Bulletin of the Maritime Institute Gdansk, 1996, 23, 2

Maciej Krzyzanowski, Prof. Dr Hab. Econ. LLD

Maritime Institute, Gdansk, Poland

THE DEVELOPMENT OF THE POLISH LAND TRANSPORTATION SYSTEMS LINKING HINTERLAND WITH THE BALTIC PORTS

Abstract The ancient amber road running from the southern part ofPoland and the neighbouring land locked countries to the has been re-es­ tablished in the project of Trans-European-Motorway TEM enlarged to the sea land transportation junction of TEM-Scandinavia. The north-south motorway is creating together with railway and Vistu­ la river a transport corridor of multimodal transport. After crossing the southern border of Poland it is running as a high way reaching Turkey and the Medite"anean Sea. The transit character of the Polish te"itory are representing also the other projects of the road systems passing from east to the west and north-east to south-west. The first one is the projected highway linking Moscow, Warsaw with Berlin and the second one is the Via Baltica comming from Finland passing Baltic Republic and Poland in its way to the Western Europe. The inaugurated by the Germany the Via Hanseatica in its way close to the Baltic Sea will pass Gennany, Poland, Russia (Kaliningrad Region), Lithuania, Latvia, Estonia reaching the Via Baltica at its northern part. The realization of the mentioned projects will create the closer co-ope­ ration between the Baltic Countries, stimulating the transit ofpassengers and commodities and enlarging the hinterland of the Baltic ports. 6 M. KrzyZanowski

1. The history and present economic situation of the country The agriculture character of Poland in the past and the location of its territory rather remote from the main overseas trading routes have retarded the development of seaborn trade. Starting from the 16th Century Poland held some place of importance in the European seaborn trade, among others as a significant exporter of high quality building timber supplying the yards in Western Europe and enhancing its overseas trade with shipments through the Port of Gdansk almost all the countries in Europe in the centuries to follow. During the interwar period, Poland has strengthened its position mainly as the exporter of coal and sawnwood, predominantly to the Swedish, French and Italian markets, establishing a steady ore and coal transportation sea link in the Baltic area. The multi-purpose commercial sea port built in towards the end of the twenties in next proximity to the Port of Gdansk, already in 1934 emerged in breakthrough as the first port in Poland and sixth in Europe by volume of cargo handled. Large consignments of Polish ce­ ment, sugar, textiles, beacon, butter and other dairy products reached the world markets via port of Hamburg, Rotterdam, Antwerp and London. The Polish merchant marine, rather small in numbers at that time, started to take an increasing share in transport of cargo from Polish commercial seaports, becoming an active instrument of the Polish seaborn trade. After the World War II, the Polish merchant marine has developed quickly. The seagoing tonnage its peak numbers in 1981 amounting to the 4.5 min tons dw. gaining the 12th position in Europe. The cargo loaded and unloaded in Polish ports of , Swinoujscie, Gdynia and Gdansk have secured the tenth position in Europe. After a long lasting crisis in shipping and seaborn trade, the Polish merchant marine and sea ports have improved its economic position. The development of the Polish land ... 7

The tonnage of shipping has been diminished from 3,949 thousand DWT in 1992 to 3,527 thousand in 1995, but the new ships replacing the old ones are representing at present much modern technology adapted to the demand of the shipping market. The cargo loaded and un-loaded in ports is growing up from 45,642 thousand tones in 1992 to 51,120 thousand in 1994. In 1992 the transit cargo transhipped in ports amounted 3,692 thousand tones in 1993 it rose to 5,890 thousand tones and in 1994 was about 5,105 thousand. The situation of the Polish economy in the three last years bas been characterised by the growth of the GDP in 1994 of 5.2% and in 1995 of 1 about 6%; and likely the same growth might me expected in 1996 . Growth in 1995 was built on export and investment demand. In current dollar terms, exports increased by around 35% in 1995, with investment volume up by at least 10%. Imports also increased rapidly (probably just marginally below the rate of export growth), as is to be expected in an economy that is beginning to restructure. Most ob­ servers expected unrecorded "cross-border" trade to be large enough to cover any officially recorded trade deficit. One of the most impressive features of 1995 was the pick-up in foreign direct investment (FDI) flows. Poland attracted around 1 billion dollars in the first half alone. The inward investment agency (P AIZ) suggests that FDI inflows could rise to as much as 3 billion dollars in 1996, triggered largely by some recent large deals. These include a large investment by Daewoo in motor cars (1.5 billion dollars is promised by the end of the decade), a commitment that has spurred GM to promise a new green-field investment worth 400 million dollars. Japanese's Matsushita concern intends to invest 60 million dollars in a new television plant, the N orwe­ gian firm Stabburet is keen to invest 75 million in fruit and vegetable

1 Despite the substantial output growth in 1995 the country's inflation annual rate was about 23% which according official statements will achieve in 1996 a level about 17% per year. 8 M. Krzyianowski trading facilities, and a US-Canadian consortium wants to invest 300 million dollars in grain-handling facilities in Gdansk. In the nearest future the logistic transportation centres will be located in this region.

2. The main land transport routes development The mentioned growing demands of trade and passenger traffic should give high priority to maintenance and upgrading of existing roads which are interconnecting national networks. Among national projects an important instrument for the imple­ mentation of the Agreement of Main International Traffic Arteries in Central, Eastern and South-eastern Europe is the Trans-European Motorway Project (fEM/. This project is being co-ordinated by the United Nations Economic Commission for Europe as executing agen­ cy and constitutes a modern network of high-capacity highway linking north with South-eastern Europe. The countries participating in this project are: Albania, Austria, Bulgaria, the Czech Republic, Greece, Hungary, Italy, Poland, Rumania, Slovakia, Turkey and Yugoslavia. The idea of extending to the TEM transportation corridor linking Baltic Sea with the Mediterranean ports of Greece and Turkey has been proposed by the Scandinavian countries. According the regional initiative taken by the Baltic Institute in Karlskrona a project TEM-Scandinavia was established. The project TEM-Scandinavia was realised by a sub-group with members from Sweden, Norway, Lithuania, Poland and Russia (Kali­ ningrad). It is evident that the demand for transit transportation of goods and passengers from Scandinavia via Karlskrona-Gdynia to Southern Eu­ rope makes this project very necessary and important. TEM named also (E 77, E 75 or A-1) is the key element in meeting of this demands. It might be emphasised that the TEM project has been included in the list of project under negotiations between European Bank for 2=J '•, ' JsWEDEN OSLO; .i 0 STOCK ~ ~ ~ Q. ~ 0 "0 8 ~ ....0 ;. ~ '"tl !2. o;· :r i» =Q. BERLIN - :. ~--~~·"_ -o-- ---~~', -·--·-:-::-:-..,.,__ .,._;.-·~· ------JKIEV- >---0 ·, Pozna!\ , "'"'nA, .. ,,...

- International road "VIA BALTICA"

- Motor-way "VIA HANS~TICA" 'l Baltic Sea Corridor ' ' High Speed Railways BR~XELLES St;j:)etersburg - Moscow ' Multi-modal transport junctions

BALTIC MULTIMODAL TRANSPORT CORRIDOR DEVELOPMENT IC 10 M. KrzyZanowski

Reconstruction and Development and Polish government (Ministry of Transport and Maritime Economy). The project for the cities of Gdynia and Gdansk concerning the "Kwiatkowski Route" linking the city and ports with the A-1 Motorway is the further substantial help leading to the realisation of the whole project. The TEM project with related transport connections was already presented at the Conference on Trans European Motorway and Other Contemporary Transport Project organized by cities of Karlskrona, Gdansk and Gdynia in co-operation with the Union of the Baltic Cities- June, 8, 1993 and 27-28, April, 1995 in Gdansk. The total extended TEM network has length of 20 160 km. Appro­ ximately 5000 km of the motorway is already in operation and 2000 km under construction. The extension to Oslo of the TEM-Scandinavia will provide a trans­ port corridor that will be of great importance to Swedish and Norwe­ gian industry for trade with countries in Central Eastern and Southern Europe as well as with Middle East. The trade exchange between Scandinavia (Sweden) and the former Eastern Block is at present rather insignificant, but rapidly growing. The growth is expected to be especially pronounced in the case of Poland with an economic growth in the last years of about 5% GDP. For the Baltic countries like: Bielorussia, Russia, Ukraine and other Visegrad countries growth is expected for some years to come. A rather cautious forecast for the future growth of Poland's econo­ my and of commercial exchange between Poland and Sweden implies a substantial growth of traffic on TEM in both Poland and Sweden. Passing through the Polish territory, parallel to Vistula River and railway line, the TEM is creating, together with other modes of trans­ port a corridor of multimodal system. The idea of building the TEM motorway has been a subject of nume­ rous location studies and other projects prepared by Transprojekt Gdansk, concerning 334 km section from Gdansk to L6dz at present under construction. The motorway collects traffic from Gdansk, Gdynia The development of the Polish land ·- 11

and and surrounding areas runs through eight provinces and ends at the city of Tuszyn, south of L6dz where joins the Tuszyn-Pio­ trk6w Trybunalski motorway section. It is not easy to prepare the traffic forecast for A-1motorway, as well as for the others, highways having in mind the lack of experience in toll roads and because of long time pay back period. Nowadays a traffic growth of about 8% annually. Vehicle ownership in Poland is now 215 vehicles per 1000 persons, while the same index for Western Europe is 450vehicles per 1000 persons. Moreover average annual km-driven per vehicle in Poland is 6-8 thousand in comparison to 15 thousands in Western Europe. It could be assumed that Poland will reach West European rates not later than in 15 years. Present traffic forecast of Transprojekt Gdansk assumes that traffic volume will hesitate from 27 000 to 50 000 vehicles per day in the year 2030 at particular segments . The second important project in the making is the Via Baltica highway. Starting in Finland (Helsinki) through ferry boat connection to Estonia and further to Latvia, Lithuania to Poland and to Western and Southern Europe is linking to the TEM network. The idea of Via Baltica was a joint result of initiative by International Road Federation and Viatek Group in Finland. The initiative from Finland was supported by the mentioned Baltic Republic considering Via Baltica as a very important road junction for domestic and international traffic. Representative of Russia has generally supported the idea of Via Baltica proposing an additional link connecting this highway with St. Petersburg. It might be emphasised that North TEM transport corridor will be crossed by the East-West motorway (A-2) linking Moscow, Warsaw, Poznan with Berlin. The Polish authorities have confirmed the need of construction of the third important motorway (Nr 3) linking the Szczecin area with Gorz6w Wielkopolski, Zielona G6ra and the capital of Czech: Praha. 12 M . KrzyZanowski

The highway has direct connection with the Baltic ferry terminals linking port of Swinoujscie with terminal in Y stad. A route of the highway has been definitely established, considering demands of toll motorway. Some reconstruction works have been already started in the middle part of this motorway. The present road linking the port-cities: Szczecin and Gdansk will be reconstructed to the express road standard. This project is related to the idea of Estonian, German and Russian (Kaliningrad) Group which have prepared project of the international motorway named Via Hanseatica. The project of Via Hanseatica would in part coincide with Via Baltica in its northern section and with the recent Polish road network development programme. Important part of this projects are the road connecting Elblqg in Poland located south east of the harbour of Gdansk with Kaliningrad in Russia. The role of the project road in regional and inter-regional perspective will be highly dependent of the future economic and political integration of the Baltic region in general and development in Kaliningrad-Elblqg area in particular. The "Baltic Coastal Road" connecting the ports on the south-east coast line of the Baltic could facililate the coastal shipping activities. All studies and prepared projects are paying particular attention to the transportation links with the port- cities and the hinterland which generally are not sufficient to meet demands of growing traffic. The improvement of nautical access to the ports of Swinoujscie - Szczecin and the land roads to the general cargo area including the construction of new bridges connecting ports and cities with road systems are the fundamental tasks which have to be done. The good location from the sea side of New Port in Gdansk doesn't need any improvements for the entrance to the port. On the other side, the access to the rail and road systems of ports of Gdynia and Gdansk need construction of bridges and reconstruction of a branch of Vistula The development of the Polish land ... 13

River providing direct sea access to the Gdansk Refinery, two ship­ yards and fishing vessels and yachts harbours.

3. The Polish ports and shipping 3.1. Ports The majority programmes of development of the Polish road net­ work are connected with sea -land transportation systems linking the hinterland of the Baltic ports with shipping. The cargo loading capacity of Polish ports and the quality level and technical conditions of cargo loading and unloading equipment is much differentiated. The level port services rendered by the specialised deep water mechanised high efficiency cargo handling and storage terminals is rather high. This refers to coal, raw materials for production of ferti­ lisers, sulphur, salt, crude oil and products loaded and unloaded in Swinoujscie and Gdansk as well as to container operations in Gdynia. The Northern Port in Gdansk is able to berth 150,000 DWT coal carriers and to handle their cargo with a speed of 50,000 tons per day. The fuel terminal in same port allows entering by 150,000 DWT tankers. The port of Swinoujscie can berth 60,000 DWT vessels ensu­ ring day rates of coal of about 10,000-15,000 of ore and raw materials. The port of Gdansk has specialised terminal for coal, sulphur, salt and raw materials for ships up to 30,000 DWT. The modern container terminal in Port of Gdynia is able to berth container carriers of the third generation and a small liquid fuel terminal of about 2 min tons. Ferry terminals in Gdansk, Gdynia and Swinoujscie have been built to meet the requirements for berthing ferries of the 1st and 2nd generations. The biggest increase was demonstrated in Gdynia 23.4%, in Szcze­ cin-Swinoujscie 17% and in Gdansk 12%. The cargo handling increase 14 M. Krzy:ianowski was at first due to better results in three groups of cargo: coal 42%, grain 52% and general cargo 28%. [7] Despite such favourable results, the figures of the turnover of Polish ports are still being those from the years before 1990. The more positive changes have been observed in the substantial growth of transit cargo. Not only traditional Polish transit partners as Czech and Slovak customers but also cargo to neighbour German companies is increasing constantly. This trend will probably be mani­ fested by an important increase in future handling of Russian paper, Slovak steel from Baltic states and liquid cargo from Slovakia and Bielorussia. The increase in container traffic and of ro-ro cargo is mainly due the participation in trade, mainly of foreign operators as Danish Maersk and British U.B.C. Also important grow has been observed in import of passenger cars transported by ferries between Gdynia and Karlskrona. Large investments are going on in Baltic Container Ter­ minal which became a separate company as the grain terminal. It might be mentioned, the ferry passenger traffic on Baltic Sea has given the first position to Finland- Estonia junction from 997,000 in 1990 to 3,071,000 in 1994. The second position has obtained the transport relations between Sweden and Poland from 408,000 in 1990, to 517,000 in 1993, with growing tendency in 1994 and 1995. The Russian-Swedish ferry traffic has been demonstrating substan­ tial growth from 33,000 in 1990, to 97,000 in 1993. Likely, the same amount in 1993 (97,000) is representing the passenger ferry service between Denmark and Poland. The program for development, modernization and restructuring of Polish ports prepared by The Ministry of Transport and Maritime Economy in Warsaw was based on the demand of port authorities and studies of the Maritime Institute in Gdansk. Also some group of experts from Japan and Holland have prepared studies which are evaluated and discussed at the conferences and seminars sponsored by the World Bank in 1994. The development of the Polish land ... 15

The general port assessment, its strategic position and main pre­ requisites has been formulated as follows: 1. The Polish ports should not only be economically fit in already existing trade patterns and trade routes, but also be attractive for routing of the expected growing cargo volumes to Poland and to nearby countries in Central Europe and the CIS. 2. Polish ports must operate in such a way that the type of ships normally used in international trade for particular kinds of cargo can be received and handled rapidly and economically. 3. The port environment has to be changed substantially into the direction of market orientated and entrepreneurial behaviour. Effective and efficient delivery of quality (value of money) ser­ vices is among others essential to create a situation whereby shippers and traders will route their transports through Polish ports and will attract investors to invest in the port and port related projects. 4. The relation between government (national and local), the port authority and private operators in the port should be well orga­ nized and stable, both in terms of division of powers and of financial responsibilities.

3.2. Shipping Baltic Sea region is about to regain its historical position as an im­ portant area of trade in Europe. In order to secure the right economic development an effective transport system is needed within the region and to and from the international markets. Baltic traffic depends first at all on development of the mutual seaborn trade of the Baltic countries and their links with the ocean borne international trade which constitutes ai present 8%.

The total Baltic turnover amounts about 300 min ton of cargo annually, 60% of which consists of traffic across Baltic Sea and 40% of the inter Baltic Traffic. 16 M. KrzyZanowski

South Eastern Baltic is the natural route for passenger transporta­ tion services and cargo transport between Norway, Sweden, parts of Denmark and to some extent Northern Germany on one hand and the Baltic states and Finland, central and Southern Russia, Poland, Czech and Slovak republics, eastern Hungary, Bielorussia, Ukraine, Rumania and Bulgaria on the other. The population of this area is roughly 300 min. The traditional ferry connections between Polish, Finnish and Swedish ports will be substantially enlarged. Generally, ferries serving the Baltic ports carry about 60 min trucks and 120 min ton of cargo on 540,000 carriages. With the annual growth of around 7% ferry traffic between Poland and Southern Sweden would comprise of 300,000 vehicles of all kinds around the turn of the Century and then 1 min vehicles ten years later. At present, Polish Baltic Shipping operates 6 passenger car ferries, Polish Ocean Lines 2 rail-car ferries and Polish Steamship Company joining forces with Euroafrica has started in June 1995 to operate a modern 1000 passenger ferry "Polonia". Polish Baltic Shipping Co. accounts for about 80% of passenger and cargo shipments by ferries between Poland Scandinavia. Recently the Polish Steamship Company and Euroafrica have jointly established a new company, Unity Line. At present about 40 ferry companies are operating on the Baltic Sea 130 ferries and the Polish ferry operators share in the total Baltic Sea ferry shipment is over 1% of total passengers shipments. Important factor of the development of the Polish ferry services is the development of the ferry terminals. The investment of a modern ferry terminal in Swinoujscie is carried on. The investment will be completed by the end of 1996. Three new berth and modern buildings designated for passengers service will be built and the terminal will be ready for berthing up to 15 ferries per day. Rostock possess the favourable position in development of ship­ ping on Southern part of Baltic Sea. Involved in the international co-operation for the development of trade and traffic in frames of the Eastern European City Co-operation Scheme and Overture the City The development of the Polish land ... 17

of over 250,000 inhabitants and good traditions have a chance to regain its strong position . The competition which does exists between Polish and East Ger­ man shipping and ports as a normal behaviour of private companies operating at the same market is not excluding the mutual co-operation which has good and long traditions. The closest co-operation with neighbouring countries located at the East side of the Polish frontiers has already started. They represent dynamic maritime centres as Kaliningrad, Klaipeda, Riga and Tallinn. The suitable forum which might help the realisation of common under­ standings and right co-operation between the Baltic maritime organiza­ tion is the Union of the Baltic Cities established in September 1991. At present the possibilities are discussed concerning the opening of Pilava narrows for the international shipping allowing free entrance of ferries and other kinds of ships which draught allow to navigate at shallow waters of Vistula Bay.

References (1] Kondratowicz L., 1993, Seaports as logistical information exchange centre, [In:] Logistic management in sea ports, Materialy IM nr 881, Gdansk. (2] Krzyzanowski M., 1993, The Adaptation ofPolish Shipping Companies to Market Conditions, "Maritime Policy and Management" Vol. 20, No 4, 301- 307, London. (3] Krzyzanowski M., 1993, Cargo Streams and Transport Routes of Hinterland of Baltic Ports, "Bull. Mar. Inst." Vol. XX, No 1, Gdansk. (4] Krzyzanowski M., 1995, Shipping and Overseas Trade, International Seminar "Preservation of the Industrial Heritage", Technical University of Gdansk- October 04-07, Book ofAbstracts, p. 59. (5] Lofgren B., Gustafsson B., 1993,Project managers: TEM Scandinavia- Our Link 'to the Motorway System of Central and Eastern Europe - The Baltic Institute- Karlskrona. (6] Poland Port Sector Study - Seminar on Institutional and Operational Develop­ ment of Polish Ports- Gdansk, June, 22-24, 1994. 18 M. Krzyi.anowski

[7] Polish Ports Recovery from Slow Down of Early 90-ties, "Polish Mar. Rev.", Gdansk, March 1995. [8] Polish Trade Logistics Management and Sea Transport including the Trade and Transport Connections between Middle East European Countries and the outside world, WW IM 4558, Gdansk, 1993. [9] Program of Polish Motorways A-1, A-3 and Expressway Elbl