Interview with Dejan Lasica, Deputy Minister of Railway Transport
within the Serbian Ministry of Infrastructure and Transportation
Direct railway services between Belgrade and Sarajevo were resumed in December 2009 after being interrupted at the beginning of the 90s following the Yugoslavian conflict. This stands proof that former Yugoslavian countries have understood that, in the matter of railways, they have to stick together and struggle to have an appropriate railway system connected to the European network. Relevant to the new context is also the strategy for the amendment of the current TEN-T network proposed in Serbia which also includes connections with the other former Yugoslavian countries that will continue to allow Belgrade the privileges it used to enjoy in the Yugoslavian era, such as access to the Adriatic Sea.
On the occasion of the Inter-ministerial Conference “South East European Transport Axis Cooperation” (SEETAC) held in Bucharest, Railway Pro wished to find out more about Serbia’s railway transport policy and how the economic downturn affects the specific initiatives of the Government in Belgrade. Dejan Lasica, Deputy Minister of Railway Transport within the Serbian Ministry of Infrastructure and Transportation has answered our initiative.
Railway Pro: How does the programme of rebuilding the Serbian infrastructure which was seriously damaged during the ex-Yugoslavian conflict go on?
Dejan Lasica: The most important railway infrastructure project in Serbia includes the lines on Pan-European Corridor X. Investments are very significant, the entire project rising to EUR 4.61 Billion and the construction of the corridor on Serbian territory will be exploited not only by all means of transport but also by neighbour countries which will gain access to the West-European network. Currently, we are doubling the line while works on the electrification and installation of new signalling systems along the entire route are in a very advanced phase of development. The end purpose is the infrastructure modernisation to allow trains to run at speeds exceeding 160 km/h on all sections of the Corridor (Belgrade-Sid, Belgrade-Subotica, Belgrade-Niş, Niş-Presovo and Niş-Dimitrovgrad) and 100 km/h in the Belgrade area. Serbia finalized the conclusion of cooperation agreements with all the neighbouring countries interested in the construction of the Corridor. The Memorandum of Understanding with Macedonia was signed in September 2009 and one month later, we officially concluded the agreement with Hungary which implies joint efforts and participation to the construction of the line and the joint development of projects to render Corridor X feasible on long term. Serbia has also recently finalized the Transport Master Plan whose financing benefited from European funds and which identified 14 projects for railway and intermodal transport, more projects than for all other means of transport. We are pleased that the project succeeded in drawing the attention of private investors, part of the funds coming from private capital.
Serbia proposes Pan-European Corridor XI: Bar-Belgrade-Arad
Railway Pro: How does Serbia see the future Pan-European network?
Dejan Lasica: The current network links Serbia’s main economic interest points and our strategy is based on the extension of the current configuration and not on changing any of our existing priorities. To this end, we have identified a route providing railway access to the Port of Bar in Montenegro, an important intermodal hub and further to Bari, Italy. A line connecting Bar to Arad, in Romania, where important facilities for railway and intermodal transport have also been developed and that will cross Corridor X in Belgrade, could offer operators an alternative to the road transport on this route which is suffocated by traffic and also render Belgrade a transport hub of major importance in the region and across Europe. We have come up with the idea of a branch for Corridor X to underline the fact that the development of such connections could turn into account Corridor X. The new route could link Corridors X, IV and VII, the indirect beneficiaries of our initiative being also Russia, Ukraine, Croatia, Hungary or Bulgaria. We are currently waiting for suggestions from the countries this corridor would cross and that we expect to connect cities such as Bar, Podgorica, Belgrade, Vrsac, Timişoara and Arad. To this effect, SEETAC conferences are extremely important as they seek to find common solutions and adopt an official position that would please all members of the initiative with respect to the new TEN-T map given the European Union’s amendment of the TEN-T strategy. “The Multimodal Corridor X” project has already been discussed during several meetings we had with officials from other countries, such as the conclusion of the Memorandum of Understanding with Italy, stamped on September 13, 2010, in Rome where this project was also reviewed.
Railway Pro: There are several quite significant discrepancies in what concerns the evolution of railway transport in the countries of former Yugoslavia. How would you explain the success of some countries, for example Slovenia, and the rather limited achievements of other ex-Yugoslavian countries?
Dejan Lasica: The differences exist but they were generated by the political context, railway transport being part of other activities. Slovenia has benefited from many direct foreign investments as it is geographically closer to Western Europe, the investment direction being from West to East. Now Serbia has caught the attention of foreign investors and we are expecting railway transport to have much to win due to private investments. Another advantage was Slovenia’s earlier accession to the European Union. Once Serbia’s accession to the EU is completed, new fund attraction opportunities will be created and the possibility to invest more in infrastructures will appear. Here I have to underline the fact that Serbia, unlike other East European countries which have waited for the EU accession to launch large infrastructure projects, has achieved and still achieves a lot without being an EU Member State which makes it possible for the country to invest the post-accession available funds in bolder projects, such as high speed lines.
Serbia’s strategy focuses on upgrading the country’s entire infrastructure as soon as possible, so as to allow trains to reach the maximum speed on all sections. Slovenia has upgraded its lines on lots, which means high speeds can be reached only on certain sections. This generates many technical problems (more severe rolling stock wear, higher energy consumption etc).
Railway Pro: Since you have brought up the subject of high speed lines, we’ve heard rumours about the acquisition of tilting trains and the modernisation of Subotica-Dimitrovgrad line. What can you tell us about these initiatives?
Dejan Lasica: There is nothing sure yet and we want to finalize the line modernisation to allow trains to reach speeds of up to 160 km/h and then we will see what comes next. Talking about mentality differences, first we should upgrade the entire line and then buy fast trains. Pendolino is still running at speeds similar to conventional trains on certain rail sections in Slovenia, which means higher operational costs.
Railway Pro: The years before 2009 were real booms for Serbia’s infrastructure modernisation financing. How does the economic downturn influence the country’s transport strategy?
Dejan Lasica: Crises come and go. This deadlock will be overcome too. What matters is the crisis overcoming strategy but also what comes next so that we won’t squander all our sustainable investment solutions during this difficult period. We must understand that transport is very important for many industries so the effort should be supported by these sectors as well because railway transport must exist in the future regardless of the hindrances. The state strategy remains unchanged during the current period of crisis and this strategy is to provide train transport services for passengers and cargo transport for economic agents. We must attract private initiatives to continue maintaining these activities to normal parameters.
A better business image would balance the force ratio between railway and road cargo transport
Railway Pro: Do you also envisage opportunities or just threats during this financial crisis period?
Dejan Lasica: Railway infrastructure investments during the crisis period represent a unique chance for many companies because there are few projects and many undertakings have already shut down business because they lack orders. At the same time, the contract of a large infrastructure project ensures current jobs and creates new ones. State guaranteed and financed investments or European funding investments are far less risky than private investments, at the same time, the state stimulating foreign investments by means of infrastructure project contracts. Infrastructure investments enjoy the advantage of supporting a sustainable sector, an initiative also resulting in GDP and overall economic growth. Various economic branches contribute to the implementation of such projects. These would be the opportunities and the reasons why all countries have announced that transport infrastructure investments represent a sure method of overcoming the crisis and relaunching the economy. The main problem is the lack of funds and the best way to substitute budget insufficiency. The financial sector has been deeply hit by the economic downturn, the banks granting very high interest loans during this tough period. We have to find solutions to these problems and one good path to follow are the public-private partnerships. PPPs can be the best financing solution and an opportunity for the countries in their region to become familiar with this type of investment which is rather common in Western Europe.
Railway Pro: What can you tell us about the image of railway transport in Serbia? Should we change the image of railway transport from a social service to a business-oriented activity that investors can turn to profit?
Dejan Lasica: The image of railway transport in Serbia begins to resemble a lot with the one in Western Europe, that of an environmentally friendly transport mode which also requires less energy. Referring to passenger services, I believe that they will always be considered a social service and it is hard to imagine that a passenger transport company could gain profit without state aid (subsidies etc). Cargo transport, on the other hand, should be more business-oriented where state would not interfere on the profile markets through financings etc. Railway cargo companies play the role of observers in the competition with road carriers which is highly beneficial but maybe a better image would help them gain ground. However, I believe the basic problems are far more complex and the reorganisation of national railway companies is very important. Over the next few years, all state companies will have to change their way of thinking and maybe a good start would be a more open business mentality from the perspective of economic competition as well.
Interview recorded by Alin Lupulescu
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