Air Traffic Infrastructure Regional Study (ATIRS) for South-Eastern Europe

Infrastructure Service Report

Federal Republic of Yugoslavia

By Nordic Aviation Resources AS

April 2001 Air Traffic Infrastructure Regional Study (ATIRS) for South-Eastern Europe Infrastructure Service Report Federal Republic of Yugoslavia

April 2001

Date of issue : 04.04.01 Prepared by : P. Katborg, T. Tønnessen, G. Pettersen and J. Rønning Checked by : T. Johnsen Approved by : J. Rønning

086ebe9f6427ba40ccb1f96dd11d0ad5.doc April 2001 Nordic Aviation Resources AS DOCUMENT IDENTIFICATION SHEET

DOCUMENT DESCRIPTION Document Title Air Traffic Infrastructure Regional Study (ATIRS) for South-Eastern Europe Infrastructure Service Report Federal Republic of Yugoslavia Subject Emerging from the regional review presented by EIB on the occasion of the Regional Funding Conference, 29-30 March, 2000, EIB has launched an Air Traffic Infrastructure Regional Study for South-Eastern Europe, in response to the need to define infrastructure priorities and corresponding investment needs on a regional south-east European scale Abstract The Air Traffic Infrastructure Regional Study for South-Eastern Europe (ATIRS) is focusing on regional long-term strategies related to two main areas of interest:

 Proposed long-term strategy for Air Traffic Management (ATM) related to en route traffic over-flying the south-east European Region; and  Air Traffic Infrastructure investments, including airport reconstruction and expansion, and Air Traffic Control (ATC) installations. The ATIRS has been carried out as an appraisal of studies, plans and proposals prepared by the states in the region, or relevant international institutions. The present report reviews proposed air traffic infrastructure investments within air traffic services and airport reconstruction in the Federal Republic of Yugoslavia. Keywords EIB ATIRS Contact Persons Written by: P. Katborg, T. Tønnessen, Tel: (+47) 22 94 20 20 G. Pettersen, and J. Rønning Checked by: Tore Johnsen, Tel: (+47) 22 57 48 20 Johan Borchgrevink Tel: (+47) 22 94 20 70 Approved by: Jon Rønning Tel: (+47) 22 94 22 80

DOCUMENT STATUS AND TYPE Document status Final Report Document category Restricted circulation Edition Edition 2.0 Edition date 04.04.01

BANK DISCLAIMER The findings, interpretations and conclusions in this report are those of the consultants and do not necessarily reflect the position of the European Investment Bank. The European Investment Bank does not guarantee the accuracy of the presented data and accepts no responsibility for their use. The information shown on any maps in this report does not imply any judgement on the legal status of any territory on the part of the European Investment Bank. Preface

086ebe9f6427ba40ccb1f96dd11d0ad5.doc April 2001 Nordic Aviation Resources AS The Air Traffic Infrastructure Regional Study (ATIRS) was launched as part of the Regional Funding Conference for South-Eastern Europe held in March 2000. The European Investment Bank, in its role as lead coordinating financial institution for investment programmes in basic infrastructure projects, submitted a Regional Project Review1 focusing on the transport, energy, water/environment and telecommunications sectors covering seven countries of the region (Albania, Bosnia and Herzegovina, Croatia, Federal Republic of Yugoslavia, Former Yugoslav Republic of Macedonia, as well as Bulgaria and Romania). One of the areas singled out for further study was air traffic infrastructure, which presented considerable needs for making up lost ground. This study, known as ATIRS, was incorporated into the so-called Quick-Start Package of projects under the Stability Pact as regional study No. 8401. It was executed under the guidance of the European Investment Bank between August 2000, when consultants were appointed, and April 2001, when the final report was delivered. The study was financed from the contribution of the Royal Ministry of Foreign Affairs of Norway, and was executed by consultants specialised in the aviation sector, Nordic Aviation Resources (NAR). It covers air traffic management (ATM) on a regional basis, including all 7 countries, and airport infrastructure in the Western part of the region. It is based on extensive field visits to all the countries concerned and on close contacts with relevant international organisations. The results are presented as a series of reports consisting of the following:

 An Air Traffic Management Report surveying the ATM situation in South-Eastern Europe, including a review of existing bottlenecks and areas requiring urgent attention or improvement  A series of 5 Country Reports dealing with Air Traffic Infrastructure in the region. The countries covered are: Albania, Bosnia and Herzegovina, Croatia, Federal Republic of Yugoslavia, and Former Yugoslav Republic of Macedonia. Topics include strategic planning, a discussion of the needs for capacity expansion (particularly of major airports) and factors affecting implementation and management of projects.

The study results cover physical and institutional aspects, and include indications on priority investments. There is considerable scope for investments in air traffic infrastructure in the region, but there needs to be differentiation according to the degree of urgency and demand in terms of projected traffic. Thus the construction of sizeable additional passenger handling capacities at certain airports seems premature, and it is recommended that efforts be focused on the modernization of existing installations or maximising their potential. In certain cases where new investments can be justified, the critical bottlenecks are in the institutional area, where reforms need to be undertaken. A specific need identified in Air Traffic Management concerns high capacity telecommunications interchange systems. Handling of existing data as well as the idea of a virtual area control centre requires much enhanced capacities for transmitting information throughout the region. This issue will be one of the future challenges which will have to be taken up.

It is hoped that the study will serve to advance the process of modernization of air traffic infrastructure in the region, thereby making a contribution to economic development and stability. The key results were presented at the European Investment Bank and subsequently at a Workshop on ATM Cooperation in South-Eastern Europe held in Sofia in March 2001 under the auspices of the Air Traffic Services Authority of Bulgaria. This workshop was attended by representatives from the entire region as well as from the international bodies concerned, and proved very successful in advancing a harmonized approach.

Besides acknowledgement of the high degree of dedication of the Consultants NAR under Tore Johnsen, Team Leader for the ATIRS, thanks are due to the numerous individuals who in one form or another contributed to the study, to the national aviation authorities in all of the countries concerned, and to the international agencies such as ECAC, EUROCONTROL, ICAO and the European Commission who readily cooperated. The study was carried out under the Projects Directorate at the EIB, represented by Caroline Reid, Director, and Peter Bond, Infrastructure Department Director. Axel Hörhager, Project Coordinator Balkans, and Bernard Pels, Technical Advisor in the Projects 1 European Investment Bank, “Basic infrastructure investments in South-Eastern Europe – Regional project Review”, Brussels, 29-30 March 2000, available from www.eib.org

086ebe9f6427ba40ccb1f96dd11d0ad5.doc April 2001 Nordic Aviation Resources AS Directorate were responsible for the detailed supervision of the consultants and technical guidance. The EIB’s Directorate for Lending Operations in the Balkans and Turkey, under Antonello Pugliese, Department Director, Patrick Walsh, Division Chief, and Massimo d’Eufemia, Coordinator, provided continued support.

Luxembourg, 27 April 2001 Axel Hörhager Project Coordinator Balkans European Investment Bank

086ebe9f6427ba40ccb1f96dd11d0ad5.doc April 2001 Nordic Aviation Resources AS European Investment Bank Infrastructure Service Report for Federal Republic of Yugoslavia Page 1 of 52

CONTENTS PAGE FOREWORD...... 2 SUMMARY...... 3 1 INTRODUCTION...... 6 1.1 Project context...... 6 1.2 Aviation sector in Federal Republic of Yugoslavia...... 8 1.3 Country specific critical factors...... 9 2 INSTITUTIONAL STRUCTURES...... 10 2.1 The aviation system...... 10 2.2 Stakeholder...... 12 2.3 Critical factors for institutional development...... 12 3 NATIONAL PROJECT PROPOSALS...... 14 3.1 Proposed projects...... 14 4 TRAFFIC FORECASTS...... 16 4.1 Presentation of existing projections...... 16 4.2 Analysis of traffic forecasts...... 17 4.3 General Traffic Forecast...... 21 5 AIR NAVIGATION SERVICES/ATM INVESTMENTS...... 23 5.1 Organisation of ATS...... 23 5.2 Proposed Investments...... 24 5.3 Financial evaluation...... 25 5.4 Priority of project proposals...... 29 5.5 Development impact...... 30 6 AIRPORT INFRASTRUCTURE INVESTMENTS...... 31 6.1 Organisation of Belgrade Airport...... 31 6.2 Technical evaluation...... 31 6.3 Financial evaluation...... 36 6.4 Priority of project proposals...... 41 6.5 Development impact...... 42 6.6 Procurement strategies...... 43 7 RISK MANAGEMENT...... 46 7.1 Assessment of Major Risks...... 46 7.2 Technical Risks...... 46 7.3 Management Risks...... 46 7.4 Institutional Risks...... 46 7.5 Financial Risks...... 47 7.6 Risks to be Monitored...... 47 8 RECOMMENDATIONS...... 48 8.1 Introduction...... 48 8.2 Priority investments...... 49 9 APPENDICES...... 52

FOREWORD

The study concerning air traffic infrastructure related to the Federal Republic of Yugoslavia started on 28. August 2000 by collection of data and relevant information from external sources, such as ECAC, ICAO and EUROCONTROL in respect of air traffic management.

During the course of the ATIRS, some major events affecting the scope and focus of the study have occurred. The most important is the democratic change that has taken place in the Federal Republic of Yugoslavia, and the country’s re-entry into international aviation sector organisations, thereby also opening for possible credit lines for air traffic infrastructure investments. Secondly, the establishment of the International Steering Committee for Bosnia and Herzegovina (ISCBH) with ICAO as the secretariat has effected, certain ad hoc measures for air traffic management over Bosnia and Herzegovina, which in time will be expected to reduce uncertainties with regards to regional ATM investments.

In the work programme of the study, attention in respect of FRY concentrated on issues related to air traffic management (ATM) of en-route traffic, whereas issues related to air traffic infrastructure investments had a low profile due to the at that time, prevailing economic sanctions imposed against the country. The democratic changes that took place after study commencement led to a change in focus, allowing appraisal of proposed air traffic infrastructure investments.

Members of the study team have visited Yugoslavia on 04. – 06. and 13. – 14. December 2000 in order to collect locally based data, for interviewing key staff of the Ministry of Transportation, and its civil aviation administration, as well as the federal air traffic control authority (FATCA) and management of Belgrade Airport.

The ATIRS team visits flowed after an EIB mission to FRY 06. – 10. November 2000, which came about on short notice. The Yugoslavian authorities and the airport company had very short time to identify, formulate and compile project programmes and proposals. Nevertheless, due to an impressive effort by the administration and the Belgrade Airport management, supported by their expert adviser, Professor V. Tosic, were in a position to present essential data and dedicate sufficient staff and time to review all relevant topics with the team.

The study team has been met with openness, and dedicated involvement. The members of the ATIRS team like to express their appreciation for the attention and assistance of the FRY aviation sector staff.

Validation of information and data received was completed on 26 January 2001.

It must be understood that the development of the region and its institutions is very dynamic, and that both organisational and structural change may proceed at a high speed. Subsequently, organisational changes or institutional restructuring may have been accomplished since validation of collected information was completed.

SUMMARY

1. Introduction The needs and potentials for investments in the air traffic infrastructure have primarily been appraised on basis of documentation concerning:

1. Proposed air traffic services (ATS) investments prepared by the Federal Air Traffic Control Authority (FATCA) of Federal Republic of Yugoslavia (FRY), on the occasion of the EIB Assessment Visit to FRY, 06 – 10 November 2000, and reconfirmed to the ATIRS Appraisal Mission 04 – 06 December 2000; and 2. Belgrade Airport reconstruction and refurbishment conceptual programme, prepared by Belgrade Airport, and reviewed with the ATIRS Appraisal Mission 04 – 06 December 2000.

The appraisal carried out during the ATIRS, confirms the need for early actions both in respect of improvement in the ATS, as well as for modifications and improved quality of service of Belgrade Airport.

2. Background It is recognised that the long term objectives in air traffic management (ATM) for South-eastern Europe should call for integration of services on a sub-regional scale. This integration will take time to implement and in the mean time ATS facilities need to be improved and extended in order to allow the air navigation services to manage both en-route traffic and the approach traffic to the airports within Federal Republic of Yugoslavia.

Civil aviation administration, air traffic control and flight inspection are responsibilities of the Federal Government of Yugoslavia. FRY has played and still plays an important role in the management of air traffic over-flying the region, and the Belgrade ACC has previously co-ordinated the ATM for an airspace extending beyond the present boundaries of FRY. Whereas staff capacity and qualifications within air traffic control seem to be well preserved, the ATS installations are in need of improvement and extension due to equipment age and lack of maintenance during the years of UN boycott.

Following upgrading of the ATS infrastructure, including ATC communication systems, the Belgrade ACC should have the capability of co-ordinating ATM services at a sub-regional scale, following a future integration of regional ATS infrastructure in compliance with EUROCONTROL ATM 2000+ Strategy and the European Single Sky concept.

The civil aviation airport infrastructure in the country is owned by the republics. The Serbian government is the owner of the airports in Belgrade, Nis and Pristina, whereas The Montenegro Government is the owner of the airports in Podgorica and Tivat.

Belgrade Airport is the only operational international airport in Serbia, and the two airports in Montenegro, Podgorica and Tivat are open for international traffic. Belgrade Airport was built and operated as a hub connecting local airports in the former Yugoslav Federal Republic to the international network. As such, the airport has been designed and built for a much higher traffic than the present, as well as the traffic potential in the foreseeable future. The airport, however, is in need of improvement of its technical facilities and installations, service quality and capacity both for passengers and planes. The runway and taxiways are basically sound, but in need of repairs and reconstruction.

3. Contents and Functions of the Infrastructure Service Report

With the assistance of a consultant, FATCA has identified shortcomings in ATS infrastructure needing urgent improvement, and identified as possible “Near-Term” projects. The proposals have been reviewed in light of EATMP requirements. After an assessment, the ATIRS Study group has concluded that the technical constraints in FRY air navigation services, which have to be most urgently improved are covered by the Near-Term priorities and are recommended to be financed for implementation.

Medium-term investments should facilitate local communication system upgrade. Long-term ATM investments should facilitate implementation of a regional communication network, allowing ATM for upper airspace to be controlled by a network (virtual Upper Airspace Control Centre).

The proposed investments at Belgrade Airport have been grouped in short term, medium term and long term investment items. Whereas short-term investments comprise of various capacity, functional and technological systems improvements in the terminal complex, various equipment, maintenance and handling demands, and installation of CAT III and taxiway repairs. Medium-term investments consist of improvements of apron and runway control and warning systems; long-term investments comprise of improvements of cargo facilities, aircraft parking stands and un-interruptible power supply system.

Considering the well-organised administration of Belgrade Airport, and the comparatively strong technical aviation sector environment in the country, it is assumed that procurement of airport redevelopment works and ATS infrastructure will be organised in packages allowing reasonably high local components in the contracts. Analysis of the Borrower's institutional framework, resources, financial and technical risks will be important for the recommendation for contract strategy.

4. Critical Items

Air Navigation Services There is a need for organisational change, transforming FATCA to become an independent commercially oriented and accountable entity. The change will be required in order to facilitate financing and efficient international and regional co-operation as basis for reliable decision processes.

A technical feasibility study concerning appropriate communication technology, connecting the various ANS installations (radar units and local APPs) to the ACC in Belgrade should be carried out in light of a future regional integration of air traffic control, and the subsequent need to avoid any cross-border interface problems.

The master plans for ANS/ATM services are outdated and a Ten Year ATM Master Plan (MATMP) for FRY, taking into consideration the re-integration of FATCA services in a larger ATM sub-region should be prepared by FATCA in a Near-Term initiative.

Belgrade Airport Belgrade Airport is organised as a State Enterprise Airport Services, owned by the Republic of Serbia. It is an accountable, commercial entity, but re-organisation should be considered in order to ensure financial and economic independence.

The latest Master Plan layout is dated from the mid 1980ies. The plan should be reviewed and adjusted to meet demands from the new reality in Balkan and Belgrade, as well define long-term strategy for the allocation of sites, specify functional dependencies, and include a staged development programme of the Airport.

The financial liquidity and the economic solidity of Belgrade Airport are very sensitive to the operations of the Serbian carrier, JAT. The carrier entertains large discounts and is frequently in default of payment. The Serbian Government owns both JAT and Belgrade Airport. The operations of JAT should be looked into in order to identify the risk potential on the part of Belgrade Airport before lending operations take place

5. Summary of Potential Investments The recommended investments have been referred and summarised in the concluding Chapter 8, below. The prospective investments have been organised in accordance with an implementation schedule aimed at:

1. Short Term investment initiatives: Commencement before the end of year 2001. 2. Medium Term investment initiatives: Completion before the end of year 2005. 3. Long Term investment initiatives: Completion before the end of year 2010.

The proposed project initiatives have been listed in a priority sequence under Sub-clause 8.2 below. It is essential that development of Master Plans, both for ATS infrastructure upgrading, and for Belgrade Airport reconstruction will precede final programming of project implementation.

Based on the expected traffic volume over-flying Yugoslavian airspace and assuming that the unit rate are competitive and that the services give value for money, the necessary investments in flight-control equipment should be made.

Based on the airports projected profit, the Belgrade Airport should be able to service the loans necessary to finance the proposed investments. Due to the likelihood of unforeseen refurbishment requirements for the Airport, a budget contingency of not less than 15% should be added to the recorded investment potential.

The table below summarises the identified investment proposals within ANS/ATS infrastructure and Belgrade Airport reconstruction.

Estimated Cost Time Frame Description in mill. EUR Short Term ATS Investments 97.86 Airport Investments 5.49

Medium Term ATS Investments 0.00 Airport Investments 14.11

Long Term ATS Investments 0.00 Airport Investments 1.68

Total Investment Potential, ATS Infrastructure, in mill EUR 97.86

Total Investment Potential, Airport Reconstruction, in mill EUR 21.28

Total Investment Potential in mill EUR 119.14

1 INTRODUCTION

As part of the programme for reconstruction and development of South-Eastern Europe, the European Investment Bank (EIB) plays a leading role in the area of basic infrastructure investments. One of the key issues emerging from the regional review presented by the Bank on the occasion of the Regional Funding Conference (29-30 March 2000) was the need to define infrastructure priorities and corresponding investment needs on a regional south-east European scale.

The regional review recommended the launching of an Air Traffic Infrastructure Regional Study (ATIRS) to assess in particular issues of the optimal extension of air traffic control and airport capacity in the region, to be carried out under the supervision of the European Investment Bank.

.1 Project context

..1 Background

In South-East Europe (SEE) there is an extensive air route network, including international airports in each country. Aircraft movements in the SEE region declined strongly in countries like Bulgaria and Romania after the economic upheaval earlier in the early 1990s, and the conflicts in former Yugoslavia led to strong decreases. By the mid-90s, traffic had generally stabilised in the region and is now increasing again. 5-6 million passengers and some 125,000 aircraft movements were registered in 1995-1996 in the region’s capital city airports.

The region plays a significant role in terms of over-flights along routes to the Middle East and beyond. Air Traffic Control (ATC) systems are thus of high priority from a European point of view.

Through ECAC most of the European states have agreed to establish and follow up programmes and plans focused on harmonisation and development of European air traffic, air traffic management and airports. All undertakings are based on Standards and Recommended Practices laid down by ICAO through Annex 2 and 11 and other relevant ICAO documents.

However, for political or financial reasons, or because of times of war and unrest, many of the countries have not been able to follow up the agreements, and thus air traffic is being hampered and undue pressure placed on neighbouring states’ infrastructure and capacity. This is pointedly evident in the Balkan region. It will benefit greatly both the individual state, the region and the global community that the air transport infrastructure is brought up to a level comparative to that of the other European states.

Airport infrastructure modernisation needs to be carried out on the basis of safety-related considerations (runway, equipment). The split of the region into smaller countries has had the effect of reducing the possibilities of operating hub and spoke systems, thus causing a deterioration of airport economic and financial perspectives. Thus very few airports in the region reach the threshold of not less than some 1.0 million passengers p.a. required to make such an operation self-financing. State support therefore remains essential, while, in the interests of more efficient management, the operational responsibilities ought to be taken by autonomous bodies unencumbered by state hierarchies. Upgrading of passenger facilities needs to be selected after demand analysis.

..2 Introduction to the ATIRS project

Fundamental issues related to planning of additional airport infrastructure capacity on a regional scale have been raised by proposed expansion or reconstruction plans, and of the way air traffic control investments should be co-ordinated.

The ATIRS is therefore focused on regional long-term strategies related to two main areas of interest:

 Air Traffic Management (ATM) related to en-route traffic over-flying the south-east European Region; and  Air Traffic Infrastructure investments, including airport reconstruction and expansion, and ATC installations

The ATIRS has been carried out as an appraisal of studies, plans and proposals prepared by the states in the region, or by relevant international institutions. The countries covered by the ATIRS are: - Albania, Bosnia and Herzegovina, Croatia, FYR of Macedonia and FR of Yugoslavia, as far as air traffic infrastructure investments are concerned.

The results of the study of a future ATM strategy has been presented in a regional report, whereas the results of the appraisal of airport and ATC investment plans have been organised in report volumes for each country.

..3 Project objectives

International institutions giving financial loan or grant assistance, in particular the European Investment Bank, the European Commission and the European Bank for Reconstruction and Development are active in the financing of projects in the field of air traffic infrastructure. Projects financed by such institutions should be sound from a technical, economic and environmental perspective. In addition, apart from the basic criteria of economic justification derived from ascertained demand for air services, the financial feasibility of projects and the extent to which projects can support loan financing has been an important consideration. The organisation of borrowers as corporate entities giving them the capability to act as professional institutions with sufficient revenue- generating potential is considered desirable.

An objective of the ATIRS has been to produce air traffic infrastructure service reports, on basis of an appraisal of the technical viability and the economical feasibility of proposed airport and ATC investments in the five South-East European countries.

The ATIRS has been carried out in due consideration of the need for developing the regulatory framework. Further, it has considered the financial and technical resources needed to implement and maintain the minimum requirements of the State’s responsibility for the establishment of safe and efficient Civil Air Operations in accordance with the Chicago Convention and the associated Standards and Recommended Practices (SARPs) given in the ICAO Annexes.

..4 Disclaimer

The findings, interpretations and conclusions in this report are those of the consultants and do not necessarily reflect the position the European Investment Bank. The European Investment Bank does not guarantee the accuracy of the presented data and accepts no responsibility for their use. The information shown on any maps in this report does not imply any judgement on the legal status of any territory on the part of the European Investment Bank.

.2 Aviation sector in Federal Republic of Yugoslavia

Basic information concerning the Federal Republic of Yugoslavia, with a review of key geographic, demographic and economic data has been attached as Appendix B.

Whereas air navigation services and inspection are the responsibility of the federal government, the airports and the airport infrastructure are owned and operated by the republics of Serbia and Montenegro.

Administration of civil aviation is part of the functions of the Ministry of Transportation, and the functions for safety regulations, airworthiness of aircraft, accident investigation and air transport planning have been organised under the Air Transport Department.

Air Traffic Control is performed by the Federal Air Traffic Control Authority (FATCA), which is an organisation under the Ministry of Transportation. Whereas FATCA is responsible for Air Navigation Services, the inspection activities are organised under the Federal Aviation Inspectorate, under the management of a Director General, reporting to the Ministry.

The airspace over the Federal Republic of Yugoslavia is of major importance for efficient routing of traffic both to Greece and Turkey and beyond. Its airspace above FL 245 has been open for en-route traffic, except during the period of war in 1999.

FRY is a former member of ICAO, but was expelled from ICAO in 1992 when UN sanctions against FRY were instituted. FRY, however, has considered itself an ICAO state. The legislation corresponds with ICAO requirements, but FRY has not ratified documents and amendments issued after 25.11.92. FRY was re-admitted to ICAO on 13.01.01.

FRY has stated adherence with the Chicago Convention, with reservation in respect of Art. 83 bis. Amendment of National Regulations is required in order to assure compliance with the latest amendments of ICAO Annexes. There are no indications that amendment of National Regulations will create any difficulty with regard to implementation of EUROCONTROL ATM strategies.

FRY has maintained good technical communication with ICAO and EUROCONTROL during the years of boycott, and re-establishing formal relations seems not to constitute particular problems.

The expertise within the aviation industry has been kept more or less intact. FRY has university level education of air traffic infrastructure design and operation. Modular system, good staff capacity and qualifications are available in ATM and ATC.

In the former Socialist Republic of Yugoslavia (SFRY), Belgrade Airport had the function of a hub in a “hub and spoke” system. Since the dislocation of SFRY the traffic at Belgrade Airport has been substantially reduced. Consequently the main components of the airport facilities are sized for a higher capacity than required in the foreseeable future.

Air traffic infrastructure within the Republic of Serbia has been severely damaged during the Kosovo conflict in 1999. Before the war in 1999, the country had five airports. One of these was destroyed during the war, and another is the airport in Pristina, Kosovo, presently under UNMIK management.

Belgrade Airport is the only operational international airport in Serbia, and the two airports in Montenegro, Podgirica and Tivat are open for international traffic.

Critical issues in respect of external services like electricity supply and communication, problems with ageing equipment in Belgrade Airport and ATS installations, passenger handling, institutional issues and human resource development, as well as project finance, have been reviewed and identified.

The consistence of traffic forecasts used in planning on the one side, and breakdown of demand on the other has been apprised to identify the potential for a stepwise development of airport reconstruction and extension.

.3 Country specific critical factors

Pre-war Yugoslavia was a major transit area for traffic from North West Europe to South East Europe and beyond. At that time the ATC within the state was based on an efficient organisation supported by appropriate technical equipment. However, the FRY infrastructure suffers from years of insufficient maintenance and inadequate renewal of assets reaching the end of their life, and compounded in the spring of 1999 by selective destruction of key strategic facilities by NATO during the Kosovo conflict.

The Federal Republic of Yugoslavia has faced rapidly deteriorating economic conditions since the late 1980s, with virtually no foreign exchange reserves. The FRY has as a result outstanding arrears with the World Bank, the EIB and other banks. These arrears will have to be settled before new finance contracts may be implemented.

For the aviation industry, as for other industries with a major part of the income in foreign currency, and with the local currency component of recurrent cost being higher than the earnings in local currency, the official exchange rate of the local currency, constitutes an actual confiscation of revenue.

There is a need for organisational change, transforming FATCA to become an independent commercially oriented and accountable entity. The change will be required in order to facilitate financing and efficient international and regional co-operation as basis for reliable decision processes.

2 INSTITUTIONAL STRUCTURES

.1 The aviation system

..1 Organisation of the system

A new Aviation Policy will be proposed to the Government late year 2000. Political obstacles are still in place after the war. However, good processes are ongoing. Whilst 21 international airports were in place in 1992, 5 were left after the war and only 3 airports exist to day - Belgrade, Podgorica and Tivat. The latter acts as relief airport for Dubrovnic in Croatia.

The expertise within the aviation industry is kept intact. Good staff capacity and qualifications are available in ATM and ATC. Further, FRY has university level education of air traffic infrastructure design and operation. A modular Pilot training to commercial pilot licence at high school level is available, allowing trainees to proceed to university.

FRY became an ICAO member in 1960, but expelled on 25.11.92 when UN sanctions against FRY were instituted. The procedure to re-establish the membership early year 2001 has started.

Following the ICAO membership, FRY will join EUROCONTROL, ECAC and JAA during the year 2001 as part of the new Aviation Policy. FRY has negotiated 90 bilateral agreements, out of witch only some 10 have been initiated. Greece is the only remaining, but an agreement is under preparation and expected to be signed in year 2001. Informal agreements have been established with FYROM, BiH, Slovenia and Croatia. An agreement on ATC was negotiated with Albania and MoU was signed in 1995.

The co-operation with Albania is dependent of the situation in Kosovo. FRY is the owner of Prisitina Airport. FRY has proposed to use upper airspace over Kosovo under the control of Belgrade ATC. FRY may on short notice mobilise for management of the upper airspace of Kosovo.

FRY has the capacity to and actually controls 50% of the upper level of BiH airspace, from flight level 160, and FRY has agreed to provide ATC for high-flying traffic in approximately 50% of BiH airspace. Last year FRY also agreed with Croatia for opening of southern corridors for én route traffic in 1999.

The Federal Republic is responsible for international co-operation, civil aviation administration (Ministry) and air traffic management (FATCA). The Serb and Montenegro Republics are the owners of aviation infrastructure - national carriers and airports.

Republic of Montenegro

State Enterprise Airport Services M ontenegro Airlines

Airport Padgorica Airport Tivat

Figur 2.1: The Republic of Montenegro

Republic of Serbia

Belgrade Airport JAT

Board of Directors 6 persons

General Manager and member og the Board of Directors

Technical Traffic Economy Export/Import Restaurants Shops Training Duty Free Concession Office

Figur 2.2: The Republic of Serbia

Federal Government

Ministry of Transport

Federal Aviation Inspectorate

Federal Air Traffic Control Authority (FATCA) Air Transport Department D 6

Training ANT ANMET R&D ATC ATC Legislation Airworthiness Service for aircraft Service for Transport Service for Air Transport Centre ATC Belgrade Airport Nine (9) airports International Affairs - Aircraft registers accident investigation Plan and Development Documents, Issue Air Transport Division - Airports and Airfields violation of safety and Approval of - Airport personnel div. serch and rescue Aviation Publications

Figur 2.3:The Federal Republic of Yugoslavia

..2 The money flow in the system

Over flight fees are collected as fiscal fees for the federal budget. The fees are reallocated for operation of ATM. The reallocation will always be less than collected fees.

The federal government will be the borrower and issuer of sovereign guarantees. The government is not familiar with all details in lending transactions and need to have the procedures conveyed to it.

Lending for reconstruction and modernisation of Belgrade Airport will likely be with the State Enterprise Airport Services (SEAS) as the borrower, guaranteed by Republic of Serb.

GDP per capita is $ 1800 (1999 estimates).

.2 Stakeholder

..1 The organisation of the system

The FRY government has no position in respect of ownership to airports. Either the Serb or Montenegro governments own the civil aviation airport infrastructure.

The State Enterprises Airport Services owns all airport facilities, including all lighting systems.

The FRY government with FATCA owns all navigation aids, including the ILS.

..2 The decision process in the system

FYR is recognised by a major changing process within political systems, professional organisations and institutional development in general.

FYR has expressed their interest in a possible co-operation project with International Financial Institutions, focusing the establishment of institutional structures and decision processes.

.3 Critical factors for institutional development

The FRY government is the guarantor for all loans for witch the FRY is in default of payment. The governments of Serbia and Montenegro are not part of the arrears problems.

The most critical item is the need for organisational change to facilitate financing and efficient international and regional co-operation as basis for a proper decision process.

Main areas to be considered in short and long-term strategies:

 Management support – international lending and risk management  Organisation of aviation system  Regional co-operation

COMMUNICATION NODE • Professional knowledge • Neutrality Knowledge on local Information flow / culture coordination

Institutions Training Management Implementation of Regional Strategies National strategies On-the-job training Project Priorities and priorities management National vs regional Planning Financial guarantees interests Procurements International regulations Reporting Controlling Specialists

State Enterprise State Enterprise FATCA Airport Services Airport Services Airport Belgrade Airport Podgorica Airport Tivat

Figure 2.4: Institutional and human resources intervention – infrastructure related organisations.

3 NATIONAL PROJECT PROPOSALS

.1 Proposed projects

..1 ATC Infrastructure

The ATIRS study group have received and reviewed the "Quick-Start Package" regarding Air Navigation and Safety related projects presented to EIB during their mission to Federal Republic of Yugoslavia 6-10 November 2000. The "Quick-Start Package" was presented to the ATIRS study group in Belgrade 13 December 2000.

This "Quick-Start Package" is a list, which gives a clear indication of the main areas where upgrading/replacement of equipment is required in order to enable convergence according to the EUROCONTROL 2000+ strategy. Summaries of the proposed project investments have been complied by the following groups:

 ATC Data Processing System  Navigation Aids (VOR/DME and ILS)  Radar Stations  Meteorological Equipment  ATC Communication Systems

..2 Belgrade Airport

The proposed investments at Belgrade Airport have been compiled in records dated December 2000. The investment projects are grouped in short term, medium term and long term investment items. The investment of each item has been identified and the projects briefly described. The total 26 items of project investment can shortly be described in the following groups:

Short-term investments . Various capacity and functional improvement in arrival and check-in areas of the terminal complex – investments app. EUR 5.2 mill. . Various technological system improvements in the terminal complex regarding information, safety and control – investments app. EUR 1.1 mill. . Extension of airport maintenance garage – investment app. EUR 0.4 mill. . Various equipment for meeting safety, maintenance and ramp handling demands – investments app. EUR 1.2 mill. . Installation of CAT III and taxiway repairs – investments app. EUR 1.5 mill.

Medium-term investments . Reconstructions and improvements of control and warning system regarding aprons and runway – investments app. EUR 5.2 mill.

Long-term investments . Extension and handling improvements of cargo facilities regarding capacity and procedures – investments app. EUR 4.0 mill. . Improvements at aircraft parking stands – investments app. EUR 0.7 mill. . Installation of un-interruptible power supply system related to CAT III equipment – investment app. EUR 0.2 mill.

4 TRAFFIC FORECASTS

.1 Presentation of existing projections

Given the historical traffic figures and patterns and the past political situation in the region, it is not possible to use standard traffic forecasting methods. The traffic volumes described below are based on input received from the country. In addition, reference traffic statistics have been presented in order to make a comparison between the forecast and the present analysis. The figures presented below are summary data, and calculations are attached as Appendix F.

The data below has been provided by the national authorities and derived from documents provided by the airport management.

AC PAX/ Over- Flights pr Year Movements Pax AC flights day 1980 46 254 2 392 521 52 1981 44 753 2 623 194 59 1982 40 442 2 462 681 61 1983 38 082 2 452 600 64 1984 40 806 2 447 815 60 1985 41 952 2 570 771 61 1986 43 708 2 866 298 66 1987 48 602 3 404 665 70 197 002 540 1988 48 120 3 277 537 68 176 777 484 1989 45 848 2 775 883 61 199 150 546 1990 43 814 2 797 917 64 204 325 560 1991 36 136 1 952 037 54 156 743 429 1992 15 814 817 676 52 145 041 397 1993 7 172 339 358 47 141 527 388 1994 7 606 357 434 47 149 380 409 1995 21 396 976 476 46 160 423 440 1996 22 452 1 192 247 53 159 904 438 1997 25 128 1 379 567 55 157 852 432 1998 27 042 1 375 760 51 157 861 432 1999 10 108 544 078 54 33 877 93 2000 19 402 1 279 000 66 160 556 440 * 2000 Estimates not including months of November and December

..1 National forecasts

Belgrade Airport has presented the following projections for the future development of the airport:

AC Year Movements Growth Pax Growth PAX/AC 2001 28 917 1 525 760 53 2002 29 799 3.05 % 1 663 078 9.00 % 56 2003 30 708 3.05 % 1 812 755 9.00 % 59 2004 31 644 3,05 % 1 975 903 9.00 % 62 2005 32 610 3,05 % 2 153 735 9.00 % 66 2006 33 604 3,05 % 2 347 571 9.00 % 70 2007 34 629 3,05 % 2 558 852 9.00 % 74 2008 35 685 3,05 % 2 789 149 9.00 % 78 2009 36 774 3,05 % 3 040 172 9.00 % 83 2010 37 895 3,05 % 3 313 788 9.00 % 87

..2 L CIP / MATMP / EUROCONTROL

Yugoslavia has not been a member of EUROCONTROL, and is therefore not included in any of the EUROCONTROL statistical material available. Subsequently, statistics or forecast from CIP document or MATM Plan, have not been available for the study team.

..3 Master Plan / Feasibility study

The Airport had no traffic forecast from their master plan to present to the study team. Further, feasibility studies have not been carried out on any of the specific projects for the airport or for FATCA.

.2 Analysis of traffic forecasts

Based on the above traffic statistics and the presented forecast, an analysis of the expected traffic volume at Belgrade Airport and in Yugoslavian Airspace will be presented.

..1 Over-flights

Due to the level of uncertainty of the forecast the analysis presented below will only deal with traffic up to the year 2010.

Assumptions Growth: 6 % pa – linear Daily average: Annual number of overflights/365 Daily peak: Average overflights per day * 1.9

The traffic forecast is based on the statistics from FATCA and the traffic growth is considered to be as the expected traffic growth in ECAC member states, 6 % per annum.

Year Over-flights 350000 2001 194 004 300000 2002 205 645 250000 2003 217 983 200000 Forecast 2004 231 062 150000 Actual 2005 244 926 100000 2006 259 622 50000 2007 275 199 0 2008 291 711 3 7 9 3 5 9 5 1 7 9 9 9 9 0 0 0 0 0 9 9 9 0 0 0 9 0 0 2009 309 214 1 1 1 1 2 2 2 2 2 2010 327 766 Figure 4.1: Over-flights up to 2010

The main factors that are considered to be of importance when establishing the traffic forecast for Yugoslavian airspace are as follows:

Growth assumptions It is assumed that the expected growth in the ECAC region of 6 % will also apply to Yugoslavian airspace and this percentage has been used as the basis for estimating air traffic growth. There seems to be no reason to dispute the general growth estimated by EUROCONTROL in the ECAC region. The volume of traffic is therefore based on the expected traffic for year 2000 from the statistics provided by FATCA.

It is worth noting that the conflict level in the Balkan region is very important for the expected traffic development for over-flying traffic in all the countries.

The growth in the traffic volume over-flying Yugoslavian airspace is also dependant on factors controlled by the Yugoslavians, their capacity and capability to handle the traffic volume, the prices for utilising the services provided and the quality of the services provided. This will be discussed below.

Effects of the Kosovo Conflict International embargo of the air space over Kosovo have so far created a bottleneck in the region and the conflicts in Yugoslavia could warrant further restrictions to the air space. It is possible that one route over Kosovo above FL 330 may be opened for en-route traffic before end of year 2001. This is, however, not expected to change the numbers of aircrafts in Yugoslavian airspace significantly.

The significant drop of traffic in 1999 clearly demonstrates the effect of the conflict in the area. The FRY airspace was closed for some time, but when re-opened, the traffic grew to its previous level almost instantaneously. It may therefore be assumed that whereas the embargo may not in the long term affect the number of flights passing through FRY airspace, the flying time in FRY airspace will increase when the embargo will be lifted.

Human and Equipment Capacity It was indicated during meetings that there is a need to update the equipment in Yugoslavia in order to be able to services the traffic in the area in the future. The present system will be able to

handle the traffic during the next few years, but it is assumed that after three years it will be necessary to update the equipment in use.

In addition, the human resources for air traffic control seems adequate to handle traffic growth in the area in the foreseeable future.

Demand for the service Airlines will choose the shortest distance to fly from a European destination to destinations in Greece, Turkey and beyond. Yugoslavian airspace is very important in this context because the shortest distance for a very high number of flights must over-fly their airspace. It is therefore an obvious conclusion that the demand for the air control services over Yugoslavia will be in demand as long as the price charged does not lead the airlines to seek alternative solutions.

It is in this respect important to focus on the neighbouring states’ capability to handle the growth in traffic, and divert the traffic streams away from Yugoslavian airspace. At present Yugoslavia seems to have a good level of human resources to service the airlines’ needs for air traffic control. Neighbouring states have neither capacity in human resources nor equipment to services the expected traffic growth in the area on their own. Yugoslavian airspace is therefore very important when it comes to the present and future traffic flow over-flying the Balkan region.

Price for the services As Yugoslavia is not a member of EUROCONTROL and of the CRCO system, it does not have to adapt to the unit rate system, where the air traffic control system is supposed to be self-financing and not to generate profits. Previously the cost for using Yugoslavian airspace has been one of the highest in the world. In 2000 the unit price was US $ 61.07. However, the total cost incurred by the airlines by flying alternative routes could be higher, thereby making FRY airspace attractive even at this high cost.

Conclusion The growth factor of 6 % will be used for the evaluations in this report.

..2 Approach Control/Traffic

Based on the above presented forecasts and estimates, a comparison and evaluation of the factors stated as determining in the above tables have been made.

The likely passenger growth in the next few years has several determining factors. The most important factors are considered to be:

 Capacity limitations  Political stability  International tourism  International business establishment  The country’s general growth

These elements will give indications on the likeliness of travel to and from FRY and the airports capability to handle the passenger volume.

..3 Capacity limitation at the airport

Reference is made to chapter 6.2 concerning airport infrastructure investments

Any capacity-limitations will create constraints on the traffic volume and if removing a constraint can increase the profitability of the airport, it should be implemented.

..4 Political stability

The country’s stability is to some extent dependent on the development of the region, but nevertheless another factor determining the future growth in passenger traffic into Belgrade. At present, the region is still considered to be unstable and therefore not as attractive as its future potential.

..5 International tourism

At present the number of international tourists have not been possible to isolate in the traffic statistics supplied by the airport. The general impression is that the number of international tourists arriving or departing at Belgrade International Airport is not significant. The country’s ability in the next few years to attract tourists to FRY in general will have an impact on the airport’s growth potential. The country and Belgrade have a potential for attracting tourist but this is not expected to be the factor generating the most significant traffic growth.

..6 International business establishment

In order to attract international business, the country needs to have some form of competitive advantage. It could be cheap labour, tax exemption, access to natural resources or good location. In addition, the country should have an adequately sized local market.

This factor will be important for the long-term growth rate, but at present it is not expected to have a major impact on the traffic growth.

..7 Effects of the Kosovo Conflict

To some extent, the conflicts in the area affect the traffic to Belgrade, but not significantly. The aftermath of the unrest in the Balkan area affect the traffic to a higher degree than the Kosovo situation does. Until the conflicts are resolved on a regional scale, and the situation normalised, the traffic to Belgrade Airport is expected to have some constraints. But the effects are expected to diminish gradually and developments in air traffic resume to a more normal growth rate.

..8 The country’s general growth

In the forecast prepared by Boeing’s report as referred in Parsons1 in 1999, it is stated that: “ GDP accounts for only two-thirds of the air travel growth. Tendencies of increasing trade, lower costs, and more flights explain the other third and are continuing. Overall, world air travel should grow 4.7 % per year.”

In Yugoslavia the GDP in 1998 was USD 2.300 per capita and in 1999 the GDP USD 1.800 per capita. The decline of USD 500 (21,7%) is also reflected in the drop in traffic volume at the airport of 60% from 1998 to 1999. It is clear that the GDP fluctuation in Yugoslavia is not a good indicator of the actual fluctuation of passenger traffic at the airport.

However, it seems clear that the GDP growth is important to the overall traffic growth at the airport. As the GDP grows, the population in the country will achieve a higher standard of living and also be more inclined to travel. Subsequently this will generate a higher traffic volume at Belgrade airport.

.3 General Traffic Forecast

Based on the above statistical input and the discussion of the factors contributing to the growth effect the following forecasts have been developed.

1. High growth alternative The high growth alternative is represented by the forecast presented from the airport. This alternative assumes that the airport will exceed an annual traffic of 3.3 million passengers in 2010. The annual growth rate in this alternative is 9 %.

Year Pax 3 500 000 2001 1 525 760 3 000 000 2002 1 663 078 2 500 000 2003 1 812 755 2 000 000 2004 1 975 903 1 500 000 2005 2 153 735 1 000 000 2006 2 347 571 500 000 2007 2 558 852 - 2008 2 789 149 8 9 0 1 2 3 4 5 6 7 0 0 0 0 0 0 0 0 0 1

0 0 0 2009 3 040 172 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2010 3 313 788

Figure 4.2: General traffic forecast using high growth rate alternative

2. Low growth alternative

Year Growth 2001 – 2005 6.50 % 2006 - 2010 5.50 % 2011 - 4.70 %

 In the first period from 2001 to 2005 the growth rate is assumed to be 6.5 %. The high growth in the last few years is assumed to be declining and then to stabilise.  In the second period from 2006 to 2010 the growth rate is assumed to be 5.5%. The establishment of co-operation with the neighbouring countries are assumed to have been re-established and business and tourist industries are developing in the country.  After 2010 the growth rate is assumed to be in line with the expected international growth-rates of 4.7% per year.

Year Pax 3 000 000 2001 1 525 760 2 500 000 2002 1 624 934 2 000 000 2003 1 730 555 1 500 000 2004 1 843 041 2005 1 962 839 1 000 000 2006 2 070 795 500 000 2007 2 184 689 -

1 2 3 4 5 6 7 8 9 0 2008 2 304 847 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0

2 2 2 2 2 2 2 2 2 2 2009 2 431 613 2010 2 565 352

Figure 4.3: General traffic forecast using low growth rate alternative

3. Average growth rate alternative The average growth rate represents the average of the high growth alternative and the low rate alternative.

Year Pax Growth 3 500 000 2001 1 525 760 0,0 % 3 000 000 2002 1 644 006 7,7 % 2 500 000 2003 1 771 655 7,7 % 2 000 000 2004 1 909 472 7,8 % 1 500 000 2005 2 058 287 7,8 % 1 000 000 2006 2 209 183 7,2 % 500 000 2007 2 371 770 7,2 % - 2008 2 546 998 7,3 % 1 2 3 4 5 6 7 8 9 0 0 0 0 0 0 0 0 0 0 1

0 0 0 0 0 2009 2 735 893 7,2 % 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2010 2 939 570 7,3 %

Figure 4.4: General traffic forecast using average growth rate alternative

Conclusion As basis for discussions in chapters below, the average growth alternative will be:

3 500 000 3 000 000 2 500 000 High 2 000 000 Low 1 500 000 Average 1 000 000 500 000 - 1 2 3 4 5 6 7 8 9 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2

Figure 4.5: High, low and average growth rate alternative up to 2010

5 AIR NAVIGATION SERVICES/ATM INVESTMENTS

.1 Organisation of ATS

Air traffic in Europe is steadily increasing, the rate being around 5% per year. The collection of route charges is the driving force behind the willingness to invest in On Route Traffic Services Units. Some states benefit from the flow of traffic; some are left in the backwaters for various reasons. Events in the Balkans have brought about changes in the flow of traffic and, consequently, the flow of revenue. Since revenue goes hand in hand with the quality of service, which is being provided, it is essential that each country be brought to a level consistent with EUROCONTROL policies. The key issues being sufficient radar data, communication and qualified personnel available in all sectors.

Implementation of the Single European Sky concept will, in the long term, aim at a reduction in the number of ACCs in the European Region. It is assumed that the strategic plans of CEATS will prove viable and be implemented within a period of approximately 10 years, and that the management of en-route traffic over the states of Bosnia and Herzegovina and Croatia in the long-term will be provided by the CEATS. This will influence the future ATM situation in FRY.

ATM in FRY is organised with an Area Control Centre (ACC) located in Belgrade. This ACC is operated by FATCA. On regional co-operation, FATCA exchanges flight data information with all neighbouring states.

FATCA has the technical capability to provide ATC above FL 160 in the airspace over Bosnia and Herzegovina, and actually performs such services in accordance with an agreement with BiH.

ATC for civilian and military air traffic has been integrated under the control of FATCA. Control of military aircraft movements is carried out by military controllers working in parallel with civilian staff in co-ordinated operations.

Belgrade ACC has the capacity to, and actually controls some 50% of the upper-level BiH airspace, from FL 160, and could on short notice mobilise for management of the upper airspace of Kosovo.

There is a need for organisational change to facilitate financing and efficient international and regional co-operation as basis for a proper decision process, and major changing processes within political systems, professional organisations and institutional development in general are taking place. FRY has expressed its interest in a possible co-operation project with International Financial Institutions, focusing the establishment of institutional structures and decision processes.

The development of a new “Aviation Policy” and subsequent commencement of the reorganisation of the administration of civil aviation are being prepared, and the new Aviation Policy was to be proposed to the Government, late year 2000.

.2 Proposed Investments

It is particularly important that investments for improving the ATM situation in the area is well balanced against the traffic distribution, and that the investments are supported and maintained through establishing policies for calculations of over-flight fees in the area. These calculations shall be compliant with ICAO and EUROCONTROL rules.

During the ATIRS Project work, the need to develop a Communication Sector Strategy for the European Air Traffic Management System (EATMS) in the SEE Region has been assessed, and carrying out a sector study for establishing such strategy has been recommended as an early action initiative for implementation of a regional ATM strategy.

Due to the need for integration of the SEE States in the European Community with regard to Air Traffic Management Installations and Services, it is important to consider all relevant aspects of such integration, and make provisions for the SEE States to fill the role as ATC providers in accordance to EUROCONTROL standards, and to support air traffic to and from European network in addition to their own needs in the SEE region.

The ATIRS study group have reviewed the "Near-Term Package" regarding Air Navigation and Safety related projects, which was presented to EIB during the bank’s mission to Federal Republic of Yugoslavia 6-10 November 2000. The appropriateness and importance of the projects described in the Project Summaries Sheets forming the Near-Term “package” have been reconfirmed during the ATIRS appraisal visits to Belgrade, 04. 06. and 13. – 14. December 2000.

The project proposals have been compiled in the main investment categories of:

 ATC Data Processing System  Navigation Aids (VOR/DME and ILS)  Radar Stations  Meteorological Equipment  ATC Communication Systems

The related Project Summary Sheets have been attached below under Appendix E.

After an assessment of the current situation, the ATIRS Study group has concluded that the technical constraints in FRY air navigation services, which have to be most urgently improved are covered by the Near-Term priorities.

The ATIRS study group will therefore recommend investments in accordance to the project priorities identified and presented by the FRY delegation. However, FRY will be part of the Regional Communication Network Project in order to improve the situation for cross-boarder communication and ATM co-ordination in the region. The ATIRS team is not convinced that the correct communication technologies have been formulated in the group of projects called “ATC Communication System”.

The FRY authorities (FATCA) are advised to carry out a technical feasibility study concerning communication technology and system development. Whereas point – point communication with certain installations may be viable, the overall communication system will in the future communicate with a regional network. FATCA should ascertain that its own communication system will have the necessary capacity, flexibility and redundancy to be able to link up with an external network, with few inherent interface problems.

Note On basis of consultations with NATO, it is expected that the “no-fly zone” over Kosovo +25 km will be maintained for the foreseeable future. However, for the long-term strategy it may be assumed that en-route traffic above FL 290 will be permitted. Depending on the evaluation of the stability in the province, NATO may open up for Route UB1 above FL 330 before end of year 2001.

A certain shift in traffic to Route UB1, thereby increasing the amount of traffic within Belgrade FIR, will inevitably take place when the route is re-opened. FATCA should give priority to installations, which would support the increased traffic.

.3 Financial evaluation

..1 Introduction

Yugoslavia is a not a member of EUROCONTROL and thus not integrated to the CRCO system. EUROCONTROL have not included Yugoslavia in their statistical material, and is not expected to in near future.

..2 Competitiveness

As a member of EUROCONTROL the country would have to accept the standard method of calculating unit rates, and the level of investments should take into consideration:

 Traffic volume  Demand for services  Quality of services

The competitiveness of Yugoslavia will be its ability to provide the service the airlines demand at an acceptable price with the defined quality. The consequent of not achieving this will be that the airlines will choose to use alternative airspace. This is not in the common interest of achieving a good flow through the Balkans and should therefore be avoided.

The Yugoslavian revenue from servicing over-flying traffic yields a considerable profit to the Federal Government budget. The Government has not yet adapted to the self-financing system, and not divert the dividends from over-flight fees to the Federal budget.

Integration to the CRCO system will require adjustments, but the value of all the equipment in the country could be entered into the cost base as investments to be depreciated over a certain number of years. This way, the Government will get a dividend from the system over many years to come, while approaching an integrated system with other European countries. Such a solution could be possible to implement in a EUROCONTROL context, but it will have to be thoroughly investigated to ascertain it will be a viable and fully acceptable solution.

The main target for EUROCONTROL and all other users of the airspace should be to promote the:

 Safety  Regularity

 Economy of the system, and thus providing a better product to users of the airspace. This should also be the main target of Yugoslavia.

The safety factor should be the overriding objective and therefore all investments enhancing safety of the traffic in the airspace should be considered to have highest priority.

Further, the regularity of the air traffic is very important in the European context. Delays in the over-flying traffic have considerable impact on the air traffic regularity all over Europe. Improvements in the regularity will therefore have financial impact in several countries.

The economy of the air traffic system will in the end affect the consumer ability and willingness to travel and have therefore a considerable impact on the development of countries and of business.

..3 Traffic forecasts

The traffic forecast for the Yugoslavian airspace is divided in over-flights and flights to and from Belgrade International Airport (approach control). Approach control to other airports have not been considered in this analysis.

Over-flights The growth factor forecasted by EUROCONTROL has been adopted for forecast on over-flights, as discussed in chapter 4. Based on a traffic volume of 183.023 in the year 2000, the following traffic volume is the result, where the volume in 2010 is 327.766 flights per year in addition to approach control.

Year Overflights Day Peak 2000 183 023 501 953 1 800 350 000 2001 194 004 532 1 010 1 600 300 000 1 400 Over- 2002 205 645 563 1 070 250 000 flights 2003 217 983 597 1 135 1 200 1 000 200 000 Day 2004 231 062 633 1 203 800 150 000 2005 244 926 671 1 275 Peak 600 100 000 2006 259 622 711 1 351 400 2007 275 199 754 1 433 200 50 000 2008 291 711 799 1 518 - - 0 1 2 3 4 5 6 7 8 9 0 0 0 0 0 0 2009 309 214 847 1 610 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 2010 327 766 898 1 706 2 2 2 2 2 2 2 2 2 2 2 Figure 5.1: Forecasted over-flights up to 2010

Approach Based on the average growth rate Scenario, and the statistical information on aircraft movements at the airport, the annual movements is expected to reach 36 277 in 2010.

40 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000 - 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2

Figure 5.2: Forecasted arrivals and departures up to 2010

Assumptions Daily average: Annual number of overflights/365 Hourly average: Daily average/16 Daily peak: Average overflights per day * 1.9

Year Arr/Dep Per day Hour Peak 2001 28 917 79 5 9 2002 29 647 81 5 10 2003 30 397 83 5 10 2004 31 165 85 5 10 2005 31 955 88 5 10 2006 32 765 90 6 11 2007 33 597 92 6 11 2008 34 451 94 6 11 2009 35 327 97 6 11 2010 36 227 99 6 12

Based on the expected peak load of 12 aircraft movements per hour, no capacity constraints from equipment or human factors at this level may be expected.

..4 Revenue structure

The system will generate income from over-flights and approach control (arrival and departure). The revenue structure in Yugoslavia is not based on a cost recovery scheme where the system is self-sustaining, but the system generates dividends to the government.

Yugoslavia should aim at being an integrated member of EUROCONTROL within the next few years. A governmental decision must be made in this respect to start the process of adapting the system to the EUROCONTROL method for pricing the services rendered from the Yugoslavian ANS.

The income from the approach control is not included in the calculations below. Approach control is assumed to be self-financing, and not subsidised by over-flight fees or government allocations.

Based on the above information in respect of income, the total debt load the Air Navigation Services could sustain, without raising the unit rate above the present level would be:

Maximum Year Debt 350 000 000 2000 0 300 000 000 2001 22 352 599 250 000 000 2002 46 046 354 2003 71 161 734 200 000 000 2004 97 784 037 150 000 000 2005 126 003 678 100 000 000 2006 155 916 498 50 000 000 2007 187 624 087 2008 221 234 131 0 0 1 2 3 4 5 6 7 8 9 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 2009 256 860 778 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2010 294 625 024

Figure 5.3:Revenue available for debt service up to 2010, in EUR

The maximum debt load is the total amount available for repayment of the loan and interests. The amount in each year is the amount available that year for debt services. In theory it is accumulative, but in accordance with EUROCONTROL regulations for calculating Unit Rates, the accumulation of profit is not permitted.

To arrive at this relationship, the UR of EUR at 67.85 has been used, and a WF of 1 and a DF of 3. The amount generated in revenue for 2000 is assumed to sustain the system, and pay a dividend of 10 % to the government. The UR has been assumed to be constant and that the UR will be adjusted to handle any inflation.

The present income level was then perceived as fixed and any increase in revenue defined as a potential increase in the possible debt load the system could be able to serve.

..5 Proposed Investments

The total cost of proposed investments in ATS infrastructure has been estimated to EUR 92,9 million by the FRY delegation to the meetings with the EIB Mission 6 – 10 November 2000.

These investments are considered necessary on short or medium term to facilitate the three main objectives of the aviation sector, including airlines and passengers, namely to:

 Improve safety  Improve regularity  Improve economy

..6 Sensitivity analysis

With a base level of revenue of approximately EUR 37.3 million in 2001 and a decrease of 10 % in the number of over-flights the following will be the maximum debt load:

Maximum 250 000 000 Year Debt 2000 - 200 000 000 2001 - 150 000 000 2002 4 187 387 2003 26 791 229 100 000 000 2004 50 751 302 2005 76 148 979 50 000 000 2006 103 070 517 2007 131 607 347 -

0 1 2 3 4 5 6 7 8 9 0 2008 161 856 386 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0

2 2 2 2 2 2 2 2 2 2 2 2009 193 920 369 2010 227 908 190

Figure 5.4: Maximum debt load with a 10% decrease in the number of over-flights

Inflation have not been considered in this analysis as it is assumed that this will be taken care of by the use of international convertible currency and adjustments in the unit rate.

Conclusion It is very important to note that the Yugoslavian airspace is crucial for an efficient traffic flow in and over the region. This was clearly demonstrated during the time when its airspace was closed and flights had to diverted to other routes.

As the information above shows, Yugoslavia will be able to handle a debt load in amount of EUR mill.92.9, plus contingencies in 2004 in the base case, and the same in 2006 in with a 10 % decrease in traffic volume.

Based on the expected traffic volume over-flying Yugoslavian airspace and assuming that the unit rate are competitive and that the services gives value for money, the necessary investments in flight-control equipment should be made.

.4 Priority of project proposals

..1 Near-term objectives

ATS infrastructure investments, identified and formulated by FATCA in a set of “Quick Start” Project Summary Sheets and referred under Sub-clause 5.2 above, which cost may be recovered against over-flight fees, should be financed for implementation in a near-term perspective.

..2 Medium-term objectives

Medium-term objectives should be to facilitate local communication system upgrade.

..3 Long term objective

Long-term objectives should be to facilitate implementation of a regional communication network, allowing ATM for upper airspace to be controlled by a network, in which the FRY ACC will connect with any ACC in the various FIRs to form a virtual Upper Airspace Control Centre, and provide sub-regional ATM co-ordination services.

.5 Development impact

..1 Local impact

The local impact will be improved safety in particular and in general, convergence with FRY LCIP, in order to achieve compliance with the ATM 2000+ strategy.

..2 Regional impact

The regional impact will be improved airspace capacity in particular and in general, convergence with EUROCONTROL ECIP, in order to achieve compliance with the ATM 2000+ strategy.

6 AIRPORT INFRASTRUCTURE INVESTMENTS

.1 Organisation of Belgrade Airport

Belgrade Airport is organised as a State Enterprise Airport Services, owned by the Republic of Serbia. It is an accountable, commercial entity, but re-organisation should be considered in order to ensure financial and economic independence.

The airport owns and operates non-aviation facilities, such as a farm. While such activities surely were feasible during times of supply shortage, it seems advisable to start a process aimed at either selling off, or organising non-aviation activities as separate business ventures.

Belgrade Airport operates most of the services to passengers and landside customers, including restaurants and shops. Out-sourcing of such services to private enterprise should be considered.

.2 Technical evaluation

..1 Present situation and facilities

The Airfield and Apron Belgrade Airport is located approximately 18 km vest of Belgrade. The aerodrome reference point co-ordinates are 020 18’ 25” East and 44 49’ 09” North. The airport altitude is 335 feet (102 m).

The airfield of the airport consists of a single runway of 3400x45m with 7,5 m shoulders. The runway orientation is 119/299 - runway ends named “12” and “30”. Runway “12” is equipped for CAT II landings and runway “30” for CAT I landings.

The structure of the runway is reported to be basically sound, but will require pavement reconstruction in a medium term perspective.

All along the runway is a parallel taxiway accessible from the runway by 4 connecting taxiways.

Perpendicular on the parallel taxiway is a double taxiway system serving a parking apron in front of the passenger terminal building and allowing aircraft access to the cargo terminal and the airlines maintenance ramps. The parking apron in front of the terminal consists of 12 aircraft stands on the terminal side of the taxiway system and 7 remote aircraft stands on the opposite side of the taxiway system. With direct access from the parallel taxiway there is a parking apron in front of a terminal pier, which accommodate for parking of 3 big wide-body aircraft. Among the 22 parking stands, 13 are served by building connected boarding bridges.

Terminal facilities The present passenger terminal building is divided into two connected terminal buildings on for domestic and one for international traffic handling. The international section is designed as a split

level building with check-in and land-side departing facilities on ground level and arrival facilities in a semi basement.

Both ends of the terminal complex are connected to passenger piers, one pier is perpendicular on the terminal and connects the 3 wide-body gates with a passenger lounge each.

The land-side traffic is consequently divided in arrival and departure traffic on each road level. The car-parking facilities in front of the terminal complex consist of both open air parking and parking-garage. The parking garage is for some unknown reason not being used by passengers. Two possible explanations are, the price of parking or/and location of the garage too far from the terminal complex and/or too complicated access.

The terminal complex has a floor area of app. 47,000 m2. At the opening in 1961 the terminal had a floor area app. 10,000 m2. It was extended in 1979 with a new international section of app. 37,000 m2. The terminal complex capacity today can only be indicated by annual figures. In 1986 the capacity indication was estimated to app. 5.5 mill. PAX, with 3.0 mill. PAX in year 2000. Today the daily peak hour occurs between 1100 and 1600 hrs. According to airports own information it is possible to handle 5 aircraft during a 20 minutes interval.

No information on statistics or forecast of TPHP2 has been available.

The substance of the building is generally in a fairly good condition. Under the last political conflict the airport was subject to bombing and windows and glass-facades on the terminal and domestic pier were smashed. The repair of the facades in the domestic pier is not in accordance with the original architecture and badly done. It should be considered to improve these repair works in the near future.

As peak hour traffic is not documented, the only indication of sufficient capacity is to be found in the fact that present terminal handled app. 1.3 mill PAX and the forecasts estimates 3.3 mill. PAX in 2020. Even if the capacity in the terminal complex in terms of PAX seems to be good in general, there are a few areas of capacity shortcomings or insufficient functionality identified:

 All too small floor space in “meters and greeters” hall in the arrival area.  Insufficient capacity at the security checks at the only land-side entrance to the international terminal section.  Passenger check-in seems to be inefficient and in particular, the security screening equipment is obsolete and will not satisfy present demands for screening efficiency;  Airport administration has proclaimed demands for de-centralised baggage security screening at each check-in counter, and the airlines have stated demands for dedicated check-in counters for each flight. Meeting these demands will lead to lack of capacity in the two check- in islands with 32 counters in the international section. This has led to the airport’s wish of updating and extending the check-in capacity.  Risky and all too steep design of the arrivals access ramp leading to the baggage claim area.

Fire and rescue facilities A more easy or direct access to the runway should be considered in relation to future planning and construction work in order to reduce the time span of reaction in emergency situations. To day the vehicles have to dive around a tank-farm to get access to the runway system.

2 TPHP: Terminal peak hour passengers

Airport maintenance facilities Most equipment for maintaining and handling at the airport is dated to 1970ties. A great part of the equipment is parked in the free because of lack of garage capacity. The airport is planning to extend the present garage facilities of 3700 m2 with 1200 m2.

Master Planning The latest Master Plan lay-out is dated from the mid 1980ties when the amounts of aircraft movements and handled passengers were on the highest ever since (app. 49.000 movements and 3.4 mill. PAX). No plan drawings or other Master Plan documents have been made available to the appraisal team. From the presentation of the Master Plan drawings at meetings in Belgrade, it appears that the plan is based on a two-runway concept with all airport facilities located between the runways. In order to fulfil the Master Plan intentions, land is continuously acquired by the airport according to the plan lay-out.

The original two-runway Master Plan concept was considered to meet a capacity demand of 90.000 aircraft movements and estimated 11 mill. PAX.

..2 Facility capacity and functionality evaluation

Airfield and Apron Evaluation In general the runway, taxiway and apron facilities do not present limitations or bottleneck situations to traffic capacity. The airfield runway and taxiway system is identified as well organized and well designed. No information has been presented regarding operation regularity, but as heavy fog can cause total stop in operations at certain times of the year it is recommended to prepare installation of CAT III equipment in the near future.

In a long-term perspective, a runway early ice warning system and UPS for CAT III equipment has been mentioned as possible improvement investments to get the best possible regularity and operation safety on the present runway system. Construction of the second runway, as shown in the original master plan, is not considered to become a topic during the next 15 years.

The apron capacity of 23 aircraft parking stands and the mix of aircraft codes that they can accommodate is considered as sufficient for the next 10-15 year with regard to forecasts of aircraft movement a year and despite the missing of peak hour documentation. It is advised to establish documentation routines with regard to statistic and forecast of TPHP in the future. It will improve the quality of the Master Plan work.

Passenger Terminal Evaluation The terminal building is generally in a good condition. There are a few capacity lacks and functional lack in the terminal complex.

One simple case of insufficient floor space is in the greeters hall in the international arrival area. The preliminary design of an extension has been carried out and it is recommended to initiate, as soon as possible, the construction of the extension. The planned extension of app. 1000 m2 will be towards and behalf of the curb side pick-up area for arriving passengers. This will cause traffic restrictions and a subsequent need for reconstructing the road system.

Further, some minor changes in the baggage claim area will have to be initiated. It should be considered to co-ordinate reconstruction of the risky ramp leading passengers to the baggage claim area at the same time.

In order to optimise the use of the terminal capacity and to make the terminal more service oriented and friendly it is recommended to either remove the procedure of security-check at the terminal land-side entrance or to distribute check positions along the whole land-side facade at the original entrances to the terminal. Present decentralised X-ray screening units in the check-in area could be reallocated for such service. In the long term, the security screening at the entrance of the departure concourse will be removed. It would, however, be apart of the airport security system to be able to install temporary security checks when the situation calls for increased entrance screening.

A comprehensive feasibility study of possible future check-in procedures and other procedures and their capacity demands should be carried out soon. The decentralised X-ray security screening of hull baggage at each check-in counter increases processing time for the passengers and causes unnecessary time loss, and related increased manpower requirements, compared to a centralised screening system. It seems therefore advisable to investigate the possibility of installing in-line efficient, state of the art X-ray units when the check-in islands are being studied.

The airport administration has introduced the existing airport information data system at a relatively early date in development. It is therefore fair to expect the system to appear outdated when starting to intervene under reconstruction. Reorganising the check-in installations and procedures as well as baggage retrieval system on arrival, will impact the FIDS part of the Airport Information Management System (AIMS). A new FIDS, allowing the airlines for example to display their logos and operate the check-inn monitors will likely be an economically feasible investment. Investigations related to upgrading of the entire AIMS, including the Central Information System (CIS) and the data transmission back-bone structure should be carried out.

The situation with the automatic baggage-handling and sorting system seems to be similar. The whole technological and functional complex of data information procedures, baggage-handling procedures, security and safety procedures and the capacity performance should be subject to a comprehensive study before making any decisions on constructions works and investment allocations. Demands from airlines should be considered leading to joint investment policies.

Fire and Rescue Station Evaluation The location of the fire and rescue facility should considered in relation to has been Because of an awkward routing for fire and rescue vehicles turn-outs, it should be considered, in a long perspective to either relocate the tank-farm in front of the fire and rescue building.

Airport maintenance facilities Before investing in new up to date equipment it is recommended to make the planned extension of the maintenance garage of 1200 m2. The investment will reduce the maintenance cost for equipment if it is parked under roof during winter conditions.

Master Planning Evaluation The airport development has been fairly loyal to the relatively old Master Plan except from some land-side developments such as the 6000 m2 Aeronautical Museum opened in 1989. The museum is located in an area for future land-side development planned for a new long term terminal complex.

Only the more than 15 years old Master Plan should be reviewed an adjusted to meet demands from the new reality in Balkan and Belgrade.

 The Master Plan should be reviewed based on the main principles of the present plan, but the review should define a long-term strategy for the allocation of sites for the various buildings

and facilities, while specifying functional dependence, physical geometry and extension room between the facilities.

 A new Master Plan must be analysed and accepted by the relevant authorities and have the status of an approved plan for locating all main facilities at the airport, like future passenger terminal extension, cargo terminal extension, maintenance activities, fire and rescue centre etc.

 The Master Plan must contain a staged development programme, specifying the logical sequence of new construction and demolition or refurbishment of old structures where the daily operational requirements are satisfactorily resolved. At the same time the development programme must be supported by long-term investment plans.

 Out-sourcing of land-side parking facilities may be of importance for the income potential of the airport. The unused parking garage is one of the study items, which should be analysed. The split of transportation modes to and from the airport should be identified. The Master Plan must subsequently comprise a study of future land-side parking facilities and their management.

..3 Environmental Considerations

Environmental Analysis Sustainable environmental solutions will normally prove to be good resource economy. Environmental screening in the form of an Environmental Analysis, compliant with a Category B3 scenario will have to be carried out before finalisation of project preparations, taking into consideration, inter alia:

 Assessment of particular environmental impacts associated with air traffic operations including noise abatement and air pollution, ground handling and servicing of aircraft, and description of mitigation requirements;  Review and analysis of environmental impacts associated with programming and design of the project;  Review of project compliance with national environmental law and regulations, EU and other international environmental standards, and standards on health, work environmental and safety;  Life Cycle Analyses of materials to be used in implementation of the project;  Review of particular environmental protection measures to be instituted during construction of the works, including demolition, storage and disposal of hazardous construction waste; and  Assessment and description of environmental criteria to be pursued during operation of the facilities including methods and procedures for waste management.

Environmental Action Plan An Environmental Action Plan will have to be prepared prior to project implementation. The action plan must address the three phases of project development:

 Project preparation;  Construction; and  Operation,

3 Reference to WB. Environmental Assessment Sourcebook, and/or Operational Directive 4.01.

and must comprise timeframes and cost for bringing the airport operations in compliance with the relevant national and international environmental standards and regulations, as well as health and safety standards, while defining the approach and methods to be applied.

.3 Financial evaluation

..1 General findings

The cost and revenue data presented to the study team was split between domestic merchandise and services and international merchandise and services. It is assumed that the accounting system has other possibilities for reporting the distribution of cost and revenue, but the data presented to the study team did not give any good basis for analysis. If the system in use does not comply with international accounting principles a new system should be implemented. The implementation of a good accounting system will also aid in the work for achieving better operating profits and better control of cost and revenue.

In order to get a better and more transparent financial system for the future it is recommended that the airport start to adopt international accounting principles. ICAO doc. 9562 (Airport Economics Manual) could be used as a guideline for the development of their internal financial department.

..2 Traffic forecasts

Based on the discussion in chapter 4 regarding the passenger growth at Belgrade International Airport the following passenger growth form the basis for the appraisal:

Year Pax 3 500 000 2001 1 525 760 3 000 000 2002 1 644 006 2 500 000 2003 1 771 655 2 000 000 2004 1 909 472 1 500 000 2005 2 058 287 1 000 000 2006 2 209 183 500 000 2007 2 371 770 - 2008 2 546 998 1 2 3 4 5 6 7 8 9 0 0 0 0 0 0 0 0 0 0 1

0 0 0 0 0 2009 2 735 893 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2010 2 939 570

Figure 6.1: General traffic forecast up to 2010

In addition to the traffic forecast the airport provided an income statement for the next ten years:

INCOME STATEMENT IN ' 000 DIN Year Revenue Cost Profit 2001 2 498 000 2 401 000 97 000 2005 2 900 000 2 740 000 160 000 2010 3 370 000 3 120 000 250 000

The expected profit in 2001 in DEM is 3,2 million when using the exchange rate of 1 DEM = 30 Din, or approximately EUR 1.64 mill. The forecasted profit was based on the high growth alternative.

One of the most important problems in the evaluation of the airport’s financial situation is the re- valorisation of the currency. The airport had 23 % of its income in foreign currency and most of the cost in local currency. The official exchange rate of 1 DEM = 6 Din has been applied to the foreign currency income, and not the actual exchange rate of some 1 DEM = 30 Din. If the actual exchange rate had been applied to the foreign part of the income for the year 2000, the income would improve with 92 % from Din 349.960.000 to Din 671.934.720.

The Government has made statements about their foreign exchange rate policy, aiming at bringing the official rate in line with a realistic exchange rate. This will improve the bottom line in the airport’s income statement.

..3 Sources of income

The airport owns and operates most of the shops and restaurants at the airport. The airport also provides the handling services and the catering services to the airlines.

The split between aeronautical and non-aeronautical income was stated to be 50/50, due to the low traffic volume the last few years. The split was previously 70/30.

The distribution of the income was presented to the study team as shown below. The table shows that the domestic sales constitute 44.68 % and international sales 42.58 %.

Income Distribution Merchandise, Domestic Sales 2.25 % Services, Domestic Sales 42.43 % Merchandise, International Sales 20.51 % Services, International Sales 22.07 % Other 12.74 %

Handling fee Handling fee constitutes the bulk part of the income at the airport, but the revenue from tax free shopping and restaurants is also important. In a benchmark study performed by Cranfield in 19972, the turnaround cost at Belgrade was only 86 % of the average cost at other airports in the study. This indicates that the handling is efficient and that there is a potential for increasing the handling fees.

Passenger terminal tax The airport charges passenger terminal tax from all departing passengers. The collected revenue from passenger terminal tax was unclear and to what extent the charges were dedicated to terminal upgrades and maintenance, or diverted into the general funding of the airport. Based on the level of charges from other airports in the area and airports around the world the charge should not exceed USD 15 per passenger in order to be competitive.

Rent of space The airlines and car rental companies pay rent for the use of space. Most of the other commercial facilities at the airport are owned and operated by the airport company. It is recommended that all contracts shall be based on a rent per square meter and a percentage of the turnover. By

designing the contracts in this manner the airport will receive additional income from higher passenger volumes at the airport. In order to be successful, it is important that the companies operating at the airport have transparent accounting systems.

Tax free and other shopping As the airport owns most of the shops and restaurants at the airport, a substantial part of the non- aeronautical revenue are generated through the operations of the tax free shops, general shops and restaurants. It should be considered if this business should constitute a part of the airport company’s business area, or if there should be a more focused strategy regarding core business operation and out-source such commercial activities.

Cargo The cargo handling at the airport is expected to grow from 4,515 tons in 1999 to 32,483 tons in 2010. The income from cargo handling is not considered to be of any great importance in the next 10 years and the future growth in cargo handling is very much dependant on the general growth in GDP and the establishment of international businesses in Yugoslavia.

Vehicle parking/Parking house The parking house seems to yield no income. Further investigation of the possibility of an increase in income from operation of parking facilities is advisable.

Improvements in revenue In general the sources of income seems to be well explored, but it is possible to develop the airports business further. The largest potential is in non-aeronautical revenues that will also be more important in the future. Areas of non-aeronautical revenues could be:

 Advertising  Rent of space  Car parking

All which are related to the ownership of land areas or space. It should be noted that it is important that a strategic decision regarding the airports business areas are made. Many of the services provided at an airport are not core business services and could be outsourced.

Operating Expenses The distribution of the operational cost at the airport was presented to the study team as shown below:

The distribution of the cost items indicates an efficient operation. This table also indicates that the Cost Distribution Cost of merchandise 16.51 % Materials for manufacturing 11.49 % Salaries 32.11 % Maintenance 7.85 % Depreciation 22.67 % Other 9.37 %

airport has a high depreciation rate. It is expected that this relates to the estimation of the capital value of the airport mentioned below, and the subsequent depreciation of the airport and assets at the airport.

The airport had 965 permanent employees and 414 workers employed through service-agencies, which gives a total work force of 1 379 persons. The reason for the high number of employees is that the airport is also operating most of the shops and restaurants at the airport. The average salary based on the forecast and number of employees was approximately Din 800.000 per year.

..4 Investment proposals

The airport presented a list of potential projects in the short-, medium- and long-term perspective to the study team. The list is enclosed as appendix.

Investment Cost in EUR Short-term investments 9.63 mill Medium-term investments 5.52 mill Long-term investments 4.52 mill Total investments 19.57 mill

The investments will increase the debt load at the airport. At present it was reported that the annual depreciation constituted 22.67 % of the total cost at the airport.

The study team was informed that the airport had made an estimation of the capital value of the airport in 1998 and that the total capital value of the airport was estimated to DEM 422,648,000, or EUR 216.1 million per 30 June 2000.

..5 Cash-flow analysis

JAT, the FRY flag carrier and the biggest airline at the airport does not pay their liabilities on time and have accumulated a significant unpaid balance. This situation could be a potential threat to the financial soundness of the airport. This problem should be sorted out early because JAT is also the most important customer. JAT is also granted a substantial discount on the service fees like landing, handing e.g.

The cash flow is also dependent on the airport’s possibilities to use the actual exchange rate for their income in foreign currency. In a situation where the airport has revenue in foreign exchange and also expenses such as interests and repayment of loans in foreign currency, the revenue should not be converted, but deposited on a currency account to avoid the risk of fluctuation in the currency exchange rate.

Based on the forecast provided by the airport and the distribution of cost and revenue shown above the following inflow of cash was derived:

2001 2005 2010 Cash flow 641 306 700 781 158 000 957 304 000

The method used was to add the annual profit to the annual amount for depreciation. Based on the official exchange rate and the unofficial exchange rate in late 2000 the amount available for servicing of debt would be:

2001 2005 2010 Cash flow 641 306 700 781 158 000 957 304 000

In DEM 1/30 21 376 890 26 038 600 31 910 133 In DEM 1/6 106 884 450 130 193 000 159 550 667

..6 Sensitivity analysis

In order to get a better view of the risk exposure if in case of a decrease in the revenue or increase in the cost, an analysis based on the forecast made by the airport has been performed:

INCOME STATEMENT IN '000 DIN INCOME STATEMENT IN '000 DIN WITH A 10 % DECREASE IN REVENUE WITH A 10 % INCREASE IN COST Year Revenue Cost Profit Year Revenue Cost Profit 2001 2248200 2401000 -152800 2001 2498000 2641100 -143100 2005 2610000 2740000 -130000 2005 2900000 3014000 -114000 2010 3033000 3120000 -87000 2010 3370000 3432000 -62000

Based on the two alternatives, 10 % decrease in revenue, or 10 % increase in cost the airport will not generate profit to cover any additional debt. It is, however, unclear if any additional loans from the level in 2000 have been calculated into the forecast.

In addition to the airport’s sensitivity to fluctuations in exchange rates, increase in cost and decrease in revenue, JAT which is the most important user of the airport have not settled their obligations to the airport. The situation concerning JAT, owned by the Serbian Government should be resolved.

..7 Debt load

Based on the forecast from the airport the cash flow available for debt services were calculated on the two sensitivity scenarios by adding the amount for depreciation to the annual profit. The following table was the result:

In Din 2001 2005 2010 Base Forecast 641 306 700 781 158 000 957 304 000 10 % Decrease in Revenue 391 506 700 491 158 000 620 304 000 10 % Increase in Cost 455 637 370 569 273 800 716 034 400

In DEM 1/30 2001 2005 2010 Base Forecast 21 376 890 26 038 600 31 910 133 10 % Decrease in Revenue 13 050 223 16 371 933 20 676 800 10 % Increase in Cost 15 187 912 18 975 793 23 867 813

In DEM 1/6 2001 2005 2010 Base Forecast 106 884 450 130 193 000 159 550 667 10 % Decrease in Revenue 65 251 117 81 859 667 103 384 000 10 % Increase in Cost 75 939 562 94 878 967 119 339 067

This is illustrated graphically:

120 000 000

100 000 000

80 000 000

60 000 000 In DEM 1/30 In DEM 1/6 40 000 000

20 000 000

- 2001 2005 2010

Figure 6.2: Cash inflow with a 10% decrease in revenue

As the table and graph clearly demonstrates the airport will generate enough cash to service their investment proposals totalling DEM 39,3 million, or some EUR 20 million, assuming that the loan have a minimum of 5 years payback period.

As shown in the table above the airport is expected to generate an annual positive cash flow of between 13 and 20 million DM, or EUR 5 to 10 million, in the scenario with a 10% decrease in revenue. This indicates that with a 20 years payback period and 8 % interest the airport should be able to handle a debt load of up to 130 million DM, or EUR 66.5 million in 2001 and up to 200 million DM, EUR 102 million, in 2010.

Recommendation Based on the airports projected profit, the airport should be able to service the loans necessary to finance the proposed investments. Also, if we take into consideration the sensitivity to changes in traffic and the currency exchange rate, the airport is expected to be able to handle the expected debt load.

.4 Priority of project proposals

..1 Near-term objectives

In the short term perspective investments should be concentrated to 5 elements of development and planning, which meets needs and demands arising in the near future:

1. Extension of greeters hall and brought about reconstruction works according to airports design. It is recommended to incorporate removal or reconstruction of ramp leading to baggage claim area. 2. Relocation or removal of security check positions at the terminal land-side entrance. 3. Extension of airport maintenance garage according to airport design. 4. Start-up of comprehensive feasibility study of the whole technological and functional complex of data information procedures, baggage-handling procedures, security and safety procedures and there capacity performance before investment in construction and equipment in the check-in hall.

5. Feasibility study of the future land-side traffic and parking facilities and their management. 6. Various maintenance and handling equipment with high priority.

..2 Medium-term objectives

1. The most likely medium-term initiatives is to concentrate on master planning, and Master Plan approval procedures; 2. Reconstruction and improvement of check-in islands, baggage make-up and break-down systems, and possible airport data information systems according to recommendations from above mentioned feasibility study. Investment depends on joint investment policy; 3. Improvements of land-side traffic and parking facilities according to recommendations from above mentioned feasibility study. Investment depends on joint investment policy; 4. Reconstruction of taxiways and runway including installation of all CAT III equipment and introduction of procedures related to reconstruction of runway; 5. Reconstruction of aprons, including introduction of new docking guidance system and 400 Hz fixed system; and 6. Provision of various maintenance and handling equipment.

..3 Long term objective

Besides a continuously master planning review, the only relevant long-term investment is the extension and improvement of cargo facilities.

.5 Development impact

..1 Local impact

Improved airport operational efficiency, allowing smoother and faster passenger check-in, improved baggage security and generally improved safety.

..2 Regional impact

Depending on the political development in the region, improved operational efficiency of Belgrade Airport may with time redevelop a limited hub and spoke system, with connecting routes to neighbouring countries.

The upgrading of the ANS system will be essential for the provision of high-level and intermediate level air traffic control over parts of BiH, as well as setting the stage for implementing a regional ATM strategy for en route traffic.

..3 International impact

Limited international impact in the form of marginal improvement in delay statistics for Central European airports

.6 Procurement strategies

..1 General comments

The possibility of securing international financing for implementation of needed upgrading of airport functions and facilities has come about on short notice following the political changes that have taken place. Procurement strategies to be adopted by Belgrade Airport have therefore not been developed at the time of the appraisal.

However, taking account of the well organised administration of the airport, and the comparatively strong technical aviation sector environment in the country, it is assumed that procurement of airport redevelopment works and ATS infrastructure will be organised in packages allowing a reasonably high local component of the contracts.

Whereas international specialist assistance may be required in certain areas in the reconstruction process, the country has the technological skills and the human resources needed to resolve and implement the required development initiatives without having to resort to out-sourcing of basic facilities like the Belgrade Airport Passenger Terminal to an international concessionaire.

However, an analysis of the Borrower's institutional framework, resources, financial and technical risks will be important for the recommendation for contract strategy. Further, requirements to proper quality assurance by the Borrower in order to secure professional implementation of works and reduce the Borrower's credit risk must be defined, and satisfactory QA procedures instituted.

The financial institutions should be involved early in the process of defining procurement strategy, contract structure and the project as such. Involving the banks at an early stage in the process will avoid unnecessary financial deadlocks and secure a successful implementation of the project.

In the presentation below, it has been assumed that all reconstruction and redevelopment options will be implemented under a fairly large number of contracts, some based on the Employer/Borrower’s detailed designs and others on Design – Build Turnkey basis. Others will be measured works contracts.

Whereas privatisation of Belgrade Airport with time might take place, it is not expected that reconstruction of the Passenger Terminal under a BOT contract against a concession will be a viable alternative, and has therefore been disregarded.

Should state authorities aim at privatisation – fully or partly - of the airport company, the legal status will not be of any direct relevance to implementation to airport development reconstruction. The legal status of the airport company as an autonomous and accountable commercial entity will, however, on the other hand be of importance in respect of borrowing and type of guarantee.

Air Navigation and Air Traffic Control Installations: It is assumed that procurement of civil and building works would be most feasibly organised with local competitive bidding (LCB), and that the technological components (DPS, Nav-Aids, radar

installations, Met-Systems and ATC communication systems) are procured following international competitive bidding (ICB).

Fire-Rescue Installations and Equipment Procurement of the works comprising a reorganisation of the access to the runway by rescue vehicles and equipment would be most feasibly be done following LCB. The proposed safety improvements at Podgorica Airport and Tivat Airport have not been appraised and the economic feasibility of the proposed improvements have not been established. The improvements are safety related and similar for both airports, comprising on the one hand airfield lighting and obstacle lights, and on the other fire fighting and rescue equipment.

Tivat Airport, besides normal scheduled traffic, had previously a capacity and function as back-up for Dubrovnic Airport, Croatia under certain weather conditions. As such it could in the future serve as an important safety element in a regional context. Dubrovnic Airport on its side, used to operate as safety back-up for Tivat. The safety related project proposals for Tivat Airport should be given priority.

The airports are both owned by the Republic of Montenegro, and it stands to reason that reconstruction will be processed jointly, with common deliveries in two contract packages comprising respectively:

1. Power supply and airfield lighting; and 2. Procurement of fire fighting and rescue equipment

Maintenance Garage Extension The works should be designed locally and tendered locally.

Passenger Terminal Various functional improvements such as reorganisation of passenger check-in islands, baggage handling and security screening, possible access security systems, AIMS (FIDS, CIS and communication back-bone) are highly specialised systems with a limited number of professional suppliers worldwide. Such systems should therefore, be procured following ICB.

..2 Form of Contract

Regardless of the form of contract for reconstruction, the borrower must follow recognised procurement policies and rules in pre-qualification of suppliers and contractors and for the tendering of the works, and comply strictly with the demand for transparency in the procurement process.

Deliveries following ICB related to air navigation and ATC infrastructure, communication systems, functional improvements in Belgrade Airport Passenger Terminal, as well as safety related equipment and installations for Podgorica and/or Tivat airports, to be tendered under ICB, should be procured under Design - Build and Turnkey contracts, preferably using FIDIC contract formats.

All works proposed for procurement following LCB, are recommended to be measured works contracts, using national contract standards, or the FIDIC Short Form of Contract.

DESIGN – BUILD AND TURNKEY CONTRACT UNDER THE AIRPORT COMPANY

Advantage Points of Concern

With limited resources and time constraints a The airport company must be organised to ensure Design – Build and Turnkey model may be used corporate governance. Options are: for execution of the reconstruction works, using a  A state owned limited liability company; FIDIC contract model. This contract type allows parallel implementation of the design and  Partly privatised company with the state as construction works, thus allowing a shorter time majority owner; period for project implementation.  Partly privatised company with the state as minority owner;  Establishing airport company as stakeholder in a Public Private Partnership Minimum risk profile (only actual incurred losses The airport company, organised as a limited or missed opportunities to be activated), allowing liability company will have to pay tax on its servicing of higher debt than for a concession earnings. contractor, or increased profit. The airport company will be the owner of the With the borrower being a public enterprise, a facilities it operates, and will retain its profits for sovereign guarantee will be required. the benefit of project renewals and maintenance. Introduction of management training programmes To secure professional management of the as part of solicited management assistance, airport, administration of the company may have aimed at retaining qualified staff in the country. to be solicited on international management for hire terms. If preferred by the Government and approved by Notwithstanding national traditions, the the international financial institutions, local management of the company must be appointed industry may be secured a position in the project, on basis of merit, and not as political appointees. either based on general terms for equal international competition rules, or given subcontracts based on a nominated subcontract model.

7 RISK MANAGEMENT

.1 Assessment of Major Risks

The countries in the region are recognised by major changing processes within political systems and professional organisations. Institutional development in the countries varies, but is regarded as critical in the entire region. The major risks are linked to the lack of common understanding, and priorities between professional organisations and ministries and will occur unless a basis for establishing suitable and reliable decision processes has been established.

Further lack of qualified staff and adequate aviation facilities constitute a serious problem in order to improve the situation, which is urgently called for by ICAO, ECAC, and EUROCONTROL.

Strategical and economical goals for project implementation must be well defined at governmental level, and communicated clearly to the corporate entity as potential borrower and responsible for project implementation. If not, then major institutional and economical risks will be the result.

.2 Technical Risks

On the technical side old equipment and lack of qualified staff do represent the most serious uncertainties. Further, a turnover of personnel disturbs a proper working process and threatens the overall safety level in the region.

Master Plans and Feasibility studies have basically been worked out by professional departments or consulting companies to satisfactory quality levels. However, problems will occur when it comes to financing and implementation of the different mitigation or improvement projects if decision processes are inadequate.

.3 Management Risks

With few exceptions, the countries do not have sufficient competence within project management, project organisation and procurement of works. The management is thus not in accordance to the guidelines as defined by international financing institutions.

Inconsistency in project priorities and an unstructured decision process forms an insufficient basis for proper and reliable project execution.

.4 Institutional Risks

In general, major change processes within political systems and professional organisations are ongoing in all countries in the region, thus creating unpredictable decision processes. This would be expected, and may also have certain positive impacts. In established societies improvement processes may be difficult to execute, as the existing systems will have inherent resilience to

change, even if new technologies indicate that changed procedures or systems could facilitate improvements.

In the countries covered by the study, the environment for change is well motivated and enthusiastic. On the other hand, disillusioned populations with a low level of confidence in the political environment may constitute hindrance to needed social and cultural change.

However, given that tailor-made strategic support is a part of the financial mechanisms of the international society, a controlled stepwise and positive development in the region may be expected.

.5 Financial Risks

Economic information is often based on deficient accounting standards and should be carefully audited, but still evaluated as uncertain as basis for decision processes.

The potential for income generation is directly related to the traffic volume. Assuming the same level of income for a public company owning and operating aviation facilities, as the case will be for a concession contractor, an inherent financial risk will occur if not rational evaluation of ownership and operating mode for the facilities have been carried out.

At a governmental level, strategic and economical goals for implementation of projects are often unclear, and do not represent the priorities defined by the professional organisations who will act as borrower. Consequently inconsistency in the loan agreement and the technical and economical execution plans for an actual project represents unacceptable financial and technical risks.

.6 Risks to be Monitored

The most critical aspect with regard to project implementation in the region is the need for bridging the gap from intentions to implementation of decisions. It is regarded as unlikely that the different countries will be able to perform all preparatory works prior to a financial allocation from international financing institutions has been given.

Therefore, in order to reduce risk in general it is recommended that appropriate support within institutional building, management, training and implementation of regional strategies will be made available to the countries as a part of the loan agreement. The aim would be to reduce the financial and technical risk levels in project implementation to a calculated acceptable level. The degree of support will vary from country to country but is regarded as critical in all countries.

Risk mitigation must be assured by established risk management systems. The most important aspect will be to identify all potential elements that might become major problems. Such potential problems unless addressed on a frequent basis, at the right level in the decision process, while they are manageable may likely become critical. Corrective action to avoid major problems must be defined accordingly and the project management must have the clear mandate and authority to implement remedial actions immediately to keep the project within budget and schedule.

8 RECOMMENDATIONS

.1 Introduction

The recommended actions for implementation of air traffic infrastructure related to ATS and airport reconstruction and extension have been summarised below. Projects related to air safety have been given highest priority for implementation. It is assumed that ATS infrastructure investments, which may be fully recovered against over-flight fees, could be financed under a bank loan.

A technical feasibility study concerning appropriate communication technology, connecting the various ANS installations (radar units and local APPs) to the ACC in Belgrade should be carried out in light of a future regional integration of air traffic control, and the subsequent need to avoid any cross-border interface problems.

Project summary sheets identifying project proposals have been based on master plan concepts, which should be updated before final reconstruction/upgrading budgets are approved. Whereas the identified and formulated improvement initiatives are viable and seemingly feasible, the likely technology gap between existing systems and facilities at Belgrade Airport may lead to down- stream impacts, requiring further replacements to ensure that present and new systems will communicate. Such down-stream impacts must be identified in a technical and economical feasibility study.

The financial liquidity and the economic solidity of Belgrade Airport are very sensitive to the operations of the Serbian carrier, JAT. The carrier entertains large discounts and is frequently in default of payment. Both JAT and Belgrade Airport are owned by the Serbian Government, and the operations of JAT should be looked into in order to identify the risk potential on the part of Bel- grade Airport before lending operations take place.

The dept service capacity for investments in ATS installations and infrastructure and in Belgrade Airport, recommended not to exceed:

End of Year Dept Service Limit Dept Service Limit ANS Belgrade Airport 2002 20 mill EUR >20 mill* 2006 100 mill EUR >20 mill* *Actual capacity for serving loans will depend on payment period and the rate of exchange for converting foreign currency to Din. for payment of recurrent costs paid in local currency.

The estimated costs are based partly on estimates provided in Project Summary Sheets, and partly by cost evaluation on basis of scope of work formulated by either FATCA or Belgrade Airport.

Short to medium term investment requirements in safety related equipment and installations at the airports in Podgorica and Tivat have been identified and cost estimated by the FRY delegation for the EIB Mission, 06- 10.11.00.

These costs in the amounts of:

Podgorica Airport: EUR 3.60 mill. Tivat Airport: EUR 1.70 mill, totalling EUR 5.1 mill. have not been included in the summaries below.

Important Note: Further, essential uncertainties exist in respect of the actual need for improvements at Belgrade Airport. When design is being carried out, and later actual refurbishment of Belgrade Airport facilities and installation starts, it is very likely that a need for upgrading internal and external services will be identified. For the purpose of financing, it is therefore advisable to add to the reconstruction budget a contingency allowance of not less than 15 % to each of the Short, Medium and Long Term investment estimates referred below.

.2 Priority investments

Recommended actions, listed in order of priority, organised the time frames of Short Term Initiatives4, Medium Term Initiatives5 and Long Term Initiatives6:

..1 Short Term Investments:

Estimated cost Priority Description in mill. EUR 01 Prepare Master Plan for ATS upgrading 0.20 02 Procurement of Radar and Flkight Data Processing System (DPS) 45.00 03 Procure and install new radar stations (PSR and MSSR) 17.50 Formulate and carry out technical feasibility study concerning 04 communication system, Project D5. Estimated budget 0.10 05 ATC Communication Systems 18.20 06 Procurement of Navigation Aids (VOR/DME and ILS) 7.20 07 Meteorological Equipment 5.00 08 Miscellaneous work, investigations, PMU services 4.66

Short Term Investments in ATS Infrastructure, in mill. EUR 97.86

4 Short Term initiatives to be initiated before the end of year 2001 and commence year 2002. 5 Medium Term initiatives to be implemented before the end of year 2005. 6 Long Term initiatives to be implemented before the end of year 2010.

Estimated cost, Priority Description in million EUR Prepare new Master Plan for the development of Belgrade 01 Airport and establish periodic Master Plan updating facility 0.30 Carry out feasibility study concerning complete re-configuration of check-in system, baggage handling (make-up and break- 02 down), AIMS, passenger and baggage security screening installations, access control. Estimated cost 0.30 Various First Phase capacity and functional improvements in the 03 arrival and departure concources. 1.50 04 Improve security screening and access control 1.10 Procure various equipment to meet safety requirements, 05 maintenance and ramp handling 1.20 06 Build maintenance garage extension 0.40 Investigate the possibility of out-sourcing re-construction and 07 operation of parking facilities by third party contrator 0.10 08 Miscelleaneous work, investigations, PMU services 0.59 Short Term Investments for Airport Reconstruction, in mill. EUR 5.49

..2 Medium Term Investments

Estimated Cost Priority Description in mill. EUR

Re-configure and re-construct check-in islands, baggage make- 01 up and break-down systems, AIMS (both FIDS and CIS), access control, signage, data communication back-bone, and CTM as required. Estimated budget. 5.00 Improve land-side parking facilities. Depends on investment 02 policy. Contingency item 0.50 Re-construct runway and taxiways, including control and warning 03 systems related to apron and taxiways/runway installation of CAT III equipment. Estimated budget 5.20 Reconstruction of aprons and aircraft parking, including new 04 visual docking guidance system, 400 Hz and 28 V ground power system. Estimated budget 0.90

05 Provision of various mainteance and handling equipment 1.00 06 Miscelleaneous work, investigations, PMU services 1.51

Medium Term Investments for Ariport Reconstruction, in mill. EUR 14.11

..3 Long Term Investments

Estimated Cost Priority Description in mill. EUR Design and implement extension and improvements to Cargo 01 Terminal Estimated Cost1.50 02 Miscelleaneous work, investigations, PMU services 0.18 Time Frame Description in mill. EUR ShortLong TermTerm InvestmentsATS Investments for Airport Reconstruction, in mill. EUR 97.861.68 Airport Investments 5.49

Medium Term ATS Investments 0.00 Airport Investments 14.11

Long Term ATS Investments 0.00 Airport Investments 1.68

Total Investment Potential, ATS Infrastructure, in mill EUR 97.86

Total Investment Potential, Airport Reconstruction, in mill EUR 21.28

Total Investment Potential in mill EUR 119.14 ..4 Summary of Potential Investments

9 APPENDICES

APPENDIX A: Abbreviations and Acronyms

APPENDIX B: Land Description

APPENDIX C: Data Collected / Source of Information

APPENDIX D: Contact Persons

APPENDIX E: Proposed Project Summaries

APPENDIX F: Traffic Forecast

Endnotes

086ebe9f6427ba40ccb1f96dd11d0ad5.doc April 2001 Nordic Aviation Resources AS 1 Airport Skopje. Feasibility Study Airport Upgrade/Rehabilitation Project. Prepared by Parsons Transportation Group Inc. May 2000. 2 User Cost at Airports in Europe, Asia & USA, Cranfield College of Aeronautics, Air Transport Group, 1997