Financing secured for Bar – Vrbnica rail modernisation

Bar – Podgorica – Vrbnica railThe European Investment Bank (EIB) has approved on 27 January a EUR 76 million loan of the EUR 80 million total cost for Bar – Podgorica – Vrbnica rail reconstruction project.

The project includes four components covering the rehabilitation of a 20 km single track section between Lutovo and Bioce in central Montenegro, the rehabilitation of 13 steel bridges totalling 2,6 km and 8 tunnels totalling 2.6 km at various locations across the line, the modernisation of 3 rolling stock workshops and depots situated in Bar, Podgorica and Niksic.

The entire project will result in 63 km of upgraded railways and 63 km of rehabilitated overhead contact as well as 3 upgraded electrical structure substations on the entire railway line and 1 rehabilitated electrical structure substation.

The project has received a total financing of EUR 231.8 million, EUR 70.5 million of which is representing the grants and EUR 131.5 million the loans. Of the total financing, WBIF has provided EUR 70.5 million, with a EUR 25 million potential grant, the European Investment Bank 116.5 million, EUR 920,000 would be a future EU/WBIF grant. The European Union provided EUR 3 million and the national contribution, including beneficiary’s, worth EUR 861,106.

In addition, in December 2022, the EBRD announced a loan extension of EUR 11 million for the railway infrastructure manager Željeznička Infrastruktura Crne Gore, to acquire the needed equipment for maintenance of infrastructure, replacing obsolete and energy-inefficient machinery that has been in use for more than 50 years. The new equipment will help improve the safety and reliability of Montenegro’s railways while reducing the maintenance and operational costs of the railway company.

In Montenegro, the Route 4 created by the Bar – Vrbnica covers rehabilitation works split into six components. These include the rehabilitation of 114 km covering the 64 km Kolašin – Podgorica, the 29 km Podgorica – Virpazar sections and the 21 km Virpazar – Bar sections. All these works are expected to be completed by 2024.

For the Kolasin – Bar section EUR 244 million are needed. The rehabilitation of the eight tunnels needs EUR 13.2 million, while the bridges will need EUR 6.7 million all of them scheduled to be completed in 2023. These structures need reconstruction works as they were refurbished 40 years ago.

Along the Bar – Podgorica – Vrbnica rail line, Montenegro has completed the rehabilitation of 45 km of sections including the 25 km Bijelo Polje – Mojkovac, the 11 km Mojkovac – Trebaljevo and the 9 km Trebaljvo – Kolašin sections.

The railway line between Bar and Vrbnica, situated at the border with Serbia is the most important rail line of Montenegro which ensures 20% of all passenger and 60% of all freight rail traffic. This railway line accounts for 60% of all freight and 10% of passenger travel.

The 167 km Bar – Podgorica – Vrbnica rail line links the Port of Bar on the Adriatic coast with the Serbian capital, Belgrade, crossing through Podgorica, Montenegro’s capital city. In addition, Podgorica is connected with a 57 km rail link to Nikšić and a 25 km link to the Albanian border.

The rail connection between Montenegro and Albania is ensured by the 120 km Vore-Hani i Hotit line which will be rehabilitated with an estimated investment of EUR 267 million including the 13 stations along the line. For this project, the EBRD has provided a EUR 62.9 million loan in august 2022. The European Bank for Reconstruction and Development (EBRD) is providing a EUR 62.9 million loan to Albania for the rehabilitation of Vore-Hani i Hotit railway line.

The mainline is crossing southern, central and northern Montenegro and forms a part of the Orient/East Mediterranean Core Network Corridor, as an indicative extension to the Western Balkans along Route 4 with a length of 580 km. The route runs from Vrsac, at Serbia – Romania border, to Belgrade in Serbia, and then to Podgorica and Bar in Montenegro.

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