The World Bank Implementation Status & Results Report Sustainable Croatian Railways in Europe (P147499) Sustainable Croatian Railways in Europe (P147499) EUROPE AND CENTRAL ASIA | Croatia | Transport Global Practice | IBRD/IDA | Investment Project Financing | FY 2015 | Seq No: 14 | ARCHIVED on 31-Oct-2023 | ISR57553 | Implementing Agencies: HZ Cargo, HZ Infrastructure, HZ Passenger Transport, Ministry of Sea, Transport and Infrastructure, Republic of Croatia Key Dates Key Project Dates Bank Approval Date: 30-Apr-2015 Effectiveness Date: 04-Aug-2015 Planned Mid Term Review Date: 31-Dec-2018 Actual Mid-Term Review Date: 12-Feb-2019 Original Closing Date: 31-May-2020 Revised Closing Date: 31-Jul-2023 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective (PDO) is to improve the operational efficiency and the financial sustainability of the public railway sector in Croatia. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Project Coordination and Sector Policy Support:(Cost $5.70 M) Support to HZ Passenger Transport Restructuring:(Cost $65.00 M) Support to HZ Cargo Restructuring:(Cost $53.40 M) Support to HZ Infrastructure Restructuring and Enabling Investment to Increase the System Efficiency:(Cost $93.10 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions MSTI. The process of drafting the Multi-Annual Infrastructure Contract (MAIC) has been completed and the MAIC will be signed in the following weeks – Completion of the draft MAIC means that PDO indicator #3 has been met. This is an important accomplishment given that it is the culmination of a long process that required many steps. The Railway Strategy and Infrastructure Plans were adopted by the Government in December 2022. Also, the World Bank team introduced the ICR team as well as the Bank staff who are going to support writing the ICR. As part of the ICR process, the borrowers will prepare and submit to the World Bank their own ICR. MSTI is supporting the procurement of the two remaining consultancies under the HZI. HZI. As noted above, the EUR 4.4 million relocation request from HZI and MSTI was processed in June 2023. These funds will be used towards the Savski - Marof works. The Savski Marof railway line has already enhanced commuter service in the Zagreb suburban area and directing 10/31/2023 Page 1 of 7 The World Bank Implementation Status & Results Report Sustainable Croatian Railways in Europe (P147499) resources towards that project makes sense. New infrastructure also supports non-motorized and multimodal transport. Level crossings works are progressing, albeit facing delays. Out of 50 level crossings, financed under the loan, 33 were fully operational by the loan closing date, and the remaining ones will be financed by the HZI. The contract for the update of the HZI restructuring study and restructuring implementation plan has been awarded recently and the HZI appointed a working group to support this assignment. The procurement for “Preparatory work for centralized traffic control and signaling modernization or ERTMS Implementation Plan (ERTMS IP)” was launched, the Bank team reviewed shortlist evaluation report and granted no objection. A contract award is expected shortly. HZC. The project was closed on November 30, 2021, and the loan funds were fully disbursed. The Government adopted a decision to compensate HZC in the amount of HRK 1.28 billion in late 2022. This provides HZC the financial status to look for private sector partner. HZC is now working to find a private partner in 2023 and meet PDO indicator #4. In terms of investment HZC is also looking to acquire new equipment to modernize its rolling stock. As part of this effort, HZC will be retrofitting 50-60 locomotives. HZC also is selling surplus bearings that were acquired with SUCRE proceeds and redirect these resources for higher priority activities. HZC did ask the World Bank for clearance and the Bank provided no objection. HZPP. This loan was closed on February 28, 2023. HZPP completed remaining activities and disbursed 100 percent of the loan proceeds. The two pending contracts were finalized. The IT audit results were available for HZPP and the World Bank. The findings of the IT audit show serious strategic, management, and supervisory deficiencies that should be addressed seriously and without delay. HZPP provided its plan to address these shortcomings and will remediate them. The contract for the “Capacity building and technical assistance to the management of HZPP in restructuring activities” was signed on March 24, 2022. All the tasks, except the software for fleet and crew management, were successfully completed by the loan closing date. HZPP is planning to acquire 70 new trainsets to modernize its fleet. SUCRE financed 5 trainsets which allowed HZPP to start replacing obsolete trains. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Substantial Substantial Substantial Macroeconomic Substantial Moderate Moderate Sector Strategies and Policies Moderate Low Low Technical Design of Project or Program Moderate Low Low Institutional Capacity for Implementation and Substantial Moderate Moderate Sustainability Fiduciary Moderate Moderate Moderate Environment and Social Substantial Moderate Moderate Stakeholders Substantial Moderate Moderate Other Moderate Moderate Moderate Overall Substantial Moderate Moderate Results PDO Indicators by Objectives / Outcomes To improve the operational efficiency and the financial sustainability of the public rail sector IN01332523 10/31/2023 Page 2 of 7 The World Bank Implementation Status & Results Report Sustainable Croatian Railways in Europe (P147499) ►HZP operating expenses per train-km (in HRK) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 45.00 50.10 49.60 41.40 Date 31-Dec-2014 16-Feb-2023 26-Oct-2023 30-Nov-2021 IN01332524 ►Number of annual train-km operated per HZI employee (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 4,032.00 4,156.00 4,156.00 4,500.00 Date 31-Dec-2014 08-Mar-2023 20-Sep-2023 30-Nov-2021 IN01332525 ►Preparation of the draft multi-annual infrastructure contract (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No Yes Yes Date 08-May-2019 09-Mar-2023 26-Jul-2023 31-Dec-2020 IN01332601 ►Completion of a strategic partnership for HZ Cargo (transaction finalized) (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 08-May-2019 09-Mar-2023 20-Sep-2023 02-Mar-2020 Intermediate Results Indicators by Components Project Coordination and Sector Policy Support IN01332608 ►Percentage of assets with resolved legal titles (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 30.00 Date 31-Dec-2014 18-Aug-2022 20-Sep-2023 30-Nov-2021 Support to HZ Passenger Transport Restructuring IN01332602 ►Number of HZP staff retrenched (Number, Custom) 10/31/2023 Page 3 of 7 The World Bank Implementation Status & Results Report Sustainable Croatian Railways in Europe (P147499) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1,724.00 1,360.00 376.00 Date 31-Dec-2014 16-Feb-2023 26-Oct-2023 30-Nov-2021 IN01332605 ►Number of HZP rolling stock rehabilitated (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 12.00 12.00 12.00 Date 31-Dec-2014 09-Mar-2023 20-Sep-2023 31-Dec-2020 IN01332610 DMUs and diesel locomotives (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 4.00 4.00 4.00 Date 31-Dec-2014 09-Mar-2023 20-Sep-2023 30-Dec-2020 IN01332613 EMUs and electric locomotives rehabilitated (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 8.00 8.00 8.00 Date 31-Dec-2014 09-Mar-2023 20-Sep-2023 30-Nov-2021 IN01332615 ►HZP five new trainsets (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 5.00 5.00 5.00 Date 01-Jan-2014 09-Mar-2023 20-Sep-2023 29-May-2020 IN01332616 ►Customers reporting perception of service improvement over past two years (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 4.44 4.44 4.44 10.00 Date 02-Jul-2018 09-Mar-2023 20-Sep-2023 30-Nov-2021 Not applicable due to COVID epidemic which led to a complete suspension of service in 2020 and Comments: reduction of service in 2021. Support to HZ Cargo Restructuring IN01332603 10/31/2023 Page 4 of 7 The World Bank Implementation Status & Results Report Sustainable Croatian Railways in Europe (P147499) ►Number of HZC staff retrenched (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1,507.00 1,455.00 910.00 Date 31-Dec-2014 09-Mar-2023 20-Sep-2023 30-Nov-2021 IN01332606 ►Number of HZC rolling stock rehabilitated (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 3,044.00 2,973.00 2,161.00 Date 31-Dec-2014 09-Mar-2023 20-Sep-2023 30-Nov-2021 IN01332611 Wagons (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 3,037.00 2,966.00 2,150.00 Date 31-Dec-2014 09-Mar-2023 20-Sep-2023 30-Nov-2021 IN01332614 Locomotives (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 7.00 7.00 11.00 Date 27-Feb-2015 09-Mar-2023 20-Sep-2023 30-Nov-2021 Support to HZ Infrastructure Restructuring IN01332604 ►Number of HZI staff retrenched (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 261.00 1,697.00 900.00 Date 31-Dec-2015 09-Mar-2023 20-Sep-2023 30-Nov-2021 IN01332607 ►Number of kms of line sections rehabilitated or improved (Kilometers, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 237.30 284.60 306.25 Date 31-Dec-2014 18-Aug-2022 20-Sep-2023 30-Nov-2021 IN01332609 ►Fatalities per 10 million train-km (Number, Custom) 10/31/2023 Page 5 of 7 The World Bank Implementation Status & Results Report Sustainable Croatian Railways in Europe (P147499) Baseline Actual (Previous) Actual (Current) End Target Value 10.00 2.00 1.00 7.00 Date 31-Dec-2014 18-Aug-2022 20-Sep-2023 30-Nov-2021 IN01332612 ►Preparatory work for centralized traffic control and signaling modernization (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 01-Jul-2020 09-Mar-2023 20-Sep-2023 30-Nov-2021 Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P147499 IBRD-85000 Closed USD 88.65 88.65 0.00 88.14 1.41 98% P147499 IBRD-85010 Closed USD 48.20 48.20 0.00 48.69 0.00 100% P147499 IBRD-85020 Closed USD 46.50 46.50 0.00 46.86 0.00 100% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P147499 IBRD-85000 Closed 30-Apr-2015 06-May-2015 04-Aug-2015 31-May-2020 31-Jul-2023 P147499 IBRD-85010 Closed 30-Apr-2015 06-May-2015 04-Aug-2015 31-May-2020 28-Feb-2023 P147499 IBRD-85020 Closed 30-Apr-2015 06-May-2015 04-Aug-2015 31-May-2020 30-Nov-2021 Cumulative Disbursements 10/31/2023 Page 6 of 7 The World Bank Implementation Status & Results Report Sustainable Croatian Railways in Europe (P147499) Restructuring History Level 2 Approved on 27-Jun-2018 ,Level Approved on 11-Jun-2019 ,Level 2 Approved on 15-Jun-2019 ,Level 2 Approved on 12-Aug-2020 ,Level Approved on 26-Aug-2020 ,Level 2 Approved on 03-Nov-2021 ,Level 2 Approved on 11-Jul-2023 Related Project(s) There are no related projects. 10/31/2023 Page 7 of 7