The World Bank Implementation Status & Results Report Republika Srpska Railways Restructuring Project (P161122) Republika Srpska Railways Restructuring Project (P161122) EUROPE AND CENTRAL ASIA | Bosnia and Herzegovina | Transport Global Practice | IBRD/IDA | Investment Project Financing | FY 2018 | Seq No: 6 | ARCHIVED on 22-Dec-2020 | ISR45115 | Implementing Agencies: Bosnia and Herzegovina, Republika Srpska, Republika Srpska Railways Key Dates Key Project Dates Bank Approval Date: 07-Dec-2017 Effectiveness Date: 31-Aug-2018 Planned Mid Term Review Date: 30-Jun-2020 Actual Mid-Term Review Date: 22-Oct-2020 Original Closing Date: 31-Dec-2021 Revised Closing Date: 31-Dec-2021 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Overall Development Objective of the Transport Sector Modernization Program (TSMP) is to improve transport connectivity of the country along priority transport links and to support improvements in transport operations and asset management practices. The Program is multi-phased with a First Phase including road sections in the Federation of Bosnia and Hezegovina, and the Second Phase including railways in the Republika Srpska. The Development Objective of the Second Phase of the TSMP is to improve the operational efficiency and financial sustainability of the railways in Republika Srpska. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Financial restructuring:(Cost $139.02 M) Workforce restructuring:(Cost $4.13 M) Organizational restructuring:(Cost $5.90 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Unsatisfactory Moderately Unsatisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions Progress in implementation: overall implementation has been moderately satisfactory so far - the financial situation of ZRS has improved considerably. Compared to 2018, the net operating loss decreased from BAM15 mi to BAM 11 mi, reflecting higher traffic levels and lower running costs, in particular related to labor. Freight traffic increased by 10% (in tonne.km) and passenger traffic by 70% (in pax.km) in 2019 compared to 2018 according to ZRS. As discussed in the Risk section, we are expecting the COVID situation to impact the financial results for 2020. The full magnitude of this impact will depend on the duration of the preventive measures and is still to be assessed. 12/22/2020 Page 1 of 11 The World Bank Implementation Status & Results Report Republika Srpska Railways Restructuring Project (P161122) Component 1 - Financial restructuring: arrears have been paid to most of current employees all former employees. Remaining payments and verification are related to lawsuits and are pending resolutions (which have been put in hold due to the COVID-19 situation). Government initiated the restructuring process according to the Law on Bankruptcy, however the first hear could not take place yet due to the COVID-19 situation. So far, this delay is not expected to impact the timely and successful implementation of this component. Component 2 - Labor restructuring: Staff numbers reached 2,252 at the end of December 2019, a total reduction of 846 employees from the initial level and 154 away from the target (out of which 600 have been verified so far). At the end of 2019, ZRS faced operational challenges related to staff resignations in key positions and specific locations. ZRS proposed the recruitment of 57 workers, 25 would go to the infrastructure department and 32 to the operations department. Excepting 2 engineers, all positions are level IV or below (workers). The recruitment process started in February has been partially completed: tranche 1 comprised 20 positions open and 18 fulfilled, tranche 2 comprised 19 positions, 15 fulfilled (unfulfilled positions did not receive any application). The 3rd and last tranche is planned to start soon. At end of May, 2020, ZRS counted 2,234 staff, a further decrease of 18 staff in 2020, reflecting 36 departures and 18 hirings. Component 3 - Organizational restructuring: the procurement of consultancy services for organizational restructuring has been slow. The contract for the first consultancy assignment (organizational accounting and asset management systems) has been finalized in November 2019. For the second assignment (business plans and public contracts) the expression of interest has been issued in November 2019 (with deadline December 20), the shortlisting process was only completed by end of March 2020 and the deadline for the RfP is June 19, 2020. So far, all procurement related issues have been dealt with. The consultant on “organizational accounting and asset management systems” has already prepared recommendations for the new ZRS organizational structure which have been presented to the MoTC on June 17 and are now under discussion. COVID-19 response: the project supported the procurement of protective equipment (masks, gloves, disinfection products) at a total amount of BAM 38,000 (excluding VAT) to protect staff and users and ensuring safe operations. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Substantial Moderate Moderate Macroeconomic Substantial Moderate Moderate Sector Strategies and Policies Substantial Substantial Substantial Technical Design of Project or Program Substantial Moderate Moderate Institutional Capacity for Implementation and Substantial Substantial Substantial Sustainability Fiduciary Substantial Substantial Substantial Environment and Social Substantial Substantial Substantial Stakeholders Substantial Substantial Substantial Other -- Moderate Moderate Overall Substantial Moderate Moderate Results PDO Indicators by Objectives / Outcomes 12/22/2020 Page 2 of 11 The World Bank Implementation Status & Results Report Republika Srpska Railways Restructuring Project (P161122) Financial Restructuring IN00940947 ►ZRS Working Ratio (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.70 1.69 1.69 1.00 Date 31-Dec-2016 30-Sep-2020 30-Sep-2020 31-Dec-2021 Workforce Restructuring IN00940948 ►ZRS labor productivity (Number (Thousand), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 146.00 150.00 150.00 215.00 Date 01-May-2017 30-Sep-2020 30-Sep-2020 31-Dec-2021 Organizational Restructuring IN00940949 ►Public Service Obligations Contract for passenger services (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Implemented and fully Value No No No covering passenger operations deficit. Date 01-Mar-2017 30-Sep-2020 30-Sep-2020 31-Dec-2021 IN00940950 ►Multi-annual infrastructure contract (MAIC) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Contract implemented, fully covering Value None None None infrastructure investments Date 30-Apr-2017 30-Sep-2020 30-Sep-2020 31-Dec-2021 Intermediate Results Indicators by Components Financial restructuring IN00941036 ►Arrears related to employees benefits and social contributions (Amount(USD), Custom) 12/22/2020 Page 3 of 11 The World Bank Implementation Status & Results Report Republika Srpska Railways Restructuring Project (P161122) Baseline Actual (Previous) Actual (Current) End Target Value 42,700,000.00 150,000.00 150,000.00 0.00 Date 01-May-2017 30-Sep-2020 30-Sep-2020 31-Dec-2021 Workforce restructuring IN00941037 ►Size of ZRS workforce (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 3,098.00 2,225.00 2,225.00 2,098.00 Date 01-May-2017 30-Sep-2020 30-Sep-2020 31-Dec-2021 IN00941039 ►Share of female employees of ZRS (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 15.00 16.00 16.00 15.00 Date 01-May-2017 30-Sep-2020 30-Sep-2020 31-Dec-2021 IN00941041 ►Percent of workers’ grievances resolved (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 100.00 100.00 100.00 Date 01-May-2017 30-Sep-2020 30-Sep-2020 31-Dec-2021 Organizational restructuring IN00941038 ►Accounting separation for infrastructure and operations (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Accounting separation Value No No No implemented Date 01-May-2017 30-Sep-2020 30-Sep-2020 31-Dec-2021 IN00941040 ►5-year Business Plans (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Business Plans updated annually as Value No No No standard management/governan ce tool 12/22/2020 Page 4 of 11 The World Bank Implementation Status & Results Report Republika Srpska Railways Restructuring Project (P161122) Date 01-May-2017 30-Sep-2020 30-Sep-2020 31-Dec-2021 IN00941042 ►Railways asset management system (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Railways asset management system used as basis for Value No No No maintenance and capital investment plans Date 01-May-2017 30-Sep-2020 30-Sep-2020 31-Dec-2021 IN00941043 ►Number of customers’ complaints (decrease percent change) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 100.00 60.00 60.00 40.00 Date 01-May-2017 30-Sep-2020 30-Sep-2020 31-Dec-2021 IN00941044 Passenger customers complaints (decrease percent change) (Percentage, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 100.00 60.00 60.00 40.00 Date 01-May-2017 30-Sep-2020 30-Sep-2020 31-Dec-2021 IN00941045 Freight customers complaints (decrease percent change) (Percentage, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 100.00 60.00 60.00 40.00 Date 01-May-2017 30-Sep-2020 30-Sep-2020 31-Dec-2021 Performance-Based Conditions IN00941046 ►PBC 1 DLR1.1(a): ŽRS restructuring plan has been approved by the RS Government (Yes/No, Intermediate Outcome, 1,000,000.00, 100.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value No Yes Yes Yes Date -- 21-Dec-2018 21-Dec-2018 -- 12/22/2020 Page 5 of 11 The World Bank Implementation Status & Results Report Republika Srpska Railways Restructuring Project (P161122) IN00941047 ►PBC 2 DLR 1.1(b): Arrears paid for 500 ŽRS workers (Number, Intermediate Outcome, 2,000,000.00, 100.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value 0.00 500.00 500.00 500.00 Date -- 21-Dec-2018 21-Dec-2018 -- IN00941048 ►PBC 3 DLR 1.2 Arrears paid for the remaining 2,598 ZRS workers, for a total of 3,098 (Number, Intermediate Outcome, 12,000,000.00, 50.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value 0.00 2,519.00 2,519.00 2,598.00 Date -- 30-Sep-2020 30-Sep-2020 -- IN00941049 ►PBC 4 DLR 1.3 More than 90% of ZRS' capital is owned by RS, as evidenced by registry certificate issued by the Banja Luka Stock (Yes/No, Process, 3,000,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value No No No No Date -- 30-Sep-2020 30-Sep-2020 -- IN00941050 ►PBC 5 DLR 2.1 Retrenchement Plans have been implemented, or voluntary separation of retirement have taken place for 500 ZRS wokers (Number, Intermediate Outcome, 2,000,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value 0.00 500.00 500.00 500.00 Date -- 07-Feb-2019 07-Feb-2019 -- IN00941051 ►PBC 6 DLR 2.2 Retrenchment Plans have been implemented, or voluntary separation or retirement have taken place for an additional 200 ZRS workers, for a total of 700 ZRS workers (Number, Outcome, 5,000,000.00, 0.00%) 12/22/2020 Page 6 of 11 The World Bank Implementation Status & Results Report Republika Srpska Railways Restructuring Project (P161122) Baseline Actual (Previous) Actual (Current) July 2019 Value 0.00 200.00 200.00 200.00 Date -- 30-Jun-2019 30-Jun-2019 -- IN00941052 ►PBC 7 DLR 2.3 Retrenchment Plan have been implemented, or voluntary separation of retirement have taken place for the remaining 300 ZRS worker, for a total of 1000 workers (Number, Outcome, 6,000,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value 0.00 150.00 150.00 0.00 Date -- 30-Sep-2020 30-Sep-2020 -- IN00941053 ►PBC 8 DLR 3.1(a) Consultants selected for ZRS reorganization (Yes/No, Process, 1,000,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value No Yes Yes Yes Date -- 28-Feb-2020 28-Feb-2020 -- IN00941054 ►PBC 9 DLR 3.1 (b) Consultants selected for ZRS business plans and contracts (Yes/No, Process, 1,000,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value No Yes Yes Yes Date -- 30-Sep-2020 30-Sep-2020 -- IN00941055 ►PBC 10 DLR 3.2 (a) Draft reports completed on the consultancies referred to in DLR 3.1 (a) (Yes/No, Process, 1,500,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value No No No Yes Date -- 30-Sep-2020 30-Sep-2020 -- 12/22/2020 Page 7 of 11 The World Bank Implementation Status & Results Report Republika Srpska Railways Restructuring Project (P161122) IN00941056 ►PBC 11 DLR 3.2 (b) Draft reports completed on the consultancies referred to in DLR 3.1 (b) (Yes/No, Process, 1,500,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value No No No Yes Date -- 30-Sep-2020 30-Sep-2020 -- IN00941057 ►PBC 12 DLR 3.3 (a) Implementation of the regulatory and functional review recommendations identified by the consulting services set forth in DLR 3.1 (a) (Yes/No, Process, 1,000,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value No No No No Date -- 30-Sep-2020 30-Sep-2020 -- IN00941058 ►PBC 13 DLR 3.3 (b) new ZRS organization structure including separate management and accounting of operations and infrastructure in place as evidenced by an RS letter to the WB (Yes/No, Process, 1,000,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value No No No No Date -- 30-Sep-2020 30-Sep-2020 -- IN00941059 ►PBC 14 DLR 3.3 (c) PSO, TAC, MAIC and Performance Contracts signed by the respective parties thereto (Yes/No, Process, 1,000,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value No No No No Date -- 30-Sep-2020 30-Sep-2020 -- IN00941060 ►PBC 15 DLR 3.3 (d) Asset management plans in place as evidenced by report on asset conditions generated by asset management system (Yes/No, Process, 1,000,000.00, 0.00%) 12/22/2020 Page 8 of 11 The World Bank Implementation Status & Results Report Republika Srpska Railways Restructuring Project (P161122) Baseline Actual (Previous) Actual (Current) July 2019 Value No No No No Date -- 30-Sep-2020 30-Sep-2020 -- IN00941061 ►PBC 16 DLR 3.3 (e) ZRS business plans for operations, infrastructure and workshops approved by its board (Yes/No, Process, 1,000,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value No No No No Date -- 30-Sep-2020 30-Sep-2020 -- IN00941062 ►PBC 17 DLR 3.3 (f) Financial accounting system and a human resources management system acquired (Yes/No, Process, 1,000,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value No No No No Date -- 30-Sep-2020 30-Sep-2020 -- IN00941063 ►PBC 18 DLR 3.4 (a) Financial accounting system and a human resources management system installed and fully functional (Yes/No, Outcome, 2,000,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value No No No No Date -- 30-Sep-2020 30-Sep-2020 -- IN00941064 ►PBC 19 DLR 3.4 (b) The PSO and MAIC are fully funded as evidenced by the RS confirmation of financial commitments (Yes/No, Outcome, 3,000,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value No No No No 12/22/2020 Page 9 of 11 The World Bank Implementation Status & Results Report Republika Srpska Railways Restructuring Project (P161122) Date -- 30-Sep-2020 30-Sep-2020 -- IN00941065 ►PBC 20 DLR 3.4 (c) PSO and MAIC reviewed and if required updated after their firs year of implementation (Yes/No, Outcome, 3,000,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value No No No No Date -- 30-Sep-2020 30-Sep-2020 -- IN00941066 ►PBC 21 DLR 3.4 (d) Approved ZRS business plans for operations infrastructure and workshops reviewed and if required updated after their first year of implementation (Yes/No, Outcome, 1,171,750.00, 0.00%) Baseline Actual (Previous) Actual (Current) July 2019 Value No No No No Date -- 30-Sep-2020 30-Sep-2020 -- Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P161122 IBRD-88080 Effective USD 60.60 60.60 0.00 47.84 10.36 82% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P161122 IBRD-88080 Effective 07-Dec-2017 06-Mar-2018 31-Aug-2018 31-Dec-2021 31-Dec-2021 Cumulative Disbursements 12/22/2020 Page 10 of 11 The World Bank Implementation Status & Results Report Republika Srpska Railways Restructuring Project (P161122) PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 12/22/2020 Page 11 of 11