3.4 Port of Constanta

VERRACON

VERKEHR ERREICHBARKEIT RAUM CONSULTING

DANUBE-BLACK SEA COOPERATION

Baseline study

Contracted by:

ecoplus. Niederösterreichs Wirtschaftsagentur GmbH Niederösterreichring 2, Haus A, 3109 St.Pölten

Version 02, 2/26/2015

VERRACON GmbH | A 1010 Wien | Eschenbachstraße 11 | [email protected] | www.verracon.at

Inhalt 2

CONTENT

EXECUTIVE SUMMARY ...... 5 1 INTRODUCTION ...... 7 1.1 Background ...... 7 1.2 Project area ...... 8 1.3 Objectives ...... 9 1.4 Methodology ...... 9 2 ECONOMIC DEVELOPMENT ...... 11 2.1 Economic development and employment ...... 11 2.2 International trade...... 13 2.2.1 Austrian foreign direct investment ...... 13 2.2.2 Austrian imports and exports ...... 14 2.2.3 Austrian imports and exports via European sea ports ...... 18 2.2.4 Bulgaria and Romania: Imports and exports ...... 20 2.3 Modal split of freight traffic ...... 23 2.3.1 Rail ...... 23 2.3.2 Road...... 23 2.3.3 Inland waterways ...... 24 2.4 Conclusion and SWOT ...... 25 2.4.1 Bulgaria ...... 26 2.4.2 Romania...... 26 3 PORTS OF THE MULTI-PORT-GATEWAY REGION BLACK SEA WEST ...... 28 3.1 Port of Odessa ...... 30 3.2 Port of Illichivsk ...... 33 3.3 Port of Galati ...... 36 3.4 Port of Constanta ...... 40 3.5 Port of Varna ...... 44 3.6 Port of Burgas ...... 47 3.7 SWOT and Summary ...... 49 4 TRANSPORTATION SYSTEM OF THE DANUBE-BLACK SEA REGION ...... 54 4.1 Rhine-Danube Corridor ...... 55 4.1.1 Route and development status ...... 55 4.1.2 Missing Links and bottlenecks ...... 59 4.1.3 Major corridor projects ...... 66 4.1.4 Reflection in the national development plans ...... 68 4.2 Orient/East-Med Corridor...... 69 4.2.1 Route and development status ...... 69 4.2.2 Missing Links and bottlenecks ...... 70

4.2.3 Major corridor projects ...... 72 4.2.4 Reflection in the national development plans ...... 73 4.3 Cross-border Connections within the black sea region ...... 75 4.4 Euro-Asian transport Linkages ...... 79 4.4.1 Maritime and combined transport linkages ...... 79 4.4.2 Continental Rail Linkages...... 86 4.5 Summary and SWOT ...... 90 5 GOOD PRACTICE NAPA ...... 93 5.1 NAPA: Ports description...... 94 5.1.1 Luka Koper – Port of Koper ...... 94 5.1.2 Trieste Port Authority ...... 94 5.1.3 Venice Port Authority ...... 95 5.1.4 Rijeka Port Authority ...... 95 5.2 Hinterland connections ...... 95 5.3 Hinterland markets/connectivity & modal split ...... 96 5.4 Port development plans ...... 97 5.4.1 Port of Venice ...... 97 5.4.2 Port of Rijeka ...... 98 5.4.3 Port of Koper ...... 98 5.4.4 Port of Trieste ...... 99 5.5 NAPA vs. WBSP ...... 99 6 RECOMMENDATIONS ...... 101 6.1 Economic development ...... 101 6.2 Transport system development ...... 102 6.3 Port cooperation ...... 103 7 FUNDING OPTIONS ...... 104 7.1 European Strategy for the Danube region (EUSDR) ...... 104 7.1.1 Priority Areas (PAs) ...... 104 7.1.2 PA 1a Mobility – Waterways ...... 105 7.1.3 PA 1b MobIlity - Rail-Road-Air ...... 106 7.1.4 EUSDR Financing instruments ...... 106 7.2 Cohesion Fund and Structural Funds ...... 107 7.3 European territorial cooperation (within ERDF) - the Danube Programme ...... 109 7.4 Connecting Europe Facility (CEF) – Transport ...... 110 7.4.1 Maritime ports ...... 112 7.4.2 Inland waterways and inland ports ...... 113 7.5 Horizon 2020 – “Smart green and integrated transport” ...... 114 7.6 International financing institutions ...... 115 7.6.1 EIB – European Investment Bank ...... 115

Executive Summary 4

7.6.2 World Bank ...... 115 7.7 JASPERS ...... 115 7.8 Funding Overview ...... 116 8 LIST OF REFERENCES ...... 118 9 FIGURES AND TABLES ...... 122 9.1 Figures ...... 122 9.2 Tables ...... 123

Executive Summary 5

EXECUTIVE SUMMARY

New trade options

With the accession of Romania and Bulgaria to the European Union the borders were opened to re-unite the historical Danube region. New trade options emerged along the Danube river connecting Central Eu- rope via the Black Sea to the Caspian basin and the far East.

Cooperation agreement

The Working Community of the Danube Regions – represented by Lower Austria (at that time chairing the Working Community of the Danube Regions) – initiated the signing of a Memorandum of Understanding supported by the stakeholders in the Black Sea region, setting a first step towards cooperation. Resultant the project “Danube-Black Sea Cooperation” provides a baseline study that will highlight the development and cooperation possiblities in the Danube-Black Sea region, supporting both (1) economic growth in the whole Danube region by fostering cooperation between the relevant stakeholders and (2) efficient infrastructural pre-conditions to upgrade environmentally friendly means of freight transport, that is inland waterway and rail transport options and competitive services.

Danube-Black Sea Gateway Region

The core area of the baseline study includes the Western Black Sea regions of Galati and Constanta in Ro- mania, and Varna and Burgas in Bulgaria. Due to the current crisis in Ukraine the Oblast Odessa is not part of the core area. Furthermore the Danube region as the hinterland of the Black Sea West Gateway region is included in the wider project area. Special focus is given to Austria. This refers especially to the analysis of economic development in the catchment area of the corridor in order to get a broader picture of development potential for the core area.

The baseline study comprises a desktop and questionnaire research on the economic development, the actual facilities of the Western Black Sea ports and their connection to their hinterland (transport system in the whole Danube region). The results of this analysis have been intensively discussed with the stakeholders in the regions, coming up with an overview on strengths and weaknesses, threats and opportunities that lead to recommendations for further action.

High potential for economic cooperation

The Black Sea region is an area with economic development potential. The GDP is still rather low compared to Central European countries, but before the crisis in 2009 the GDP was growing much faster in the West- ern Black Sea region. The crisis curbed the growth, especially in 2009, but since then a significant recovery can be observed. Regarding the direct investment Austrian companies are very important players in the Black Sea region. The foreign trade statistics show that Austria imports large amounts of raw materials and fuels from the Black Sea region. Manufactured goods and chemical products are the most important goods exported to the countries of the Black Sea region. These are products potentially affine to inland waterway transport along the Danube river and further to the far East and the Caspian basin.

Executive Summary 6

Improve regional transport infrastructre and remove functional bottlenecks

With the revision of the TEN-T programme, the region is connected with Central and Western Europe by two Core network corridors – the Orient/East-Med corridor and the Rhine-Danube corridor. Both are rail and road corridors. The Rhine-Danube corridor also includes the inland waterways. These corridors provide the main link between the Western Black Sea region and the Central European countries. The Danube serves as common backbone for inland waterway transport to Central Europe but also separates Bulgaria and Romania with only two bridges connecting the countries. Defined European corridors and core ports benefit from additional EU funding that facilitate the upgrading of high-level transport infrastructure. How- ever, the upgrading of regional and cross-border connections within the Black Sea region, connections between the ports and other important transport nodes as well as with their hinterland will be essential, too.

Coopetition – Cooperation & Competition

Although Constanta is the biggest and most productive port in the region, each of the other ports has its own strengths, too. Galati has a strong geopolitical position bordering Ukraine and Moldova having access to two different railway gauges and being a pentamodal port. The port of Burgas is connected to the Ori- ent/East-Med Core Network Corridor (CNC) and has good connections to Sofia as well as to Turkey. The port of Varna lacks a direct connection to the Danube as well as to one of the core network corridors.

With these specific characteristics in mind cooperation between the Western Black Sea ports can benefit the whole region as well as each single port. The Northern Adriatic Ports Association (NAPA) is a good example for successful cooperation for promoting common interests and joint marketing. First cooperation activities should focus on jointly stressing the importance of a higher hinterland railway/inland waterway accessibility & connectivity.

Working together towards a high functional gateway to the Caspian Basin and the Far East

The Danube region has a high potential to act as the gateway for freight transport from Central Europe via the Black Sea to the Asian markets. The following recommendations help the ports and regions adapt to these new challenges.

The analysis has shown that there is still limited knowledge about economic development possibilities and future market trends affecting demand in the Danube-Black Sea region. Therefore detailed analysis of the economic system including strategies for specifically Danube-affine industry location as well as strengthening business cooperations is recommended.

In order to be able to exploit the potential, infrastructural bottlenecks and missing links have to be overcome. While the main corridors are in the focus of European funding schemes and policies, efforts have to be focused on the improvement of the necessary regional transport links. This will help to connect the ports with their hinterland and establish them as intermodal terminals. Additionally administrative and legal barriers will have to be tackled. Upgrading of aging port infrastructure and expansion of port capacity is also a very important factor. A joint voice helps to lobby for speeding-up already ongoing and planned actions.

This leads to the recommendation of establishing a cooperation platform with a common vision and a joint marketing strategy. The ports can promote their profile and position themselves within the cooperation. This will enhance the visibility on a global level. For realising the recommended actions the EU offers several funding options that can best be used in a joint effort. Whilst cooperating on a global level regional competition will continue to sharpen each port´s characteristics within the regional context (Coopetition).

Introduction 7

1 INTRODUCTION

1.1 BACKGROUND

The White Paper: Roadmap to a Single European Transport Area sees transport as “fundamental to our economy and society. Transport enables economic growth and job creation." At the same time not only the White paper, but also many other European policies (Euope 2020 Strategy, ESDS etc.) stress that the growth target must not compromise the challenging ambitions to reduce emissions and negative environmental impact.

With respect to 2005, freight transport activity is projected to increase by around 40% in 2030 and by little over 80% by 2050 (Source: Transport 2050 roadmap). Based on this expected transport development the European Commission set the objective to shift 30% of road freight transport over 300km to environmental friendly means of transport (rail, ship) until 2030 (50% until 2050) - a big challenge for the transportation system in Europe.

By 2011 around 75.3% of imports and exports transported in extra EU-27 countries have been transported via the European seaports. Although having a smaller share compared to that figure, an amount of 37% of goods transported by ship within the EU is still remarkable. Ports and shipping therefore play a central role in the overall European transport system. Having a good access to the ports will be a crucial success factor for competing regions.

During the last TEN-T revision process some the most important European ports have been clustered to “Multi-Port Gateway Regions” (MPGR).

Figure 1 – Multi-Port Gateway Regions

Source: Notteboom 2009: Economic analysis of the European seaport system

For Austria the following „Multi-Port Gateway Regions“ are of mayor relevance:

Introduction 8

• The extended Rhine-Sheldt Delta & the Helgoland Bay region (No. 1, 2) • The Black Sea West region (No. 7) • The North Adriatic region (No. 10)

The Port of Koper became the most important import and export gateway for goods from and to Austria in the last years. Saving 7 days travel time for goods coming from Far East compared to the North Sea ports. Koper offers a big advantage for the Austrian economy. In order to improve their position as competitors of the North Sea ports, the ports of Venice, Trieste, Koper and Rijeka decided to cooperate within the NAPA (North Adriatic Ports Association). Together they would like to gain a higher share of the international trade flows. The more ships are approaching the NAPA ports, the bigger the share on the market and the higher are the advantages for the regions/economies with direct access to those ports.

The ports in Romania, Bulgaria and the western Ukraine have been established as the gateways for goods to Central Asia. Therefore Austrian businsses are keen to improve the connection to the Black Sea region. The Danube – connecting Central Europe with the Black Sea region – provides environmental friendly means of transport for businesses interested to get access to the ports of the Black Sea West region. By further developing these ports the Danube region, but especially Lower Austria with its Danube ports, will benfit from better connections to the global market.

Initiated by the Working Community of the Danube Regions (ARGE Donauländer) the regions and ports of the Black Sea West region set a first step. By signing a Momorandum of Understanding the cooperation between the stakeholders in the Black Sea region and the Danube region, represented by Lower Austria (at that time chairing the Working Community of the Danube Regions) should be intensified.

“The aim of this Memorandum of Understanding is to enhance cooperation and coordination among the partners towards a deeper common economic development of the regions as well as a development of the cooperation of the relevant river-ports and sea-ports and to enhance policies in this area which facilitate such development.”

With this baseline study the posiblities for cooperation and the framework conditions for the implementation of joint projects should be analysed.

1.2 PROJECT AREA

The core area of the basline study includes the Western Black Sea regions of - Galati and Constanta in Romania and - Varna and Burgas in Bulgaria - Due to the current crisis in Ukraine the Oblast Odessa is not part of the core area. However Ukraine and Turkey are taken into account in the study because of the importance for the Black Sea.

Furthermore the Danube region as the hinterland of the Black Sea West Gateway region will be included in the wider project area. Special focus will be given to Austria. This refers especially to the analysis of economic development in the catchment area of the corridor in order to get a broader picture of development potential for the core area.

Introduction 9

Figure 2 – Project area (Black Sea West Gateway region and its hinterland)

Source: Notteboom 2009: Economic analysis of the European seaport system

1.3 OBJECTIVES

This study will highlight the development and cooperation possiblities in the Danube-Black Sea region. It will come up with recommendations for joint project initatives and the possibilities to access existing European and international Funds.

1.4 METHODOLOGY

Having in mind the economic development in the region, the main part of the study will be dedicated to the analysis of the current situation of the Western Black Sea ports and the transportation system connecting them to their hinterland.

Based on the information and data collected in a desktop research and information provided directly by the ports, cities and regions involved (in the form of questionnaires), a first draft of the study´s results was discussed with the stakeholders of the region. In order to facilitate the discussion the findings were presented in a SWOT analysis. The analysis covers the following topics:

- Economic development in the Danube-Black Sea region - The Western Black Sea ports as the main gateways to central Europe - The transport system as a major factor for further economic development in the region

Introduction 10

Figure 3 – Methodological approach

Source: Authors´ own figure

The findings of the analysis and the discussion in the regions are concluded in the elaboration of recommendations. These recommendations include possibilities for cooperation against the background of the most important development priorities in the study area.

Based on these recommendations the stakeholers involved will come up with concrete project ideas which will be discussed in the partnership and further developed in order to receive funding from the existing European and Interational funds.

Economic development 11

2 ECONOMIC DEVELOPMENT

In the following chapter the economic development of the Black Sea Region and its hinterland is going to be analyzed on the basis of existing studies. The objective is to get an overview about differences between the countries as well as the possibilities for further cooperation between the Danube and the Black Sea Region. Special focus will be given to the Austrian economcy and its links with the Black Sea region. In order to have the bigger picture in some cases the analysis has been extended to other countries in the southern and eastern Black Sea area.

2.1 ECONOMIC DEVELOPMENT AND EMPLOYMENT

The figures on economic development show that the Black Sea Region is an area with huge economic development potential. The crisis curbed the growth, especially in 2009, but since then a significant recovery can be observed.

The countries that joined the EU since 2004 generally have a low GDP per capita. Austria’s GDP per capita averages over 35,000€ while in the countries shown in Figure 4 the largest number is 7,500€. On the other hand these countries have a high capacity to catch up. The per capita GDP in Austria has increased by about 16% from 2006 to 2012, while the GDP growth in the Western Black Sea countries ranges between 25 and 65%. The largest growth is recorded in Ukraine. The crisis hit those countries very hard in 2009 though. The growth rates of over 7% of the pre-crisis years have since then only been re-achieved by Turkey.

Figure 4 - GDP per capita in the Western Black Sea Region

40.000

35.000

30.000

25.000

20.000

15.000

10.000

5.000

0 2006 2007 2008 2009 2010 2011 2012

Bulgaria 3.400 4.000 4.600 4.600 4.800 5.200 5.400 Romania 4.500 5.800 6.500 5.500 5.800 6.100 6.200 Turkey 6.000 6.700 7.000 6.100 7.500 7.500 Ukraine 1.837 2.242 2.663 1.828 2.245 2.574 3.018 Austria 31.300 33.000 34.000 33.100 34.100 35.700 36.400

Source: Authors own figure based on Eurostat

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Most of all, the crisis hit companies very hard, leaving many unemployed. In the year 2009 the unemployment rates of Turkey, Ukraine and Austria peaked but recovered very soon. In Romania the incline lasted until 2011 while the unemployment rate in Bulgaria rose from 2008 until 2012 from 5.6% to 12.3% (see Figure 5).

Figure 5 - Unemployment rate in the Western Black Sea Region, Turkey and Austria

14,0%

12,0%

10,0%

8,0%

6,0%

4,0%

2,0%

0,0% 2008 2009 2010 2011 2012

Bulgaria 5,6% 6,8% 10,2% 11,3% 12,3% Romania 5,8% 6,9% 7,3% 7,4% 7,0% Turkey 9,7% 12,6% 10,7% 8,8% 8,1% Ukraine 6,4% 8,8% 8,1% 7,9% 7,5% Austria 3,8% 4,8% 4,4% 4,1% 4,3%

Source: Authors own figure based on Eurostat, Turkstat und Ukrstat

The distribution of the working population to economic sectors shows a heterogeneous picture (see Figure 6). Austria has a small agricultural share of 4.8% and a high share of the service sector with 71.7%, close to the EU average. In the countries of the Western Black Sea Region however the agricultural sector plays a much more prominent role. In Turkey, Bulgaria and Romania almost the same number of people are employed in the primary and in the secondary sector. In Ukraine the secondary sector (with 34%) is very prominent. In the service sector, the differences are again very clear. Austria has a high share while in Turkey, Ukraine and Bulgaria just around half of the workforce is employed in the service sector. In Romania, this number is less than 40%. The shift to a service economy is still ongoing in the Western Black Sea region.

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Figure 6 - Distribution of working population by economic sector

100%

90%

80%

70% Tertiary Sector 60% Secondary Sector 50% Primary Sector 40%

30%

20%

10%

0% EU-27 Bulgaria Romania Ukraine Turkey Austria

Source: Authors own figure based on Eurostat, Turkstat und Ukrstat

2.2 INTERNATIONAL TRADE

2.2.1 Austrian foreign direct investment

The growing economic interlacing is also reflected in the willingness of Austrian companies to invest in the Black Sea regions. Regarding the direct investment Austria is one of the most important players in the Black Sea region being the country with the second most direct investments in Bulgaria, Romania (both behind the Netherlands) and Turkey (second to the United Kingdom) and on fifth place in Ukraine in 2012.1

Figure 7 shows the development of Austrian direct investment in Bulgaria, Romania, Turkey and Ukraine. The data from the Austrian National Bank includes stock of direct investment held by Austrian investors at the end of the year. These include equity capital and other capital (which consists mainly of intra-company loans). The Austrian ownership of property abroad is not included in the database of the figure.2

1 Republic of Turkey, Ministry of Economy 2013; ukrstat; National Bank of Romania 2013; Bulgarian National Bank 2013 2http://www.oenb.at/Statistik/Standardisierte-Tabellen/auszenwirtschaft/direktinvestitionen/Stand-der-- sterreichischen-Direktinvestitionen-im-Ausland-nach-Regionen.html (Last accessed: 26 November 2014)

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Figure 7 - Development of Austrian direct investment in million Euros

12000

10000

8000

6000

4000

2000

0 2005 2006 2007 2008 2009 2010 2011 2012 2013

Bulgaria 1482 1.624 2.748 3.685 3.930 4.082 4.183 4.330 4.510 Romania 2843 4.793 5.682 6.238 6.311 7.480 7.423 9.642 9.968 Turkey 63 417 2.621 1.884 2.876 4.385 5.115 5.961 4.009 Ukraine 509 2.402 3.699 2.474 1.126 2.047 1.518 1.782 1.813

Source: Authors own figure based on National Bank of Austria

In Romania and Bulgaria the capital of Austrian investors has increased steadily since 2005. Austrian in- volvement in Turkey has also increased enourmously and only declined recently (2012 to 2013) where the future development is to be seen in the next years. In Ukraine however the peak was reached in 2007 with 3.7 billion Euros. Since then the Austrian direct investment has balanced and amounts to approximately 2 billion Euros. Nevertheless investments in all countries have been increasing – in Romania, Bulgaria and Ukraine for more than 300% and in Turkey they have multiplied by 60. Given the overall Austrian direct investments abroad, Romania ranks third after Germany and Czech Republic. Turkey follows sixth, Bulgaria sixteenth and the Ukraine twenty-sixth.

2.2.2 Austrian imports and exports

The exports of Austrian goods to the Black Sea Region have already reached pre-crisis levels in most of the countries. Some countries however are still legging behind those levels. This is especially true for Ukraine where exports in 2012 are about 50,000t lower than in 2008 (see Figure 8).

Economic development 15

Figure 8 - Austrian exports to the Black Sea region in 1,000t

1400

1200

1000

800

600

400

200

0 2007 2008 2009 2010 2011 2012

Bulgaria 320,3 313,5 232,4 244,3 264,4 317,4 Romania 879 1011,7 766,3 862,7 915,9 1182,1 Turkey 368,5 388,9 369,8 517,8 479,7 474,8 Ukraine 179,1 192,6 115,9 131,7 130,4 142,9 Azerbaijan 7,8 7,4 5,8 11,3 13,7 15,3 Georgia 8,9 10,4 8,4 9,4 10,9 9,6 Kazakhstan 41,1 38,9 32,4 23,3 26,8 41,4

Source: Authors own figure based on Statistik Austria

In relative terms, the fastest growing market for Austrian goods is Azerbaijan with an increase of 96% from 2007 to 2012. In absolute terms however the Austrian exports to Romania and Turkey are more important. The growth rate is around 34% in Romania and 29% in Turkey (303,000t and 106,000t between 2007 and 2012). Austrian exports to Ukraine have declined by more than 20% in total over the analysed time span from 2007 to 2012.

The situation is quite different when looking at the Austrian imports from the Black Sea region. Except for Georgia, the imports to Austria are exceeding the pre-crisis levels. Since 2011 the growth rates are significantly lower than before and sometimes even negative. The strongest decline in imports can be ob- servedfrom Ukraine. It can be expected that the current crisis in Ukraine will have further negative impact on this development.

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Figure 9 - Austrian imports from the Black Sea region in 1,000t

6000

5000

4000

3000

2000

1000

0 2007 2008 2009 2010 2011 2012

Bulgaria 124 126,7 100,7 145 193,1 151 Romania 394,7 370,8 411,9 827,6 996,8 1184,1 Turkey 347,8 367,1 320,7 344,7 369,3 401,5 Ukraine 4604,4 3381,4 3019,5 5457,2 5435,6 4815,2 Azerbaijan 39,1 0 104,1 175,2 93,8 220 Georgia 2,2 1,1 0,5 20 0,4 0,4 Kazakhstan 1839,7 1991 2796,3 1846,7 2168,7 2045,4

Source: Authors own figure based on Statistik Austria

Looking at the product classes it shows that in terms of volume of imports from the Black Sea region (Bul- garia, Romania, Ukraine, Turkey, Azerbaijan, Georgia and Kazakhstan) clearly raw materials and fuels are the most important goods (see Figure 10).

Figure 10 - Austrian imports from the Black Sea Region by types of goods in 1,000t

7.000,0

6.000,0

5.000,0

4.000,0

3.000,0

2.000,0

1.000,0

0,0 2007 2008 2009 2010 2011 2012

Raw materials 4.660,0 3.479,7 3.290,5 6.021,5 6.190,0 5.768,3 Fuels 1.983,5 2.047,7 2.927,8 2.113,3 2.255,1 2.261,3 Other imports 396,3 419,6 297,1 387,4 421,2 401,6 Manufactured goods 312,3 291,1 237,6 294,2 391,4 386,4

Source: Authors own figure based on Statistik Austria

Other imports, that add up to 401,600t, include comestible goods, beverages and tobacco, fats and oils, chemical products, machinery and vehicles and other finished goods.

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In terms of value of imports, fuels place first, followed by raw materials, other finished goods, machinery and vehicles, and manufactured goods. The origin of raw materials and fuels from the Black Sea region shows that over 90% of the fuels come from Kazakhstan while a similar percentage of raw materials comes from the Ukraine. Other goods are heterogeneous in terms of their origin.

Austrian exports to the Black Sea region, however, are dominated by different types of goods. With about 750,000t manufactured goods and 470,000t chemical products, these products are clearly the quantitative- ly most exported goods into the Black Sea region, followed by raw materials, comestible goods, fuels, machinery and vehicles. While the quantity of exported manufactured goods in 2012 has not reached the pre- crisis levels of 2007 and 2008 exports of chemical products were not really affected. With the exception of the period from 2008 to 2009, the amount of exported chemical products from Austria to the Black Sea Region increased continuously and reached 50% above the level of 2007 in 2012 (see Figure 11).

Figure 11 - Exports from Austria to the Black Sea Region by types of goods in 1,000t

900

800

700

600

500

400

300

200

100

0 2007 2008 2009 2010 2011 2012

Manufactured goods 798 823,3 605,3 636,3 718,3 752,5 Chemical products 309,6 348,3 323,9 392,2 420,6 470,4 Raw materials 89,9 147,6 131 218,9 144,7 301,6 Comestible goods 136,4 174,3 193,7 246,3 231,9 231,8 Fuels 203 178,5 103,2 101,8 103,2 211,8 Machinery and vehicles 191,4 195,4 106,8 139,8 157,2 154,3 Beverages and tobacco 48,1 56,7 38,6 36,8 40,7 35,5 Other finished goods 23,3 32,5 22,7 23,7 23,2 23,1 Fats and oils 4,9 5,5 5,5 4,1 1,8 2,4

Source: Authors own figure based on Statistik Austria

Concerning the value of exports, machinery and vehicles are by far the most important types of goods. The values of the exported machinery and vehicles exceed those of the imports by almost one billion Euros. Other important types of goods with an export value over one billion Euros per year are manufactured goods and chemical products.

Looking at the exports in tons by country the dominance of Romania as trade partner for Austria is obvious. In 2012 almost 1.2 Mio tons of Austrian exports have been transported to Romania. Imports from Ukraine, however, exceed those from Romania fourfold (see Figure 12).

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Figure 12 - Import/Export of goods between Austria and the Black Sea region (2012 in metric tons)

Source: Authors own figure based on Statistik Austria

2.2.3 Austrian imports and exports via European sea ports

The development of Austrian imports via the main European ports is shown in Figure 13. Imports via Con- stanta have increased eightfold since 2005. In recent years the increase was even higher. With more than 2.7 million tones per year Constanta is today the third most important port for Austrian imports, ahead of Hamburg and Antwerp and equivalent to Koper and Rotterdam. The increase derived mainly from to the rising coal imports for Austrian industry from overseas.

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Figure 13 - Austrian imports via the main European sea ports in tonnes

4.500.000 4.000.000 3.500.000 3.000.000 2.500.000 2.000.000 1.500.000 1.000.000 500.000 0 2005 2009 2010 2011 2012 2013

Koper 2.738.415 2.025.263 3.296.158 3.844.400 3.344.716 3.650.247 Rotterdam 3.778.645 3.250.000 2.865.000 3.140.000 3.050.000 3.130.000 Constanta 354.708 237.494 556.770 1.307.543 1.439.701 2.780.843 Hamburg 938.265 897.415 1.136.153 1.251.626 1.351.341 1.264.200 Antw erp 951.538 951.512 1.008.354 1.027.062 1.019.501 1.068.244 Ports of Bremen 106.282 85.000 92.225 107.903 110.061 105.700 Rijeka 27.221 36.110 33.286 34.813 34.054 36.145

Source: Authors own figure based on Seehafenbilanzen 2005, 2010, 2011, 2012 and 2013

Looking at the figures on Austrian exports the most frequently used port is Koper, with nearly 2 million tonnes of Austrian exports in 2012. Hamburg ranks second, followed by the ports of Bremen and Antwerp. Constanta is found only in 7th place with just over 213,084 tonnes of Austrian goods exported in 2013 (see Figure 14). Although the trend is very positive, especially since 2010, the figures are not comparable in absolute numbers with the leading ports.

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Figure 14 - Austrian exports via the main European sea ports in tonnes

2.500.000

2.000.000

1.500.000

1.000.000

500.000

0 2005 2009 2010 2011 2012 2013

Koper 788.946 1.324.014 1.651.202 1.771.545 1.848.817 1.984.796 Hamburg 1.385.617 1.504.338 1.715.679 1.801.613 1.751.628 1.723.865 Ports of Bremen 1.017.439 1.050.000 1.146.600 1.343.815 1.384.130 1.342.700 Antw erp 745.808 878.319 951.512 1.062.286 1.046.039 1.130.041 Rotterdam 733.718 820.000 695.000 510.000 380.000 315.000 Rijeka 175.490 250.834 226.873 236.532 250.060 250.060 Constanta 40.609 11.693 35.238 204.958 109.741 213.084

Source: Authors own figure based on Seehafenbilanzen 2013, 2012, 2011, 2010, 2005

2.2.4 Bulgaria and Romania: Imports and exports

This chapter concentrates on the interrelations within the Western Black Sea Region.

Looking at the trade between the two big players in the region, Bulgarian imports from Romania exceeded the exports to Romania in 2007. Since then Bulgaria exported more tons of goods to Romania than it imported. While the amount of goods imported stays constant the exports have doubled. The gap widened to approximately 1,400 tons in 2012 (see Figure 15).

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Figure 15 - Bulgarian imports and exports from Romania in 1,000t

3.500

3.000

2.500

2.000

1.500

1.000

500

0 2007 2008 2009 2010 2011 2012

BG imports from RO 1.661 1.920 1.628 1.887 1.800 1.800 BG exports to RO 1.613 2.298 2.096 2.989 3.276 3.189 Source: Authors own figure based on Eurostat

Divided by types of goods the Bulgarian exports mainly consist of raw materials, manufactured goods and comestible goods. These three types amount to 85% of the total exports.

Figure 16 - Bulgarian exports to Romania by types of goods in 1,000t

1200

1000

800

600

400

200

0 2007 2008 2009 2010 2011 2012

Raw materials 729,3 711,4 486,6 964,7 1020,4 966 Manufactured goods 367 631,2 548,3 661,5 917 933,5 Comestible goods 223,7 593,2 666,9 879,1 839,3 802,8 Chemical products 174,2 183,9 183,1 230,4 307,8 291,1 Fuels 57,9 85 132,4 160,9 66,1 78,6 Machinery and vehicles 25,3 35,5 21,7 25,8 48,3 42,6 Fats and oils 5,1 23 26,3 32,5 31,2 30,4 Beverages and tobacco 15,3 20,4 16,5 18,1 30,1 24,5 Other finished goods 14,9 14,6 14,4 16,2 16,1 19,3 Source: Authors own figure based on Eurostat

The imports from Romania to Bulgaria, however, were dominated by fuels in 2007. Despite a strong decline since 2008 fuel is still the most imported type of good in 2012 followed by manufactured goods, chemical products, comestible goods and raw materials.

Economic development 22

Figure 17 - Bulgarian imports from Romania by types of goods in 1,000t

900

800

700

600

500

400

300

200

100

0 2007 2008 2009 2010 2011 2012

Fuels 748,1 820,5 657,8 643,3 502 478,7 Manufactured goods 212,5 221,2 216,1 226 369,9 387,6 Chemical products 203,8 210,4 202,2 361,6 330,5 333,7 Comestible goods 175,8 221,2 196,2 267,3 310,1 272,2 Raw materials 251,4 364,8 278,1 298 188,3 207,6 Beverages and tobacco 20,6 35,7 43 39,4 44,8 44 Machinery and vehicles 19,7 24,2 13 20,6 24,4 37,6 Other finished goods 14,7 8,5 11,1 13,4 14,9 19,7 Fats and oils 14,5 13,3 10,6 17 15 19

Source: Authors own figure based on Eurostat

Economic development 23

2.3 MODAL SPLIT OF FREIGHT TRAFFIC

After a more general analysis of the international freight flows in the region, the focus of the next chapter will be on the means of transport used for transporting the goods between the countries.

2.3.1 Rail

Figure 18 shows the development of freight transport by rail as per percentage of the total tonne- kilometres of freight transport by all means of transport. While the share has risen to almost 40% in Austria since 2002, it has declined sharply in Ukraine and Bulgaria. While the Ukraine however still has a share of 68.1% rail freight traffic, the share in Bulgaria is just 11.4%. A similar trend can be observed in Romania until 2007. Since 2008, the share of goods transported by rail in Romania is increasing again. With a share of only about 5% rail freight transport (Figure 18), no inland waterway transport (Figure 20) and about 95% share of road freight transport, Turkey shows a completely different picture and a severe lack of sufficient alternative infrastructure.

Figure 18 - Share of rail freight transport (in percent) in total freight transport in tonne-kilometres

90,0

80,0

70,0

60,0

50,0

40,0

30,0

20,0

10,0

0,0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Turkey 4,6 5,4 5,7 5,2 5,2 5,2 5,6 5,5 5,7 5,4 Bulgaria 33,1 34,3 29,2 25,4 27,1 25,1 20,5 11,9 10,7 11,4 Romania 34,4 30,4 27,8 21,7 19,4 18,9 19 19,4 23,5 28 Austria 29,3 28,7 31,4 32,8 33,8 34,8 37,4 36,4 39 39,9 Ukraine 82,4 82,1 78,4 78,3 76,8 71,3 67,6 69,7 69,6 68,1

Source: Authors own figure based on Eurostat and Turkstat

2.3.2 Road

While Turkey remains at a very high level of freight transport by road with about 95%, the situation in the other countries has changed significantly. Especially in Romania the share of road freight transport tremen- dously decreased until 2008 in favour of rail and inland waterways. While the share of road transport in Austria was also decreasing, Ukraine added 15% points to its share of freight transported on the roads. Although inland waterways transportation has been intensified in Bulgaria, the share of road transport increased for about 10% (see Figure 19).

Economic development 24

Figure 19 - Share of road freight transport (in percent) in total freight transport in tonne-kilometres

100,0 90,0

80,0 70,0

60,0 50,0 40,0

30,0 20,0

10,0 0,0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Turkey 95,4 94,6 94,3 94,8 94,8 94,8 94,4 94,5 94,3 94,6 Bulgaria 62,9 61,7 66,9 70,8 69 70,1 66,9 67,4 68,1 73,6 Romania 57,3 62,4 60,8 67,3 70,5 71,3 70,2 60 49,2 50,3 Austria 65,8 67,4 65,6 64,1 63,2 60,9 58,6 59,5 56,3 56 Ukraine 17,3 17,5 21 21,2 22,8 28,3 32,2 29,8 30,3 31,7

Source: Authors own figure based on Eurostat and Turkstat

2.3.3 Inland waterways

The values of the inland waterways remained almost constant in Austria, Ukraine and Turkey in the period from 2002 to 2011. Since the accession of Romania and Bulgaria to the European Union the tonne- kilometres transported via inland waterway increased rapidly in these countries. While in 2007 only 4.8% of tonne-kilometres of freight transport were traveled by barge in Bulgaria this number increased to 15% in 2011. In Romania, the upturn began a year later and raised the share from 10.8% to 21.7% in 2011 (see Figure 20). While the development in Romania led to a decline of goods transported by road transport (-21%), the development in Bulgaria led to a decline of rail transport of 13.7%.

Economic development 25

Figure 20 - Share of inland waterway transport (in percent) in total freight transport in tonne-kilometres

0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Turkey 0 0 0 0 0 0 0 0 0 0 Bulgaria 4 4 3,9 3,7 3,9 4,8 12,6 20,7 21,2 15 Romania 8,2 7,1 11,4 11 10 9,8 10,8 20,6 27,2 21,7 Austria 4,9 3,9 2,9 3 3 4,2 4 4,1 4,7 4,2 Ukraine 0,3 0,4 0,7 0,5 0,4 0,4 0,2 0,5 0,2 0,3

Source: Authors own figure based on Eurostat and Turkstat

2.4 CONCLUSION AND SWOT

The Black Sea Region is an area with economic development potential. The GDP is still rather low compared to Central European countries but before the crisis in 2009 the GDP was growing way faster in the WBSR. The crisis curbed the growth, especially in 2009, but since then a significant recovery can be observed. However the recovery runs at different pace in the particular countries. The growth rates of over 7% of the pre-crisis years have only been achieved by Turkey and the shift to the service economy is still ongoing in the Western Black Sea area. Forecasts are therefore difficult to make. Another element of un- certainty is the state of Schengen accession. Bulgaria and Romania are eager to join the Schengen Area but there are concerns in some other EU states. Regarding the direct investment Austrian companies are very important players in the Black Sea region. Austria is the country with the second most direct investments in Bulgaria, Romania and Turkey in 2012.

The foreign trade statistics show that Austria imports large amounts of raw materials and fuels from the Black Sea region. Manufactured goods and chemical products are the most important goods exported to the countries of the Black Sea region. The Austrian imports via Constanta have increased eightfold since 2005. In recent years the increase was even higher. With more than 2.7 million tonnes per year the port is now the third most important port for Austrian imports. The increase can mainly be explained by the rising trade of Austrian companies with raw materials.

Due to the ongoing crisis in Ukraine the SWOT analysis will mainly focus on the situation in Bulgaria and Romania. Furthermore addiational information provided during the workshops and bilateral discussions by the partners in the region are included.

Economic development 26

2.4.1 Bulgaria

The GDP is still far behind the EU average and also lower than in Turkey and Romania. Austrian direct investments are growing constantly since 2007. The level of investments never reached the level of Romania (almost half the amount). While the imports from Austria reached the pre-crisis level in 2012, the exports from Austria to Bulgaria are still behind the volumes of 2008. The type of goods varies much more than in Romania, where the by far largest amount is related to raw materials. The Bulgarian ports do not play a significant role as entrance or exit points for Austrian goods. They rather serve their own national hinterland or are internationally oriented towards Serbia and Macedonia. The share of goods transported on rail decreased significantly mostly in favor of inland waterway transport.

Table 1 - SWOT analysis of the Bulgarian economic development Positive Negative  Constant growth of foreign direct invest-  Low GDP per capita

ment from Austria since 2005  Exports from Austria to Bulgaria in 2012 did

 Low costs for skilled labour not reach pre-crisis-level yet  Strong growth of freight transported via  Highest unemployment rates in the region

inland waterway since 2007  Disloyal contractors Statusquo  Increase of exports to Austria since join- ing the EU (+42%)  Growing importance of exports of raw  Unclear state of Schengen accession material from the Black Sea region to  Uncertain future economic growth Austria could bring rising demand for in-

land waterway shipping  Available budget of EU funds not yet fully

tapped and could be used in a more ef-

turetrend u

F fective way  High possibility of increased importance of public-private partnership and conces- sions

2.4.2 Romania

Romania can already look back on a strong cooperation with Austria in terms of imports/exports (highst shares of exports from Austria to Romania) and direct investments (highest amount of Austrian direct in- vestements). The world class port of Constanta (being the third most important port for Austrian imports) acts as an important gateway for raw materials satisfying the high demand of Austrian industry.

Romania has the lowest unemployment rate of the Western Black Sea countries. The country still has a very high percentage of people employed in the primary sector. PPP projects can be of future importance if the public regulations are going to be simplified. The growth of inland waterway transport in 2008 di not lead to a decrease of rail transport – on the contrary, both means of transport flourished. The percentage of goods transported via road decreased in the last decade.

Economic development 27

Table 2 - SWOT analysis of the Romanian economic development Positive Negative  Increase of exports to Austria since join-  Low GDP per capita ing the EU (+64%)  Exports from Austria to Romania in 2012 did

 Strong growth of foreign direct invest- not reach pre-crisis-level yet

ment from Austria since 2005  Disloyal contractors  Strong growth of freight transported via

inland waterway since 2008 Statusquo  Growth of freight transported via rail since 2008  Low cost skilled labour force  Growing importance of exports of raw  Unclear state of Schengen accession material from the Black Sea region to  Uncertain future economic growth Austria could bring rising demand for in-

land waterway shipping  Available budget of EU funds not yet fully

tapped and could be used in a more ef-

turetrend u

F fective way  High possibility of increased importance of public-private partnership and conces- sions

Ports of the Multi-Port-Gateway Region Black Sea West 28

3 PORTS OF THE MULTI-PORT-GATEWAY REGION BLACK SEA WEST

The Black Sea can offer 40 ports and harbors in 6 countries. The current study will focus on the Western Black Sea region including the following ports:

- Ports of Odessa and Illichivsk in Oblast Odessa (Ukraine) - Port of Galati in Galati County (Romania) - Port of Constanta in Constanta County (Romania) - Port of Varna in the Oblast Varna (Bulgaria) - Port of Burgas in the Oblast Burgas (Bulgaria)

Due to the current crisis in Ukraine the analysis of the Ukrainian ports of Odessa und Illichivsk in the Oblast Odessa can not be carried out as profound as for the Romanian and Bulgarian ports.

All six ports analysed in this study are competing for goods and passengers to be transported from and to Central Europe. In order to be successful in the international competition a collaboration between the ports of the Western Black Sea regions would be advantageous.

The knowledge of the strengths and weaknesses of the individual ports within the Multi-port gateway region Black Sea West is the basis for building a far-reaching cooperation between the ports of the western Black Sea region. Notteboom3 defined a set of criteria which could help to characterize ports and to identify the strength and weaknesses.

1. Geographical location o Vis-à-vis the immediate and distant hinterlands: Distance and access to the international markets and the national centers are key elements of the comparison of different ports. o Vis-à-vis the main shipping lines: The most significant international sea route for the Black Sea region runs through the Strait of Gibraltar, the Mediterranean, the Suez Canal and the Red Sea, connecting the North Atlantic to the Indian Ocean and subsequently with the Pacific Ocean. (See Figure 21)

3Notteboom 2009: Economic analysis of the European seaport system, ITMMA - University of Antwerp S.29

Ports of the Multi-Port-Gateway Region Black Sea West 29

Figure 21 - Commercial Sea-Routes in 2012

Source: http://upload.wikimedia.org/wikipedia/commons/3/39/Shipping_routes_red_black.png

To show the distance of the ports to this route, the following time- and distance-measurements are given:  To the southernmost tip of Sicily  To Suez Canal Terminal  To the Sea of Marmara

Only the days and hours traveling, and not transshipment-times are given. The assumed average speed is 14 knots.

2. Physical and technical infrastructure o Nautical accessibility profile (maximum draft and maximum vessel length, tidal windows, and restrictions to vessels) o Terminal infrastructure and equipment (terminal capacity as a function of terminal surface, number of berths, number and type of quay and yard cranes, stacking height, etc.) o Hinterland accessibility profile (intermodal interface for trucks, rail, barge and short sea)

3. Port efficiency o Port turn-around time (berth performance ratio, ship waiting times due to congestion) o Terminal productivity (moves per hour) o Cost efficiency (out-of-pocket and time costs of port calls and cargo handling) o Port operating hours: 24/7/365

4. Further Criteria o Interconnectivity of the port (sailing frequency of deep-sea and feeder shipping services) o Reliability, capacity, frequency and costs of inland transport services by truck, rail and barge(if any) o Quality and costs of auxiliary services such as pilotage, towage, customs, etc. o Efficiency and costs of port management and administration (e.g. port dues) o Availability, quality and costs of logistic value-added activities (e.g. warehousing) o Availability, quality and costs of port community systems o Port security/safety and environmental profile of the port o Port reputation (satisfactory ranking in benchmarking studies)

Ports of the Multi-Port-Gateway Region Black Sea West 30 o Expansion plans (this criteria was added by the author)

The aim of the research is to compare the ports of the Black Sea region based on these criteria. Since few data is publicly available, cooperation with partners from the Black Sea regions is essential. The partners provided most of the necessary information by filling in a questionnaire. This information has been used to update and complete the picture on the current status in the ports.

For the purposes of benchmarking the ports of the Black Sea region are compared with the ports of the northern Adriatic. The necessary data is obtained from the SETA project.

3.1 PORT OF ODESSA

Vis-à-vis the immediate and distant hinterlands According to Merk et. al. Odessa falls in the category of the independent port-cities with about one million inhabitants. Compared to the capital the port city is still relatively large and through 4 the large distance of over 300km certain independence is assumed. In addition to good road and railway connections with Kiev - part of the Pan-European Corridor 9 - there are also road and rail links to the hinterland, especially to Podolia, Moldavia and Galicia. Latter region is the connection to the landlocked central European countries of the Danube region. A connection with the Danube exists via Moldova and Bucharest. Vis-à-vis the main shipping lines Odessa is the northernmost port of the study area, and thus the furthermost from the main ship-

Geographical location Geographical ping lines in the Mediterranean.5  To the southernmost tip of Sicily: 2,171km; 3 days 12 hours  To Suez Canal Terminal: 2,213km; 3 days 13 hours  To the Sea of Marmara: 642km; 1 day 1 hour Nautical accessibility profile (maximum draft and maximum vessel length, tidal windows, and

restrictions to vessels)

According to Ukport ships can have the following maximum dimensions: Length: 240m, Width: 40m Draught: 12m. 6 The information, however, varies from source to source and can be up to 330m in length and 13m draft. 7

frastructure Terminal infrastructure and equipment (terminal capacity as a function of terminal surface, num- n ber of berths, number and type of quay and yard cranes, stacking height, etc.) The area of the port is 141 hectares. 54 berths extend over more than 9km in length.8 The berths are equipped with:  32 portal cranes with a capacity of 16/20/32/40t  24 portal cranes with a capacity of 10/20t  10 portal cranes with a capacity of 5/6t  3 mobile cranes with a capacity of 40/60t

Physical and technical i technical and Physical  4 gantry unloaders with a capacity of 32/36t  8 yard cranes  5 rail mounted cranes9

4 Merk et. al. 2011: The Competitiveness of Global Port-Cities: The Case of the Seine Axis (Le Havre, Rouen, Paris, Caen), France 5 http://www.searates.com/reference/portdistance/ (Last accessed: 26 November 2014) 6 Ukport 2011: Presentation – Ukrainian ports, Istanbul 7 http://www.port.odessa.ua/index.php/en/about-port/technical-characteristics (Last accessed: 26 November 2014) 8 http://www.port.odessa.ua/index.php/en/about-port/technical-characteristics (Last accessed: 26 November 2014)

Ports of the Multi-Port-Gateway Region Black Sea West 31

Hinterland accessibility profile (intermodal interface for trucks, rail, barge and short sea) Goods can be delivered by truck, rail, river and maritime shipping to the harbour.10 In addition, a dry port exists, that has good access to rail and road connections.11

Port turn-around time (berth performance ratio, ship waiting times due to congestion) Not specified Terminal productivity (moves per hour) The port’s technical capacities allow handling of more than 21 million tonnes of dry and 25 million tonnes of bulk cargoes annually. Container terminals provide handling of over 900,000 TEU per year.12 This equals 2,400 tonnes of dry cargoes, 2,850 tonnes of bulk cargoes and 100 TEU per hour.

Cost efficiency (out-of-pocket and time costs of port calls and cargo handling) The Figures in are calculated with an exchange rate of 1 UAH = 0.090€ and 1€ = 11.076 RON (11.5.2013) They include 20% value added tax.

Table 3 - Costs at the port of Odessa

Use of a crane Use of the crane „FC-4/63“(15t) 236EUR/hour Use of the crane „FC-48“(100t) 267EUR/hour Fresh water supply 8.5€-12€ per m³ Service of one employee of the Fleet’s Service mooring crew 7€/hour Port efficiency Port Rates for services of mooring, unmooring and remooring of ships Vessels tonnage up to 1.000m³ 24€ Vessels tonnage from 1.001 to 5.000m³ 49€ Vessels tonnage from 5.001 to 10.000m³ 74€ Vessels tonnage from 10.001 to 20.000m³ 99€ Vessels tonnage from 20.001 to 40.000m³ 148€ Vessels tonnage from 40.001 to 80.000m³ 198€ Vessels tonnage over 80.000m³ 247€ Further mooring and unmooring costs 0.071€ per m³ Source: http://www.port.odessa.ua/images/about_port/tarrifs-port-fllet-13.06.13-eng.pdf

Port operating hours The port operates 24/7/365

Interconnectivity of the port (sailing frequency of deep-sea and feeder shipping services)

Not specified Reliability, capacity, frequency and costs of inland transport services by truck, rail and barge The cargo terminal of the dry port can handle up to 2,000 TEU per day. In addition, parking for 300 trucks and a good connection to the railway system is available. The direct-to-rail discharge

intensity of oils and fats is 40 wagons per day.13 Further Criteria Further Quality and costs of auxiliary services such as pilotage, towage, customs

9 Ukport 2011: Presentation – Ukrainian ports, Istanbul 10 http://www.port.odessa.ua/index.php/en/about-port/technical-characteristics (Last accessed: 26 November 2014) 11 http://www.port.odessa.ua/index.php/en/partners/dry-port (Last accessed: 26 November 2014) 12 http://www.port.odessa.ua/index.php/en/about-port/technical-characteristics (Last accessed: 9 December 2013) 13 http://www.port.odessa.ua/index.php/en/services/transshipment (Last accessed: 26 November 2014)

Ports of the Multi-Port-Gateway Region Black Sea West 32

The following services are offered at the port of Odessa:  10.000m² warehouses for goods in bond  Towage and mooring operations in the Port of Odessa harbour waters  Ice channelling of vessels, entering and going out of the Port of Odessa  Supplying vessels with culinary water in the port and at anchorage: 8,5€-12€ per m³  Ship repair  Reception of bilge and sewage water, oil rest, domestic and nutritive waste  Fire control and fire-fighting14 Efficiency and costs of port management and administration (e.g. port dues) Not specified Availability, quality and costs of logistic value-added activities (e.g. warehousing) The dry port offers the following facilities and services:  A container terminal with a storage capacity of 20.000 TEU  30,000m² of warehouses class A  10,000m² warehouses for goods in bond  5,000m² low-temperature warehouses  Outdoor storage rooms for non-Standard containers and goods  Customs and all control authorities on the grounds 15 Furthermore, there are 45,000m³ tank capacities for fats and oils, 18,000m² warehouses and 150,000m² of open-air storage area for metals and metal products, storage room for 340,000t of grain and 656,000m³ of oil.16 Availability, quality and costs of port community systems The port of Odessa was the first Ukrainian port to operate with a single-window system as port community system. This offers enormous simplification and potential for savings.17 Port security/safety and environmental profile of the port The area has an alarm and monitoring system and a fire suppression system. The organization Eco-port was founded in 2009. It should ensure, among other tasks, the development and the environmental protection in the area of the port.18 Port reputation (satisfactory ranking in benchmarking studies) Not specified Expansion plans Not specified

14 http://www.port.odessa.ua/index.php/en/services/fleet-service (Last accessed: 26 November 2014) 15 http://www.port.odessa.ua/index.php/en/partners/dry-port (Last accessed: 26 November 2014) 16 http://www.port.odessa.ua/index.php/en/services/transshipment (Last accessed: 26 November 2014) 17 http://www.uspa.gov.ua/en/press-center/news/uspa-news/470-dokumentooborot-v-odesskom-portu- osushchestvlyaetsya-cherez-edinuyu-informatsionnuyu-sistemu (Last accessed: 26 November 2014) 18 http://www.port.odessa.ua/index.php/en/social-responsibility/eco-port (Last accessed: 26 November 2014)

Ports of the Multi-Port-Gateway Region Black Sea West 33

3.2 PORT OF ILLICHIVSK

Vis-à-vis the immediate and distant hinterlands In contrast to Odessa Illichivsk is rather small with about 60,000 inhabitants. This is explained by

the proximity of a major port.19 The connection with the hinterland runs via Odessa. Next to the

road from Illichivsk to Odessa two railway lines are running. One of them is reserved for freight

traffic. From Odessa there are good road and railway connections with Kiev - which are even cation

o part of the Pan-European Corridor 9 - and road and rail links further inland, especially to Podolia, Moldavia and Galicia. Vis-à-vis the main shipping lines The numbers of Illichivsk are similar to those of Odessa since the difference is only 24 km. With

an assumed average speed of 14 knots the difference is approximately one hour:20 Geographical l Geographical  To the southernmost tip of Sicily: 2,146 km, 3 days 11 hours  To Suez Canal Terminal: 2,189 km, 3 days 12 hours  To the Sea of Marmara: 618 km, 1 day 0 hours Nautical accessibility profile (maximum draft and maximum vessel length, tidal windows, and

restrictions to vessels)

According to Ukport ships can have the following maximum dimensions: Length: 275-300m,

Draught: 12m.21 structure a Terminal infrastructure and equipment (terminal capacity as a function of terminal surface, number of berths, number and type of quay and yard cranes, stacking height, etc.) 29 berths extend over more than 6km in length.22 The berths are equipped with:  24 portal cranes with a capacity of 16/20/32/40t  51 portal cranes with a capacity of 10/20t  13 portal cranes with a capacity of 5/6t  4 cranes for transshipment with a capacity of 10/20t23 Hinterland accessibility profile (intermodal interface for trucks, rail, barge and short sea)

Physical and technical infr technical and Physical The internal road network allows trucks to reach or leave the area through 5 checkpoints and to drive directly to the berths. The internal rail network has a length of 50km. The lines enter and leave the area at 6 points. The port is able to serve a total of up to 1,300 freight wagons.24 Port turn-around time (berth performance ratio, ship waiting times due to congestion)

Not specified

Terminal productivity (moves per hour) ciency

i The port could handle 30 million tonnes of cargo and 1.15 million TEU per year. Per hour this would correspond to 3,400 tonnes of cargo and nearly 130 TEU.25

Cost efficiency (out-of-pocket and time costs of port calls and cargo handling) Port eff Port The port charges 0.174 USD per cubic meter of the ship entering or leaving the port. The mooring dues are calculated according to Table 4

19 Merk et. al. 2011: The Competitiveness of Global Port-Cities: The Case of the Seine Axis (Le Havre, Rouen, Paris, Caen), France 20 http://www.searates.com/reference/portdistance/ (Last accessed: 26 November 2014) 21 Ukport 2011: Presentation – Ukrainian ports, Istanbul (Last accessed: 26 November 2014) 22 http://www.port.odessa.ua/index.php/en/about-port/technical-characteristics (Last accessed: 26 November 2014) 23 Ukport 2011: Presentation – Ukrainian ports, Istanbul 24 http://www.ilport.com.ua/page/port-about/ (Last accessed: 9 December 2013) 25 http://www.ilport.com.ua/page/port-facilities/ (Last accessed: 9 December 2013)

Ports of the Multi-Port-Gateway Region Black Sea West 34

Table 4 - Mooring dues in the port of Illichivsk Ships volume in m³ USD Up to 1,000m³ 28 1,000 – 5,000m³ 57 5,000 – 10,000m³ 85 10,000 – 20,000m³ 114 20,000 – 40,000m³ 171 40,000 – 80,000m³ 228 Over 80,000m³ 284 Source: http://www.ilport.com.ua/ckfinder/userfiles/files/Port%20dues%20and%20payment%20for%20services%20to%20shipowners.doc

The fee for the loading and unloading of normal goods is 2,8USD/t, for fuels and LPG 2,1USD/t.26 Port operating hours The port operates 24/7/365

Interconnectivity of the port (sailing frequency of deep-sea and feeder shipping services) Not specified Reliability, capacity, frequency and costs of inland transport services by truck, rail and barge The port can handle up to 1,300 wagons a day.27 Quality and costs of auxiliary services such as pilotage, towage, customs The pilotage dues are calculated according to Table 5.

Table 5 - Pilotage dues in the port of Illichivsk Pilotage Rate (in USD per m³)

Out-of-harbour pilotage

ria Up to 1 mile 0.0057 e From 1.1 to 5 miles 0.0025 From 5.1 to 30 miles 0.0014 Over 30 miles 0.0008

Further Crit Further In-harbour pilotage: 0.0139 Source: http://www.ilport.com.ua/ckfinder/userfiles/files/Port%20dues%20and%20payment%20for%20 services%20to%20shipowners.doc

Efficiency and costs of port management and administration (e.g. port dues) The port dues for cargo vessels are: 28  0.032USD Canal dues per m³  0.046USD Lighthouse dues per m³  Berth dues: 0.035USD per m³ per call  Anchorage dues (for more than 12 hours anchorage): 0.0043USD per m³ and hour

26http://www.ilport.com.ua/ckfinder/userfiles/files/The%20fee%20for%20the%20use%20of%20the%20berth%20and% 20the%20port%20territory%20by%20the%20clients%20during%20handling%20operations.doc (Last accessed: 9 De- cember 2013) 27 http://www.ilport.com.ua/page/port-about/ (Last accessed: 9 December 2013) 28http://www.ilport.com.ua/ckfinder/userfiles/files/Port%20dues%20and%20payment%20for%20services%20to%20shi powners.doc (Last accessed: 9 December 2013)

Ports of the Multi-Port-Gateway Region Black Sea West 35

 Administration dues: 0.022USD per m³ Availability, quality and costs of logistic value-added activities (e.g. warehousing) The port has storage facilities which can accommodate 1.5 million tonnes of different cargoes. The total open storage area is 575,000m², the warehouse area –is 28,000m².29 The prices are shown in Table 6.

Table 6 - Prices for storage at the port of Illichivsk

Storage period UAH / t per day and night Lagerzeit €/t pro Tag Open storage area Nicht überdachter Lagerraum For all cargoes Güter die nicht zu Metallprodukten oder Roheisen zu zählen sind Within 4 days and nights Technological storage Tage 1 - 4 gratis For each day and night from 5th to 64th 0.08 Von Tag 5 bis Tag 64 0,007€ For each day and night from 65th and further 0.39 Ab dem 65. Tag 0,035€ Metal products Metallprodukte Within 4 days and nights Technological storage Tage 1 - 4 gratis For each day and night from 5th to 30th 0.01 Von Tag 5 bis Tag 30 0,0009€ For each day and night from 31st to 45th 0.03 Von Tag 31 bis Tag 45 0,0027€ For each day and night from 46th to 64th 0.06 Von Tag 46 bis Tag 64 0,0054€ For each day and night from 65th and further 0.26 Ab dem 65. Tag 0,0234€ Рig iron Roheisen Within 4 days and nights Technological storage Tage 1 - 4 gratis For each day and night from 5th to 94th 0.01 Von Tag 5 bis Tag 94 0,0009€ For each day and night from 95th and further 0.04 Ab dem 95. Tag 0,0036€ Covered storage area Überdachter Lagerraum For all cargoes Alle Güter Within 4 days and nights Technological storage Tage 1 - 4 gratis For each day and night from 5th to 64th 0.75 Von Tag 5 bis Tag 64 0,0676€ For each day and night from 65th and further 7.49 Ab dem 65. Tag 0,6748€ Source: http://www.ilport.com.ua/ckfinder/userfiles/files/From%2001_01_2013%20Storage%20of%20export- import%20and%20transit%20cargoes.doc Availability, quality and costs of port community systems Since the 14th of October the port of Illichivsk uses the Single-Window-System „Single Window — a local solution“, which is also used at the port of Odessa.30 Port security/safety and environmental profile of the port The port provides continuous monitoring of shipping in order to ensure navigational safety, and continuous monitoring for fire.31 Port reputation (satisfactory ranking in benchmarking studies) Not specified Expansion plans Not specified

29 http://www.ilport.com.ua/page/port-about/ (Last accessed: 9 December 2013) 30 http://www.uspa.gov.ua/en/press-center/news/uspa-news/611-v-ilichevskom-portu-prodolzhaetsya-testirovanie- informatsionnoj-sistemy-portovogo-soobshchestva (Last accessed: 26 November 2014) 31 http://www.ilport.com.ua/page/fleet/ (Last accessed: 9 December 2013)

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3.3 PORT OF GALATI

Vis-à-vis the immediate and distant hinterlands Galati is located 160km westwards from the point the Danube flows in the Black Sea (kilometer zero, Sulina). It is located at the Danube river and it serves as a core maritime and inland port on

the TEN-T Rhine-Danube corridor. It is as well part of the Pan-European Transport Corridors 7 and

tion 9. The port is located 80-100 km away from the Pan-European transport corridor 4. The Port of a Galati has no highway in a radius of 100km. However, the strength of the harbour is the gateway function between Romania, Ukraine, and Moldova. Galati is connected both to the European rail network as well as to the broad gauge rail network from Moldova, Ukraine and subsequently Russia.32 Vis-à-vis the main shipping lines

Geographical loc Geographical Distance between Galati and the defined points:33  To the southernmost tip of Sicily: 2,162 km, 3 days 12 hours  To Suez Canal Terminal: 2,209 km, 3 days 14 hours  To the Sea of Marmara: 592 km, 1 day 0 hours Nautical accessibility profile (maximum draft and maximum vessel length, tidal windows, and restrictions to vessels) The maximum draft of 7.3m is defined through the draft of the Sulina branch. The longest berth is 120m, the majority between 100 and 110m.34

Terminal infrastructure and equipment (terminal capacity as a function of terminal surface, num-

ber of berths, number and type of quay and yard cranes, stacking height, etc.) The area of the ports amounts to 86,4ha with a quay-length of over 7km.35 The equipment for the 56 berths consists of:

frastructure 36

n  2 Floating cranes, each 100t capacity (Work in tandem for 150t heavy pieces)  7 floating cranes with capacities of 32t(3x), 16t(3x), 10t  7 mobile cranes with capacities of over 63t, 50t(4x), 30t, 25t  3 crane bridges with 25t and 32t capacity  19 quay cranes with 5-10t capacity37 Hinterland accessibility profile (intermodal interface for trucks, rail, barge and short sea) The port is accessible for deep sea and inland navigation. The connection with the road network

sical and technical i technical and sical exists, but the distance to the next highway is 130km. Galati is connected both to the European

Phy rail network (12km rails on the port-area) as well as to the broad gauge rail network from Moldo- va, Ukraine and subsequently Russia.38

32 Costea 2012: Danube Inland Harbour Development – State of the art study – Hinterland connections 33 http://www.searates.com/reference/portdistance/ (Last accessed: 26 November 2014) 34 http://www.romanian-ports.ro/html/port_bazin_en.html (Last accessed: 26 November 2014) 35 Capatu 2013b: Presentation Port Galati Description, Krems 36 Capatu 2013b: Presentation Port Galati Description, Krems 37 http://www.romanian-ports.ro/html/port_docuri_en.html und http://www.romanian- ports.ro/html/port_bazin_en.html (Last accessed: 26 November 2014) 38 Costea 2012: Danube Inland Harbour Development – State of the art study – Hinterland connections

Ports of the Multi-Port-Gateway Region Black Sea West 37

Port turn-around time (berth performance ratio, ship waiting times due to congestion) Not specified Terminal productivity (moves per hour)

The handling capacity is depending on port installations and equipments. All cranes are more than 50 years old and inefficient (high energy consumers) Except of the container facility there are no 39

ficiency intermodal facilities. The facilities for containers can handle 30.000 TEU/year. f Cost efficiency (out-of-pocket and time costs of port calls and cargo handling)

Not specified Port e Port

Port operating hours Not specified

Interconnectivity of the port (sailing frequency of deep-sea and feeder shipping services) Not specified Reliability, capacity, frequency and costs of inland transport services by truck, rail and barge The company Metaltrade has the capacity to operate 40 large rail wagons per day on the broad gauge. Because of the lack of a silo Metaltrade is using specialized containers for loading cereals. With this procedure 1,500t of cereals can be handled per day.40 Quality and costs of auxiliary services such as pilotage, towage, customs The custom dues are complicated and port administration is not involved in it. There are small companies (customs agents) providing services to calculate and make all formalities requested by the custom. Their offices are located inside the port.41 Pilotage and towage services are provided by private companies which concessed these public services from Lower Danube River Administration (AFDJ, see www.afdj.ro). Pilotage is mandatory 42

only for maritime vessels.

Efficiency and costs of port management and administration (e.g. port dues) teria i In Table 7 the costs for infrastructure use charged by the port administration are shown.

Table 7 - Accruing costs at the port of Galati

Further Cr Further Service Costs Minimal port tariff 162 €/vessel calling the port Port infrastructure use General cargo/Animals 0.45 €/t Bulk cargo 0.34 €/t Containerized goods 4.32 €/TEU Oil products 0.54 €/t Using the quay without operations 23.17 €/vessel/day Source: Information provided by Carmen Costache Availability, quality and costs of logistic value-added activities (e.g. warehousing) The terminals are equipped as follows43: DOCURI Terminal :

39 Information provided by Carmen Costache 40 Capatu 2013b: Presentation Port Galati Description, Krems 41 Information provided by Carmen Costache 42 Information provided by Carmen Costache 43 Information provided by Carmen Costache

Ports of the Multi-Port-Gateway Region Black Sea West 38

 Facilities for containers: 7,200m² open space, 5,000m² warehouses  Silos : 40,000t storage capacities  Storage : 59,937m² open spaces, 17,940m² warehouses  Facilities : custom Bazinul Nou Terminal :  Storage : 111,105m² open spaces, 46,565m² warehouses  Facilities : custom, free zone Mineralier Terminal :  Storage : 41,565m² open spaces The tariffs for this facilities are settled on negotiations base by port operators44 Availability, quality and costs of port community systems There is no “port community system”. There is an urgent need for it.45 Port security/safety and environmental profile of the port Vessels and cars for collecting waste, assisting hazardous cargo transshipment and accidental pollution intervention are available.46 The costs of provided services are shown in Table 8. They are mandatory for maritime vessels.47

Table 8 - Services provided by port administration for vessels in port

Household Waste Water Collection and Treatment Tariff 23.9 €/m³ The garbage collection tariff Trip value of the specialized vessel 33.83 €/Trip Trip value of specialized car 7.44 €/Trip Garbage collection and transport 1.56 €/Bag Hydrocarbon ship-waste collection tariff Trip value of the specialized vessel - Galati area 39.92 €/Trip Collecting and treating hydrocarbon residues 41.27 €/m³ Tariff for collecting, packing, transporting & disposing of hazardous ship waste Used oil, sludge and bilge water generated by inland navigation 0.04 €/kg Absorbents, dirty oily rags, used filters, polishing materials and 0.04 €/kg protection clothes with a high content of hazardous substances Metal packaging contaminated by hazardous substances 0.14 €/kg Oil and fuel filters 0.14 €/kg Source: http://www.romanian-ports.ro/html/tarife_en.html Port reputation (satisfactory ranking in benchmarking studies) Not specified Expansion plans  Intermodal terminal: The terminal will be constructed on the existing port infrastructure by modernization and rehabilitation according to the high level standards for intermodal trans- shipments. The terminal will enable operation of UIT’s in block trains and will provide Ro-Ro facilities. An electrified shunting station will be constructed by modernization of Bazinul Nou Railway station and modern equipments for monitoring and control of freight and transport

44 Information provided by Carmen Costache 45 Information provided by Carmen Costache 46 http://www.romanian-ports.ro/html/activitate_mediu_en.html (Last accessed: 26 November 2014) 47 Information provided by Carmen Costache

Ports of the Multi-Port-Gateway Region Black Sea West 39

as well as software support will be provided. Up to date studies are conducted. The works should start in 2015 and be finished in 2018.48  Improvement of navigability and removal of sediments49  Logistic platform and industrial park50  Port’s road and rail access improvement: Construction of four electrified tracks (2 normal, 2 broad) to the shunting station and a direct road connection to the ring road51  Ring road around the city of Galati: The feasibility study for the ring road that should decon- gest the city is completed. The project should be realized in 2017.52

Figure 22 - Location of the different Terminals in Galati

Source: Information provided by Carmen Costache

48 DaHar – Danube Inland Harbour Development 2013a: Local Action Plan for Galati 49 DaHar – Danube Inland Harbour Development 2013a: Local Action Plan for Galati 50 DaHar – Danube Inland Harbour Development 2013a: Local Action Plan for Galati 51 DaHar – Danube Inland Harbour Development 2013a: Local Action Plan for Galati 52 DaHar – Danube Inland Harbour Development 2013a: Local Action Plan for Galati

Ports of the Multi-Port-Gateway Region Black Sea West 40

3.4 PORT OF CONSTANTA

Vis-à-vis the immediate and distant hinterlands

The port of Constanta is the thirteenth largest container port and sixteenth largest port in Europe.

It serves the Romanian hinterland as the main port. Constanta is directly connected with Bucha- rest by a highway. Constanta marks the end of the TEN-T Rhine-Danube Corridor which connects the city and the port to the Central European hinterland. This means that even the Danube Re- gion in Austria is contestable market for the ports of Romania and Bulgaria. 53 Vis-à-vis the main shipping lines Distance between Constanta and the defined points:54

 To the southernmost tip of Sicily: 1,894 km, 3 days 1 hour Geographical location Geographical  To Suez Canal Terminal: 1,937 km, 3 days 3 hours  To the Sea of Marmara: 366 km, 14 hours Nautical accessibility profile (maximum draft and maximum vessel length, tidal windows, and restrictions to vessels) The maximum draft of vessels is 19m; however tankers with a draft over 11m cannot call at the port in the night.55 The tidal differences are negligible and average 0.5m.56

Terminal infrastructure and equipment (terminal capacity as a function of terminal surface, number of berths, number and type of quay and yard cranes, stacking height, etc.) The total surface sums up to 3,926ha with a quay length of almost 30km. There are 156 berths (out of which 140 are operational).57 The company DP World Constantza is the largest container-company in Constanta. They maintain the berths 121-125 and use the following equipment:  8 cranes with a capacity of 41t  3 cranes with a capacity of 50t  2 cranes with a capacity of 75t  3 cranes with a capacity of 100t  15 mobile cranes with a capacity of 15t (2 of them rail-based)  4 reach-stacker with a capacity of 50t Physical and technical infrastructure technical and Physical  55 tractors and 8 fork lifters with a capacity of 1,5-15t58 Hinterland accessibility profile (intermodal interface for trucks, rail, barge and short sea) A rail link to the Romanian railway network is available from any terminal and almost every berth In addition there are daily shuttle trains in major national centres. Overall, the length of the railway network is 300km on the area of the port. 59 The container terminal has three 616m long, parallel rails. Thus it is possible to load 3 trains with 30 wagons each simultaneously.

53 Notteboom 2008: The relationship between seaports and the intermodal hinterland in light of global supply chains - University of Antwerp 54 http://www.searates.com/reference/portdistance/ (Last accessed: 26 November 2014) 55 http://www.aries-shipping.ro/port-directory/port-information/constanta-constantza-port.php (Last accessed: 26 November 2014) 56 Constantza Port 2013: Constantza port handbook 2013/2014 57 Capatu 2011: Presentation : Why Constanta 58 Constantza Port 2013: Constantza port handbook 2013/2014 59 http://www.portofconstantza.com/apmc/portal/static.do?package_id=con_intermod_cf&x=load (Last accessed: 26 November 2014)

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The length of the road system on the harbour is 100km. It is connected by 10 exits and entrances to the Romanian national road network. 60 The 64km long Danube-Black Sea Canal connects the port directly with the Danube. With a width of 90m, a depth of 7m and a vertical clearance under the bridges of 17.5 m, the channel is a waterway of class VI. 61 Port turn-around time (berth performance ratio, ship waiting times due to congestion) The turn-time of Operator DP World Constantza from entrance to exit averages 30 minutes.62 Terminal productivity (moves per hour) The total handling capacity of the port is about 120 million tonnes a year. 63 This equals almost 14,000t per hour. For coal and coke, the discharge rate is about 45,000t per day or 2,000t per hour, for chemical products and fertilizers 4.2 million tonnes per year, equivalent to about 480t per hour. 64 For cereals, the example of the MV Niki (with a length of 253.92 meters and 101,652 DWT) shows that 65,000 tonnes can be loaded in 30 hours (2,166t/h). Afterwards the ship had to change berth in order to gather another 25,000t. In total it took 3 days and 8 hours for 90,000t which means 1.125t per hour. Other examples: MV Wadi Alarish 51,545t grain in 35 hours (1,473t/h) and the MV Atalanta with 25,000 t in 44.5 hours (1,020t/h) 65 Cost efficiency (out-of-pocket and time costs of port calls and cargo handling) The port access tariff is 0.155€ per gross tonnage of the vessel. It reduces with frequent or regular arriving of the ship. The Quay tariff is applied per vessels maximum length and number of days in the port depending on the type of vessel and the gross tonnage. (see Table 9) The Basin tariff is calculated according to the same principle. (see Table 10)

ciency i Table 9 - Quay tariff in the port of Constanta in €/m/day Gross tonnage Tanker Container-carrier Bulk-carrier

Port eff Port 0 – 5,000 8,094 7,469 3,735 5,000 – 10,000 15,565 8,472 5,852 10,000 – 20,000 17,806 8,749 9,960 20,000 – 45,000 23,527 8,963 11,204 45,000 – 70,000 33,122 9,496 18,673 Over 70,000 35,115 10,030 26,142 Source: http://www.portofconstantza.com/apmc/portal/static.do?package_id=tarife_apmc_baza&x=load

Table 10 - Basin tariff in the port of Constanta in €/m/day Gross tonnage Tanker Container-carrier Bulk-carrier 0 – 5,000 0.790 0.427 0.651 5,000 – 10,000 0.747 0.309 0.576 10,000 – 20,000 0.683 0.256 0.534

60 http://www.portofconstantza.com/apmc/portal/static.do?package_id=con_intermod_fluvial&x=load (Last accessed: 26 November 2014) 61 http://www.portofconstantza.com/apmc/portal/static.do?package_id=con_intermod_fluvial&x=load (Last accessed: 26 November 2014) 62 Constantza Port 2013: Constantza port handbook 2013/2014 63 Capatu 2011: Presentation : Why Constanta 64 http://www.portofconstantza.com/apmc/portal/static.do?package_id=term_vs&x=load (Last accessed: 26 November 2014) 65 Capatu 2013a: Presentation: Constanta Port – Present & Future, Krems

Ports of the Multi-Port-Gateway Region Black Sea West 42

20,000 – 45,000 0.651 0.224 0.501 45,000 – 70,000 0.640 0.213 0.480 Over 70,000 0.619 0.203 0.448 Source: http://www.portofconstantza.com/apmc/portal/static.do?package_id=tarife_apmc_baza&x=load

Tariff rates for supervision, security and control of loading/discharging operations are: 0.08€/GTU (but not less than € 215/vessel) - for maritime vessels 0.355€/GTU for inland cargo-vessels66 Port operating hours The port is operating 24/7/365. Between Saturday 7:00am and Monday 7:00am as well as on 1st and 2nd of January, 1st of May, 15th of August, 1st, 25th and 26th of December and on orthodox Easter the staff at the port is working overtime. 67 Interconnectivity of the port (sailing frequency of deep-sea and feeder shipping services) A total of 18 companies (e.g. Black Sea Feedering, MSC and Maersk) operate Container Lines with starting point Constanta. Their destinations are mainly far eastern regions. The Bulgarian River Shipping Company (BRP) operates a regular Container Line since 2005. It runs between Constanta and the inland port of Belgrade. In addition it is possible to call at other Dan- ube-harbors at a minimum of 5-10 containers. A year later, the company Mainrom Line Logistics Ltd. (MRL) started a weekly container service between the ports of Constanta and Giurgiu in Ro- mania. The container service from MRL includes the transport by barge and onward transportation of containers to the metropolitan area of Bucharest by truck. If necessary, the frequency can be doubled to 2 runs per week. Other ports such as Galatz and Svishtov can be called from a minimum volume of 5-10 containers.68

teria Reliability, capacity, frequency and costs of inland transport services by truck, rail and barge i Each port terminal has access to the Romanian railway system. Additionally every day shuttle trains provide fast transport of containers to the most important national destinations.69

Quality and costs of auxiliary services such as pilotage, towage, customs Further Cr Further Pilotage is available 24/7. It is obligatory and conducted by specialized and authorised operators: S.C. CANAL SEA SERVICES S.R.L., S.C. BLACK SEA PILOTS S.R.L, S.C. MARITIME PILOT S.R.L. und S.C. EUROEST PILOT S.R.L.70 The company S.C. LOGISTIC REMO SERVICES S.R.L. provides towage.71 Efficiency and costs of port management and administration (e.g. port dues) Not specified Availability, quality and costs of logistic value-added activities (e.g. warehousing) Warehouses can be rented. The price lies between 0.20€ and 0.87€ per m² and month. It depends on the type of warehouse.72 The covered storage area in the container terminal amounts to 5,000m².73 However there are many port operators who operate warehouses by themselves.74

66 http://www.portofconstantza.com/apmc/portal/static.do?package_id=tarife_apmc_speciale&x=load (Last accessed: 26 November 2014) 67 Constantza Port 2013: Constantza port handbook 2013/2014 68 Stein 2012: Potentialanalyse von Unternehmen im Einzugsbereich der österreichischen Donau für die Inanspruch- nahme von Containerliniendiensten in der Distributionslogistik 69 http://www.portofconstantza.com/apmc/portal/static.do?package_id=con_intermod_cf&x=load (Last accessed: 26 November 2014) 70 http://www.portofconstantza.com/apmc/portal/static.do?package_id=tarife_pilotaj&x=load (Last accessed: 26 No- vember 2014) 71 http://www.portofconstantza.com/apmc/portal/static.do?package_id=tarife_remorcaj&x=load (Last accessed: 26 November 2014)

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The costs for water are 5€/t and for electricity 0.30€/Kwh. Availability, quality and costs of port community systems The Integrated Information System SIVECO – a Single-Window-System is used at the port of Con- stanta. It controls the following activities:75  Harbor activity: Management of maritime and river traffic (ships, arrivals, maneuvers, depar- tures), cargo traffic, port events  Finance, Accounting: Financial Management, Financial Accounting, Cost Control Manage- ment, Budgets, Fixed Assets, Inventories  Commercial Activity: Contracts, Litigations, Ships Refunds, Rental Refunds, Invoicing  Maintenance: Equipment Maintenance/Repairs, Infra- and Superstructure Maintenance, Interface with Cost Estimates computing packages, Material Stocks for Maintenance/Repairs, Materials procurement for Maintenance/Repairs, Monitoring the fuel consumption for ships and heating stations  Services: Services for re-providing communications, electric energy, thermal energy, water; miscellaneous services; General Stock Management; Overall Procurement Management; GIS Interface  Investment: Investment Plans, Public Acquisitions (investments, equipment acquisition, repair works), Management of the Cost Estimates  Human Resources, Payroll: Employee Records, Recruiting, Performance Evaluation, Training, Evaluation Center, Payroll  Access Control: Management of the Port Access Information  E-mail: E-mail Management, Registration of Source/Destination Data  Management Informational System: Analysis of the financial-accounting indicators, Analysis of the purchase orders, Analysis of the equipment availability and of repair costs, Analysis of the investment achievement, Analysis of the port traffic Port security/safety and environmental profile of the port The port area is protected through 12km security fence, 19 gates and approximately 200 surveillance cameras.76 Radar monitoring is provided 24/7.77 In 2001 the project “Environment and Infrastructure in Constantza Port” was started. To date, the following sites were completed: an ecological landfill for solid waste and garbage, an incinerator for sanitary waste and contaminated ship residues and a ship to combat water pollution.78 Port reputation (satisfactory ranking in benchmarking studies) In almost all publications the port is referred to as the leading port in the western Black Sea region.79 Expansion plans  Extension of the breakwater by 1,050m: The purpose of the project is to improve the operations conditions inside the port, by decreasing wave stirring in the south port basins and improving navigation safety. Planned completion date is March 201580

72 http://www.portofconstantza.com/apmc/portal/static.do?package_id=tarife_apmc_alte_bunuri&x=load (Last accessed: 26 November 2014) 73 http://www.portofconstantza.com/apmc/portal/static.do?package_id=term_containere&x=load (Last accessed: 26 November 2014) 74 http://www.medtainer.ro/medrom-logistics.html and http://www.euroccoper.ro/en/news/ (Last accessed: 26 November 2014) 75 http://www.siveco.ro/en/about-siveco-romania/case-studies/integrated-information-system-siveco-applications- maritime-ports (Last accessed: 26 November 2014) 76 Capatu 2013: Presentation: Constanta Port – Present & Future, Krems 77 Constantza Port 2013: Constantza port handbook 2013/2014 78http://www.portofconstantza.com/apmc/portal/vizstire.do?bifa=null&method=showNews&old_method=showNews DetailList&id_stire=10009&tip_stire=2 (Last accessed: 9 December 2013) 79 Notteboom 2008: The relationship between seaports and the intermodal hinterland in light of global supply chains 80 Capatu, Alexandru (2014): Presentation Constanta Port – Present & Future

Ports of the Multi-Port-Gateway Region Black Sea West 44

 Extension of the Lighter Berth: The project consists of achieving a new mooring front with a length of 170 meters, in order to increase the efficiency of port operations in the area 81  Development of the railway capacity in the river-maritime area: The project focuses on the completion of a systematized rail complex in the river-maritime sector that will assure efficient railway services for port operators.82  Ring road - connection with DN 3983  Bridge over the Danube-Black Sea Canal: This project connects the port with the Bucharest- Constanta highway, through the Constanta City bypass and provides a direct link between the North and South areas of the port without transiting the town. It was inaugurated in Novem- ber 201484

3.5 PORT OF VARNA

Vis-à-vis the immediate and distant hinterlands Varna and Burgas are the two most important ports in Bulgaria. Between them exists a direct road connection, and from Burgas the most important cities like Stara Zagora, Plovdiv and the capital Sofia can be reached by highway. The capital however, is about 300 km inland. A direct motorway connection from Varna to Sofia is planned. Until now, it’s finished from Varna to Shumen. (see Figure 23)

Figure 23 - Important roads (planned and existing) in Bulgaria

Geographical location Geographical

Source: Authors own figure based on: http://commons.wikimedia.org/wiki/File:Bulgarian_motorway_network_de_version2012_numbers_correction.svg

81 Capatu, Alexandru (2014): Presentation Constanta Port – Present & Future 82 Capatu, Alexandru (2014): Presentation Constanta Port – Present & Future 83 http://www.portofconstantza.com/apmc/portal/static.do?package_id=proiecte_port&x=load (Last accessed: 2 Feb- ruary 2015) 84 http://www.portofconstantza.com/apmc/i.do?lan=en (Last accessed: 29 January 2015)

Ports of the Multi-Port-Gateway Region Black Sea West 45

Varna is connected to a multi-lane, high-performance railway line that leads into the hinterland, to Sofia and to neighbouring countries. The route from Varna is part of the comprehensive network of the TEN-T. In addition, Varna is also the end point of Pan-European Corridor 8 The connection between Varna and Ruse is the main junction with the Danube river. Between these cities exist a road and a rail link which is important for the further transport of goods on the Danube river.85 Vis-à-vis the main shipping lines Distance between Varna and the defined points:86  To the southernmost tip of Sicily: 1,809 km, 2 days 22 hours  To Suez Canal Terminal: 1,852 km, 2 days 23 hours  To the Sea of Marmara: 280 km, 11 hours Nautical accessibility profile (maximum draft and maximum vessel length, tidal windows, and restrictions to vessels)

The maximum draft is 11.5m.87

Terminal infrastructure and equipment (terminal capacity as a function of terminal surface, number

frastructure of berths, number and type of quay and yard cranes, stacking height, etc.) n 36 Berths extend over an entire quay length of 5,775m. They are equipped with:  49 quay cranes with a with varied capacity up to 32t  3 gantry cranes with a capacity of 30-35t  2 mobile cranes with a capacity of 100t and 2 with a capacity of 63t88

Regarding the containers, up to 7,600 TEU can be stored in the designated area of 118,000m².89 Hinterland accessibility profile (intermodal interface for trucks, rail, barge and short sea)

Physical and technical i technical and Physical Both the connection to the Bulgarian road and the rail transport system are satisfactory. The distance from Varna-East to the European road E-87 is only a minute and the E-70 to Ruse and the unfinished highway to Sofia are within 10 minutes. In terms of rail transport, all berths have a connection to the Bulgarian rail network.90 Port turn-around time (berth performance ratio, ship waiting times due to congestion) Not specified Terminal productivity (moves per hour)

For liquid chemicals, the rail unloading station has a capacity of 2,000t/day and the ship loading facility has a capacity of 600t/h. For soda, there are 2 ship loaders of 400 tonnes per hour capacity.91 Cost efficiency (out-of-pocket and time costs of port calls and cargo handling) A detailed table for the cost of loading goods at the port of Varna can be found at Port efficiency Port http://www.port-varna.bg/content/10/files/PORT_VARNA_TARIFF_2014_ENGLISH_last.pdf Port operating hours The port operates 24/7/365.92

85 http://www.port-varna.bg/transits.php (Last accessed: 9 December 2013) 86 http://www.searates.com/reference/portdistance/ (Last accessed: 26 November 2014) 87 http://www.port-varna.bg/index.php?l=1&m=1&p=1 (Last accessed: 26 November 2014) 88 http://www.port-varna.bg/index.php?l=1&m=1&p=1 (Last accessed: 26 November 2014) 89 http://www.port-varna.bg/index.php?l=1&m=3&p=15 (Last accessed: 26 November 2014) 90 http://www.port-varna.bg/index.php?l=1&m=3&p=14 (Last accessed: 26 November 2014) 91 http://www.port-varna.bg/index.php?l=1&m=3&p=15&postPage=2 (Last accessed: 26 November 2014)

Ports of the Multi-Port-Gateway Region Black Sea West 46

Interconnectivity of the port (sailing frequency of deep-sea and feeder shipping services) Not specified Reliability, capacity, frequency and costs of inland transport services by truck, rail and barge The ports of Varna and Ruse work with the Bulgarian State Railways and the Bulgarian River Ship- ping Company to coordinate the intermodal transport. For the route from Varna to Ruse this includes the loading from barges to rail at the port of Ruse (trucks are an option), transport to Varna by rail and the loading onto sea-going vessels respectively vice versa. The travel time is thus short- ened by 2 days.93 Quality and costs of auxiliary services such as pilotage, towage, customs Pilotage, towage and customs are carried out by the following companies:  Pilotage: Pilot Station – P Ltd., Varna  Towage: Port Fleet 99 Ltd., Navibulgar EAD, Varna Towage Company Ltd.  Customs: Regional Directorate of Customs Administration94 Efficiency and costs of port management and administration (e.g. port dues) Table 11 - Costs of port management and administration in the port of Varna

Administrative service Costs Providing a set of bulletins/statement for ship/cargo 1.20€/Set operations

Issuing of warehouse receipt 6.00€/receipt

ria Changes in documents due to transfer of ownership,

e 20.00€/operation per operation Source: http://www.port-varna.bg/content/10/files/PORT_VARNA_TARIFF_2014_ENGLISH_last.pdf

Further Crit Further Availability, quality and costs of logistic value-added activities (e.g. warehousing) There are 273,000m² open storage area as well as 77,500m² warehouses available. The costs are shown in Table 12. Table 12 - Costs for the storage of goods in the port of Varna Storage period Warehouses in Open storage Warehouses out- Open storage the port area in the port side the port area outside the port area area € per t per day Day 1 – day 15 0.04 0.03 0.03 0.02 Day 1- day 60 0.11 0.06 0.07 0.04 Day 1 – day 60 0.18 0.10 0.14 0.07 Over 60 days 0.24 0.12 0.20 0.10 After the 90th day 0.28 0.16 0.24 0.13 € per t per month 2.80 1.60 2.80 1.60 Container/day 20’ Full 20’ Empty 40’ Full 40’ Empty Up to 15 days 1.08 0.72 1.80 1.44 Up to 30 days 1.52 0.98 2.52 1.98 Over 30 days 2.16 1.44 3.60 2.88 Reefer containers 24.00 24.00

92 http://www.port-varna.bg/aboutus.php (Last accessed: 9 December 2013) 93 http://www.port-varna.bg/transits.php (Last accessed: 9 December 2013) 94 http://www.port-varna.bg/index.php?l=1&m=3&p=16 (Last accessed: 26 November 2014)

Ports of the Multi-Port-Gateway Region Black Sea West 47

Source: http://www.port-varna.bg/content/10/files/PORT_VARNA_TARIFF_2014_ENGLISH_last.pdf

Availability, quality and costs of port community systems Since 2010 the Port of Varna implements the Integrated Management System, which includes certi- fied management systems to international standards ISO 9001:2008; BS OHSAS 18001:2007 and ISO 14001:2004.95 Port security/safety and environmental profile of the port The port of Varna has ISPS Security Level 1. Port reputation (satisfactory ranking in benchmarking studies) Not specified Expansion plans  Intermodal terminal96

3.6 PORT OF BURGAS

Vis-à-vis the immediate and distant hinterlands Burgas is connected to the important cities in the hinterland by a highway. The direct route to Sofia, which is already about 300 km inland, passes the cities of Stara Zagora and Plovdiv. The

connection with Serbia and Macedonia, who function as an extended hinterland, runs via Sofia. Burgas is connected to a multi-lane, high-performance railway line that leads into the hinterland, to Sofia and to neighbouring countries. The route Burgas-Sofia is part of the core network of the Trans-European Transport Networks TEN-T as well as part of the Pan-European Transport Corridor 8. High-level transport links to Central Europe and the Balkans exist from Sofia. Vis-à-vis the main shipping lines Burgas is the port with the lowest distance to the Bosporus and the main shipping-lines in the

Geographical location Geographical Mediterranean. The distance from Burgas to the defined points is:97  To the southernmost tip of Sicily: 1,771 km, 2 days 20 hours  To Suez Canal Terminal: 1,813 km, 2 days 22 hours  To the Sea of Marmara: 242 km, 9 hours

Nautical accessibility profile (maximum draft and maximum vessel length, tidal windows, and

restrictions to vessels)

ture c The maximum draft is 11m and the maximum ship size is 65,000 DWT. The tides do not affect the navigation.98

Terminal infrastructure and equipment (terminal capacity as a function of terminal surface, number of berths, number and type of quay and yard cranes, stacking height, etc.) The quay-length amounts to 3,900m. There are 23 berths for general cargo ships, 4 berths for bulk cargoes, 3 piers for tankers and 2 Ro-Ro berths. The Port East is equipped with electric shore cranes of SWL 16t, Port West is equipped with cranes with a capacity up to 40t. The bulk terminal has a bulk cargo throughput of approximately

7 million tonnes a year, and the container-terminal provides 60,000m² for storage of containers. Physical and technical infrastru technical and Physical That equals 1,330 ground slots. Presently the containers are stowed on 3 tears high.99

95 http://www.port-varna.bg/index.php?l=1&m=1&p=1 (Last accessed: 26 November 2014) 96http://www.novinite.com/articles/158801/Bulgaria+to+Start+Building+Intermodal+Terminal+in+Varna+in+2015 (Last accessed: 29 January 2015) 97 http://www.searates.com/reference/portdistance/ (Last accessed: 26 November 2014) 98 http://ship-photos.8m.net/port.html (Last accessed: 26 November 2014) 99 http://ship-photos.8m.net/port.html (Last accessed: 26 November 2014)

Ports of the Multi-Port-Gateway Region Black Sea West 48

Hinterland accessibility profile (intermodal interface for trucks, rail, barge and short sea) Most of the berths have a connection to the railway system, but all can be reached by truck.100 Port turn-around time (berth performance ratio, ship waiting times due to congestion) Not specified

Terminal productivity (moves per hour) The coal unloader type SIWERTELL has a coal discharging capacity of 1,200 t/hour and in the con-

101 ciency

i tainer-terminal 15 containers per hour can be handled. That equals 360 containers per day. Cost efficiency (out-of-pocket and time costs of port calls and cargo handling)

Not specified Port eff Port Port operating hours The port operates 24/7/365102

Interconnectivity of the port (sailing frequency of deep-sea and feeder shipping services) The Bulgarian container operator BULCON keeps fortnightly sailing from Burgas.103 Reliability, capacity, frequency and costs of inland transport services by truck, rail and barge Not specified Quality and costs of auxiliary services such as pilotage, towage, customs Pilotage and Towage are available 24/7 but not compulsory.104 Efficiency and costs of port management and administration (e.g. port dues) Not specified Availability, quality and costs of logistic value-added activities (e.g. warehousing) The 0pen storage area amounts to 307,500m² and there are 87,130m² warehouses. 105 The availa-

ble cold storage has a capacity of 10,000 tonnes and covers an area of 7,000m².106 Availability, quality and costs of port community systems Not specified Port security/safety and environmental profile of the port The port of Varna has ISPS Security Level 1. 107 Further Criteria Further Port reputation (satisfactory ranking in benchmarking studies) Not specified Expansion plans  4 new terminals (Container, Ro-Ro, bulk and liquid cargo): This project is ongoing and is grounded in the 1991 general development scheme of port facilities and the general development plan. One terminal is already finished and loading operations started on the 16th of November 2005.108  Public Access Zone: The General Development Plan of Port Burgas until 2015 mentions this project. Part of the port of Burgas-East should be gradually opened for public access. A SWOT-Analysis has already been conducted but the schedule for further developments is unclear.109

100 http://ship-photos.8m.net/port.html (Last accessed: 26 November 2014) 101 http://ship-photos.8m.net/port.html (Last accessed: 26 November 2014) 102 http://ship-photos.8m.net/port.html (Last accessed: 26 November 2014) 103 http://ship-photos.8m.net/port.html (Last accessed: 26 November 2014) 104 http://ship-photos.8m.net/port.html (Last accessed: 26 November 2014) 105 http://ship-photos.8m.net/port.html (Last accessed: 26 November 2014) 106 http://port-burgas.bg/en/for-business/cold-store/ (Last accessed: 26 November 2014) 107 http://port-burgas.bg/en/organization/isps-code/ (Last accessed: 26 November 2014) 108 http://port-burgas.bg/en/projects/expansion-project/ (Last accessed: 29 January 2015) 109 http://port-burgas.bg/en/projects/public-access-zone/ (Last accessed: 29 January 2015)

Ports of the Multi-Port-Gateway Region Black Sea West 49

3.7 SWOT AND SUMMARY

In terms of their hinterland the Bulgarian and Romanian ports differ widely. The situation is summarized in the following figure.

Figure 24 – Ports and their hinterland

Source: Authors´ own figure based on feedback from representatives of the ports; map: http://ec.europa.eu/transport/infrastructure/tentec/tentec-portal/main.jsp

While the Romanian ports mainly focus on the Danube countries as their hinterland, the port of Burgas is mostly serving its Bulgarian hinterland as well as Macedonia and Serbia. Unforunatley the information for Varna is missing. Due to these differences the analysis is trying to summarize the status for the ports of the two countries separately.

Ports of the Multi-Port-Gateway Region Black Sea West 50

Table 13 provides a condensed picture of the ports transport connections with their hinterland. Constanta is by far the port with the best connection to the different modes of transport while Galati is the only port connected to the Russian broad gauge network. The Bulgarian ports lack the direct connection to the Dan- ube. This is probably one reason why the Romanian ports see the Central European countries as their hinterland whereas the Bulgarian ports focus on other areas.

Ports of the Multi-Port-Gateway Region Black Sea West 51

Table 13 - Connection of the ports Odessa Illichivsk Galati Constanta Varna Burgas Motorway direct (M- direct (M- - 5 km 5 km (not 10 km connection highway) highway) continuous (nat. center) to Sofia) High-level rail direct 10 km Direct (nor- direct direct direct connection mal & broad (nat. center) gauge) Connection Rail - - YES YES ~ via Ruse - IWW Road - - YES YES ~ via Ruse - Connection to Rail YES YES - YES YES YES Airport nearby Road YES YES - YES YES YES

As Table 14 shows, Constanta is the biggest and most productive port in the region. Containers and bulk cargo are the most important goods in the ports of the Western Black Sea Region. The capacities of bulk and container transshipment in the port of Constanta exceed those of the other ports by far. The other ports have different strengths and are sometimes specialized on certain goods – like Galatis big share of steel goods.

Table 14 - Summary of the port data Odessa Illichivsk Galati Constanta Varna Burgas Distance To Sicily 2,171 km 2,146 km 2,162 km 1,894 km 1,809 km 1,771 km To the Suez Canal 2,213 km 2,189 km 2,209 km 1,937 km 1,852 km 1,813 km To the Sea of 642 km 618 km 592 km 366 km 280 km 242 km Marmara Berths 54 29 56 156 36 23 Quay length 9,000m 6,000m 7,000m 30,000m 5,800m 3,900m Max. draft 12-13m 12m 7,3m 19m 11,5m 11m Intermodality (x- 4 (+ airport) 3 (+ air- 5 4 (+ airport) 3 (+ airport) 3 (+ airport) modal) port) Transshipment Capacity: 25 M Capacity: 5.1 M t Capacity: 10.7 M t 7 M t/j Bulk cargo t/j 30 M t/j (2011) 120 M t/j (2013) Transshipment Capacity: 1.15 M 30,000 TEU/j 1.5 M TEU/j 131,460 130,000 TEU container 900,000 TEU/j TEU/j TEU (2013) Warehouses >50,000m² 28,000m² ~ 70,000m² Info missing 77,500m² 87,130m² (5,000m² only for containers) Outdoor storage 150,000m² for 575,000m² 538,000m² 4.7 M t for 273,000 m² 307,500m² rooms metal products coal and cereals Container storage 20,000 TEU in 26,000 TEU 12,200m² 38,340 TEU 7,600 TEU 4,000 TEU the dry port Most important Bulk cargo, Containers Steel goods, Cereals, Cereals, Bulk cargo, goods containers bulk cargo containers containers metal cargo

Ports of the Multi-Port-Gateway Region Black Sea West 52

The development plans of the ports and regions of their hinterland show a prominent focus on improvements of hinterland connectivity as well as capacity extension. In Constanta many improvements are nearly finalized whereas in Galati and Varna the upgrading towards an intermodal terminal is still in the planning phase. The Danube–Bucharest Canal connecting the Romanian capital with the Danube River is a missing link in the Danube system. The technical-economical documentation of the project was approved by an interministerial committee in 2012. At present, the project needs to be approved by Government Decision.

Table 15 - Expansion plans of the ports and their infrastructure* Galati Constanta Varna Burgas Port  Improvement of navi-  Extension of the  Intermodal  4 new terminals gability and removal breakwater terminal (Container, Ro-Ro, of sediments  Extension of the bulk and liquid  Intermodal terminal Lighter Berth cargo)  Logistic platform and  Public Access industrial park Zone Rail  Port’s road and rail  Development of   access improvement the railway capacity in the river- maritime area Road  Ring road around the  Ring road - con-  - city of Galati nection with DN 39  Bridge over the Danube-Black Sea Canal IWW  Danube–Bucharest  Danube–Bucharest - - Canal Canal Airport - - - - * No information for Odessa and Illichivsk

The Bulgarian ports have different strengths and weaknesses. Varna has a shorter distance to Constanta and the Danube River at Ruse but the connection to Ruse must be modernised in order to be effective. Also there is no continuous connection to the Bulgarian capital city Sofia. Burgas on the other hand is connected to the Orient/East-Med Core Network Corridor (CNC) and has better connections to Sofia. It is also the Western Black Sea port closest to the Bosporus and the main shipping-lines in the Mediterranean.

Ports of the Multi-Port-Gateway Region Black Sea West 53

Table 16 - SWOT analysis of the Bulgarian ports Positive Negative Port of Varna Port of Varna  Short distance to Constanta and Ruse (for  Not part of the TEN-T core network, thus not connection to Danube river) a EU priority to develop the port  All berths have a connection to the Bul-  No direct highway connection to Sofia

garian rail network  No direct connection to the Danube river

Port of Burgas Port of Burgas

Statusquo  Direct highway connection to Sofia  No direct connection to the Danube river  Port with the lowest distance to the Bos- porus and the main shipping-lines in the Both ports Mediterranean  Lack of bypass roads around agglomerations

Port of Varna Port of Varna  Restoration of design parameters along  Port of Varna could be left behind because it Ruse-Varna railway line mentioned in the is not part of the core network draft of OP Transport 2014-2020  Lack of navigational reliability in certain sections on the Danube river Port of Burgas

 Burgas is part of the Orient-East Med No Bulgarian port is directly situated by the

corridor which connects Central and Danube river and thus could fall back in im- Western Europe with the growing market portance for European transport

turetrend in Turkey

u F  Port of Burgas is classified a core port and could recruit funding for upgrading and extension

Both ports could be used as a shortcut for goods coming from far east to Central Eu- rope

For future success it will be essential to use these strengths. Varna faces the threat to be left behind because it is not part of the European core network. Rapid connections to the Danube as well as a capable logistic centre in Ruse are to aspire. On the other hand Burgas should get maximum use out of possible EU funding.

The Romanian picture is different because Constanta is a big player in the business of European sea ports compared to Galati and the two Bulgarian ports. The port of Constanta has enormous resources and does not run at full capacities yet. The container throughput dropped after the crises, however between 2012 and 2013 there was a significant increase of transported goods from Austria. Even though Constanta is not situated at the main stream of the Danube River, the Danube-Black Sea Canal connects the city and its port to the river. Galati on the other hand has a strong geopolitical position bordering Ukraine and Moldova

Ports of the Multi-Port-Gateway Region Black Sea West 54 having access to 2 different railway gauges and being a pentamodal port. For both ports, the removal of barriers – nautical and administrative – on the Danube River is essential for further development.

Table 17 - SWOT analysis of the Romanian ports Positive Negative Port of Constanta Port of Constanta  Thirteenth largest container port and sixteenth largest  Container throughput tumbles after cri- port in Europe and therefore the leading port in the ses Western Black Sea region  From 2005 to 2012 fastest growing port for Austrian imports (ranking 3rd in 2012)  Maximum draft of vessels is 19m, by far highest container capacity in the region  Total handling capacity: 120 million tonnes a year, 14,000t per hour

 Linked to the Danube and the Black Sea  Tetramodal port (rail, road, inland and deep sea ships)  Part of the European core network (CEF funding possible) Statusquo  Constanta not yet at full capacity (open possibilities)

Port of Galati Port of Galati  Directly situated by the Danube river  The maximum draft is only 7.3m (secure)  Connected to the European standard gauge and the at Sulina branch broad-gauge railway system of Moldova, Ukraine and  No airport in short distance of Galati further to Russia  Galati has no connection to a highway  Available space for extension and there are not even plans for one  Part of the European core network (CEF funding possible)  Lack of intermodal facilities  Lack of integration of informational flows, of ITS use for port operations  Shortcut for goods coming from far east to Central Eu-  Less regulations for non EU ports (Giur-

rope giulesti, Reni, Ismail) could affect future  Galati plans to develop a multi-modal platform for the investment in Romanian ports and shift port and its hinterland connections transport volumes to non-EU ports

Futuretrend  Strong geopolitical position of Galati (Ponto-Baltic System  Lack of navigational reliability in certain connecting Galati via Ukraine and Poland to Gdansk) sections on the Danube river

Transportation system of the Danube-Black Sea Region 55

4 TRANSPORTATION SYSTEM OF THE DANUBE- BLACK SEA REGION

Efficient transport connections to international markets are a basic pre-condition for the economic development of the Danube-Black Sea region. To provide attractive offers for freighters and the shipping industry, the ports have to be considered as a significant part of the transport system but not the only one relevant for transporting goods and passengers as door-to-door service is required.

The hinterland can be categoriesed as follows: - The transport system between the Black Sea region and the Danube region. Particularly the landlocked countries Austria, Czech Republic, Slovakia and Hungary  the international port hinterland - The transport system in and between the Black Sea regions (Burgas, Varna, Constanta, Galati, Odessa)  the regional hinterland - The transport system between Europe and Asia  the Black Sea region as a hub for the Euro-Asian transport linkages

Figure 25 shows the most important hinterland markets for the different ports. The Romanian ports are clearly orientated towards the Central European countries Austria, Czech Republic, Slovenia, Hungary and Slovakia, whereas the port of Burgas defines southern Bulgaria, Macedonia and Serbia as its hinterland. The port of Varna made no specification about the hinterland they serve.

Figure 25 – Ports and their hinterland

Source: Authors´ own figure based on feedback from representatives of the ports; map: http://ec.europa.eu/transport/infrastructure/tentec/tentec-portal/main.jsp

Transportation system of the Danube-Black Sea Region 56

Furthermore Figure 25 shows the Core Network Corridors (CNC) 4 and 9. With the revision of the TEN-T program, the region is connected with Western Europe by two Trans-European transport corridors – the Orient/East-Med corridor and the Rhine-Danube corridor. Both are rail and road corridors. The Rhine- Danube corridor also includes the inland waterways. The objective of these corridors is to “complete seamless connections for the sake of efficient, future-oriented and high-quality transport services for citizens and economic operators.”110

4.1 RHINE-DANUBE CORRIDOR

This corridor provides the main link between the western Black Sea and the continental European countries, connecting Romania, Bulgaria, Croatia, Hungary, Slovakia, the Czech Republic, Austria, Germany and France all along the Main and Danube rivers to the Black Sea (Figure 26). The main goal is the improvement of (high speed) rail and inland waterway interconnections.111

Figure 26 – Route of the Rhine-Danube Corridor

Source: Authors´ own figure based on ec.europa.eu/transport/themes/infrastructure/ten-t-guidelines/corridors/doc/rhine_danube_map.pdf

4.1.1 Route and development status

The Rhine-Danube CNC connects nine Member States. From Strasbourg it departs into two branches: the first branch runs through Germany, Czech Republic and Slovakia to the Ukrainian border and the second

110 http://ec.europa.eu/transport/themes/infrastructure/ten-t-guidelines/corridors/index_en.htm (Last accessed: 26 November 2014) 111 http://ec.europa.eu/transport/themes/infrastructure/ten-t-guidelines/corridors/rhine-dan_en.htm (Last accessed: 26 November 2014)

Transportation system of the Danube-Black Sea Region 57 one along the Rhine-Main-Danube Rivers to the Black Sea. Additionally to the nine Member States, the Danube River, main backbone of the corridor, connects Serbia, Bosnia-Herzegovina (via Sava), Moldova and Ukraine.112

Inland Waterways

From the confluence of the headwaters Breg and Brigach in Germany to its mouth in the Black Sea the Dan- ube has a length of 2,845 km and is after the Volga, Europe's second longest river. The navigable length from Kelheim (D) to Sulina (Ro) is 2,411 km. On its way it passes ten countries. Downstream, these are Germany, Austria, Slovakia, Hungary, Croatia, Serbia, Romania, Bulgaria, Moldova and Ukraine. The navigable Danube can be divided into three sections: The upper section from Kehlheim to Gönyü (620 km), the middle section from Gönyü to the Iron Gates on the border between Serbia and Romania (860 km) and the lower section from the Iron Gates to the mouth at Sulina (930 km).113

Since 1992, the Danube is connected to the Rhine by the Rhine-Main-Danube Canal. The length of the Rhine-Main-Danube waterway is about 3,500 km. It represents the backbone of the inland navigation between north-western European basins and the Black Sea. The 64 km long artificial Danube-Black Sea Canal shortens the distance from the Danube to the Black Sea by about 240 km and flows near Constanta into the Black Sea.114 The building of the Danube-Bucharest Canal was stopped in 1991 with only 60% completed but there are intentions to finalise the project.115

The route of the inland waterway in the Rhine-Danube Corridor is shown in Figure 27.

112 European Commission 2014: Core Network Corridors – Progress report of the European coordinators 113 Stein 2012: Potentialanalyse von Unternehmen im Einzugsbereich der österreichischen Donau für die Inanspruch- nahme von Containerliniendiensten in der Distributionslogistik 114 Stein 2012: Potentialanalyse von Unternehmen im Einzugsbereich der österreichischen Donau für die Inanspruch- nahme von Containerliniendiensten in der Distributionslogistik 115 Government of Romania, Department for infrastructure projects and foreign investment: Financing, design and Execution of Bucharest-Danube Canal – Systematization of Arges and Dambovita rivers for Navigation and other uses

Transportation system of the Danube-Black Sea Region 58

Figure 27 - Route of the Rhine-Danube IWW Corridor

Source: Authors´ own figure based on Matousek, Karl (2014a)

Rail

The corridor for rail infrastructure can be divided into two branches: the Black Sea branch and the Czech- Slovak (CS) branch. While the Black Sea branch runs a similar path to the inland waterway infrastructure and passes Vienna, Bratislava, Budapest, Bucharest and runs towards Constanta and the Black Sea, the CS Branch has two starting points (Munich and Nuremberg) and runs via Plzen and Prague towards the Ukrain- ian border. For the transport from the Black Sea to the Central European hinterland the CS branch is less important and therefore the focus in this report lies on the Black Sea branch. The Black Sea branch also shows layout variants (in Germany the northern route via Frankfurt/Nürnberg and the southern route via Stuttgart/München/Salzburg and in Romania the northern route via Sebes and southern route via Craio- va).116 Figure 28 shows the railway infrastructure of the corridor.

116 European Commission (2014) – Core Network Corridors – Progress report of the European coordinators

Transportation system of the Danube-Black Sea Region 59

Figure 28 - Route of the Rhine-Danube Rail Corridor

Source: Authors´ own figure based on Matousek, Karl (2014a)

Nearly all parts of the corridor are designed for passenger and freight traffic. Exceptions are the high-speed line Stuttgart-Ulm (passenger only) and some small sections within the Vienna node dedicated to freight trains exclusively. The vast majority of the corridor consists of conventional rail lines. Only few new rail lines in Germany (Karlsruhe-Mannheim, Stuttgart-Ulm) and Austria (Linz-Vienna) have been categorised as high- speed (allowing an operational speed of over 200km/h).117

Road

The road corridor is also divided into the Black Sea branch and the CS branch. While the north-western starting point for road and rail of the whole corridor is Strasbourg, contrary to the rail corridor the only road starting point for the CS branch is Nuremberg. The Black Sea branch runs a similar path to the inland waterway and rail infrastructure and passes Vienna, Bratislava, Budapest, Bucharest and runs towards Con- stanta and the Black Sea splitting up near Timisoara and being reconnected in Pitesti (see Figure 29).

117 European Commission (2014) – Core Network Corridors – Progress report of the European coordinators

Transportation system of the Danube-Black Sea Region 60

Figure 29 - Route of the Rhine-Danube Road Corridor

Source: Authors´ own figure based on Matousek, Karl (2014a)

4.1.2 Missing Links and bottlenecks

Inland Waterways Existing bottlenecks cause severe problems for transport on the Danube River. Periods of high or low water reduce the reliablitly of freight transport on the river, lower environmental impact and administrative bottlenecks often lead to delays in transport times.

Nautical bottlenecks and missing links

Figure 30 shows some of the nautical bottlenecks.

Listed by country the bottlenecks are:118

Germany: Low fairway depth from Straubing to Vilshofen (1.55 m)

Austria: Low fairway depth in the areas of Wachau and from Vienna to the Slovak border (in some locations down to 2.20 m) The refurbishment of navigability in the section east of Vienna till the border with Slovakia is being successfully dealt with through a best practice that is being tested via a pilot project inside the natural protected area.

Slovakia: Insufficient height under bridges: at Bratislava (km 1,868.14) – 7.59m, at locks of the Gabčíkovo Hydro Electrical Complex (km 1,826.55 and km 1,819.3) – 8.90m. Upgrading is required up to 9.10m

Slovak-Hungarian border: In the section from Sap (1,810.0 km) to km 1,708.2 (Mouth of the River Ipoly) - low maximum draught at dry seasons (1.70 m) and height under bridges: road bridge Medved’ov (1,806.35 km) - 8.85 m; railway bridge Komárno (1,770.4 km) - 8.10-8.15 m; road bridge Komárno (1,767.8 km) - 7.75 m. Upgrading to 2.50m maximum draught and 9.10 m height under bridges is required.

118 United Nations 2006: Inventory of main standards and parameters of the E waterway network – „Blue Book“ First revised Edition

Transportation system of the Danube-Black Sea Region 61

Hungary: In the section from km 1,708.2 km to Budapest (1,652.0 km) – low maximum draught (1.50 - 1.70 m) and height under the railway bridge Ujpest (1,654.5 km) - 7.66m. Upgrading to 2.50m maximum draught and 9.10 m height under the bridge is required.

In Hungary a study has been performed to evaluate the necessary intervention in thirty-one sites. Works have not yet started as the study is still been kept on hold for environmental reasons.119

Serbia: From km 863.0 to km 845.5 - low fairway depth at dry seasons (below 2.50m) with fairway depth limited to 2.20 to 2.30 m for 7-15 days a year.

Romania/Bulgaria: Danube from km 863 to km 175 - low fairway depth at dry seasons (below 2.50m) at several critical sections:  From km 863 to 610 fairway depth of 2.10-2.20m for 7-15 days per year  From km 610 to 375 fairway depth of 1.80-2.00m for 20-40 days per year  From km 375 to 300 fairway depth of 1.60-2.20m for 30-70 days per year  From km 300 to 175 fairway depth of 1.90-2.10m for 15-30 days per year

From 170 km to the Black Sea - low fairway depth at dry seasons (below 7.30 m) at several critical points and at the Sulina bar at the mouth of the Sulina Canal where it meets the Black Sea, where the fairway depth is limited to 6.90-7.00 m for 10-20 days a year.

Studies have been undertaken in the section that forms the border between Bulgaria and Romania. An inter-ministerial committee has been set up in order to coordinate the efforts and to develop a strategy for a territorial development of the region along the Danube.120

Another main missing link is the Danube-Bucharest Canal. The works on this project (which were started in 1986 and stopped in 1991) were 60% completed. The aim was and is to connect Bucharest with the Danube through a waterway having the transport capacity of up to 20 million tonnes per year. The total length of the waterway would be about 104 km. In 2009, the National Company "Administration of the Navigable Canals" SA awarded the contract for updating the feasibility study and the technical expertise of the already performed construction works. The technical-economical documentation of the project was approved by the Technical-Economical Committee of the Ministry of Transport and Infrastructure and by the Interminis- terial Committee in 2012. At present, the project needs to be approved by Government Decision.121

119 http://ec.europa.eu/transport/themes/infrastructure/ten-t-guidelines/corridors/rhine-dan_en.htm (Last accessed: 26 November 2014) 120 http://ec.europa.eu/transport/themes/infrastructure/ten-t-guidelines/corridors/rhine-dan_en.htm (Last accessed: 26 November 2014) 121 files.groupspaces.com/MobilityWaterways/files/836714/K9dlCgRdpKDNnXTgHeHK/1-PA1A002_RO_Danube- Bucharest_Canal_v2.pdf (Last accessed: 26 November 2014)

Transportation system of the Danube-Black Sea Region 62

Figure 30 - Nautical bottlenecks and water classes of the Danube River

Source: http://www.via-donau.org/uploads/media/Nautische_Engpaesse.pdf

Administrative/functional bottlenecks

Regulations and administrative procedures for vessels and transshipment operations as well as customs and border crossing procedures vary from country to country. There are a huge number of these regulations and many differences among them. This situation causes significant administrative efforts for the companies and quite often leads to delays in transport times as e.g. in the case of customs and border crossing procedures. In addition, some public administrations demand considerable fees and duties for services which are redundant or even unnecessary.122 Infrastructure improvements, in fact, require consistent investments and time, but soft measures can make a change with small economic efforts.123

There are initiatives that want to identify obstructive and costly administrative procedures which hamper transport and logistics operations and advocate for their abolishment or at least for their harmonisation.

The European Commission has ordered a study on administrative and regulatory barriers in the field of inland waterway transport. The most important findings are124:

122 http://www.prodanube.eu/activities/2-stories/lightbox/81-removal-of-administrative-barriers-for-danube-logistics (Last accessed: 26 November 2014) 123 http://www.cei.int/content/acrossee-project-workshop-eu-parliament-streamlining-transport-connections-western- balkans (Last accessed: 26 November 2014) 124 European Communities 2008: Final Report for the study on administrative and regulatory barriers in the field of inland waterway transport – Part A

Transportation system of the Danube-Black Sea Region 63

 Discontent with the performance of the inspection authorities because of a shortage of competent staff  Problems with sailing- and resting time regulation and crew composition  Long delays to obtain certificates  Lack of proper job profiles  Confusion about charges in ports, locks and waterways  Delays because of red tape and inefficient procedures at the borders with non-EU countries  Language barriers

The more specifically detailed analysis by countries shows the following problems125:

Austria - Inflexible regulation with respect to working conditions and working times - Imbalanced requirements applied within the licensing procedure along the Rhine versus Danube - High port dues and non-transparent calculations - High standards/requirements with regard to ship insurances and high rates paid for provided services - Restrictive opening hours ports in Austria - Long waiting periods at locks - Double submission of statistical data Hungary - Delays because of control procedures and administrative hindrances at the borders - No general obligation for the insurance of inland ships / unfavourable conditions - Lack of qualified labour Croatia - IWT laws are outdated and do not properly cover all aspects of inland navigation - Lack of understanding and initiative from the government’s side in order to support and subsidize the IWT sector - Landside navigation aids and signs constitute a problem - Lack of qualified workforce - Control procedures at the border between Hungary and Croatia are connected to long waiting times - Communication and language Serbia - IWT laws are outdated and do not properly cover all aspects of inland navigation - Conditions at ports as well as the procedure of assigning the status of the term “international port”. Lack of regulation on ports in general - Lack of lobbying power and support provided by the public authorities - Theft in ports - Control procedures at the border between Hungary and Serbia are connected to long waiting times - Communication and language Romania - Lack of funding in connection with cumbersome bureaucratic procedures - Port procedures are longwinded and complicated - Communication and language - Competencies for IWT are shared by a number of national authorities - Lack of qualified staff - Period of validity of vessel certificates is only one year Bulgaria - Port dues are not fed back or allocated to port investments and improvement - Communication and language

125 European Communities 2008: Final Report for the study on administrative and regulatory barriers in the field of inland waterway transport – Part A

Transportation system of the Danube-Black Sea Region 64

- Lack of qualified staff - Fleet is only partly insured - Application procedure to obtain certificates for navigation on the Bulgarian section of the Danube is long

Projects like ACROSSEE and the Flagship Axis Initiative of SEETO try to tackle the barriers by implementing common standards across the different administrative procedures that represent, together with the company discriminations, the real hidden cost of the non integration of the SEE area. The focus of ACROSSEE lies on the optimisation of international borders management, which includes reducing cross-border transit time, increase regional and international trade by improving border crossings, ensuring that national trade facilitation procedures are compatible with markets and administrative procedures. The project will promote institutional and stakeholders´ permanent cooperation in order to provide concrete actions and projects to contribute to the Danube strategy, the Adriatic strategy and the Black sea synergy.126

Rail

Several bottlenecks in the railway system are located in the cross-border areas between the countries127  Cross-border sections Germany-Czech Republic: Connections from Germany to the Czech Republic are not included in the current Federal Transport Infrastructure Plan and are being analysed for the revision due in late 2015.  München-Mühldorf-Freilassing: Line upgrade is delayed because of political priority setting and the limitations to the transport budget. Only isolated measures are implemented or under construction so far.  Cross-border section Freilassing-Salzburg: The new bridge over the river Saalach will not be finished before 2016. The start of the construction works for the third track between Freilassing and Salzburg was planned to be in spring 2014 but will be further delayed.  Vienna – Bratislava: In July 2007 the Austrian and Slovak Ministries of Transport agreed to develop the cross-border section together. On the southern alignment between Vienna and Bratislava the three neighbouring States Austria, Slovakia and Hungary want to study between 2014 and 2020 alternatives to connect the rail lines and the airports.  Cross-border section Lököshaza (Hungary)/Curtici (Romania): The missing second track on the Hungari- an side jeopardizes the full benefits of the major works in progress between Arad and Curtici.

126 http://www.southeast-europe.net/en/projects/approved_projects/?id=201 (Last accessed: 26 November 2014) 127 European Commission (2014) – Core Network Corridors – Progress report of the European coordinators

Transportation system of the Danube-Black Sea Region 65

Figure 31 - Areas with insufficient rail line equipment

Source: Galonske, Niklas (2014)

Sections with one or two electrified tracks capable of a speed of at least 100 km/h are considered complete from an infrastructural perspective. Figure 31 shows areas with single track sections or missing electrification. Considerable parts of the Black Sea branch in Germany, Austria, Hungary and Romania are already completed or are planned to be finalised within the next two years. The installation of ERTMS is also mandatory. However, other parts are not yet completed or insecure regarding their finalisation. 128

There are also other limitations to freight and passenger trains regarding the alignment. Figure 32 shows areas on the corridor with critical alignment. Low axle load is a problem in the whole Romanian corridor network as well as in Hungary while low line speed and strong incline occurs in Slovakia and the Czech Re- public. In many Romanian areas as well as between Regensburg and Plzen the train length is limited to less than 600m.

128 European Commission (2014) – Core Network Corridors – Progress report of the European coordinators

Transportation system of the Danube-Black Sea Region 66

Figure 32 - Areas with critical alignment

Source: Galonske, Niklas (2014)

Another possible limitation for rail transport is the line capacity. In some sections in Germany and the Czech Republic as well as in the area of Bratislava is nearly working to full capacity (over 90%). A high utilisation is also reached in many parts of the Romanian corridor, between Vienna and Bratislava and in further sections of the Czech Republic.

Figure 33 - Areas with high line capacity utilisation

Source: Galonske, Niklas (2014)

Road

Compliance with the type of road specified in the planning documents (motorway, express way or ordinary road) has been achieved on many road sections of the Black Sea branch of the Rhine-Danube Corridor ex-

Transportation system of the Danube-Black Sea Region 67 cept on limited sections with unfavourable road conditions. Here, numerous projects are ongoing in all Member States, in particular in Romania, Hungary, Czech Republic and Slovakia.129

Figure 34 shows the missing links and sections with critical road conditions. These are mainly concentrated in Slovakia (between Žilina and the Ukrainian border) and in Romania.

Up to now Romania has invested mainly in the branch from Lugoj over Sebes and Sibiu to Constanta. The routes from Pitest over Bucharest and Cernavoda to Constanta, the bypass of Sibiu as well as the route Arad-Timisoara have already been completed. The routes Nadlac-Arad and Timisoara-Sibiu should be completed by 2015, the route Sibiu-Pitesti at the earliest in 2020. Romania will however not invest heavily in the second road branch from Arad via Calafat (at the border to Bulgaria) and Craiova to Bucharest because this route is not in the focus of national interests.

Figure 34 - Critical road conditions and missing links

Source: Matousek, Karl (2014b)

4.1.3 Major corridor projects

In September 2014 the Connecting Europe Facility (CEF) has invited Member States to propose projects to use the 11.9 billion € of EU funding to improve European transport connections. CEF Transport is the successor of the TEN-T Programme (2007-2013) and is therefore the most important instrument of the EU to fund the transport corridors. Member States have time until 26th February 2015 to submit their projects. Table 18 lists CEF pre-identified projects which show the areas were it is most likely that projects are realised in the period from 2014 to 2020. It is clearly visible that the focus is on the IWW and Rail infrastructure with 13 rail projects and virtually the whole Danube from Kehlheim to the Black Sea as a possible area for studies and works.

129 European Commission (2014) – Core Network Corridors – Progress report of the European coordinators

Transportation system of the Danube-Black Sea Region 68

Table 18 - CEF-pre-identified projects of the Rhine-Danube Corridor Area Project description Inland waterways Komárom – Komárno Studies and works for cross-border bridge Danube (Kehlheim - Constanța/Midia/Sulina) Studies and works on several sections and bottlenecks; inland waterway ports: multimodal interconnections Sava Studies and works on several sections and bottlenecks (including cross-border bridge) Bucharest – Danube Canal Studies and works Rail Strasbourg – Kehl – Appenweier Works interconnection Appenweier Karlsruhe - Stuttgart - München Studies and works ongoing Ostrava/Prerov – Žilina – Košice – UA border Upgrading, multimodal platforms Munich – Prague Studies and works Nuremberg – Prague Studies and works München - Mühldorf - Freilassing - Salzburg Studies and works ongoing Salzburg - Wels Studies Nürnberg - Regensburg - Passau - Wels Studies and works Rail connection Wels - Wien Completion expected by 2017 Wien – Bratislava / Wien – Budapest / Bratislava – Studies high speed rail (including the alignment of Budapest the connections between the three cities) Budapest - Arad Studies for high speed network between Budapest and Arad Arad - Brașov - București - Constanța Upgrading of specific sections; studies high-speed Craiova – Bucharest Studies and works Road Zlín – Žilina Cross-border road section Port Constanta Port interconnections, MoS (including icebreaking services) Giurgiu, Galați Further development of multimodal platforms and connections with the hinterland: studies and works Slavonski Brod Studies and works Source: EU (2013): Regulation (EU) No 1316/2013 of the European parliament and of the council

For the connection to the Black Sea region the following projects are of major relevance:

Inland Waterways - Danube (Kehlheim - Constanța/Midia/Sulina)

There are many sites on the Danube where projects have already started or will start in the next programming period. These include the refurbishment of navigability in the section from east of Vienna to the border of Slovakia. This issue is being successfully dealt with through a pilot project inside the natural protected area. A bridge in Bratislava is being lifted up in order to allow the transit of vessels of category VI while in Hungary a study has been performed to evaluate the necessary intervention at thirty-one sites. Works have not yet started as the study is still been kept on hold for environmental reasons. Studies have also been undertaken in the section that forms the border between Bulgaria and Romania. An inter-ministerial committee has been set up in order to coordinate the efforts and to develop a strategy for a territorial development of the region along the Danube. In Romania, at Calarasi-Braila, an experimental monitoring pro-

Transportation system of the Danube-Black Sea Region 69 gramme, supported by the International Commission for the Protection of the Danube River (ICPDR), has been set up to evaluate the impact on the flora and fauna during and after the construction of the infra- structures meant to redirect part of the flow from the Bala branch to the main branch of the river.130

Rail - Arad - Brașov - București - Constanța

This section is very crucial for transport from the Black Sea to Central Europe connecting Constanta and Bucharest with the already well developed rail corridor in Hungary. Already in the last programming period the focus of Romanian works was on this branch of the TEN-T priority axes 7 and 22.131 It was planned to finish the works and a lot of progress was made – the connection Constanta-Bucharest is completed – but some sections still need to be upgraded.

Ports – Constanta and Galati

The European documents contain no further information on the development plans of the ports. A further analysis of the ports expansion projects can be found in chapter 3. The information is mainly taken from representatives of the port who have to propose projects to be funded by the CEF. The development projects of the ports of Burgas and Varna are not eligible to receive subsidies by the CEF.

4.1.4 Reflection in the national development plans

The focus of the works in the last programming period was on the northern branch of the TEN-T priority axes 7 and 22 (Curtici – Predeal). In the Operational programme 2007-2013 it reads that for the route from Arad to Calafat all necessary preparatory studies will be envisaged, with the aim of starting the works in the next programming period.132 Because the connection Arad - Brașov - Bucharest - Constanta is not completed yet the works may concentrate on this northern branch like in the last programming period. The connection Arad-Calafat may therefore be postponed. The route Craiova-Bucharest was not part of a TEN-T priority axis in the last programming period, therefore the period 2014-2020 will concentrate on studies on modernization in this area. Because there is no draft for the Romanian OP Transport 2014-2020 available there might be changes. The draft of the Transport Master Plan however does not include any new rail projects, but rehabilitation projects. In the coming 16 years, the Government aims at running modernisation projects for about 2,950km of railway lines. Concerning road projects, the draft comprises road projects for additional 656 km of highways, which require investments of about 6.6 billion Euros. The highways development projects incorporated in the GTMP are Sibiu-Brasov (103 km), Ploiesti-Comarnic (49 km), Gilau-Bors

130 http://ec.europa.eu/transport/themes/infrastructure/ten-t-guidelines/corridors/rhine-dan_en.htm (Last accessed: 26 November 2014) 131 Government of Romania; Ministry of Transport 2007: Sectoral Operational Programme TRANSPORT 2007 - 2013 132 Government of Romania; Ministry of Transport (2007): Sectoral Operational Programme TRANSPORT 2007 - 2013

Transportation system of the Danube-Black Sea Region 70

(177 km), Craiova-Pitesti (115 km), Comarnic-Brasov (54 km) and Brasov-Bacau (158 km). The Master Plan however covers the period of time from 2014 to 2030.133

4.2 ORIENT/EAST-MED CORRIDOR

4.2.1 Route and development status

The Orient/East-Med Corridor is a long North West - South Eastern corridor which connects Central Europe with the maritime interfaces of the North, Baltic, Mediterranean and Black Sea. It runs from multiple Ger- man ports via Dresden, the Czech Republic and Slovakia, with a branch through Austria, further via Hungary and Romania to the Greek ports of Thessaloniki and Piraeus and in another branch to the Bulgarian port of Burgas, with a link to Turkey (Figure 35). With the Elbe it also consists of an inland waterway, but for the transportation of goods from the Black Sea to the Central European countries rail and road are the most important means of transport. 134

Figure 35 - Route of the Orient/East-Med Corridor in Southeast Europe

Source: Authors own figure based on http://ec.europa.eu/transport/themes/infrastructure/ten-t- guidelines/corridors/doc/orient_east_med_map.pdf

133 http://govnet.ro/General/Economics/The-Government-presented-the-General-Transport-Master-Plan-for-2014- 2030 (Last accessed: 26 November 2014) 134 European Commission (2014) – Core Network Corridors – Progress report of the European coordinators

Transportation system of the Danube-Black Sea Region 71

Rail

The corridor rail network covers eight countries (Germany, Czech Republic, Austria, Slovakia, Hungary, Ro- mania, Bulgaria and Greece). Its total distance between Wilhelmshaven and Piraeus is approximately 4,200km, depending on the routing in Germany and the Czech Republic. The biggest part of this entire distance (if multiple branches are not taken into account) is allotted to Bulgaria (1,055km which is equivalent to 25% of the distance), followed by Greece (866km = 20%), Germany (685km = 16%) and Romania (506km = 12%), Czech Republic (472km = 11%) and Hungary (403km = 10%). Austria (150km = 4%) and Slovakia (94km = 2%) have only small shares of the average length. The total rail infrastructure length including all distinct sections is 6,246km, resulting from parallel branches in Germany and the Czech Republic.135 There are 4 starting points in Germany – Bremerhaven, Wilhelmshaven, Hamburg and Rostock. The branches from Wilhelmshaven and Bremerhaven unite in Bremen whereas the other two branches meet in Berlin. Both branches are united in Dresden. After passing Prague, the corridor splits up some times, with branches passing Vienna and Bratislava. From the Hungarian border on there corridor is united again and runs the same track as the Rhine-Danube Corridor via Budapest to Arad. Via Craiova and Vidin the corridor runs towards Sofia where it splits up into two branches. One running to Thessaloniki, Athens and Patra whilst the other one runs towards the Black Sea, splits up and ends in Burgas and the border of Turkey.

Road

The road infrastructure covers nine countries. This includes Cyprus, whereto a “Motorways of the Sea” link exists. The total average distance of the road corridor is on average 4,682km. The biggest part of this distance is allotted to Greece (1,245km = 26%), followed by Bulgaria (969km = 21%), Germany (727km = 15%) and Romania (543km = 12%), Czech Republic (460km = 10%), Hungary (397km = 8%), Austria (157km = 3%), Cyprus (102km = 2%) and Slovakia (82km = 2%). The total infrastructure length including all distinct sections is 5,644km.136 The route is very similar to the rail corridor. The starting points in Germany are the same – Bremerhaven, Wilhelmshaven, Hamburg and Rostock, ultimately uniting in Dresden. Via Prague, two branches at Vienna/Bratislava, Budapest, Arad the road corridor splits up at Sofia. One branch is running to the main Greek ports whilst the other one ends at the border of Turkey and at Burgas, connecting the Cor- ridor to the Black Sea.

4.2.2 Missing Links and bottlenecks

Rail

Rail bottlenecks exist between Germany and the Czech Republic, in the four-county-area between Brno and Györ as well as in sections connecting Hungary to Greece: 137

135 European Commission (2014) – Core Network Corridors – Progress report of the European coordinators 136 European Commission (2014) – Core Network Corridors – Progress report of the European coordinators 137 European Commission (2014) – Core Network Corridors – Progress report of the European coordinators

Transportation system of the Danube-Black Sea Region 72

 Brno-Györ: The connection between the Czech Republic and Hungary is divided between two branches, one via Vienna, the other one via Bratislava. The cross-border sections are mostly in a poor technical condition, making projects to improve capacity necessary.

 Szolnok-Thessaloniki: This section connects Greece to Hungary. It covers the border-crossings between Hungary and Romania, Romania and Bulgaria as well as between Bulgaria and Greece. The characteristics of the railway lines are rather heterogeneous. It has been part of the former Priority Project 22 where several studies were carried out to improve the connection. In addition, operational rules could be improved in order to reduce lengthy border crossing times which can run up to 48 hours. A good cooperation between the four Member States is crucial in order to agree on the characteristics of the future connection and to ensure full interoperability.

 Furthermore the connection Dresden-Prague

There are still considerable parts of the rail alignment whose technical characteristics do not comply with the thresholds set out by Regulation (EU) 1315/2013: 138

 Most of the corridor’s rail network is compliant with the minimum axle load threshold (85%). Excep- tions are the entire part in Romania, continuing with a smaller section into Hungary from their border in Curtici up to Békéscsaba. This is also the case along Promahonas – Thessaloniki, Domotikis – Tithorea and Kiato – Patra sections in Greece.

 With regard to train length, there are several longer sections along the corridor (approximately 50%) that cannot accommodate a train composition of 740 m length. These are lines in Germany from Mag- deburg to the Czech border, the entire part of the corridor in the Czech Republic, Slovakia and Austria, the Hegyeshalom - Budapest section in Hungary, and the entire section in Romania, apart from the section Filiasi – Craiova. Most parts of the Bulgarian rail network do not comply with the regulation’s requirements, with the exception of a number of sections between Plovdiv and Burgas as well as from Svilengrad to the Turkish Border.

 With regard to operational speed, approximately 20% of the corridor’s rail network operates on a speed lower than the 100 km/h threshold. These are small sections in the Czech Republic (Děčín- Ustinad Labem), Slovakia (Bratislava - Border SK/HU) and longer ones in Romania (Border HU/RO – Ar- ad and Craiova – Calafat) and Greece (SKA – Kiato). The issue is, however, most prominent in Bulgaria, where the majority of the network operates on a lower speed. The latter includes the entire sections of Vidin – Kulata, from the Romanian to the Greek border.

 The deployment of ERTMS (which is mandatory) is still a major issue along the corridor with 65% currently lacking the system. The system has not been implemented along the entire parts of Germany,

138 European Commission (2014) – Core Network Corridors – Progress report of the European coordinators

Transportation system of the Danube-Black Sea Region 73

Slovakia, Romania and Bulgaria apart from the sections Plovdiv – Dimitrovgrad and Stara Zagora – Bur- gas. In the remaining countries, the sections lacking ERTMS are between Budapest and the Romanian border in Hungary, and Domokos – Tithorea and Kiato – Patras in Greece.

 As regards electrification, the corridor’s railway network is for its most part electrified (90%) apart from the sections Oldenburg – Wilhelmshaven in Germany there are also the sections shown in Figure 36: The Calafat – Craiova section in Romania, the Dimitrovgrad – Svilengrad section in Bulgaria and certain sections in Greece.

Figure 36 - Railway electrification in the southern parts of the corridor

Source: Authors´ own figure based on European Commission 2014

Road

The majority of the road sections of the corridor are motorways or express roads (84%) with 2-4 lanes per direction with the exception of small sections in the Czech Republic, Slovakia, Austria and Greece. In Bulgar- ia and Romania the issue is more prominent. Certain urban nodes may face problems with the capacity of their road network.139

4.2.3 Major corridor projects

139 European Commission (2014) – Core Network Corridors – Progress report of the European coordinators

Transportation system of the Danube-Black Sea Region 74

The following list shows CEF pre-identified projects which are the areas were it is most likely that projects are realised in the period from 2014 to 2020.

Table 19 - CEF-pre-identified projects of the Orient/East-Med Corridor Area Project description Rail Dresden - Prague Studies for high-speed rail Prague Upgrading, freight bypass; rail connection airport Prague – Breclav Upgrading Prague - Brno - Breclav Upgrading, including rail node Brno and multimodal platform Breclav – Bratislava Cross-border, upgrading Bratislava – Hegyeshalom Cross-border, upgrading Tata – Biatorbágy Upgrading Budapest – Arad – Timişoara – Calafat Upgrading in HU nearly completed, ongoing in RO Vidin – Sofia – Thessaloniki – Athens/Piraeus Studies and works Sofia – Burgas/TR border Upgrading Athens - Patras studies and works, port interconnections Road Mosonmagyaróvár – SK Border Cross-border upgrading Vidin – Craiova Cross-border upgrading Slavonski Brod Studies and works Source: EU (2013): Regulation (EU) No 1316/2013 of the European parliament and of the council

The rail projects Budapest – Arad – Timişoara – Calafat, Vidin – Sofia – Thessaloniki – Athens/Piraeus and Sofia – Burgas/TR border as well as the road project Vidin – Craiova are partially located in the Western Black Sea countries of Bulgaria and Romania. Table 19 is not binding for the member states. The member states define their projects in the Operational Programmes. The next chapter will analyse on which projects the member states focus on.

4.2.4 Reflection in the national development plans

The CEF-pre-identified projects described in Table 19 are not binding for the Member States in their programming decisions. The decision to implement those projects is a competence of the Member States. It is therefore interesting to see which projects have been given high priority for implementation by the Mem- ber States. In the working version of the OPTTI 2014-2020 Bulgaria declared the following projects as priority (see

Transportation system of the Danube-Black Sea Region 75

Table 20). This version is still a draft but shows the priority of the projects. Romania however has not yet released a draft for their OP.

Transportation system of the Danube-Black Sea Region 76

Table 20 - List of major projects to be implemented during programming period Completion of the modernization and rehabilitation of railway line Plovdiv-Bourgas - Phase ІІ Planned start of implementation: Third quarter of 2015 Planned completion date: Third quarter of 2019 Restoration of design parameters along Ruse-Varna railway line Planned start of implementation: Second quarter of 2015 Planned completion date: Second quarter of 2020 Modernisation of railway line „Karnobat-Sindel” Planned start of implementation: Third quarter of 2015 Planned completion date: Second quarter of 2020 Modernization of railway section Sofia-Septemvri (with focus on Septemvri – Elin Pelin sub section) Planned start of implementation: Third quarter of 2015 Planned completion date: Third quarter of 2020 „Struma”Motorway, Lot 3 „Blagoevgrad-Sandanski” A 29 Planned start of implementation: Second quarter of 2015 Planned completion date: First quarter of 2022 Speed Road „Vidin -Montana” Planned start of implementation: Second quarter of 2015 Planned completion date: Third quarter of 2020 Hemus” Motorway (section to II 35 Pleven-Lovetch junction) A29 Planned start of implementation: Second quarter of 2017 Planned completion date: First quarter of 2022 „Kalotina-Sofia” Motorway (section 1: Kalotina/Serbian border – Sofia Ring Road) Planned start of implementation: Second quarter of 2014 Planned completion date: Third quarter of 2016 Road Е-79 „Mezdra - Botevgrad” Planned start of implementation: Second quarter of 2015 Planned completion date: Third quarter of 2020 Source: OP Transport Bulgaria 2014: Working version of the OPTTI 2014-2020

The completion of the modernization and rehabilitation of the railway line Plovdiv-Burgas and the modernization of the railway section Sofia-Septemvri are part of the CEF-pre-identified rail project Sofia – Burgas/TR border and they also have high priority in the General Transport Master Plan. The modernization of the railway line Plovdiv-Burgas is required to be completed during the programming period 2014-2020. Im- portant measures are laying fiber optic cable on the railway section Plovdiv-Burgas, introduction of station interlocking in the section Karnobat-Burgas, development of Burgas railway junction, preparation for the development of Plovdiv railway junction, rehabilitation of the section Plovdiv-Orizovo; modernization of sections Orizovo-Mihaylovo and Yambol-Zimnitsa as well as smaller measures.

Another focus of the OP Transport for the programming period 2014-2020 lies on the connection of the port of Varna. The railway line Karnobat – Sindel which is going to be upgraded is the shortest land connection between Bulgaria’s biggest Black Sea ports – Varna and Burgas, with a length of 123 km. The remaining 52km of one-way railway lines are going to be upgraded to a design speed of 130 km/h in all sections, with the exception of Lazarevo – Vedrovo (18 km) and Ljuliakovo – Asparouhovo (35,7 km) with a design speed of 85 km/h. The restoration of design parameters of the railway line Ruse-Varna should improve the connection from Varna to the Danube. The railway line is electrified and consists of two sections – Ruse-

Transportation system of the Danube-Black Sea Region 77

Kaspichan and Kaspichan-Varna. Currently, the line is problematic because the scheduled average speed of passenger trains is 66 km/h and that of freight trains is 62 km/h whereas the design speed is 110 to 130 km/h. The project is also important with a view to the planned construction of an intermodal terminal in Ruse.140

4.3 CROSS-BORDER CONNECTIONS WITHIN THE BLACK SEA REGION

The necessary measures to improve the Rhine-Danube and the Orient/East-Med Corridor have a high development priority on national and European level. As these two corridors are crossing Romania and Bulgar- ia mostly west to east, the transport infrastructure connecting the two countries (incl. Ukraine) is given less priority in the European and in the national development plans.

Rail

The cross-border rail traffic between Romania and Bulgaria runs mainly over the two existing bridges across the Danube which are connecting the two countries on the 470 kilometers where the river is their common border. The bridge between Giurgiu and Ruse was the only bridge on this section until in 2013 the bridge Vidin-Calafat in the far west of the common border was opened and is now part of the Orient/East-Med Corridor. While second named bridge is very new, the one between Giurgiu and Ruse was opened in 1954. It is in critical infrastructural condition and furthermore has to be raised to provide clearance for larger ships. This can lead to delays. 141

Another connection exists between the Bulgarian province of Varna and the Romanian county of Constanta. From Sindel the line crosses the border at Negru Voda and meets the connection Constanta-Bucharest at Medigia - about 20 kilometers west of Costanta. This line is not electrified and only of regional importance.142

The main bottleneck is the connection Varna – Ruse – Giurgiu – Bucharest (using the Danube bridge at Ruse/Giurgiu). The railway line from Varna to Ruse is electrified but the scheduled average speed of passenger trains is only 66 km/h and that of freight trains only 62 km/h whereas the design speed is 110 and 130 km/h. The OP Transport mentions the restoration of the design parameters as an action to be financed in the 2014-2020 programming period. This project is also important with a view to the planned construction of an intermodal terminal in Ruse. On the other side of the border the connection of Giurgiu to the main rail infrastructure of Romania however is even more critical because it only consists of a single track, which is not electrified.

140 OP Transport Bulgaria 2014: Working version of the OPTTI 2014-2020 141 Băncilă, Petzek 2009: The History of the Romanian Danube Bridges in Proceedings of the Third International Con- gress on Construction History, Cottbus, May 2009 142 Council of the European Union 2012: Proposal for a Regulation of the European Parliament and of the Council on Union guidelines for the development of the Trans-European Transport Network - Brussels

Transportation system of the Danube-Black Sea Region 78

Between Romania and Ukraine cross-border rail traffic is in an even worse state. A route leads from Con- stanta via Medgidia to Tulcea - where it ends and does not cross the border to Ukraine due to the topo- graphical difficulties in the Danube Delta. On the Ukrainian side a railway line runs from Odessa to Izmail. However, it also stops close to the border. The roughly twenty kilometers between the two railway lines are not linked. From Galati there is a link to Ukraine, but this non-electrified narrow gauge railway crosses the line to Ukrainian territory only for leaving it again shortly after and running into Moldovan territory. There is no connection to route Odessa-Izmail and the next cross-border connection to Ukraine is in the west of Odessa.

Road

The cross-border road infrastructure can be compared to the status on rail. The main connections are the two existing bridges across the Danube. There are some car ferries on the common Danube border, which are however not relevant for the connection of the ports to the national and international hinterland. Addi- tionally the European route E87, which runs along the coast and is part of the TEN-T overall network connects the four ports of Burgas, Varna, Constanta and Galati but is mainly of regional importance.

Similar to the situation of the rail connections, cross-border traffic between Romania and Ukraine is a big problem. There is no direct connection between Tulcea and Izmail due to the Danube Delta. For a distance of 20km a detour of more than 100km via Galati and over Moldovan territory must be taken into account. However there are plans to introduce a ferry-bridge between Izmail and Tulcea. The estimated traffic volumes are 22,000 cargo vehicles, 22,000 automobiles, 1,800 buses and 80,000 passengers per year. The distance the ferry travels is about 30km and it needs 2 hours for a crossing.143

The critical cross-border connection between Romania and Bulgaria may be one of the main reasons why the Bulgarian Black Sea ports (especially Varna) are focusing on their own country and the Balkan countries as their main hinterland, while the Romanian ports can reach all the countries of Central Europe easily by using the Danube. By better connecting Varna to the Danube port of Ruse it would be possible to benefit from the planned developments for a more efficient use of the Danube rivers transport capacity.

Critical port connections

Not only the cross-border connections are critical, some ports need improvement regarding their connection to the TEN-T Corridors as well. While Constanta as the terminal of the Rhine-Danube Corridor is connected to all means of transport – inland waterway, rail and road – the Port of Galati for example is not connected to the Rhine-Danube Corridor via highway. The distance to the highway Bucharest-Constanta is 100km. That is why the road connection of this port is seen critical. The railway infrastructure is better, providing electrified two-track service connecting Galati via Buzau and Ploiesti with the rail corridor. Alt- hough equally not being connected to the corridor via highway the road connection to the port of Giurgiu is not seen that critical because of the proximity to the Rhine-Danube road corridor. The connection to the rail infrastructure of the corridor however is critical because it only consists of a single non-electrified track.

143 http://issuu.com/teeena/docs/paromizmail (Last accessed: 26 November 2014)

Transportation system of the Danube-Black Sea Region 79

In Bulgaria Burgas is the terminal of the Black Sea branch of the Orient/East-Med rail and road corridor. It is therefore connected to the Central European countries and furthermore the North Sea by the Orient/East- Med Corridor although there are missing links and bottlenecks especially on the section between Sofia and the Hungarian border. Varna however is not a core port of the TEN-T network and also the connection to the Corridor is not ideal, especially the road infrastructure. Varna is connected to the rail corridor by a railway line to Sofia which is electrified and at least equipped with two tracks. The railway line Karnobat-Sindel which connects Varna with the corridor northwest of Burgas is single tracked in some sections but the modernisation is planned. The works should start in the end of 2015 and the planned completion date is the second quarter of 2020.144 The road connection of Varna is much more critical. The highway connection to Sofia is not finished. Starting from Sofia it ends in Yablanitsa and from Varna in Shumen. In between there are 284km missing. While a small part of this highway is mentioned to be built in the Operational Pro- gramme Transport the connection to Burgas is not. The works on the motorway to Burgas were stopped after only 11 of 103 kilometers and it is unclear when it is going to be finished. The road connection to the Orient/East-Med Corridor is therefore seen critical for Varna. Figure 37 shows the critical cross-border and port connections in the region.

Figure 37 - Critical cross-border and port connections in the Western Black Sea Region

Source: Authors´ own figure based on Matousek, Karl (2014b) and http://ec.europa.eu/transport/infrastructure/tentec/tentec-portal/main.jsp

144 OP Transport Bulgaria 2014: Working version of the OPTTI 2014-2020

Transportation system of the Danube-Black Sea Region 80

Black Sea Highway

The Black Sea Ring Highway project envisages a four-lane ring highway system, approximately 7,700 kilometers long, to connect the BSEC member states with one another. The MoU on the Coordinated Development of the Black Sea Ring Highway was signed in 2007 and entered into force in November 2008. 145 The route should run via Istanbul, Samsun, Trabzon, Batumi, Poti, Novorossiisk, Rostov-on-Don, Mariupol, Odessa, Chisinau, Bucharest, Plovdiv and Istanbul in a circle with branches leading to important areas around the main route (see Figure 38).

Figure 38 - Black Sea ring highway draft map

Source: BSEC – Organization of the Black Sea Economic Cooperation 2007: Presentation Black Sea Ring Highway Caravan

While Turkey and Greece have finished the construction of the section of the highway in their territories, other countries struggle because of missing political will and financial resources – because even though the main part of the highway should run on already existing roads some countries have problems in raising the necessary money for building or upgrading their share of the ring road. Besides that the public opinion in some countries is against the highway plans. Anyway more efforts should be spent to reduce administrative burdens, visa requirements and other direct and indirect costs at border crossings resulting in disruptions and delays in the freight transport chains. 146

145 http://www.hurriyetdailynews.com/members-set-to-build-highways.aspx?pageID=238&nID=24061&NewsCatID=457 (Last accessed: 26 November 2014) 146 BSEC 2007: Presentation Black Sea Ring Highway Caravan

Transportation system of the Danube-Black Sea Region 81

4.4 EURO-ASIAN TRANSPORT LINKAGES

Euro-Asian transport lines operate via various routes. In this chapter the maritime and combined transport linkages as well as the continental rail linkages will be presented. The analysis focuses on the relevance of the Black Sea region as a gateway between Europe and Asia compared to other alternative routes.

Sea transport is by far the most important mode of transport for Extra-EU trade (see Figure 39). With more than 1,675 million tonnes in 2011 it accounts for approximately 75% of the foreign trade.

Figure 39 – Extra-EU-27 Trade by mode of Transport in 2011

Source: Eurostat 2013: Statistical Pocketbook 2013

The example of China shows that almost 94% of goods are transported into the EU by ship. Road and rail amount to little over 6% (other means of transport were not taken into account). Nevertheless, the amount of train services between Asia and Europe has increased in recent years.

4.4.1 Maritime and combined transport linkages

There are several possible routes to connect Europe with Asia. These routes compete against each other. Depending on the service requirements and the actual destination each one of them hase certain advantages.

Black Sea Suez Canal Linkage

The Black Sea region is situated in close proximity to the main world shipping axis linking North America, Europe and Pacific Asia through the Suez Canal, the Strait of Malacca and the Panama Canal. The strategi- cally important passages Bosphorus and Dardanelles make it possible that ships starting their voyage in the Western Black Sea region reach the Suez Canal in approximately 3 days. The Bosphorus passage is consid-

Transportation system of the Danube-Black Sea Region 82 ered an international shipping lane of free access (with Turkey reserving rights to close its navigation to other nations). In this respect, the Black Sea region can operate as a gateway to Central Europe. The distance is almost 2,500mM shorter than the alternative route via Rotterdam.

The passage works close to full capacity with 50,000 ships, including 5,500 tankers, transiting each year. Since the capacity of Bosphorus is limited and navigation can be hazardous, some projects were already designed aiming at coping with these problems.147 The passage itself is a secondary shipping route in the global system (see Figure 40).

Figure 40 – Main maritime shipping routes

Source: http://people.hofstra.edu/geotrans/eng/ch3en/conc3en/main_maritime_shipping_routes.html

Northeast Linkage

The sea route from Europe to Asia - measured between Rotterdam and Tokyo - is about 21,100km through the Suez Canal (see Figure 41). The Northeast Passage is with only 14,100 km significantly shorter. The time is reduced from a little less than five weeks to almost 3 weeks.

147 http://people.hofstra.edu/geotrans/eng/ch1en/appl1en/bosporus.html (Last accessed: 1 December 2014)

Transportation system of the Danube-Black Sea Region 83

Figure 41 - Comparison between the Northeast Passage and the Suez Canal route

Source: http://www.mdz-moskau.eu/wp- content/uploads/2012/12/Northern_Sea_Route_vs_Southern_Sea_Route-1024x1024.jpg

The collapse of the Soviet Union resulted in a decline of navigation on the Northeast Passage. Relatively high transport costs (especially for icebreakers) affected the choice. Figure 42 shows that the route is still not used intensively in 2012 in comparison to other major sea routes.

Figure 42 - Commercial sea routes in 2012

Source: http://upload.wikimedia.org/wikipedia/commons/3/39/Shipping_routes_red_black.png

Transportation system of the Danube-Black Sea Region 84

Climate change and the intentions of Russia to invest in the Northeast Passage could make it economically advantageous again. For the Russian government an increased transport volume could be interesting due to the charges levied.

Regarding the climate there are different predictions, but the fact is that in 2008, for the first time, the Northeast and the Northwest Passage were ice-free at the same time. In the following years, the Northeast Passage was ice-free for at least several weeks. The duration of the passability tends to expand. 148

The Russian government is already preparing for an increase in transport volume on the Northeast Passage. At the end of 2011 Prime Minister Putin declared that an investment of € 500 million in the development of infrastructure is going to be undertaken. Another billion Euro will be invested in the modernization of the icebreaker fleet by 2014. Until 2020 three new nuclear icebreakers as well as six new diesel-powered icebreakers should be operational. 149 The transport volume has increased significantly in each case in recent years. While in 2011 and 2012 41 and 46 transit trips were counted, the number increased to 71 in 2013. The cargo volume 2013 was also higher than in the year before. 150 According to Russian officials 60 to 80 million tonnes are possible on the long run. In this optimistic scenario this route would be able to be a strong competition to the Trans-Siberian Railway.

Caucasus and Caspian Sea Linkage

However not all ship traffic in the Black Sea leaves via the Bosphorus and joins the main shipping route in the Meditarranean. The interconnections between the Western Black Sea region and the Eastern Black Sea region are very important for linking the EU to the countries of the Caucasus and the Caspian Sea. Figure 43 shows a route using block trains from Germany to Constanta and ferryboat to Batumi in Georgia. The average time is 15 days compared to 25 days via northern European ports. The company ROMCARGO established a ferry line traveling between Constanta, Batumi and Illichivsk that can transport a wide variety of goods. The ferryline will decrease transit time and logistics costs for all kinds of goods and commodities exchanged between the European Union and Caspian countries and beyond. In four steps this project will be developed:

 Step 1 – Increase volumes on the regular ferry route of UKR Ferry between Constanta and Batumi, focused on TIR trucks, semitrailers, and project cargo loaded in Ro-Ro basis

 Step 2 – Expand the type of cargo towards containers and palletized goods, based on small start up volumes

 Step 3 – Expand to door to door services for companies moving cargo from EU to Caspian countries and beyond.

 Step 4 – Provide value added services in Constanta and Poti ports; warehousing, cold storage, container stuffing, LCL, empty container depot

148 http://www.spiegel.de/wissenschaft/natur/tauende-arktis-nordost-und-nordwestpassage-erstmals-gleichzeitig- eisfrei-a-574539.html (Last accessed: 26 November 2014) 149 http://www.gtai.de/GTAI/Navigation/DE/Trade/maerkte,did=385026.html (Last accessed: 26 November 2014) 150 Northern Sea Route Information Office – Transit Statistics 2011, 2012 and 2013

Transportation system of the Danube-Black Sea Region 85

Figure 43 - Combined transportation from Germany to Georgia

Source: Romcargo Maritim 2014: Romcargo Maritim Terminal – Gateway to EU

Between the Black Sea and the Caspian Sea block train services are offered. One of them is operated by the POLZUG Intermodal Group and travels between Poti (Georgia) and Baku (Azerbaijan). The container trains are made of wagons of the same type. With no stopping for assembly and disassembly, the block train offers high-volume customers an economic alternative to regular rail freight operations or road transport. From Baku onwards, shipment continues by ferry across the Caspian Sea to Aktau, Kazakhstan, for rail transport to Central Asia.151 Figure 44 shows the transport infrastructure in the Southern Caucasus, connecting the Black and the Caspian Sea.

151 United Nations 2012: Euro-Asian Transport Linkages Phase II – Expert Group Report

Transportation system of the Danube-Black Sea Region 86

Figure 44 - Transportation links in the Southern Caucasus

Source: Ayirtman 2014: Presentation Multimodal transport in Caucasus region

The Georgian port of Batumi is one of the main Georgian gates for the access of goods coming from Asia and the Middle East to Central and Eastern Europe through the Caucasus. Figure 45 shows the five terminals and eleven berths. Throughput capacity of dry cargo berths (7, 8 and 9) is 2.2 million tons annually. According to the infrastructure development plan, the open storage territory of the port was enlarged by 2, 469m² and comprises 18,881m².152

Other development projects in Georgia are153:

 Construction of Anaklia port

 Poti port expansion plan

 Tbilisi Railway Bypass Project

 Baku – Tbilisi - Kars Railway

 Block Train Poti – Baku

152 Batumi Sea Port 2014: Presentation: Batumi Sea Port at the Constantza Port Day; Krems 153 Ayirtman 2014: Presentation Multimodal transport in Caucasus region at the Constantza Port Day; Krems

Transportation system of the Danube-Black Sea Region 87

Figure 45 - Scheme of the Batumi Sea Port

Source: Batumi Sea Port 2014: Presentation: Batumi Sea Port at the Constantza Port Day; Krems

For the connection across the Caspian Sea the port of Baku is a main hub. The Baku International Sea Trade Port comprises of a main cargo terminal, an oil terminal, the ferry terminal and a passenger terminal. The port´s throughput capacity has been constantly growing and reaches up to 15 million tons of liquid bulk and up to 10 million tons of dry cargoes.154 This constant growth led to the construction of the New Baku Inter- national Sea Trade Port. At the first stage, the ports cargo transhipment will be 10 million metric tons of cargo and 50,000 containers per year. In the second phase the port´s capacity will reach 17 million metric tons of cargo and 150,000 containers and by the end of the third stage 25 million metric tons of cargo and 1 million containers per year.155 The new port is located 60km southwest of Baku near Alat (see Figure 46).

154 http://bakuseaport.az/eng.html (Last accessed: 24 December 2014) 155 Republic of Azerbaijan 2014: Presentation: The New Baku International Sea Trade Port

Transportation system of the Danube-Black Sea Region 88

Figure 46 - Location of the New Baku International Sea Trade Port

Source: http://en.trend.az/infographics_page.php?id=167;

4.4.2 Continental Rail Linkages

Figure 47 - Euro-Asian transport linkages

Source: Schwetz 2013 – Presentation as part of the Black Sea Conference in Krems

Transportation system of the Danube-Black Sea Region 89

The continental rail links between Asia and Europe represent an alternative to the shipping routes between the two continents. Currently the ship traffic dominates the Euro-Asian trade in goods, since the large distance, political instability, hidden costs, safety concerns, waiting times at borders and other unpredictabili- ties let the rail links seem less attractive. Figure 48 shows routes from China via Kazakhstan, Mongolia and/or Russia to Belarus and the European Union. While the Chinese rail infrastructure has the same track gauge as most European countries, the track width in the intervening countries is much greater. Transship- ment at border stations is necessary. 156

Figure 48 - Northern corridor of the trans-Asian railway

Source: United Nations 1999: Development of Asia-Europe rail container transport trough block-trains

The change in track width and inefficient interfaces result in a very low share of rail in freight transport between the EU and the successor states of the Soviet Union. The Trans-Siberian Railway however, would be a link to the borders of China and to the Pacific port of Vladivostok. To intensify the use of this transport route from the Far East to Europe, extensive investment is required. From the Russian perspective this is connected to the expansion of the broad gauge network to Central Europe, and thus achieving a higher transport volume. For this reason, the Breitspur Planungsgesellschaft was founded in 2008. The railway companies of Austria, Slovakia, Ukraine and Russia each have a share of 25%. The goal is to extend the broad gauge line that currently ends in Košice to Vienna and herewith achieve the connection to Central Europe. 157 A feasibility study in 2011 came to the conclusion that the project is both legally, technically and financially feasible. The total cost of the project is estimated at 6 billion Euros.158 In Austria, approximately 20 km broad gauge track and a freight terminal (800 million Euros) would have to be built. The study identi- fies the year 2028 as a realistic date for the start of operations.159 A further, more detailed feasibility study is in preparation.

156 United Nations 2012: Euro-Asian Transport Linkages Phase II – Expert Group Report 157 WKO 2012: Positionspapier der WKÖ zu einer Verlängerung der russischen Breitspurbahn bis in den Raum Wien 158 Breitspur Planungsgesellschaft 2011: Pre-feasibility study for broadgauge railway connection between Košice and Vienna 159 Breitspur Planungsgesellschaft 2011: Pre-feasibility study for broadgauge railway connection between Košice and Vienna

Transportation system of the Danube-Black Sea Region 90

Regarding the price, transport by sea is cheaper. The example of the transport of a notebook from Choonquing to the Netherlands shows that the costs per notebook tripples if transported by train instead of by sea. However, the travel time required by rail is 22 days, 16 days shorter than by sea transport. 160 Rail transport between Europe and Asia thus ranges somewhere in between the rapid, but expensive air- transport and the cheap, but slow deep-sea shipping.

Due to this circumstance more block trains operate between Asia and Europe. Those which operate continuously for several years however are specially organized for specific companies. Attempts were also made to establish line services, but only with limited success. 161 Table 21 shows some of the block trains organized for specific companies.

Table 21 - Block trains on the Trans-Siberian Railway Route Trains per week Runtime (days) Rail operator Freight owner Vostochny (Russia) – 3 11 Russkaya Troyka Hyundai Taganrog (Russia) Vostochny - Izhevsk 7-8 9 Russkaya Troyka, KIA (Russia) F.E. Trans Vladivostok-Moscow 1 11-12 Russkaya Troyka Various Vostochny – Saryagach 2 14 Trans Container, GM Daewoo (Kazakhstan) - Uzbeki- Unico Logistics stan Vostochny- Na- 3 9-10 F.E. Trans Sangyong bereschnyje Tschelny (Russia) Source: United Nations 2012: Euro-Asian Transport Linkages Phase II – Expert Group Report

In addition there are block trains on a regular basis for the automobile companies Skoda, VW and Peugeot. DB Schenker offers an exclusive service for BMW from Leipzig to Shenyang since 2011, with a transport time of 23 days. With 40 containers (40') per train there is enough demand for a planned increase to daily service. For an IT entrepreneur in Duisburg Schenker offers weekly trains from Chongqing to Duisburg. These also need 22-23 days which is much shorter than the alternative route at sea. 162

There also exist container block trains which are not reserved for individual companies (see

160 DB Schenker 2012: Presentation – Rail based transports between China and Europe 161 United Nations 2012: Euro-Asian Transport Linkages Phase II – Expert Group Report 162 DB Schenker 2012: Presentation – Rail based transports between China and Europe

Transportation system of the Danube-Black Sea Region 91

Table 22).

Transportation system of the Danube-Black Sea Region 92

Table 22 – Regularly, non-exclusive container block trains Route Trains per week Berlin - Kunzevo (Russia) 3 Brest - Ilijezk - Arys (Kazakhstan) 2 Brest-Nauschki - Ulan Bator - Huh-Hoto (China) 2 Almaty – Dostyk – Alaschankou (China) 6 Lianyunggang (China)- Dostyk – Assake (Uzbekistan) 1 Tianjin (China) - Alaschankou – Almaty (Kazakhstan) 3 Source: United Nations 2012: Euro-Asian Transport Linkages Phase II – Expert Group Report

The rail connection between Europe and Asia is particularly interesting due to their time saving compared to the transport by sea. Only in case of processing centers in Asia located far inland train service can even be the cheaper alternative. 163 In most of the cases transport via ship from Asia to Western Europe is the cheaper way.

163 United Nations 2012: Euro-Asian Transport Linkages Phase II – Expert Group Report

Transportation system of the Danube-Black Sea Region 93

4.5 SUMMARY AND SWOT

With the revision of the TEN-T program, the region is connected with Central and Western Europe by two Core network corridors – the Orient/East-Med corridor and the Rhine-Danube corridor. Both are rail and road corridors. The Rhine-Danube corridor also includes the inland waterways. These corridors provide the main link between the Western Black Sea region and the Central European countries.

Efficient transport along these corridors is still not easy because of many existing bottlenecks. On the Dan- ube River navigation is suffering from bottlenecks that reduce the reliability of the connections. Long periods of high or low water make its navigation less attractive for freight transport purposes, despite the lower environmental impact. Furthermore regulations and administrative procedures as well as customs and border crossing procedures vary from country to country. This situation causes significant problems for the companies and quite often leads to delays in transport times. Rail and road bottlenecks are also very often a cross-border problem. There are multiple initiatives that want to tackle these problems on national and on EU level.

The individual strengths, weaknesses, opportunities and threats of the national transport systems are listed below. The Danube serves as common backbone for inland waterway transport to Central Europe but also separates Bulgaria and Romania with only two bridges connecting the countries.

While both Bulgarian ports are connected to Sofia via rail, the road connection of Varna to its capital is critical and the link Varna-Ruse which is essential for the connection to the Danube River needs modernisation. The restoration of parameters on this track is planned, as well as an intermodal terminal in Ruse. These actions should improve the current situation. Another problem is the expected growth of freight transport that will lead to congestions if reforms of the transport sector are delayed.

Table 23 - SWOT analysis of the Bulgarian transport system Positive Negative  Burgas is part of the Orient/East-Med  No direct connection to the Danube – the Corridor providing access to Central Eu- existing connection Varna-Ruse needs mod- rope via Sofia and to Turkey including the ernisation

possibilities to upgrade the railway line  Inadequate connections to Romania

Sofia-Burgas and Burgas-TR Border with  Dissatisfying condition and level of mainte- substantial co-financing of EU (CEF) nance of the existing transport infrastructure

 Burgas connected with Sofia directly via  Varna not yet connected to Sofia via highway Statusquo highway  Missing high level connection between the ports and Constanta - the works on the highway between Burgas and Varna stopped - only 11km are finished

Transportation system of the Danube-Black Sea Region 94

 The draft of OP Transport 2014-2020  Delays in works for Orient/East-Med and mentions the building of “Hemus” Mo- Rhine-Danube corridors. Completion of works torway connecting Varna with Sofia is only planned for after 2030  Restoration of design parameters along  Erosion of the banks and islands and low Ruse-Varna railway line mentioned in the depth and other bottlenecks in certain sec- draft of OP Transport 2014-2020 - Inter- tions of the Danube river modal terminal planned in Ruse (men-  Expected growth of freight transport (80%

tioned in OP Transport 2014-2020 draft) - until 2050) will only increase road traffic if

resulting from that possibilities to use the not invested in other means of transport Danube more efficiently e trend e  With growing traffic current bottlenecks

tur  Completion of the modernization and along main transport corridors will further

u F rehabilitation of the railway line Plovdiv- degrade transport service quality Burgas mentioned in the draft of OP  Delay in reforms, restructuring and moderni- Transport 2014-2020 zation of the transport sector and his sub sec-  Opening of the transport sector to public- tors private partnership projects  Additioanl CEF/CF funds available for the development of the European Core ports (Burgas)

The Rhine-Danbue Corridor will provide the Romanian ports with high-level transport connections to the Central European regions. Besides the possible problems with the implementation of the planned devel- opemnd measures along the Corridor, there are still problems on the national and cross-border level to be solved in order to generate competitive transport conditions for the regions and the ports.

With the Rhine Danube Corridor Constanta will be able to rely on high level rail and road connections to Bucharest and further on to the Central European hinterland. Although Galati is located in a strategic area with connections to Moldova and Ukraine, it is off the planned high level road and rail connection (furthermore it is missing an airport). The existing infrastructure is not in good shape improvement is not in sight. The main focus of the national government is on the measrues along the Rhine-Danube Corridor.

For both Romanian ports it is very important that the existing bottlenecks on the Danube river will be sov- end and operation will be possible the whole year round.

The missing cross-border connections are not only an obstacle in the coopartion with the Bulgarian Black Sea region and its ports. It is limiting the transport connections to the expansively growing market in Turkey to shipping services. A better connection between Constanta and Galati would furthermore be a first important step for overcoming the cross-border bottlenecks to Ukraine.

Transportation system of the Danube-Black Sea Region 95

Table 24 - SWOT analysis of the Romanian transport system Positive Negative  Constanta is directly connected to Bucha-  Galati has no connection to a highway and rest with modern rail (modernasation there are no plans to improve this situation 2008) and road infrastructure (highway)  No airport in a short distance of Galati  The Danube river connects the whole  Low railway speed due to degradation of region with the Central European hinter- many sections of the rail network land  Dissatisfying condition and level of mainte-  Constanta has an airport nearby nance of the existing railway infrastructure

 low railway speed (except newly build sections, e.g. Bucharest-Constanta)  Poor road quality, poor lighting and improper

Statusquo signing system creates high risk for accidents  Existing infrastructural and administrative/organization bottlenecks hamper effi- cent transport on the Danube (delays, higher costs, etc.)  transport capacity not reached by far  Bad or non-existing cross-border connections (rail and road) to Bulgaria and Ukraine  Further/necessary improvements along  Unclear national priorities for necessary de- the Rhine-Danube Corridor will have high velopment measures as the operational pro- probability to receive EU-Funding (CEF) gramme for transport has not been finalized  Additioanl CEF/CF funds available for the yet development of the European Core ports  Delays in works for Rhine-Danube corridor. (Constanta and Galati) Completion of works is only planned for after  Upgrading of specific sections and studies 2030

for high-speed on the railway track Arad-  Erosion of the banks and islands, low depth Brašov-Bucurešti-Constanta is included in and other bottlenecks in certain sections of

the list of major corridor projects with a the Danube river prevent effienct transport

turetrend u

F very hig probability to receive financing and affect realiablity from the CEF  Development measrues are mainly focusing on infrastructure – measures to improve organisation or to overcome administrative burdens do not have high priority  Delay in reforms, restructuring and modernization of the transport sector and his sub sectors

Good practice NAPA 96

5 GOOD PRACTICE NAPA

The Northern Adriatic ports have established an association with the aim to promote the North Adriatic transport route and attract more cargo that historically and traditionally travels through North EU ports, especially to the Le Havre – Hamburg range. The NAPA was established in March 2010 by the Port Authori- ties of Ravenna, Trieste, Venice and the Port of Koper. In the same year the Port Authority of Rijeka has also joined the association, creating a unique association on European level of all Big North Adriatic sea ports. In 2013 Ravenna has withdrawn from the association, so only 4 members remain until today.

NAPA is a non-profit organisation that aims to globally promote the North Adriatic transport route, enhance transport logistic and by that consequently also decrease emission created by the transport sector. The legal office has been established in Trieste, Italy. The association has a 6-month presidency that rotates between the members. Regular meetings are held every semester in a different location.

The partners in the association are port authorities except for Koper that is a joint stock company, owned in 51% by the state of Slovenia. The Port of Koper also performs activities and duties of a port authority, but also is a terminal operator, that is different in the case of the other association members. All the other members are public agencies / port authorities that perform usual and defined by law authority activities.

Figure 49: NAPA ports location

Source: NAPA

Within the association different working groups, represented by one member per port, are established that cover different activities and important topics like: - Promotion - Development projects

Good practice NAPA 97

- EU projects – common participation

An important activity is the participation to international logistics and transport fairs where the association is presenting itself, its activities, benefits, interest etc.

All members are paying an annual fee that covers the administrative and promotional activities. One of the main activities is common participation to EU funded projects in different EU programs. In the first years the association has been very active and has participated in many EU projects achieving good results and become a reliable and stable partnership.

In the table below are described the core activities of the NAPA members.

5.1 NAPA: PORTS DESCRIPTION

5.1.1 Luka Koper – Port of Koper

Luka Koper is the only NAPA member that is not legally a port authority, but performs activities of port authorities and also operates the terminals (12) in the port of Koper.

Luka Koper is a multipurpose port that handles all types of cargo with the exception of crude oil and LPG/LNG. The main cargos handled are containers, cars and break bulk cargo. The port is first for handling containers in the NAPA, and only second to Barcelona for cars in the Mediterranean. It has ambitious developments plans that would enhance its traffic in the next future.

Working activities: - Invests in infrastructure and suprastructure of the port. - Takes care of maintenance, security. - Core business covers cargo handling and warehousing services for all types of goods, complemented by a range of additional services for cargo with the aim of providing a comprehensive logistics support for customers. - The company manages the commercial zone and provides for the development and maintenance of port infrastructure.

5.1.2 Trieste Port Authority

Trieste port is the biggest port in the NAPA for total throughput. It mainly handles crude oil and other liquid cargo. It is also u multipurpose port being the second in the NAPA for TEU’s. It has ambitious plans for the development of the container business. It also has a high number of Ro-Ro traffic.

Working activities: - Primary task of directing, planning, coordinating, promoting and controlling port operations and other commercial and industrial activities in the port; - responsible for routine and non-routine maintenance of the common parts of the port area and for engaging and controlling providers of services of general interest to port users. - preparing a Three Year Operating Plan

Good practice NAPA 98

5.1.3 Venice Port Authority

The port of Venice is a very active international port. It is a multipurpose port that has some limitations because of the low draft in the Venice lagoon. It has very big developments plans focused on the container business. Venice is also the one of the biggest cruise ports in the Mediterranean.

Working activities: - Guide, plan, co-ordinate, promote and monitor port operations. - in charge of maintaining common areas and the seabed, overseeing the supply of services of general interest, managing the State Maritime Property and planning the development of the port.

5.1.4 Rijeka Port Authority

The “smallest port” in the NAPA for throughput. The Port of Rijeka is the last port that has joined the association and has still a lot to learn in terms of cooperation, EU projects, etc... It is a multipurpose port that has different locations in the Kvarner bay. The main cargoes are container and liquid bulk. Its ambitious development plans are ranging from the development of the container business to a new liquid terminal on the Krk Island.

Working activities: - Taking care of building, maintaining, managing, protecting and improving the maritime domain repre- senting the port area. Building and maintaining the port’s shoring. Expert surveillance of the of building, maintaining, managing and protection of the port area (port’s shoring and superstructure), - Provide for a constant and free performance of port traffic, the technical-technological unity and safety of the port area for navigation, as well as for the order in the port, - Provide for the services of general interest or services for which there is no economic interest of other business subjects, (port guarding, fire protection etc.)

5.2 HINTERLAND CONNECTIONS

The NAPA ports have been included by the European Commission (EC) in the new TEN-T network as core ports on two corridors: the BALTIC ADRIATIC and the MEDITERRANEAN.

Good practice NAPA 99

Figure 50: Core Network Corridors connecting the NAPA ports with their hinterland

Source: Port of Koper

This creates future possibilities for financing new infrastructural projects and targeted investments in the new financial perspective 2014-2020 periods. From the new Connecting Europe Facility (CEF) tool the NAPA ports could exploit a crucial investment cycle for their long term business development.

5.3 HINTERLAND MARKETS/CONNECTIVITY & MODAL SPLIT

The NAPA ports serve a very broad but somehow similar hinterland markets with small differences from port to port.

Luka Koper is a very transit oriented port where only around 30 % of its throughput goes to the national market, 70% are transported to hinterland countries of Austria, Hungary, Germany, Slovak republic, Czech Republic, south Poland and north Italy. The port is one of the leading ports on a global scale when it comes to modal split. It has a 60-40 % modal split in favour of rail. More than 52 trains are leaving the port on a daily basis. The main hinterland railway connection to Divača is only a one single railway track that prevents the port to ship more cargo via rail. The second railway track construction works should start in year 2014/2015.

Trieste port main asset is the pipeline connection to Bavaria and therefore the crude oil is directly “shipped” to this business wealthy and developed region. The rest of its cargo is mostly going the north Italian industries within Friuli, Veneto and Trentino. It also serves the Austrian and German market with other types of goods. Some smaller quantities are shipped via rail to Hungary and Czech Republic. Trieste has also a good modal split but not in favour of rail as Koper has. From the port it has many daily intermodal trains to the hinterland, but still most of the cargo is transported via road. The railway infrastructure from the port has some capacity limitations but still far from being used to all of its possible extent.

Venice port is mostly oriented to the north Italian market and regions of Veneto, Lombardia, Trentino and Friuli. It serves in smaller quantities also the Austrian and German market.

Venice has a low % of rail transported cargo. This could be connected with the hinterland industries that are located in the closer regions and do not necessary need rail transport to their facilities. Venice is the only

Good practice NAPA 100 port in the NAPA that has also inland waterway transport as some cargo is send by ship by the river Po, to the city of Mantova and further on.

Rijeka port is a nationally oriented port to the northern part of Croatia, but also some cargos are shipped to Austria, Hungary and Serbia. Most of the cargo is send by road as the railway infrastructure is not adequate and only smaller quantities can be transported by rail. In the last years it has increased its share but many investments should be undertaken in order to increase the modal split for railway transport.

On the maritime side all the ports are served by same and different shipping lines. Koper, and Trieste are called by two direct Asia – Europe services operated by the biggest shipping lines of Maersk/ CMA CGM and Evergreen, while is Rijeka touched has one direct service.

Multiple intra-med and feeder lines are calling at the NAPA ports connecting them with the main Mediter- ranean hubs and ports and global supply chains on a daily/weekly level. This creates also a momentum for exporters that could use the regular services to decrease transport cost and be more competitive on some segments.

The Port of Koper has also regular car carriers’ lines that call every week, while Trieste has a daily Ro- Ro service from Turkey.

5.4 PORT DEVELOPMENT PLANS

Between all the NAPA ports the development plans are very ambitious and intensive. All the ports are planning to invest heavily in better and modern port capacities as they foreseen a high growth in the next years, based on studies and end of the crisis in the EURO area. The investments are concentrated in the development of container business as it shows the higher development pace for the future. The trend of containeri- sation is going on already for some years and that it is not supposed to stop until further notice. From port to port also other cargos are important for their development as being cars for Koper, Liquid bulk for Trieste etc. In the pictures below the ambitious port plans are shown.

5.4.1 Port of Venice

Figure 51: Port development plans – Port of Venice

Source: Port of Venice

Good practice NAPA 101

5.4.2 Port of Rijeka

Figure 52: Port development plans – Port of Rijeka

Source: Port of Rijeka

5.4.3 Port of Koper

Figure 53: Port development plans – Port of Koper

Source: Port of Koper

Good practice NAPA 102

5.4.4 Port of Trieste

Figure 54: Port development plans – Port of Trieste

Source: Port of Trieste

5.5 NAPA VS. WBSP

Compared to the NAPA ports the WBSP ports are located on the other side of the European continent, relatively far from the main markets of Central Europe. The ports in the new EU member states are organised as Port Authorities that perform regular activities of maintenance, security, control etc. The Port of Costan- ta is by far the biggest by throughput of all and it also has biggest capacities. All the other ports are smaller by traffic and port capacities. The difference between the other EU ports is that WBSP ports have also the river Danube that allows them to exploit inland waterways deep until the markets of Hungary and Austria.

The WSBP have old port equipments, smaller warehousing facilities, that increase operation costs and slow down throughput time in a very competitive market. This prevents them to be more attractive for the logistics companies that require a fast and effective business environment.

One of the main problems for the WSBP is the poor hinterland connectivity by road/rail they have. Only a small proportion of cargo is transported by rail and inland waterways, the rest is by road which is not in line with the present intermodal philosophy that aims at green transport in the region. This also creates more congestion and the whole supply chain with time lost and more emission produced.

Both governments (ROM & BUL) should invest heavily in the transport network in the next years in order to make the WSBP more attractive for different shippers, forwarders and other transport companies that operate on a global level. This would create some preconditions for the ports to invest in capacity development and new modern equipment that would eventually acquire more cargo flows.

In the below table a comparison of all ports main data is done. Differences between the ports are mainly on the capacity and infrastructural level. NAPA ports have higher sea depth (draft) than most of the WBSP ports with the exception of Costanta.

Good practice NAPA 103

All ports have a similar total area and also quay length. When a comparison between those two facts and the total throughput of ports is done, it comes out that NAPA ports are very much productive compared to WBSP. The same comparison could be made for TEU capacity.

All NAPA ports have already developed and concluded their Masterplans while for WBSP only Varna and Burgas have done so, but many years ago.

For the WBSP ports it is important to start to invest in new facilities and infrastructure that will create the basis for a good development of their services on the medium and long term. The ports should also somehow influence their national governments to invest in the national infrastructural network as soon as possible.

Recommendations 104

6 RECOMMENDATIONS

Reconsidering the objectives defined in chapter 1.3 this study shall highlight the development and cooperation possiblities in the Danube-Black Sea region. It shall come up with recommendations for further economic cooperation, the development of the transport system and the possible cooperation between the ports in the region.

The recommendations given in this chapter will be taken as a basis for the development of joint project initatives to be further developed by the partners in the Danube-Black Sea gatway region.

6.1 ECONOMIC DEVELOPMENT

The Western Black Sea region is an area with economic development potential. The GDP is still rather low compared to Central European countries. The high amount of direct investments of Austrian companies in the region (Austria is the country with the second most direct investments in Bulgaria, Romania and Turkey in 2012) underlines the importance of the region for the Austrian economy.

Figure 55 - Import/Export of goods between Austria and the Black Sea region (2012 in metric tons)

Source: Authors´ own figure based on Statistik Austria

The foreign trade statistics underline the economic relations between Austria and the region. While exports to Austria are still dominated by raw materials (most prominent in Ukraine followed by Romania), imports mainly consist of processed goods. Given the low costs for skilled labour and the ongoing shift to the service economy in the region, the potential for economic cooperation between Austria and the other Central Eu- ropean countries is still high.

Recommendations 105

As the analysis has shown there is still limited knowledge about development possibilities and future trends affecting cooperation and demand in the Danube-Black Sea gateway region.

 Recommendation 1: Conduct a detailed analysis of economic system in the region and beyond

 Recommendation 2: Make use of the comparative advantages offered by the river Danube as cheap and sustainable means of transport through business cooperation and enable industrial location of companies in the catchment area

 Recommendation 3: Strengthen existing business cooperation networks and build up new ones

6.2 TRANSPORT SYSTEM DEVELOPMENT

The condition of infrastructure (rail, road, inland waterways) in the Danube Black Sea gateway region is poor. The development plans of the European Commission and the responsible national authorities are mainly focusing on the improvement of infrastructure along the Core Network Corridors.

Figure 56 - Critical cross-border and port connections in the Western Black Sea Region

Source: Authors´ own figure based on Matousek, Karl (2014b) and http://ec.europa.eu/transport/infrastructure/tentec/tentec-portal/main.jsp

Besides the bottlenecks in infrastructure, organisational/functional bottlenecks (procedures, information, etc.) of the transport system are a major constrain for efficient use of the existing infrastructure.

 Recommendation 4: Highlight the necessary measures to improve the regional transport infastructure in the Danube Black Sea Gateway region (between the Black Sea ports, within the most important transport nodes, etc.)

Recommendations 106

 Recommendation 5: Develop solutions to overcome the existing functional bottlenecks (organization, administration, informaiton, etc.)

 Recommendation 6: Monitor the implementation of the CEF pre-identfied measures along the Core Network Corridors

 Recommendation 7: Use joint voice to lobby for speeding-up of already ongoing and planned actions as in the interest of the whole Black sea region

 Recommendation 8: Use EU-funding for modernising of aging existing infrastructure (hinterland connection)

6.3 PORT COOPERATION

Because of their specific location, the Bulgarian and Romanian ports could act as the natural gateway for goods to Central Europe, especially for the Danube countries. Weak transport infrastructure is one of the major challenges to be tackeld in order to make use of the location advantages. The development of proper hinterland transport infrastructure would lead toward development of traffic. The example of NAPA clearly shows that a modal split in favor of rail and inland waterways is increasing success chances. Therefore the development of adequate railway infrastructure must be a present and future long term priority of the ports. The Bulgarian and Romanian ports are very different in terms of port characteristics (hinterland, connections to the transport system, capacities, etc.). For a successful cooperation it is necessary to find common objectives, which could lead to long term benefits for each single port.

With the exception of Varna the ports are defined as core network ports being directly connectd to the Core Network Corridors. This allows them to exploit the European funds for targeted investments in their accessibility and capacities.

 Recommendation 9: Jointly stress the importance of a higher hinterland railway/IWW accessibility & connectivity

 Recommendation 10: Use EU-funding for modernising of aging existing infrastructure (ports capacity expansion, developing of intermodal infrastructure etc.)

 Recommendation 11: Analyse the global economic development influencing the Danube-Black Sea gat- weway region in order to better understand the current and potential future market

 Recommendation 12: Enhance regional visibility of the region on global level by elaborating a common marketing strategy

Funding Options 107

7 FUNDING OPTIONS

This chapter provides an overview of the existing EU funding possibilities for stakeholders from the Danube- Black Sea region. The funding opportunities have been selected primarily according to the findings in the previous chapters.

It is not the aim of this chapter to select the most suitable funding scheme for one project idea. Rather will the information provided allow project promotors to get an overview of the existing funding options, the relevant fundig institutions to be involved and the steps to be taken for a successful project proposal.

Projects can be located on the regional, the national, the cross-border and the european/international level. Based on the available information this chapter provides several funding possibilities which are suitable for different types of transport related projects. The EU funding has different approaches: - Technical support for projects (no grants just assistance) - Grants for pre-feasibility studies or feasibility studies, strategies etc. - Grants for infrastructure investment - Financial instruments for infrastructure investments

Since the new multi-annual programming phase (2014-2020) is about to start, a lot of funding opportunities are not fully designed yet.

7.1 EUROPEAN STRATEGY FOR THE DANUBE REGION (EUSDR)

The EU Strategy for the Danube Region (EUSDR) is a macro-regional strategy adopted by the European Commission in December 2010 and endorsed by the European Council in 2011. The Strategy was jointly developed by the Commission, together with the Danube Region countries and stakeholders, in order to address common challenges together. The Strategy seeks to create synergies and coordination between existing policies and initiatives taking place across the Danube Region.

7.1.1 Priority Areas (PAs)

The Danube Region Strategy addresses a wide range of issues. They are divided among 4 pillars and 11 priority areas. Each priority area is managed by 2 Priority Area Coordinators (PACs).

Funding Options 108

Figure 57: EUSDR Pillars and Priority Areas

Source: http://www.danube-region.eu/about/priorities

Refering to the recommendations for further cooperation in the Danube-Black Sea Gateway Region the following two priority areas are of major importance:

7.1.2 PA 1a Mobility – Waterways

The final targets for EUSDR Priority Area 1a are as follows:

 Increase the cargo transport on the river by 20% by 2020 compared to 2010. [target maintained as in EC Communication of Dec. 2010]

 Solve obstacles to navigability, taking into account the specific characteristics of each section of the Danube and its navigable tributaries and establish effective waterway infrastructure management by 2015. [target reformulated from EC Communication of Dec. 2010: "Remove existing navigability bottlenecks on the river so as to accommodate type VIb vessels all year round by 2015"]

 Develop efficient multimodal terminals at river ports along the Danube and its navigable tributaries to connect inland waterways with rail and road transport by 2020. [target reformulated from EC Communication of Dec. 2010: "Development of efficient multimodal terminals at Danube river ports to connect inland waterways with rail and road transport by 2020"]

 Implement harmonised River Information Services (RIS) on the Danube and its navigable tributaries and ensure the international exchange of RIS data preferably by 2015. [new target; not in EC Communication of Dec. 2010]

 Solve the shortage of qualified personnel and harmonize education standards in inland navigation in the Danube region by 2020, taking duly into account the social dimension of the respective measures. [new target; not in EC Communication of Dec. 2010]

Funding Options 109

7.1.3 PA 1b MobIlity - Rail-Road-Air

PA1b targets the following actions:

Action (1) -“To bring to completion the TEN-T (rail and road) Priority Projects crossing the Danube Region, overcoming the difficulties and the bottlenecks including environmental, economic and political, particularly in the cross-border sections”.

Action (2) -“To implement the Rail Freight Corridors forming part of the European rail network for competitive freight”.

Action (3) -“To enhance cooperation between air traffic stakeholders in order to prepare a plan to implement shorter plane routes”.

Action (4) -“To ensure sustainable metropolitan transport systems and mobility”.

Action (5) -“To improve the regional/ local cross-border infrastructure and the access to rural areas”.

Action (6) -“To develop further nodal planning for multimodality”.

Action (7) -“To develop further Intelligent Traffic Systems by using environmental friendly technologies, especially in urban regions”.

7.1.4 EUSDR Financing instruments

In order to support the development within the Danube region, the EUSDR provides two financing instruments, which provide technical assistance and seed money for the development of projects.

It is expected that there will be two addiational TAF-DRP calls in spring/summer 2014.

Figure 58: Main characteristics of TAF-DRP and START

Source: Presentation of Mrs. Papst during the Danube Region Transport Days in Ljubljana, October 2014

Funding Options 110

7.2 COHESION FUND AND STRUCTURAL FUNDS

The Structural Funds and the Cohesion Fund are the financial instruments of European Union (EU) regional policy, which is intended to narrow the development disparities among regions and Member States. The Funds participate fully, therefore, in pursuing the goal of economic, social and territorial cohesion.

There are two Structural Funds:

 the European Regional Development Fund (ERDF) is currently the largest. Since 1975 it has provided support for the creation of infrastructure and productive job-creating investment, mainly for businesses;

 the European Social Fund (ESF), set up in 1958, contributes to the integration into working life of the unemployed and disadvantaged sections of the population, mainly by funding training measures.

The Cohesion Fund is sepecially dedicated for EU member states with <90% of EU average GNI/ capita, which means that out of the total circle of countries in the Danube region only the regions marked in dark orange (less than 90% of EU average GNI/capita) in the map below are eligible.

Each EU member state is responsible for the management of programmes which receive support from the Structural Funds. For every programme they designate a managing authority (at national, regional or other level).

Low carbon economy is one of the 4 key priority areas, for which 80% of the funds of the European Territo- rial Cooperation programmes are used.

The cohesion-policy for the planning period 2014 – 2020 foresees partnership agreements between every EU member country and the Commission. Thereafter each member has to provide its operational programme. The envisaged timeframe for negotiation and acceptance of the programmes differs between the countries. It is expected that the programmes will be finalized in the first quarter of 2015.

Within the frame of the “structural and Investment Funds” the European Regional Development Fund (ERDF) aims to strengthen economic and social cohesion in the European Union by correcting imbalances between the regions.

Funding Options 111

Figure 59: Structural Funds 2014-2020 – Regional Eligibility

Source: http://ec.europa.eu/regional_policy/index.cfm/en/policy/how/is-my-region-covered/

It has to be noted that all eligible countries are currently in the process of creating their Integrated Transport Strategies.

Funding Options 112

7.3 EUROPEAN TERRITORIAL COOPERATION (WITHIN ERDF) - THE DANUBE PROGRAMME

The European Regional Development Fund (ERDF) is one of the two structural funds´ programmes. It consists of three strands: (1) cross-border, (2) transnational and (3) interregional cooperation. The cross-border cooperation is devided into separate programmes according to its regional focus.

Instead of the previous South East Europe Programme three new transnational programmes will support the development and implementation in South East Europe - The Danube Transnational Programme - The Adriatic Ionian (Adrion) Programme - The Balkan-Mediterranean Programme

For the Danube-Black Sea region the Danube Programme will be most suitable as it covers the whole Dan- ube macro-region.

The Danube programme follows the same geographical scope (Austria; Bulgaria; Croatia; Czech Republic; Germany’s Baden-Württemberg and Bavaria; Hungary; Romania; Slovakia; Slovenia; Bosnia and Herze- govina; the Republic of Moldova; Montenegro; Serbia; parts of Ukraine) than the EU Strategy for the Dan- ube Region (http://www.southeast-europe.net/en/about_see/danubeprogramme/).

Implementation of the programme will be coordinated by joint structures set up in Budapest, Hungary. Implementing structures of the programme are designed in a new institutional setup, taking into account simplification and transnationality as guiding principles.

The objectives, priorities and the amount of funding allocated to the future transnational cooperation Pro- gramme for the period 2014-2020 are still in the negotiation phase. The approval of the programme is expected in the first half of 2015.

The draft thematic priorities of the Danube programme are: - Innovation - Environment and Culture - Transport and Energy - Capacity Building and Governance

The overall budget of the programme is expected to be 202 Mio. EUR. Sucessful projects will be co-financed with a rate of 85%.

The first calls for proposals under this programme are expected to be launched in September 2015.

Funding Options 113

7.4 CONNECTING EUROPE FACILITY (CEF) – TRANSPORT

This facility is open for “projects of common interest” of at least 2 EU member countries as well as between member states and neighbouring countries, thus giving access to funds to all countries of the Danube region. The Directorate General for Mobility and Transport (DG MOVE) of the European Commission provides funding for project support actions via CEF.

The CEF is a key EU financial instrument to promote growth, jobs and competitiveness through targeted infrastructure investment at European level. It is divided into three main areas, CEF Transport being one of them. CEF aims at the development of high-performing, sustainable and efficiently interconnected trans- European networks.

Under the Connecting Europe Facility (CEF), €26.25 billion will be made available from the EU’s 2014-2020 budget to co-fund TEN-T projects in the EU Member States. Of this amount, €11.305 billion will be available only for projects in Member States eligible for the Cohesion Fund.

For the financing period 2014 – 2020 the focus is on

 building missing cross-border links, and  removing bottlenecks along the main transport corridors (Core Netork Corridors) within the European Union.

Innovation and Networks Executive Agency - INEA:

- Executive Agencies of the European Commission turn EU policy into action by overseeing program implementation. This means they follow EU co-funded projects throughout their lifecycle, providing feedback to the Commission in the process. This is in addition to giving a wide variety of support to the program beneficiaries and ensuring good visibility on the added-value of EU funding. - At the beginning of 2014 the new (INEA) has taken over management / administration of the calls for proposals. INEA is the successor of the TEN-T EA (Trans-European Transport Network Executive Agency, which was created by the European Commission in 2006 to manage the technical and financial implementation of its TEN-T Programme - INEA manages parts of the new CEF (as well as the Horizon2020 programme). In total, it is expected that the agency will manage a budget of up to €37 billion for the new Programmes (€30 billion from the CEF and €7 billion from H2020). - Furthermore INEA continues to manage the remaining 2007-2013 TEN-T Programme projects, as well as the remaining projects from the Marco Polo Programme (freight logistics), which it takes over from the Executive Agency for Competitiveness and Innovation.

The CEF priorities are major cross-border projects and projects addressing main bottlenecks on the 9 TEN-T multimodal Corridors:

• Pre-identified projects on the core network as well as other projects on the core and comprehensive network • Implementation of the horizontal priorities

Funding Options 114

• New technologies and innovation • Increasing the opportunity for private investment support • Connect TEN-T network with neighbouring countries

Furthermore CEF followes specific funding objectives which are: • FO1: Removing bottlenecks and bridging missing links (~80% of max budget) • FO2: Ensuring sustainable and efficient transport in the long run (~5% of max budget) • FO3: Optimising integration and interconnection of modes and enhancing interoperability (~15% of max budget)

CEF Key features • Funds allocation mainly through grants but also financial instruments • Higher co-funding rates which can be further increased under certain conditions (e.g. bottlenecks, cross-border) • For the cohesion envelope co-funding rate up to 85% • Implementation by Multi-annual (80-85%) and Annual (15-20%) Work Programmes

The structure of calls 2014 is based on multi-annual and annual work programmes.

1. Multi-annual Working Programmes (MAP): • Max budget available: 11bln • Objective: stimulate efficiency; strengthen visibility of the 9 corridors • Coverage: pre-identified projects along the 9 core network corridors, other core network projects and horizontal priorities (Annex 1 of the CEF regulation)

2. Annual Working Programmes (AP): • Max budget available : 1bln • Objective: implementation of the core network by 2030 and comprehensive network • Coverage: transport infrastructure development /transport services and facilities; projects on the core and comprehensive network

Funding Options 115

Figure 60: Structure of multi-annual and annual calls

Source: Anna Panagopoulou, INEA, CEF Info Day 2014, 9-10 October

For each call specific terms of reference have been developed including specifications on topics, funds per call, eligibility rules of different parnters (cohesion fund countries and others), etc. More information about the current running call (2014) can be found at http://inea.ec.europa.eu/

7.4.1 Maritime ports164

The 2014 CEF call defines a general objective for the development of maritime ports: Support the development of ports as efficient and sustainable entry and exit points fully integrated with the land infrastructure in line with the Communication "Ports: an engine for growth" of 2013

The call priorities are focusing on:

1. Hinterland connections to the Core Network (rail, inland waterway or road if other hinterland connections are not an option) with adequate capacity and efficiency (Comprehensive AND Core Network ports!)

2. Port access aiming at providing safe maritime access in the form of breakwaters, capital dredging activities, access channels, locks and navigational aids (ONLY Core Network ports)

164 Source: Marc Vanderhaegen, European Comission – DG MOVE (Presentation given during 2014 CEF Transport Calls Info Days, Brussels, 10 October 2014)

Funding Options 116

3. Basic infrastructure in the form of internal basins, quay walls, jetties, backfills and land reclamation as long as it does not provide selective advantage to a particular operator or group of operators (ONLY Core Network ports!)

4. Reception facilities for oil and other waste, including residues from scrubbers, to meet environmental requirements (Comprehensive AND Core Network ports!)

5. Implementation of new facilities and technologies regarding use of alternative energy, e.g. LNG bunkering, shore-side electricity, etc. (Comprehensive AND Core Network ports!)

7.4.2 Inland waterways and inland ports165

The general objective for the development of inland waterways and inland ports in the 2014 CEF call is: Support the implementation of the Commission's NAIADES II Communication, which aims for inland navigation transport to become a quality mode of transport: well-governed, efficient, safe, integrated into the intermodal chain, with quality jobs occupied by a skilled workforce, and adhering to high environmental standards.

Priority is given for filling missing links, clearing important bottlenecks, deploying innovative technology, improving intermodal connections and developing smart infrastructure. Sea and inland ports should receive particular attention as regards inland waterway-friendly access and facilities. The ports are encouraged to strengthen cooperation and coordinate investment across TEN-T corridors.

The CEF call priorities for inland waterways are: • navigation conditions and/or more capacity • Upgrading, modernisation (including remote control) and building of locks • Increase under-bridge clearance • Creation and/or upgrade of infrastructure for mooring and waterside operations • Create new waterways (if pre-identified under the Multi Annual Programme, or in AP/Annex 2) • Facilities for ice-breaking, hydrological services, dredging

For inland ports the call priorities are: • Provide access to inland ports and connections of inland ports to rail and road sections of the core network • Improve access of inland ports to waterways (incl navigational aids) • Upgrade basic infrastructure in inland ports (quaywalls, jetties) • Provide waterside terminals with better infrastructure (storage, stacking areas) • Reception facilities for oil and other waste • ICT applications eg. Single window, streamlining formalities (not including River Information Sys- tems) • Providing or improving road/rail access and connections within inland ports • Facilities for loading/transhipment, ice-breaking, hydrological service, dredging

165 Source: Marc Vanderhaegen, European Comission – DG MOVE (Presentation given during 2014 CEF Transport Calls Info Days, Brussels, 10 October 2014)

Funding Options 117

• Implementation of fixed infrastructure to supply alternative energy eg. LNG bunkering, shore-side electricity

More information about previous and running calls can be obtained at: http://inea.ec.europa.eu/en/news__events/events/2014_cef_transport_info_day.htm

7.5 HORIZON 2020 – “SMART GREEN AND INTEGRATED TRANSPORT”

INEA has been installed to manage i.a. two parts of the Horizon2020 programme, the EU's main financial instrument for the research area.

The Smart green and integrated transport and Secure, clean and efficient energy are part of H2020's "Better Society" objective tackling societal challenges shared by all Europeans.

Regular Horizon 2020 calls will be published by INEA, which might be applicable for funding (parts) of the topics covered in the report.

The application process

- Upon publication of an appropriate Call for Proposals - submission of online proposal (see Partici- pant Portal with all specific instructions http://ec.europa.eu/research/participants/portal/desktop/en/home.html )

- Find suitable partners - many calls require a team of at least three partners. The Participant Portal can also be used for partner search inserting specific experience, competence or facilities.

- Evaluations by experts - all proposals are evaluated by a panel of independent specialists in their fields. The panel checks each proposal against a list of criteria to see if it should receive funding.

- Grant agreement - Once a proposal passes the evaluation stage (five months’ duration), applicants are informed about the outcome. The European Commission (usually INEA on behalf of the EC) then draws up a grant agreement with each participant. The grant agreement confirms what research & innovation activities will be undertaken, the project duration, budget, rates and costs, the European Commission's contribution, all rights and obligations and more. The time limit for signing the grant agreements is generally three months.

Calls for proposals under the Horizon 2020 program always require a certain level of (technical) research / innovation. Therefore it might be difficult to have a corridor study included under this program.

Funding Options 118

7.6 INTERNATIONAL FINANCING INSTITUTIONS

7.6.1 EIB – European Investment Bank

EIB is strongly supporting railway projects being the most promising transport modes for reduction of greenhouse gas emissions. In general EIB is active within and outside the EU, thus covering all countries involved. Typically EIB is rather active in funding the investments (specifically in connection with TENs) than the respective studies.

7.6.2 World Bank

The World Bank group is focused on developing and transition countries. Therefore most of the EU member countries are no major subjects of World Bank funding.

The World Bank group has ongoing business in Serbia and Turkey, which is based on multiannual programmes and therefore all funds are already dedicated to projects until 2016.

7.7 JASPERS

JASPERS („Joint Assistance to Support Projects in European Regions“) is funded by EC, EIB, EBRD and KfW. Its objective is to improve the quality of major projects to be submitted for grant financing under structural or cohesion funds. JASPERS supports EU-members (incl. candidate countries such as Serbia and Turkey).

A precondintion to get support from JASPERS and for the allocation of EU-funds is the existence of an Inte- grated Transport Strategy. The strategy and the respective projects have to have to follow and intermodal approach.

Applications have to be submitted through National Authorities. JASPERS operates on the bases of country Action Plans prepared annually by member states

Therefore JASPERS could be an important partner in the preparation of future cooperation projects in the Danube-Black Sea region. It is recommended to involve the JASPERS experts in an early stage of the project development process in order to guarantee that the project approach is in line with the reuqirments of the different EU/international funding programmes.

Funding Options 11 9

7.8 FUNDING OVERVIEW

EUSDR Cohesion Fund Structural Funds CEF ERDF Horizon 2020

Regional Danube macro region: Bulgaria, Croatia, Cyprus, EU Member EU Member States EU Member EU Member States and Eligibility from the Black Forest the Czech Republic, Estonia, States (incl. Neighboring and States and Neigh- Countries associated to (Germany) to the Black Greece, Hungary, Latvia, Third Countries) boring Countries Horizon 2020 (all coun- Sea (Romania-Ukraine- Lithuania, Malta, Poland, tries in the Danube-Black Moldova) Portugal, Romania, Slovakia Sea region) and Slovenia.

Relevant PA 1a Mobility- Trans-European transport Implement re- Core network corri- Regional Devel- achieve a European Priority Waterways networks and Environment gional develop- dors, comprehensive opment transport system that is resource-efficient, cli- Areas of (incl. transport which clearly ment goals of EU network mate- and environmen- PA 1b-Rail Road Air Action benefits the environment, tally-friendly, safe and e.g. developing rail seamless for the benefit of all citizens, the econ- transport, supporting inter- omy and society modality, strengthening public transport)

Funding START: projects supports infrastructure European Region- pre-identified list of INTERREG VA three Calls for proposals: instruments projects under the Connect- al Development projects where most (Cross-border), (1) Mobility for Growth, (and TAF-DRP: technical (2) Green Vehicles, (3) ing Europe Facility (CEF) Fund (ERDF) and CEF investments will INTERREG VB Small Business and Fast assistance) be placed (Transnational), Track Innovation for European Social INTERREG VC Transport Fund (ESF), (Interregional)

Supported Project development Priority projects of Europe- Studies and infrastruc- Investment prep- Research and innovation activities and project implementa- an interest as identified by ture aration activities, actions tion activities the EU network actions, small scale investments

Funding €900,000 total €63.4 billion €278 billion €26.25 billion (half of it €10.1 billion €6 339 million budget reserved for Member (€10,000- States eligible for the €40,000/project) Cohesion Fund)

Co- Max. 90% Depending on programme Depending on Studies: 50% Up to 85% de- financing programme pending on pro- Infrastructure: Rail rate gramme and networks (up to 30% country for bottlenecks, 40% for cross-border links), IWW (up to 40% for bottlenecks and cross- border links)

List of references 12 1

8 LIST OF REFERENCES

References - Ayirtman 2014: Presentation Multimodal transport in Caucasus region at the Constantza Port Day; Krems - Băncilă, Petzek 2009: The History of the Romanian Danube Bridges in Proceedings of the Third Interna- tional Congress on Construction History, Cottbus, May 2009 - Batumi Sea Port 2014: Presentation: Batumi Sea Port at the Constantza Port Day; Krems - Breitspur Planungsgesellschaft 2011: Pre-feasibility study for broadgauge railway connection between Košice and Vienna - BSEC – Organization of the Black Sea Economic Cooperation (2007): Presentation Black Sea Ring High- way Caravan - Capatu 2011: Presentation : Why Constanta - Capatu 2013a: Presentation: Constanta Port – Present & Future, Krems - Capatu 2013b: Presentation Port Galati Description, Krems - Capatu 2014: Presentation Constanta Port – Present & Future - Constantza Port 2013: Constantza port handbook 2013/2014 - Costea 2012: Danube Inland Harbour Development – State of the art study – Hinterland connections - Council of the European Union 2012: Proposal for a Regulation of the European Parliament and of the Council on Union guidelines for the development of the Trans-European Transport Network – Brussels - DaHar – Danube Inland Harbour Development 2013a: Local Action Plan for Galati - DaHar – Danube Inland Harbour Development 2013b: Local Action Plan for Giurgiu - DB Schenker 2012: Presentation – Rail based transports between China and Europe - EU 2013: Regulation (EU) No 1316/2013 of the European parliament and of the council - European Commission 2014: Core Network Corridors – Progress report of the European coordinators - European Communities 2008: Final Report for the study on administrative and regulatory barriers in the field of inland waterway transport – Part A - Eurostat 2013: Statistical Pocketbook 2013 - Galonske 2014: Presentation: TEN-T CNC Rhine-Danube Corridor study; Second Corridor Forum; Corri- dor Characteristics Rail - Government of Romania; Ministry of Transport 2007: Sectoral Operational Programme TRANSPORT 2007 – 2013 - Government of Romania, Department for infrastructure projects and foreign investment: Financing, design and Execution of Bucharest-Danube Canal – Systematization of Arges and Dambovita rivers for Navigation and other uses - Matousek 2014a: Presentation: TEN-T CNC Rhine-Danube Corridor study; Second Corridor Forum; Part 1: Outline of Corridor and infrastructure determination - Matousek 2014b: Presentation: TEN-T CNC Rhine-Danube Corridor study; Second Corridor Forum; Part 2. Corridor Characteristics and Objectives - Merk et. al. 2011: The Competitiveness of Global Port-Cities: The Case of the Seine Axis (Le Havre, Rou- en, Paris, Caen), France - Northern Sea Route Information Office – Transit Statistics 2011, 2012 and 2013 - Notteboom 2008: The relationship between seaports and the intermodal hinterland in light of global supply chains - University of Antwerp - Notteboom 2009: Economic analysis of the European seaport system

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- OP Transport Bulgaria 2014: Working version of the OPTTI 2014-2020 - Republic of Azerbaijan 2014: Presentation: The New Baku International Sea Trade Port at the Constan- tza Port Day; Krems - Romcargo Maritim 2014: Romcargo Maritim Terminal – Gateway to EU - Schwetz 2013: Presentation as part of the Black Sea Conference in Krems - Seehafenbilanzen 2005, 2010, 2011, 2012 and 2013 - Stein 2012: Potentialanalyse von Unternehmen im Einzugsbereich der österreichischen Donau für die Inanspruchnahme von Containerliniendiensten in der Distributionslogistik - Ukport 2011: Presentation – Ukrainian ports, Istanbul - United Nations 1999: Development of Asia-Europe rail container transport trough block-trains - United Nations 2006: Inventory of main standards and parameters of the E waterway network – „Blue Book“ First revised Edition - United Nations 2012: Euro-Asian Transport Linkages Phase II – Expert Group Report - WKO 2012: Positionspapier der WKÖ zu einer Verlängerung der russischen Breitspurbahn bis in den Raum Wien

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Figures and Tables 125

9 FIGURES AND TABLES

9.1 FIGURES

Figure 1 – Multi-Port Gateway Regions ...... 7 Figure 2 – Project area (Black Sea West Gateway region and its hinterland) ...... 9 Figure 3 – Methodological approach ...... 10 Figure 4 - GDP per capita in the Western Black Sea Region ...... 11 Figure 5 - Unemployment rate in the Western Black Sea Region, Turkey and Austria ...... 12 Figure 6 - Distribution of working population by economic sector ...... 13 Figure 7 - Development of Austrian direct investment in million Euros ...... 14 Figure 8 - Austrian exports to the Black Sea region in 1,000t ...... 15 Figure 9 - Austrian imports from the Black Sea region in 1,000t ...... 16 Figure 10 - Austrian imports from the Black Sea Region by types of goods in 1,000t ...... 16 Figure 11 - Exports from Austria to the Black Sea Region by types of goods in 1,000t...... 17 Figure 12 - Import/Export of goods between Austria and the Black Sea region (2012 in metric tons) ...... 18 Figure 13 - Austrian imports via the main European sea ports in tonnes ...... 19 Figure 14 - Austrian exports via the main European sea ports in tonnes ...... 20 Figure 15 - Bulgarian imports and exports from Romania in 1,000t ...... 21 Figure 16 - Bulgarian exports to Romania by types of goods in 1,000t ...... 21 Figure 17 - Bulgarian imports from Romania by types of goods in 1,000t ...... 22 Figure 18 - Share of rail freight transport (in percent) in total freight transport in tonne-kilometres ...... 23 Figure 19 - Share of road freight transport (in percent) in total freight transport in tonne-kilometres ...... 24 Figure 20 - Share of inland waterway transport (in percent) in total freight transport in tonne-kilometres .. 25 Figure 21 - Commercial Sea-Routes in 2012 ...... 29 Figure 22 - Location of the different Terminals in Galati ...... 39 Figure 23 - Important roads (planned and existing) in Bulgaria ...... 44 Figure 24 – Ports and their hinterland ...... 49 Figure 25 – Ports and their hinterland ...... 54 Figure 26 – Route of the Rhine-Danube Corridor ...... 55 Figure 27 - Route of the Rhine-Danube IWW Corridor ...... 57 Figure 28 - Route of the Rhine-Danube Rail Corridor ...... 58 Figure 29 - Route of the Rhine-Danube Road Corridor ...... 59 Figure 30 - Nautical bottlenecks and water classes of the Danube River ...... 61 Figure 31 - Areas with insufficient rail line equipment ...... 64 Figure 32 - Areas with critical alignment ...... 65 Figure 33 - Areas with high line capacity utilisation ...... 65 Figure 34 - Critical road conditions and missing links ...... 66 Figure 35 - Route of the Orient/East-Med Corridor in Southeast Europe ...... 69 Figure 36 - Railway electrification in the southern parts of the corridor ...... 72 Figure 37 - Critical cross-border and port connections in the Western Black Sea Region ...... 77

Figures and Tables 126

Figure 38 - Black Sea ring highway draft map ...... 78 Figure 39 – Extra-EU-27 Trade by mode of Transport in 2011 ...... 79 Figure 40 – Main maritime shipping routes ...... 80 Figure 41 - Comparison between the Northeast Passage and the Suez Canal route ...... 81 Figure 42 - Commercial sea routes in 2012 ...... 81 Figure 43 - Combined transportation from Germany to Georgia ...... 83 Figure 44 - Transportation links in the Southern Caucasus ...... 84 Figure 45 - Scheme of the Batumi Sea Port ...... 85 Figure 46 - Location of the New Baku International Sea Trade Port ...... 86 Figure 47 - Euro-Asian transport linkages ...... 86 Figure 48 - Northern corridor of the trans-Asian railway ...... 87 Figure 49: NAPA ports location ...... 93 Figure 50: Core Network Corridors connecting the NAPA ports with their hinterland ...... 96 Figure 51: Port development plans – Port of Venice ...... 97 Figure 52: Port development plans – Port of Rijeka ...... 98 Figure 53: Port development plans – Port of Koper ...... 98 Figure 54: Port development plans – Port of Trieste ...... 99 Figure 55 - Import/Export of goods between Austria and the Black Sea region (2012 in metric tons) ...... 101 Figure 56 - Critical cross-border and port connections in the Western Black Sea Region ...... 102 Figure 57: EUSDR Pillars and Priority Areas...... 105 Figure 58: Main characteristics of TAF-DRP and START ...... 106 Figure 59: Structural Funds 2014-2020 – Regional Eligibility ...... 108 Figure 60: Structure of multi-annual and annual calls ...... 112

9.2 TABLES

Table 1 - SWOT analysis of the Bulgarian economic development ...... 26 Table 2 - SWOT analysis of the Romanian economic development ...... 27 Table 3 - Costs at the port of Odessa ...... 31 Table 4 - Mooring dues in the port of Illichivsk ...... 34 Table 5 - Pilotage dues in the port of Illichivsk ...... 34 Table 6 - Prices for storage at the port of Illichivsk ...... 35 Table 7 - Accruing costs at the port of Galati ...... 37 Table 8 - Services provided by port administration for vessels in port ...... 38 Table 9 - Quay tariff in the port of Constanta in €/m/day ...... 41 Table 10 - Basin tariff in the port of Constanta in €/m/day ...... 41 Table 11 - Costs of port management and administration in the port of Varna ...... 46 Table 12 - Costs for the storage of goods in the port of Varna ...... 46 Table 13 - Connection of the ports...... 50 Table 14 - Summary of the port data ...... 50 Table 15 - Expansion plans of the ports and their infrastructure* ...... 51 Table 16 - SWOT analysis of the Bulgarian ports ...... 52 Table 17 - SWOT analysis of the Romanian ports ...... 53

Figures and Tables 127

Table 18 - CEF-pre-identified projects of the Rhine-Danube Corridor ...... 67 Table 19 - CEF-pre-identified projects of the Orient/East-Med Corridor ...... 73 Table 20 - List of major projects to be implemented during programming period ...... 74 Table 21 - Block trains on the Trans-Siberian Railway ...... 88 Table 23 – Regularly, non-exclusive container block trains ...... 89 Table 24 - SWOT analysis of the Bulgarian transport system...... 90 Table 25 - SWOT analysis of the Romanian transport system ...... 92