In one of the first projects in Poland planned to be co-financed with EU Structural Funds the EBRD is lender of record for a loan to the Krakow public transport company MPK for PLN110 million (€25 million equivalent). The loan will finance the acquisition of new trams and infrastructure improvements.
The EBRD and the City of Krakow have been partners since 1998, when the first urban transport project was signed to develop a Fast Tram link which was of high importance in a city with one of the highest public transport market shares in Poland: 95 per cent of all journeys to the city centre are via public transport, provided by Miejskie Przedsiebiorstwo Komunikacyjne S.A. (MPK). This company is the city’s sole public transport operator, with a network of 119 bus and 23 tram routes and some 314 million passengers in 2003.
With assistance mobilised by the EBRD, the company is now undergoing modernisation. A new public sector contract will define the rights and obligations of the City of Krakow and MPK, set objective targets and introduce a transparent remuneration system to ensure a stable commercial framework for the company.
The separation of regulatory, operations and infrastructure management will help to maintain service quality, while increasing efficiency and reducing operating costs, said Thomas Maier, EBRD Director of Municipal and Environmental Infrastructure. The selection of a private bus operator to run part of the bus services, planned for a tender during 2005, will foster competition.
A priority for MPK is the modernisation of its rolling stock. The company’s 426 trams have an average age of 22 years, and its buses are on average 7.7 years old. The acquisition of 24 new low floor trams with EU and EBRD funds will represent significant improvement as will the renewal of infrastructure.
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