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World Bank Document Public Disclosure Authorized Public Disclosure Authorized RailwayPublic Disclosure Authorized Reform in South East Europe and Turkey On the Right Track? D d Public Disclosure Authorized WORLD BANK Carolina Monsalve Railway Reform in South East Europe and Turkey On the Right Track? Transport Unit, Sustainable Development Europe and Central Asia Region Report No. 60223-ECA March 2011 Document of the World Bank ©2011 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org Cover photo: Elyce Feliz/Flickr/2009 licensed under a Creative Commons Attribution License. This report was prepared by the staff of the International Bank for Reconstruction and Development / The World Bank. The findings, interpretations, and conclusions expressed in it do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgement on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. CURRENCY EQUIVALENTS (Exchange Rate Effective February 28, 2011) Currency Unit - EURO EUR 1 = US$ 1.383 WEIGHT AND MEASURES Metric system FISCAL YEAR January 1 – December 31 Vice President, Europe and Central Asia: Philippe H. Le Houerou Director, Strategy and Operations, ECAVP: Theodore O. Ahlers Sector Director, ECSSD: Peter D. Thomson Sector Manager, Transport: Henry G.R. Kerali Task Team Leader: Carolina Monsalve ABBREVIATIONS AND ACRONYMS AFER Romanian Railway Authority AII Agreement on Infrastructure Interconnection BCA Border-crossing Agreement BCC Border-crossing Commission BCP Border-crossing Point BDZ EAD Bâlgarski Dârzhavni Zheleznitsi, Bulgarian Railway Operating Company BH Bosnia and Herzegovina BHŢJK Bosanskohercegovačka Željeznička Javna Korporacija, BH Rail Coordinating Body BOL Bill of Lading BRC Bulgarian Railway Company CARDS Community Assistance for Reconstruction, Development and Stabilization CDL Commercial Dispatch Level CER Community of European Railway and Infrastructure Companies CFR Căile Ferate Române or Romanian Railways COTIF Convention Concerning the International Transport of Goods by Rail CUU Contrat Uniforme d'Utilisation des Wagons, Standard Contract for the Use of Wagons (often called AVV) CTC Centralized Traffic Control DB Deutsche Bahn, German National Railways DEKAK Railroad Accident Investigation Board DETAŞ Turkish Railways Transportation Corporation DG Directorate General DMU Diesel Multiple Unit EBRD European Bank for Reconstruction and Development EC European Commission EDI Electronic Data Interchange EEC European Economic Community EIB European Investment Bank EPR European Performance Regime ERA European Railway Agency EU European Union FBH Federation of Bosnia and Herzegovina FTE Forum Train Europe FYR Former Yugoslav Republic GDP Gross Domestic Product GTZ Deutsche Gesellschaft für Technische Zusammenarbeit, German Agency for Technical Cooperation GFR Grup Feroviar Roman, Romanian Rail Group, a private freight operator HSH Hekurudha Shquiptare, Albanian Railways HŢ Hrvatske Željeznice, Croatian Railways IAS International Accounting Standards IASB International Accounting Standards Board IFI International Financial Institution IFRS International Financial Reporting Standards IT Information Technology IPA Instrument for Pre-Accession JŽ Jugoslovenske Železnice, Yugoslav Railways KM Kilometer KR Hekurudhat e Kosovës, Kosovo Railways KUGM Land Transport General Directorate MC+ Marginal cost plus mark-up MKD Macedonian Denars MOPWTT Ministry of Public Works, Transport and Telecommunication MOT Ministry of Transport MTC Ministry of Transport and Communications MoU Memorandum of Understanding MŢ Makedonski Železnici, Macedonian Railways MŢ-T Macedonian Railways Transport MŢ-I Macedonian Railways Infrastructure MSTI Ministry of Sea, Transport, and Infrastructure NRIC National Railway Infrastructure Company OBB Österreichische Bundesbahnen, Austrian Federail Railways ODL Operational Dispatch Level OECD Organization for Economic Cooperation and Development PSO Public Service Obligation PSC Public Service Contract PKP Polskie Koleje Panstowowe, Polish State Railways PLK Polskie Linie Kolejowe, Polish Railway Infrastructure Manager PPIAF Public-Private Infrastructure Advisory Facility PPP Public Private Partnership RFID Radio Frequency Identification RNE RailNetEurope RoRo Roll On, Roll Off RRB Railway Regulatory Body RRLB Romanian Railway Licensing Body RRSA Romanian Railway Safety Authority RS Republika Srpska RSD Serbian dinar SAAF Romanian Railway Assets Administration Company SMF Romanian Railway Management Services Company SEE South East Europe SEETO South East Europe Transport Observatory SOP-T Sector Operational Programme for Transport SŢ Slovenske Železnice, Slovenian Railways SNCFR Societatae Nationala a Cailor Ferate Române, former vertically integrated Romanian Railways SNCF Société Nationale des Chemins de Fer Français, French National Railway Company SPAD Signal Passed at Danger TAC Track Access Charge TCDD Türkiye Cumhuriyeti Devlet Demiryollari, Turkish Railways TEN-T Trans European Transport Network TFG Transferoviar Grup SA, private Romanian freight and passenger operator TPM Train Performance Management TU Traffic Unit UIC Union des Chemins de Fer, International Railways Union UNECE United Nations Economic Commission for Europe UNMIK United Nations Interim Administration Mission in Kosovo VAT Value Added Tax ŢCG Željeznice Crne Gore or Montenegrin Railways ŢICG Željeznička Infrastruktura Crne Gore, Montengro Infrastructure Railway Company ŢPCG Željeznički Prevoz Crne Gore, Montenegro Railways Passenger Company ŢFBH Željeznice Federacije Bosne i Hercegovine, Federation of Bosnia and Herzegovina Railways ŢRS Željeznice Republike Srpske, Republika Srpska Railways ŢS Železnice Srbije, Serbian Railways ŢTP Železnicko Transportno Preduzece Beograd, predecessor to Serbian Railways TABLE OF CONTENTS Executive Summary ...................................................................................................................................... 1 Introduction ................................................................................................................................................. 17 Progress in Institutional Reform ................................................................................................................. 23 Introduction ............................................................................................................................................ 23 Bulgaria and Romania ............................................................................................................................ 29 Turkey .................................................................................................................................................... 35 Albania ................................................................................................................................................... 37 Bosnia and Herzegovina ........................................................................................................................ 38 Croatia .................................................................................................................................................... 40 FYR Macedonia ..................................................................................................................................... 42 Kosovo ................................................................................................................................................... 44 Montenegro ............................................................................................................................................ 45 Serbia ..................................................................................................................................................... 47 The Need for Continued Institutional Reform ....................................................................................... 51 Conclusions - Continuing Necessary Institutional and Regulatory Reform ......................................... 55 A Comparative Assessment of Operating and Financial Performance ....................................................... 58 Introduction ............................................................................................................................................ 58 Traffic Trends ........................................................................................................................................ 59 Operational Performance ....................................................................................................................... 66 Financial Performance ........................................................................................................................... 73 Conclusions - Improving Operating and Financial Performance ........................................................... 80 The State of International Integration ......................................................................................................... 87 Introduction ...........................................................................................................................................
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