The European Bank for Reconstruction and Development (EBRD or the Bank) is considering extending a loan to the Government of Kosovo to rehabilitate Kosovo’s north-south railway line from the Serbian border near Leshak station  to the border with FYR Macedonia at the Hani i Elezit station (the Project). The Project will be implemented in three phases and consists of the rehabilitation and upgrading of the following sections:

- Fushe Kosove – FYR Macedonia border (Phase 1);

- Fushe Kosove – Mitrovice (Phase 2); and

- Mitrovice - Serbian border (Phase 3).

The Government of Kosovo has engaged in a wide-ranging rail reform programme to bring the sector into compliance with EU directives. A comprehensive railway sector reform and reorganisation was initiated at the end of 2005. The public railway company was converted into a joint stock company (Kosovo Railways JSC) and operated as an integrated railway until 2011. In 2011, the company was split into an infrastructure company (the Client or the Company or INFRAKOS) and a train operating company (TRAINKOS) and these have operated as separate companies since end-August 2011. A track access regime has been developed and is in operation, currently between the INFRAKOS and TRAINKOS. These charges are set by INFRAKOS, supervised by the rail regulator and approved by the Government of Kosovo.

The Project is of strategic importance, being part of Route 10 of the SEETO (South-East Europe Transport Observatory) core railway network as well as being included in the 2012 Multi-Modal Transport Strategy for Kosovo.

This line is also among the priority projects included in the following strategic documents:

- Kosovo Economic Vision Action Plan 2011 – 2014;

- Sectoral Strategy of Ministry of Infrastructure 2012 – 2017;

- Mid Term Expenditure Framework 2012 – 2014.

Rail Route 10 has a total length of 252 km and connects Kraljevo (SRB) - Fushe Kosove (KOS) - Goce Petrov (the FYR of Macedonia). The Kosovan Government has produced a National Development Multi Modal Transport Strategy, which includes Rail Route 10. One hundred and forty eight km of Route 10 is located within Kosovo territory, providing a north-south connection between Leshak-Hani i Elezit. The total length of the southern section of the line (Fushe Kosove – Hani i Elezit) is 64km, of which 40km is on flat terrain, and 24km in mountain area.

Rail Route 10 sustained significant damage during the period 1990-1999, some of which has been partially repaired. The level of regular maintenance over the same that period was reduced to a minimum resulting in the current sub-standard condition of the line. Maximum speeds have been reduced to 60-70km/h and in some specific cases the maximum speed is as low as 20km/h due to safety reasons (sections with tunnels for instance).

The Company is now looking to engage an internationally qualified consultant (the Consultant) to prepare the technical documentation required for the rehabilitation and partial upgrade of the infrastructure components of the southern section of Rail Route 10 (Phase I of the Project) so as to achieve the original design speeds along the 64km section between Fushe Kosove and Hani i Elezit (the Assignment).