of port efficiency included a successful severance plan for the Luka Rijeka dd, implemented during the mid 2000s, and several supports to improve the port authority management. In spite of the postponement of the construction of the Zagreb Container terminal, the project successfully supported the change in contractual relationships between the port authority and the public operator Luka Rijeka dd, with the set up of concessions for various activities, and concession of the Brajdica container terminal to a subsidiary of Luka Rijeka (Adriatic Gate). This subsidiary was successfully privatized after a competitive process in 2011, making it one of the only privatization done in the sector. The Luka Rijeka dd is contemplating similar operations for some of its other concessions (grain, bulk), while the Zagreb terminal will be concessioned to a private operator under the Second Rijeka Gateway Project. -- Implementation of the Port-City component mostly comprised the full preparation of all the needed administrative steps to carry out the redevelopment ofthe area, which last over the full life of the project, as well as the linkage of the passenger terminal to the city (cofinanced by the project and the city of Rijeka). The actual implementation of the redevelopment of the Delta-Porto Baros will happen under the Second Rijeka Gateway Project, as will the last activities to support environmental improvement in the Port. In terms of achievement of the project’s objectives: -- The road component has allowed to increase the connection between the Port and its hinterland and reduced transit time in the city by more than half. Public Disclosure Copy -- Traffic growth has followed the project objectives in terms of freights, while objectives for passenger traffic were not met as demand has not followed (Rijeka does not manage to attract cruise ships because of a less attractive location and hinterland compared to many other Croatian ports, and traditional ferry services suffer from competition and from bridge constructions). Page 2 of 6 The World Bank Report No: ISR6692 -- Privatization of the management of the Brajdica container terminal is a main achievement, while the Port productivity has dramatically improved (decrease in staffing over 10 years compared to an average of 7% traffic growth). -- The physical implementation of the main Port activities as initially designed (container terminals and urban redevelopment) will happen only once the Second Rijeka Gateway Project is completed. But as early as June 2013 the Port capacity for container traffic will more than double, exceeding 300,000 TEU against 150,000 today. -- Beyond the construction of the two terminals, the government of Croatia has committed to fund road D403, which will link the Rijeka bypass to the Zagreb Container Terminal by 2016 and enable the full use of the terminal's capacity. Locations Country First Administrative Division Location Planned Actual Croatia Not Entered Rijeka Croatia Not Entered Orehovica Public Disclosure Copy Croatia Not Entered Draga Croatia Not Entered Sveti Kuzam Croatia Not Entered Port of Rijeka Croatia Not Entered Krk Bridge Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Total Rijeka port traffic (non liquid) increases Text Value 3.6 million tons 4.5 million tons 4.3million tons by an average 7% a year from 2004 to 2009 Date 31-Dec-2003 31-Dec-2011 30-Sep-2012 Comments Decrease from 2010 as traffic final value for 2012 will not be suffered from economic crisis known by closing date. end in second half of 2011.
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