Launch of railway projects puts Serbia among EU member states

Although it has the statute of EU candidate country, Serbia tries to align its railway transport system to European standards. As part of the Strategy on transport infrastructure modernisation in Serbia by 2015, the authorities plan to rebuild and upgrade infrastructure to integrate the system into the TEN-T network, but also to answer to mobility and economic needs. Therefore, in order to develop transport, the authorities focus on upgrading European corridors, including their links, and to create intermodal terminals on key corridors.

Under the General Transport Master Plan, transport projects require investments of EUR 22.2 Billion by 2027 (around EUR 1.5 Billion/year) and include 33 projects that will be developed through EU financing (with pre-accession and accession funds), lines of credit granted by European banks for investments and the state budget. Also, EUR 7.5 Billion are ne-cessary for maintenance works and the finalization of the existing projects. The strategy includes the attraction of new investments in poor regions, the promotion of trade and the improvement of relationships with neighbouring countries.
The Operational Programme “Economic Development” sets transport as priority axis and stipulates the development of projects aimed to increase infrastructure quality and capacity as part of the European and regional transport network. More precisely, the Instrument for Pre-accession Assistance (IPA) prioritizes and supports the projects of two transport modes: railway and maritime. In order to integrate into the TEN-T network and to answer to European standards, the authorities plan to upgrade railway Corridor X (Salzburg-Ljubljana-Zagreb-Belgrade-Niš-Skopje-Veles-Thessaloniki), Xb related sections (Belgrade-Budapest) and Xc sections (Niš-Sofia), the main lines linking Serbia’s large cities to neighbouring countries. The railways density of the Republic of Serbia of 49.2 km/1000km2 is comparable with the EU-27 average, as well as the density in France, and Corridor X represents 21% of the total length of Serbia’s railway network, while 32% of the length of the Serbian section of the corridor is double track. The authorities want to double the railway lines through rehabilitation, modernisation, doubling and electrification to meet European standards. Around EUR 4.6 Billion are necessary to implement the modernisation projects of Corridor X.

Significant loans and projects

Over recent years, Serbia has negotiated with several states and institutions on the allocation of lines of credit dedicated to the implementation of railway infrastructure projects. In December 2012, the authorities signed the agreement on state guarantees for the credit of EUR 25 Million granted by Kuwait Fund for Arab Economic Development, the financial support of the programme for the development and modernisation of Prokop railway station (Belgrade). The Kuwaiti loan will be dedicated to the construction of related railway infrastructure and of the electric network for Prokop station and, under the project, more lines will be built (apart from the already existing 4 lines) and the interlocking system will be implemented. Also, the Communications Building will be built and it will take over all communications activities in the capital. Currently, the railway station is only used by the trains of BG Voz operator and the accomplishment of the works will permit the extension of transport operations for local, regional and international services. If the project was initiated and implemented according to plans, Kuwait partners announced that they would continue to invest in the extension of the project aimed to build adjacent buildings and a shopping centre with a surface of 130,000 m2.
“The entire project could be finalized in three years when Prokop Station will be put in service and the old station (the existing rail station) will be relocated towards the city centre allowing a distance reduction for all the trains which cross Belgrade. Following the projects, Serbia’s capital will have a modern station equipped with latest technologies and will provide transport connection with urban, intercity and international traffic”, declared Milutin Milošević, the project manager of Belgrade Railway Junction (a project including the large scale reconstruction of the railway network in Belgrade).
Serbia has also negotiated the crediting of railway projects with Russia and according to recent information, “the first railway project financed with the Russian USD 800 Million credit will be launched in March”, Transport Minister Milutin Mrkonjic announced in January. The project includes the doubling of the 16-km Belgrade-Pancevo line, the construction of the simple 68-km Valjevo-Loznica line, the modernisation of six sections on Corridor X with a total length of 110 km, the acquisition of around 30 diesel trains from Russia and the modernisation of the Serbian section of Belgrade-Bar line.
The European Bank for Reconstruction and Development (EBRD) is one of the most active financial institutions in granting support for the implementation of Serbian infrastructure projects. In 2010, the Bank approved several loans for Serbian Railways (Zeleznice Srbije) for the financing of the railway infrastructure modernisation, including Corridor X. “To promote economic integration, the EBRD will continue to cooperate in allocating funds for future projects and will prioritize the projects on the development of the transport network part of pan-European corridors and then main lines”, states the EBRD report for Serbia (of 2012).
At the beginning of the year, Serbian Railways announced its interest in getting an EBRD loan to finance the construction of Stalac-Djunis double-track line in the south of the country (part of Belgrade-Nis-Skopje-Thessaloniki line). The company is ready to invest EUR 300 Million in modernisation projects financed by EBRD and the first project could be initiated as early as March, shows the company in a press release published after the meeting of its CEO Dragoljub Simonovic with the EBRD Manager for Serbia Matteo Patrone. A contract was signed at the beginning of the year on the modernisation of Gilje-Cuprija-Paracin section, part of Belgrade-Nis line. The contract is estimated at EUR 16.2 Million and will be implemented by an Italian consortium (Italiana Costruzioni S.p.A/Consorzio Armatori Ferroviari S.C.p.A./Consorzio Stabile).
Moreover, in 2012, Serbian authorities have invited Chinese entrepreneurs to participate in the construction of the national section of Corridor X which is expected to absorb investments of EUR 4-4.5 Billion over the next 5 years. In December, the Ministry of Transport announced that CCCC International (Chinese company) had signed a memorandum which paved the road for the participation of the Chinese company in railway modernisation projects in Serbia. Collaboration will mainly focus on the Novi Sad-Subotica and Nis-Dimitrovgrad sections of Corridor X and on the modernisation of Belgrade-Bar line. The double-track section will be electrified and will allow trains to run at speeds of at least 160 km/h. Serbia has already begun works on Corridor X, including a road-railway bridge across the Danube in Novi Sad, Nis railway junction and the bridge across Velika Morava in Cuprija.
Another important project is the modernisation of Petrovaradin-Beocin line for which public and private companies analyse the possibility to implement the project using a public-private partnership, as the government of Voivodina Province (north) announced. The 17.2 km line which has not been used since 2007 due to its poor condition could take over cargo from cement manufacturer Lafarge Beocinska Fabrika Cementa, as well as part of the passenger transport in Novi Sad. According to the feasibility study, the costs of the project could amount to EUR 45 Million. For the beginning, Zeleznice Srbije wants to invest only EUR 11 Million to allow the traffic of diesel trains and then the line will also be upgraded for the traffic of electric trains.

Serbia, interested in international projects

To increase opportunities for attracting investments and to integrate its transport system, Serbia eyes international railway projects. Therefore, the government of Voivodina Autonomous Province announced the conclusion of a contract on the elaboration of the draft project of Serbia-Hungary railway line at a cost of EUR 1.6 Million. The cross-border project, financed with EU funds through the Instrument for Pre-accession Assistance could be implemented as of 1 February and finalized in July 2014.
The contract on the elaboration of Szeged-Roszke-Horgos-Subotica line project and of the papers for Subotica-Csikeria-Bacsalmas-Baja line was signed at the end of December 2012.
Also, “Serbia will participate in the railway project of the line around the Black Sea Basin aimed to improve passenger and freight transport in the region, as well as eastern connections”, declared the Serbian Minister of Transport, Milutin Mrkonjic (in January 2013). Serbia will participate financially to the implementation of the project and will observe its tasks, said Milutin Mrkonjic after meeting the secretary general of the Organisation of the Black Sea Economic Cooperation (BSEC), Victor Tvircun. “Negotiations with potential investors from the US and Japan have already been carried out on the development of the draft project”, said Tvircun.
Serbia will play an important part in the project thanks to its geographic position on Corridor X and XI which connect it to the Black Sea Region.

[ by Pamela Luică ]
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