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04/29/2021 | Press release | Distributed by Public on 04/30/2021 13:53

Modernizing railways and linking Serbia to the world

Industrial park with railway yard in Belgrade, Serbia | Photo credit: World Bank

The European Union has declared 2021 to be the year of railways, and the World Bank is on board, putting its money into rail tracks, crossings and people. The World Bank has just approved a track rehabilitation project that sends a strong signal about its long-term commitment to modernizing railways in Serbia and in Europe and Central Asia. This is a 10-year US$400 million engagement in rail, a clean form of transport. The loan to Serbia not only aims to improve infrastructure but also to strengthen the institutions that oversee key rail projects and address the country's air quality challenge. This decarbonization project puts Serbia on track to join EU countries in a move toward cleaner transport.

This attention to rail in Serbia began in 2015, as the Bank's transport team focused on supporting Serbia's reforms. This work involved three basic structural changes--reorganizing the way railways are set up, financial housekeeping, and workforce optimization. A small grant from the Multimodal and Logistics (MOLO) trust fund rail window with Austrian funding allowed for World Bank and Serbian identification of investments in infrastructure and a focus on best management of the railway's assets.

The World Bank is known for comprehensive project preparation, and many things make this operation distinct. It punches all the items on the list of Bank's corporate commitments, such as:

  • incorporating both women's and men's transportation needs into operations,
  • cutting greenhouse gas emissions,
  • promoting citizen engagement,
  • and focusing on regional integration.

The loan is using a Multiphase Programmatic Approach, or an MPA, which goes beyond infrastructure investments to focus on important technical matters. This means building systems for strong rail asset management, which focuses on track and other infrastructure maintenance. It is safety management, which is changing corporate culture to put safety at the center of railway operations. And it is cutting-edge, building in intelligent systems like digital technology to improve safety and increase efficiency. All of these are a priority for Serbia, because improvements on each of them, separately, combine to boost the overall performance of all of the infrastructure investments. It also means Serbia will integrate and connect better with EU countries.

This is all part of a US$5 billion investment from international financial institutions to rehabilitate Serbia's core rail network. The World Bank loan is key, because it offers the only funding for much needed non-infrastructure investments.

Some areas of the project will make a difference in the way Serbia's railways are managed. For example, it provides resources to sustainably manage infrastructure and to strengthen the institutions needed to run a modern railway, including human capital. The exciting part of the project is that it helps take railways to the next level.

Another World Bank project in Serbia, also supported by MOLO, aims to open the rail system to women workers by helping them get better access to jobs and boosting the number of women working for railroads. For this project the team was able to 'gender tag' PhD scholarships at Serbian universities in order to attract a new generation of high-level women professionals. Currently, the vast majority of PhD students receiving financial support are male. The project will provide financial support to fund three female PhD students in the rail sector.

Another key part of the project focuses on the greening of the transport system in Serbia. A remarkable 92 percent of the financing is dedicated to climate change mitigation and/or adaptation. This is impressively high, as the World Bank's current target is 35 percent in climate co-benefits.

The expectation is that the biggest benefit from this project will be a drop in deaths and injuries related to track crossing and train accidents, and even an improvement in general road safety. Built into the project are fixes to 150 high-risk level crossings and funding for permanent level crossing safety improvements. Other measures include better maintenance and asset management to help managers monitor the condition of the infrastructure and do track maintenance at the most optimal times, as well as safety management systems that identify risks in a proactive manner. These are two important components of the MPA, and they will bring Serbia in line with safety standards both in the region and in the EU

Building a greener and safer passenger and freight railway system requires innovation and investment. At the core of this is the commercial offer, which puts the rail customer at the center of day-to-day activities. This customer-oriented mindset has been growing in the Serbian railway sector, and this project will further that, by linking Serbian passengers and goods with the rest of the world in a safe, greener, and more efficient way.

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