PKP LHS RAILWAY IMPROVEMENT PROJECT

Modernisation of railway infrastructure including stations, signalling and level crossings, as well as purchase of the maintenance equipment for the dedicated broad gauge line (1520 mm) in the south-east of Poland.

The project indicatively consists of the following components: • Construction of new Zamosc - Majdan LHS passing loop, • Reconstruction of the Zamosc – Bortatycze LHS station track layout, • Construction of the fiberglass telecommunication cable on the section LHS headquarter – Zamosc Bortatycze LHS – Slawkow LHS, • Reconstruction and extension of the Hrubieszow station, • Construction of the Local Control Centres at Zamosc Bortatycze LHS, Wola Baranowska LHS and Sedziszow LHS stations, • Construction of the computerised signalling at Slawkow LHS station, • Implementation of the signalling at selected level crossings on the LHS line, • Purchase of the tracks maintenance equipment. The list of components will be confirmed / verified during appraisal.

The project consists of several separate investments, some of which (construction and modernisation of the stations) fall under Annex II of the Environmental Impact Assessment (EIA) Directive 2011/92/EU, and may therefore require an EIA. This will be assessed during the appraisal. Should any investment have a negative impact on an area forming part of the Natura 2000 network (falling under the Habitats Directive 92/43/EEC or Birds Directive 79/409/EEC), the Bank would require the promoter to act according to the provisions of the aforementioned Directives.

The promoter has been preliminarily assessed by EIB as not having the status of a contracting entity subject to the obligations of the EU Directive 2014/25/EU for the following reason. The promoter is a public undertaking operating on the basis of a special or exclusive right granted by a competent authority; moreover the promoter gained such right without competition. However, its activities do not fall within the definitions stated in Articles 8-14 (specifically Art 11 on transport) of the Directive which would otherwise require such public undertaking to apply the Directive's provisions. The company does not provide a network delivering a service to the public in the field of transport by virtue of its current position as both infrastructure manager and sole railway undertaking. In its freight operating activities, the conditions under which it operates are not laid down by a competent authority; rather it is free to determine the routes to be served, the capacity to be made available and the frequency of the service. There is no public service obligation. This initial opinion on the promoter's status under Directive 2014/25/EU is to be confirmed during appraisal. Moreover, the promoter receives no compensation for its activities and the contracts proposed to be financed in part by the EIB loan under this operation are not otherwise financed by public funds. The promoter also faces competition from the parallel E30 rail line as well as from the road sector. Despite not being subject to a public procurement regime, the promoter has promulgated and applies its own rules for the procurement procedures for supplies, services and works. These rules ensure due economy, efficiency, fairness and transparency in the procurement process. The Bank will encourage the promoter to publish relevant tender notices in the EU Official Journal.