EBRD loan to support Tbilisi buy new buses
By Christina Tashkevich

The Messenger, Georgia
Aug 2 2005

The EBRD loan will allow Tbilisi to buy
more transit buses like this

The European Bank for Reconstruction and Development (EBRD) announced
on July 29 that it is lending Euro 3.1 million to the Tbilisi Bus
Company.

According to the organization’s press release, the loan is “to help
Georgia restore basic municipal bus services in its capital and give
the residents of Tbilisi access to affordable transport.”

Tbilisi Bus Company, owned by the City of Tbilisi, will use the funds
to buy 150 new and second-hand buses and parts.

“Georgia’s transport networks were hamstrung by the conflicts and
under investment that followed independence in 1991,” EBRD says.
According to the organization’s information, the company had 1,200
buses at that time for the city’s 1.4 million people. But by 2004 the
fleet was down to 80 buses, with only half working on an average day.

According to the EBRD, city authorities have already bought 182
second-hand buses, which cost Euro 15,000 each. “The saving has enabled
the company to offer good service with affordable fares despite low
incomes in Tbilisi,” says the bank’s press release issued on July 29.

EBRD says with the 100 new extra buses bought by open tender and 50
second-hand buses bought by a direct contract, the company plans to
expand the number of routes from 42 to 80. The buses will be able
to carry 18 per cent of Tbilisi’s passengers by 2007 against just 10
per cent today.

“As the official bus service improves, fewer minibuses will be needed
and can be regulated more effectively thereby improving safety,
traffic conditions and service quality,” the organization believes.

The City Hall announced its plans to increase the number of municipal
buses and trolley-buses to replace marshrutkas earlier this year.
Planners hope the shift will free up the main arteries of the city.

Three companies – the Ukrainian company Bogdan, which produces
Japanese buses, Hyundai and a Chinese bus production company – all
won a pre-qualification competition to have their vehicles used as
Tbilisi city buses.

EBRD’s Director, Municipal and Environmental Infrastructure, Nikolay
Hadjiyski says that this is the first time an international finance
organization has financed the purchase of second-hand buses. It is
also the first “non-sovereign” loan for a municipal utility made to
the Bank’s seven lowest-income countries of operation, known as the
Early Transition Countries (ETC).

The ETC initiative was launched in 2004 in order to stimulate market
activity in Armenia, Azerbaijan, Georgia, the Kyrgyz Republic,
Moldova, Tajikistan and Uzbekistan “by using a streamlined approach
to financing more and smaller projects, mobilizing more investment,
and encouraging economic reform.”