The European Investment Bank (EIB), the European Union's financing institution, is advancing a EUR 88 million (1) to the Commune of Palermo for the construction of 3 new tramway lines and the purchase of dedicated transport vehicles. The loan is granted to Azienda Municipalizzata Autotrasporti (AMAT), a public service company controlled by the Commune and responsible for the city's transport services.

"The Bank is committed to improve the quality of urban environment in Italy's Mezzogiorno", said EIB Vice President Massimo Ponzellini commenting on the agreement. "This specific project will help restraining the growth in private car usage and reducing congestion and traffic-related environmental problems in Palermo." In 1998 the EIB also approved a EUR 36 million loan to Azienda Municipalizzata Acquedotto di Palermo (AMAP), responsible for water supply to the city. 

The current project comprises the construction of 3 tramway lines: Leonardo da Vinci line (4.8 km long with 13 stations), Calatafimi line (4.4 km long with 12 stations) and Roccella line (5.6 km long with 15 stations). While not currently interlinked, the lines should become the axes of an integrated transport system connecting the city centre with its outskirts. The project also includes the provision of 27 tram-sets, with a capacity of 250 passengers, the construction of 3 depots as well as a central control unit. 

The tramway lines will serve a population of about 120,000 and a potential market of 350,000 movements/day. Implementation is expected to end in 2004, and the tramway lines to be in operation at the beginning of 2005. Under the construction phase, it is estimated that about 3,000-man years of temporary employment will be required.

The EIB's financing will complement Italian State grants awarded to this specific project under law n. 211 of 1992, supporting mass transport projects in major Italian cities. 

The EIB was established in 1958 to finance projects geared to achieving the objectives of the European Union, particularly in the spheres of regional development, trans-European transport, telecommunications and energy networks, as well as the environment. In line with the requests of the European Council meetings held in Amsterdam in June 1997 and Cologne in June 1999, the Bank has stepped up financing in support of urban renewal. Over the past five years (1995-1999), schemes aimed at improving living conditions in towns and cities have attracted EUR 10 billion, with the emphasis on developing urban transport. 

(1) EUR 1 = 1 936.27 ITL, 0.596700 GBP