SUSTAINABLE CROATIAN RAILWAYS IN EUROPE PROJECT
Summary of key challenges and opportunities
September 11, 2018 - Zagreb, Croatia KEY CHALLENGES AND WHY THEY EXIST
CROATIA HAS CHANGED AROUND THE RAILWAY
VALUE ADDED OF DIFFERENT SECTORS VALUE ADDED OF DIFFERENT SECTORS TO TO GDP (1995) Industry GDP (2017) (including Industry Services, construction), (including value added value added construction), (% of GDP) (% of GDP) value added 50% 23% (% of GDP) 27% Agriculture, forestry, and Agriculture, fishing, value forestry, and added (% of fishing, value GDP) added (% of 3% Services, GDP) value added 6% (% of GDP) Manufacturing Manufacturing 61% , value added , value added (% of GDP) (% of GDP) 13% 17%
Source: World Development Indicators, Accessed August 2018 DISPARITY IN QUALITY BETWEEN ROAD AND RAIL AFFECTS COMPETITIVENESS
Quality of Transport Infrastructure (overall) Austria 7,0 6,5 Croatia 6,0 5,5 Denmark 5,0 4,5 France Quality of airport 4,0 3,5 Quality of roads infrastructure 3,0 Germany 2,5 2,0 Italy
Netherlands
Poland
Romania Quality of railways Quality of Ports infrastructure EU Avg.
Source: World Economic Form “World Competitiveness Report – Infrastructure Benchmarks RAILWAYS – FALLING PASSENGER DEMAND
PASSENGER STATISTICS (ROAD AND RAIL) 8.000 Total Railway as % of total Road as % of total 60% 7.000
50% Kms - 6.000 40% 5.000 4.000 30% 3.000 20% 2.000 10% by mode total of %
1.000 MillionPassenger - 0% 2010 2011 2012 2013 ҉ 2014 2015 2016 Source: Croatian Bureau of Statistics ROADS CAPTURING INCREMENTAL FREIGHT DEMAND
200.000 FREIGHT STATISTICS (ROAD AND RAIL) 10,0% 180.000 Total Railway as % of total Road as % of total 9,0%
160.000 8,0% km
140.000 7,0% -
120.000 6,0%
km carried km - 100.000 5,0% tonne
80.000 4,0% Tonne
60.000 3,0% (incl. maritime)(incl.
40.000 2,0% total of %
Million 20.000 1,0%
- 0,0% 2010 2011 2012 2013 ҉ 2014 2015 2016 Source: Croatian Bureau of Statistics CROATIA LAGS E.U. PEERS FOR RAILWAYS PASSENGER DEMAND (2015 DATA)
100 Passenger cars Motor coaches, buses and trolley buses Trains 90 80 70 60 50 40 30
20 % of total mode share mode totalof % 10
0
Italy
Spain
Malta
Latvia
France
Poland
Greece
Ireland
Cyprus
Croatia Austria
Estonia
Finland
Sweden
Norway
Portugal
Bulgaria
Belgium
Slovenia Slovakia Hungary
Romania
Germany… Denmark
Lithuania European…
Switzerland
Netherlands Luxembourg
Source: Eurostat Republic Czech United Kingdom United SHARE OF RAILWAYS FREIGHT SLIGHTLY HIGHER THAN E.U. PEERS (2016 DATA)
120 Roads Railways Inland waterways 100
80
60
40
20 % of total mode share mode totalof %
0
Italy
Spain
Malta
Latvia
France
Poland
Greece
Ireland
Cyprus
Croatia
Austria
Estonia
Finland
Sweden
Norway
Portugal
Bulgaria
Belgium
Slovenia Hungary Slovakia
Romania
Denmark
Lithuania
Switzerland
Netherlands
Luxembourg
Germany (until… Germany
Czech Republic Czech
European Union… European United Kingdom United Source: Eurostat SOME OF THE KEY CHALLENGES AND WHY THEY EXIST
1. Smaller scale and legacy network only recently being reintegrated
2. Old, slow infrastructure contributes to lack of competitiveness and inefficiency
3. Overly complex infra. designed for a different era no longer fit for purpose – this costs more to inspect, maintain, and operate
4. Governance frameworks remain under development but new Public Service Obligation is a positive step OPPORTUNITIES DEMAND FOR INTERNATIONAL PASSENGER TRANSPORT EXISTS
TOTAL PASSENGERS CROSSING CROATIA'S BORDERS BY ROAD 100.000.000 (2017, ENTRIES + EXITS) 81.059.943 80.000.000 entry + exit of passengers on road border crossing points 50.963.562 60.000.000 40.000.000
20.000.000 13.154.319
7.337.779 2.484.801
0
border
border
border
Croatian-Slovenian
Croatian-Hungarian
Herzegovinian border Herzegovinian
Croatian-Bosnian Croatian-Bosnian and
Croatian-Montenegrin Croatian-Serbian border Croatian-Serbian Source: Croatian Bureau of Statistics INCREASING ROLE OF PRIVATE SECTOR IN FREIGHT WITH COMPETITION
HŽ I TRACK ACCESS CHARGE REVENUE FROM PRIVATE OPERATORS (2013-2017) 12.000 Income from fees for access to railway 10.000 infrastructure (private co.s) 8.000
6.000
HRK '000 HRK 4.000
2.000
0 2013 ҉ 2014 2015 2016 2017
Source: HZI financial statements 2014-2017 DEMOGRAPHIC OPPORTUNITIES IN THE COMPANIES
600 2017 STAFF AGE PROFILE OF HŽPP 497 381 400 268 234 182 172 200 category 75 112 16 # of of by staff # age 0 less than 25 26-30 31-35 36-40 41-45 46-50 51-55 56-60 61 and older Age Group 2266 2500 2016 STAFF AGE PROFILE OF HŽI 2000 1514 1500 category 1000 670
# of of by staff # age 500 156 212 0 20-30 31-40 41-50 51-60 61-65 Source: HZI and HZPP company data Age Group GROWTH IN CONTAINERIZED TRAFFIC BENEFITTING BOTH PORTS AND RAILWAYS
INDEXED TRENDS IN CONTAINER TRAFFIC 1,75 (2010 - 2016) 1,65 1,55 1,45 1,35 1,25 1,15
Indexed Value (2010 = 1.00) = (2010 Value Indexed 1,05 0,95 2010 2011 2012 2013 2014 2015 2016 World Croatia Slovenia Italy Romania
Source: UNCTAD statistics KEY OPPORTUNITIES
1. Potential for “total line modernization” approach and infra. simplification
2. Developing market for freight services with enhanced competition and choice
3. Opportunities for suburban peri-urban service to develop further
4. Opportunities for international passenger transport along key corridors at higher speeds
5. Demographic opportunities in the companies to change course
6. Opportunity to develop Croatia’s key freight corridor (Rijeka-Zagreb-Koprivnica) ANNEXES POPULATION TRENDS FOR CITIES OVER 50K PEOPLE
1,04 POPULATION TRENDS - CITIES OVER 50K PERSONS
1,02 Growth 1,00
0,98 Decline 0,96 0,94 0,92 0,90
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Populaiton Index (Yr. 2007=1.0) (Yr. IndexPopulaiton CITY OF ZAGREB Split Rijeka Osijek Zadar Velika Gorica Pula - Pola Slavonski Brod Karlovac POPULATION CENTERS
LOCATION OF CROATIA'S POPULATION (2016) CITY OF ZAGREB 803.647 19% Split 172.362 4% Rijeka 120.855 3% Osijek 104.638 3% Zadar 75.437 2% Velika Gorica 63.323 All other areas 2% 2.649.111 Pula - Pola 64% Karlovac Slavonski Brod 56.527 52.488 55.825 1% 1% 1% PORTS - RIJEKA CARGO TONNAGE BY TYPE (2011-2017)
14.000.000
12.000.000
10.000.000
8.000.000
6.000.000 Tonnes
4.000.000
2.000.000
0 2011 2012 2013 2014 2015 2016 2017
Dry cargo (general, bulk, timber) Container cargo Fuel cargo Total tonnage PORTS - RIJEKA CONTAINER TRAFFIC
300.000
250.000
200.000
150.000
Foot Equivalent Unit Equivalent Foot -
100.000 Twenty
50.000
0 2011 2012 2013 2014 2015 2016 2017
TEU ROADS – FATALITY RATES PER 100K POPULATION
12 2013 2014 2015 10
8
6
4
2 Fatality rate / 100k population 100k / rate Fatality 0 LOGISTICS PERFORMANCE INDEX – LOOKING BEYOND INFRASTRUCTURE
Bulgaria Ability to track and trace consignments (1=low to 5=high) 4 Croatia 4 4 Quality of trade and transport-related 3 Competence and quality of logistics services Greece infrastructure (1=low to 5=high) 3 (1=low to 5=high) 3 3 Hungary 3 2 2 Italy 2
Ease of arranging competitively priced Overall (1=low to 5=high) Latvia shipments (1=low to 5=high) Lithuania
Romania Frequency with which shipments reach Efficiency of customs clearance process consignee within scheduled or expected time (1=low to 5=high) Slovakia (1=low to 5=high)
Slovenia -
MOBILITY IS A COMPETITIVE AND COMPLEX BUSINESS
Or Or Or -
NOT JUST INFRASTRUCTURE - WHO WE ARE, WHERE WE GO, WITH WHOM, AND SERVICE MATTERS
ACTIVITY / LAND USE CHARACTERISTICS
TRIP MAKER CHARACTERISTICS
TRIP # D CHARACTERISTICS O
TRANSPORT SYSTEM CHARACTERISTICS