AIR TRAFFIC CONTROL UPGRADE II

The project will upgrade SMATSAs current air navigation control software to a state of the art air traffic control system. This upgrade will enable the promoter to maintain the highest operational and safety and security standards in air traffic control, consistent with the EUROCONTROL European ATM masterplan and the Single European Sky (SES) regulations. The project scope comprises the software and hardware upgrade of the TopSky system, including the network equipment for interconnecting all the components on SMATSAs main air traffic control center in Belgrade, as well as other company locations in Podgorica, Tivat, Batajnica, Kraljevo and Nis. Related services are also included in the project include: system design, software development, factory acceptance testing, installation, integration, training, site acceptance testing and support for operational transition.

The aim is to modernise the ATC infrastructure in Serbia and Montenegro in accordance with the Single European Sky (SES) regulations, a central element of European air transport policy. SES infrastructure is included in the priority Trans-European Transport Networks (TEN-T), making the project eligible for EIB financing as a Priority Project in Neighbouring countries - extended TEN-T.

The project aims to modernize air navigation systems in Serbia and Montenegro in line with SES regulations, a key part of European air transport policy. As part of the priority TEN-T network, it qualifies for Bank financing as a Priority Project in Neighbouring countries. This initiative is also part of the Economic and Investment Plan (flagship 8 - DIGITAL INFRASTRUCTURE) by the European Commission, which seeks to boost long-term economic recovery, support green and digital transitions, and foster regional integration with the EU.

Aligned with the 2017 Transport Community Treaty between the EU and the Western Balkans, Serbia's signing of the European Common Aviation Area (ECAA) Agreement in December 2017 marks a significant step towards deeper integration into the European aviation area, enhancing growth, connectivity, and competitiveness.

The project, co-financed with the EBRD, will improve air traffic management efficiency over Serbia and Montenegro, contributing to the Single European Sky initiative. This will lead to more direct aircraft routings, fewer delays, environmental cost savings, and safety improvements, with a high expected economic return, as well as high regulated financial return for the promoter.

The EIB's significant financial contribution, including a 14-year tenor and favourable conditions, is crucial for the project's financing plan. The Bank's support in procurement and reporting will also raise standards.

The project takes places in Serbia and Montenegro both non-EU countries. In Serbia, the project scope does not fall under Lists (Annexes) I or II of the Environmental Impact Assessment (EIA) law that lists the projects that mandatorily require (Annex I) or that may require (Annex II) an EIA. Similarly in Montenegro the project scope does not fall into the Lists (Annex) I or II of the EIA law, meaning that in both countries the Competent Authority does not make a decision as to whether a formal EIA is required. Were this project located within the EU, it would not fall under Annex I or Annex II of Directive 2011/92/EU amended by the Directive 2014/52/EU on the assessment of the effects of certain public and private projects on the environment (EIA Directive).

The promoter shall implement the project in accordance with the procurement rules and procedures of the European Bank for Reconstruction and Development (EBRD) and in compliance with the requirements and standards that have been agreed between EBRD and the EIB for projects under a Project Implementation Agreement as foreseen in the Bank's Guide to Procurement. In particular, the Bank will require that calls for international tenders will be published in the OJEU in accordance with the Bank's Guide to Procurement.

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