Balkan priorities

17 July 2013

Dr Johannes Kyrle

Dr Johannes Kyrle

Investments in the transportation system and the energy sector must take priority in order to generate economic development and growth, as well as the creation of much needed jobs, a conference on infrastructure in the Balkans was told.

“It is difficult to pursue economic development without highly efficient transport networks,” said Ambassador Dr Johannes Kyrle, Secretary General of Austria’s Federal Ministry for European & International Affairs.

He added, “On the other hand, stable and reasonable energy prices are prerequisite to reignite, sustain and expand economic growth.”

Dr Kyrle was speaking at the opening of the Balkans Infrastructure & Construction 2013 Summit, held in Vienna, Austria, and organised by International Research Networks.

He said, “The Western Balkan countries face significant challenges in building an effective transportation infrastructure. They need to restore and expand the transport links that tied them together before the devastation of the Yugoslav wars.

“Albania, on the other hand, needs to develop routes with its neighbours, in the aftermath of the communist regime’s isolationist policies.”

Dr Kyrle added that at the same time, the entire region needed to focus on the modernisation of transport networks.

“The legacy of the Cold War years, coupled with the process of Yugoslavia’s dissolution, bequeathed an outdated transport system that requires a lot of work to reach EU standards.”

Integrate with EU

He also said that the transport network that was envisaged would need to incorporate a variety of safety, sustainability and environmental requirements, and also to integrate itself with the wider EU transport routes.

He pointed out that the promotion of transport integration was one of the tasks of the Stability Pact for South Eastern Europe introduced by the European Union in 1999. This was replaced in 2008 by the Sarajevo-based Regional Co-operation Council, a regionally-run organisation.

“At the same time,” he said, “promotion of transport integration has been taking place through individual organisations, such as the South East Europe Transport Observatory (SEETO), which aims to enhance co-operation within the Western Balkans, facilitate investment and attract the attention of international finance Institutions.”

EU standards

The prospect of EU accession has also had significant impact on the transport sector, said Dr Kyrle, as EU candidate and potential candidate countries needed to align their transport safety and environmental systems to current EU standards.

“Brussels, from its side, is working towards the integration of the Western Balkans’ transport network to the pan-European scheme of ten transport network corridors (TEN-T – the European Commission’s Trans-European Network for Transport) that traverse the entire continent,” said Dr Kyrle, who added, “Three of them – corridors 5, 8 and 10 – will be running through countries of the Western Balkans.”

Nenad Nikolić, general manager of SEETO, told the conference, “Each Western Balkans country wants to develop a transport system to connect with the rest of Europe. The governments of the Western Balkans are giving lots of incentives.”

Seven regional participants – Albania, Bosnia & Herzegovina, Croatia, the Republic of Macedonia, Montenegro, Serbia and the United Nation’s Mission in Kosovo – signed a memorandum of understanding in 2004 for the development of the core regional transport network. SEETO was created in 2005 to facilitate the implementation of the memorandum.

Mr Nikolić said that total investments in the SEETO Comprehensive Network since 2004 had totalled €13.2 billion. He said there had been €9.2 billion of implemented investments in more than 300 infrastructure projects, with 75% of total investments – implemented and secured – going into the road sector. In the next few years there will be shift to rail and inland waterways, he added.

The priority project list in SEETO’s five-year Multi-Annual Plan 2013 comprises 44 projects. Mr Nikolić said that more than €8.2 billion was needed for priority projects implementation in the next five years, for 20 road, 11 rail, seven inland waterway, four seaport and two airport projects.

He said efficient connection to Ten-T gave good connection to Europe, and he called for the creation of a more efficient administrative network, with a good regional and Europe-wide framework.

Representatives of a number of Balkan countries presented details of their infrastructure plans.

Gordan Bakota, Croatia’s ambassador to Austria, said that his country’s joining of the EU – on July 1, 2013 – was “largely defining both the priorities and the path of our investments, as well as the financial resources used for the infrastructure projects”.

He continued, “Several priorities have been detected – projects in railway infrastructure worth €120 million, projects in inland waterways worth €1.6 million, and technical assistance worth €18.4 million.”

He said that since railway transport had been set as one of the priorities of the government, it had established a railway committee. “The committee defined the Rijeka Transport Route as the priority to be financed from EU funds – the total value is estimated at €3 billion.”

This route, which connects the Hungarian border with the city of Rijeka was described by Mr Bakota as one of the most important transport routes for Croatia.

Road infrastructure

Rudo Vidović, Deputy Minister of Communications & Transport for Bosnia & Herzegovina, told the conference that his ministry’s priorities included the acceleration of the construction of road infrastructure, in particular corridor 5c, and to renovate the Sava river waterway from Sisak, via Brčko, to Belgrade.

Construction of the motorway on the corridor 5c was said to be currently the most important infrastructure investment in the region, and the transport corridor (north/south) was described as being of exceptional significance for the economic development of Bosnia & Herzegovina.

The corridor 5c motorway is 337km long. It stretches from Svilaj on the Sava river via Sarajevo, all the way to Bijača. It will form part of the Ten-T network.

Mr Vidović said, “Connecting corridor 5c with the Adriatic/Ionian axis will not only be the transit solution for Albania, Macedonia, Montenegro and Croatia, but also the fastest road connection between Central and Eastern European countries and the Adriatic Sea.”

The importance of infrastructure development was stressed by Verica Kalanović, Serbia’s Minister of Regional Development & Local Self-Government. She said, “Infrastructure is the basis for development of every society.”

Of 18 Serbian cities, she said 15 were not connected to fast roads, and that she wanted to see linked infrastructure to enable a better life for people. She said the plans up to 2020 were for cities of more than 100,000 inhabitants to be connected to a highway, or at least fast roads.

Funds, she said, were needed for 1,000km of modern roads.

She considered five models of financing – funds from the budget of the Republic of Serbia; privatisation funds – National Investment Plan; international financial institutions’ loans; 50:50 joint financing; and bilateral connection agreements.

Mrs Kalanović said she realised that no single model was the best one. “We are deeply aware that each has advantages and disadvantages,” she said.

She added that by 2020, she believed that Serbia would have a network of highways linking to neighbouring countries.


Etrit Bekteshi, counsellor at the Albanian Embassy, concentrated on his country’s energy industry. He said that this year, construction had started, or was about to start, on hydropower projects on the Devoll river, the Fan i Madh and Fan i Vogël rivers, and the Curraj river.

He said that for the €940 million project in the cascade of the Devoll river, a contract had been signed in 2009 with Norwegian company Statkraft.

In the cascade of the Fan i Madh and Fan i Vogël rivers, an investment of €99 million had been made, while for the cascade of the Curraj river, the investment amounted to €100 million.

He said, “Inasmuch as the foreign investments are concerned for 2012, we would emphasise the construction of two hydropowers – Ashta 1 and Ashta 2 – with an investment value of €142 million, by the Austrian company EVN, and Verbund – a contract signed in 2008.”

He also highlighted the completion of the buyout process by Kurum International of four hydropowers – HEC Uleza, Shkopet, Bistrica 1 and Bistrica 2 – for €110 million.

From the Republic of Macedonia, Ambassador Dr Gjorgji Filipov said, “The government of the Republic of Macedonia had a clear goal when embarking upon advancement of the overall road and rail infrastructure, as well as air traffic, which is clearly one of the prerequisites for attracting foreign investments, improving the business climate, and attracting a maximum number of tourists.”

He said what was imperative in all of these priority goals was the modern, up-to-date transport network which had been a focus for several years.

He said that the Republic of Macedonia was on the cross path of the major TEN-T road corridors, east-west (Corridor 8) and north-south (Corridor 10), and he pointed out some key projects which had been executed in the past few years or were still ongoing.

Corridor 10

He said the first priority was the construction of the Demir Kapija to Smokvica highway, at 28km, which meant the completion of the final part of road Corridor X, and was a project which would continue to be carried out in accordance with European standards over the course of the next year.

“The realisation of the contract, worth €210 million, by the year 2016, is expected to result in a modern highway that will connect the Republic of Macedonia with its neighbours to the north and south, and further on, with the EU member states,” said Dr Filipov.

He added that investing in the development of railways as environmentally-friendly transport was a strategic goal and long-term plan. Therefore, he said, one of the main commitments of the government was the completion of the east/west rail axis, connecting the Ionian and Black Sea, through the construction of the railway Corridor 8.

This project has begun and Dr Filipov said, “I would like to emphasise that this is one of the projects that will surely mark this decade.”

For the beginning of 2014, construction work on the rehabilitation and upgrading of the railway station in Skopje will start. He added that this work would be “in accordance with the best practices from Europe” and would take into consideration passengers with reduced mobility. It should, he added, be completed by early 2015.

Nenad Nikolić of SEETO said, “Everybody is dedicated to removing the bottlenecks which are hindering transport flows.”

When it came to financing projects, he said that it was not possible to find the necessary funds in the same way it used to be at the beginning of this century.

“So, we have to find creative solutions to finance projects, and learn to use the available funding in the most effective way,”
he said.


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