The Connectivity Agenda in the Western : A snapshot

Briefing Aprill 2020 CONTENTS:

Executive Summary 1

1. Introduction 2

2. The Connectivity Agenda and its main financing instruments 2

2.1. Western Balkans Investment Framework (WBIF) 3

3. Connectivity and infrastructure in the Western Balkans 3

3.1. 4

3.2. (BiH) 5

3.3. 6

3.4. 7

3.5. 8

3.6. 9

4. Conclusion 10

Notes 12 EXECUTIVE SUMMARY

Regional cooperation is one of the key components of preparing the Western Balkans (WB) for the (EU) enlargement process. The Berlin Process was launched in 2014 by the German Chancellor Angela Merkel to facilitate this coopera- tion, among others aiming to improve connectivity both within the WB countries and between the WB and the EU. The ultimate goal of which is to improve living standards and quality of life for the citizens.

This mutual commitment by the WB countries and EU has been further strengthened through the EU Connectivity Agenda for the WB (launched in 2015), a combination of political commitment and monetary funds to strengthen the and energy sectors. Since the Berlin Process, several projects were undertaken or are currently underway. Until 2019, the Agenda supported 39 projects with an investment value of EUR 3.2 billion, grant value of EUR 880 million and EUR 97 million on technical assis- tance for project preparation. However, all WB countries lag behind in both sectors in comparison to EU members’ states. Key challenges identified include low operation and administrative capacity, limited progress and investment in renewable energy options, old infrastructure to demand for higher monitoring and cooperation. This Agenda offers many opportunities to improve not just the energy and transport sec- tors but also the wellbeing of WB citizens in the long term. It is therefore essential for the WB to make the most of the Connectivity Agenda and further intraregional coop- eration in reaching their goals.

As the information provided in this briefing was limited by restricted access to data and literature resources, we do not exclude that further information on the topic might exist

1 1. INTRODUCTION Connectivity holds that both states and individuals can only reap the full benefits of globalization when the world is connected through permanent and highly advanced physical and digital linkages.

The establishment of networks on the supranational, national and personal levels is therefore paramount to any region aiming to uphold stable economies amongst neighbouring countries and a high standard of living for all. Yet, the current state of infrastructure in the Western Balkan Six (WB6) countries is 50% below the EU aver- age.¹

Regional cooperation is imperative to palliate this deficit and prepare WB for the EU enlargement process. In 2014, the Berlin Process, a diplomatic and outcome-oriented initiative was launched to facilitate such cooperation. One of the main objectives of the process is to improve connectivity both within the WB and between the WB and the EU. At the WB Summit in Berlin (2014), first in the series of the Berlin Process, the WB countries pledged to make connectivity a priority. Pledges by WB countries have been reconfirmed in the subsequent annual summits held in Vienna (2015), Paris (2016), (2017), London (2018), and Poznań (2019). The Berlin Process and other EU-WB Summits, including Sofia (2018) and (2020), reaffirmed the EU’s support for the WB countries, and the commitment by the latter to the European perspective for the region.

This is a snapshot to the progress, including key challenges and opportunities to the WB6 to fulfil their pledges and achieve their goals in further advancing the connectivi- ty. It starts with a short introduction of the Connectivity Agenda, followed by a brief country-by-country overview, and conclusions.

This briefing only scratches the surface of such a massive topic related to connectivity in WB which requires a comprehensive research and analysis to fully understand and appreciate the progress, challenges, impact and benefits to the societies in each WB country and region as whole.

2. THE CONNECTIVITY AGENDA AND ITS MAIN FINANCING INSTRUMENTS

The Connectivity Agenda aims to strengthen regional cooperation and economic development in the WB. Launched by the EU in 2015, it combines the high-level politi- cal commitment of the parties involved with monetary funds to strengthen the trans- port and energy sectors. It sponsors projects (39 financed in 2019) on road, rail and waterways throughout the WB6. These projects, with an investment value of EUR 3.2 billion and a grant value of EUR 880 million, ² have a dual aim. First, they benefit citi- zens by cutting down travel times, increasing overall safety and reducing air pollution. Second, they contribute to the economy by increasing trade, creating new jobs and securing energy efficiency at competitive pricing.³ It also requires that connectivity reform measures are incorporated in each country’s regulatory and legislative frame- works.

As further elaborated below, the Agenda’s main financial backer is the Western Bal- kans Investment Framework (WBIF). Investment in transport, energy and digital tech- nology, aims to contribute to political stability, economic prosperity and social develop- ment. 2 2.1. WESTERN BALKANS INVESTMENT FRAMEWORK (WBIF)

WBIF, as the leading funding instrument toward the Connectivity Agenda, has been launched in 2009 by the European Commission (EC), together with the Council of Development Bank (CEB), the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB). The framework has two main objectives. The first is the distribution of grants, loans, and expertise to ensure adequate financing to priority investment projects. The second is to strengthen coherence and synergies among donors so as to increase the positive impact and visibility of investments in WB.⁴ WBIF sup- ports private sector development as well as infrastructure development within the environ- ment, energy, transport, and social sectors. Despite challenges, the WBIF is increasingly leveraging loans and grants, and giving priority to projects with regional impact. By doing so it furthers regional and national strategies, allowing for accelerated preparation and exe- cution of priority investments.

3. CONNECTIVITY AND INFRASTRUCTURE IN THE WESTERN BALKANS

The following provides a brief country-by-country overview of the progress in advancing the Connectivity Agenda, along with the key challenges and opportunities for the WB coun- tries.

Transport in Albania consists of transport by land (rail, roads), water and air. Albania has sev- eral seaports with Durrës, Vlorë, Sarandë, and Shëngjin being the most important ones. The country’s sole commercial is International Airport. Currently its only direct connection to other WB countries is the flight between Tirana and (Serbia). It has no railway links with , Kosovo and North Macedonia, and freight service only with Montenegro. By land Albania borders Greece, Kosovo, Montenegro and North Macedonia.

Transport in BiH includes transport by land (rail, roads) and air. BiH has small access to the Adriatic Sea with 20 km of coastline in the town of Neum. The country’s largest airport is International Airport. Its only direct connection to other WB countries is through flights between Sarajevo and Banja Luka (BiH), and Belgrade (Serbia). It has railway links with and Serbia but not with Montenegro. BiH is bordered by Croatia, Montenegro and Serbia.

Similarly, in Kosovo there is road, rail and air transport. Currently, only the railway with North Macedonia is functional. The country’s only commercial airport is Prishtina International Airport which has no direct flights to other WB countries. Kosovo is landlocked and bor- dered by Albania, Montenegro, North Macedonia and Serbia.

Transport in Montenegro consists of road, rail, water and air. The main seaport is Port of Bar. Montenegro’s direct connection to other WB countries is through its two commercial in and Tivat which offer direct flights to Belgrade and Niš (Serbia) only. Its railway is linked with Serbia only whereas with Albania freight service is used. Montenegro borders Albania, BiH, Croatia, Kosovo and Serbia.

North Macedonia’s transport system includes road, rail and air transport. North Macedonia has no sea access but there are recreational marinas on Lake and other lakes. Its direct connection to other WB countries is through its two commercial airports in and Ohrid which offer direct flights to Belgrade (Serbia) only. Its railway is linked with Greece, Kosovo and Serbia, and but not Albania and Bulgaria. It is bordered by Albania, Bul- garia, Greece, Kosovo and Serbia.

3 Serbia is landlocked, bordering BiH, Bulgaria, Croatia, , Kosovo, Montenegro, North Macedonia and . Transport includes rail, road, water and air. The most important inland waterway is the Danube. Of the six WB countries, Serbia has the most developed direct connection to other WB countries through its two commercial airports in Belgrade and Niš which offer direct flights to Tirana (Albania), Banja Luka and Sarajevo (BiH), Podgorica and Tivat (Montenegro), and Skopje (North Macedonia). Serbia has no direct flights to Kosovo. Serbia has rail links with all neighbouring coun- tries, except Albania.

3.1. ALBANIA

When it comes to transport policy Albania has some level of preparation and is moderately prepared in the energy sector.⁶ However, its average infrastructure development was esti- mated to be nearly 70% lower than the European average.⁷

The country’s sole commercial airport is Tirana International Airport. Construction of a second airport, near Vlora was scheduled to start in 2018 but was put to a halt as the negoti- ation with the Turkish consortium failed. The Ministry of Infrastructure revived the project in December 2019 by opening an international tender.⁸ Albania’s only current direct connec- tion to other WB countries is through flights between Tirana and Belgrade (Serbia).⁹

The railway system consists of three main lines respectively ending in , Vlora and Shkodra. It connects the capital Tirana to the coast in Durrës and other prominent cities but lacks international connections.

Albania is part of the Pan-European Corridor. Modernization of its highway system has been ongoing since the early 90s. Highways and state roads are primarily concentrated in the coastal areas. The three national motorways connect major cities and make up a total of 333,5 km. Motorway A1 being the longest. It forms part of the Pan-European Corridor X which spans from Salzburg, Austria, to Thessaloniki, Greece and connects the Adriatic Coast at Durrës with the capital Tirana before ending at Kukës. Motorway A2 connects to Vlorë and Motorway spans from Tirana to . While the main roads have generally been renovated, the roads in rural areas remain in poor condition. Street lighting is seldom pro- vided, road works often left unmarked and deep potholes inadequately secured making driving at night hazardous.

Albania ratified the Transport Community Treaty in 2018 which aims to further integrate WB countries with the EU in the field of transport by applying the common standards. The 2019 EC Country Report for Albania notes that since 2018 Albania has made steady progress in aligning its national legislation on road transport with the EU acquis. Yet it struggles implementing rules and guidelines on training and sanctions as well as strength- ening its inspection capacity.

The new railway code aims to separate train operations from infrastructure management. Unfortunately, it fails to fully transpose the recast Directive on a single European railway area and the EU safety and interoperability rules. Thus the separation of train operations from infrastructure management remains incomplete.

As part of the Connectivity Agenda there have been investments to rehabilitate the mari- time and railway paths linking Tirana and Durrës. This work, currently in progress, should benefit the region in a myriad of ways. It will create a safe and efficient transport system by sea for the largest port in Albania (and one of the largest in the Adriatic Sea), increase cargo capacity and traffic, and create 230 new jobs. Overall, it is expected to improve the regional trade flow and have a positive impact in the economy.

4 Albania ranks last in terms of energy supply stability in the Balkans. Electricity is mainly pro- duced from hydropower. In 2016, the average interruptions of the power system amounted to 97 hours annually. Seeing these issues, Albania should promote alternative sources of renewable energy in compliance with current environmental standards.

3.2. BOSNIA AND HERZEGOVINA (BIH)

Bosnia and Herzegovina is at an early stage of preparations in the field of transport and energy, as noted by the 2019 EC Country Report on BiH. Transport has developed slowly and insufficiently due to underlying structural problems such as damages from the war, inade- quate maintenance, financial issues and the fall out of the 2014 flood. Despite the existence of a 2015 framework transport policy and a 2016 framework transport strategy, the overall legal and regulatory framework remain fragmented. The alignment of national legislation with the EU acquis on transport varies substantially depending on the transport mode. This disparity, combined with insufficient administrative capacities, lack of implementation and coordination, and poor cooperation between government levels, has hampered investment in the sector. Notwithstanding the positive step that the signing of the Transport Commu- nity Treaty in 2018 represents, BiH needs to intensify its work in implementing connectivity reform measures.

There are several airports in BiH but most are unpaved and not open for commercial flights. Commercial flights are only available in Sarajevo, Mostar, Tuzla, and Banja Luka. Sarajevo is by far the largest airport, scheduling daily flights to Munich, Istanbul and Zagreb and weekly flights to several countries. However, connections to other WB6 remain less frequent. Currently Sarajevo and Banja Luka only have direct flights to Belgrade (Serbia). The current railway system succeeds the Yugoslav Railways system which suffered enor- mously during the war. Transport via train is comparatively low-cost but slow. Only three main lines remain: Sarajevo to Zagreb, Sarajevo to Doboj and Sarajevo to Zenica. Despite “priority status”, the restoration of train lines is slow.

The condition of roads and motorways has drastically improved, but still remains far below the EU average. As a result, the Tourism Association gives out warnings to always carry a reliable map, spare parts for cars and snow chains in winter. Affordable and well connected remain the main source of transport. Some operators offer routes to travel around the country and internationally, mainly toward EU Member States.

As part of the Connectivity Agenda, projects have been implemented in BiH to develop the Corridor Vc motorway, called the Mediterranean Corridor. The highway aims to connect BiH to Croatia, Hungary, and the Adriatic Sea. Corridor Vc is the leading international transport corridor in BiH, and its development is a strategic priority for the country and part of the Western Balkans Core Network. The project is also supported by the OPEC Fund for Interna- tional Development (OFID). Two loan agreements, worth a total of USD 55.5 million, were signed by the OFID and Bosnia and Herzegovina’s government representatives in 2018. The project is expected to have a positive impact on the economy of BiH.

In addition, two projects on road interconnection (Svilaj to Odžak and Banja Luka to Gradiš- ka) aim to connect BiH to the main transport routes in Croatia. The latter is in its earlier stage and expected to be completed by mid-2022. However, the lack of other projects linking BiH to other WB countries is noticeable.

Though electricity supply is mostly secured, it is mainly fuelled by coal and is a main source of air pollution in the country. In Sarajevo, air pollution reaches hazardous levels several times per year.

5 Legislation has yet to be aligned with the third energy package in the field of both electrici- ty and gas. In general, BiH is not meeting its obligations arising from the Energy Communi- ty Treaty. The EC has recommended that BiH increases and implements measures with regards to energy efficiency and renewable energy sources. Action plans should also be drafted to ensure that the energy strategy is implemented under climate change commit- ments.

3.3. KOSOVO

Kosovo is at the early stages of transport policy and energy. While some progress has been achieved on implementing the Connectivity Reform, further efforts are needed to strength- en regional connectivity. Overall, Kosovo should strengthen administrative capacities and the institutional framework to implement the Transport Community Treaty.

Currently, the country has only one commercial airport: Prishtina International Airport. In 2018, it handled 2.16 million passengers, reaching the 2 million mark for the first time. The airport is well connected to EU countries, especially Germany, with extension and upgrade of the runway scheduled for completion in 2020. Currently, Kosovo has no direct flights to other WB countries. Kosovo possesses two other airports: Airport, which was used in the past exclusively for military purposes, and Airport, which is no longer func- tional. Tentative plans to open for commercial uses have proved unsuccess- ful so far.

The rail network is very poorly developed. Currently, the only international connection is from Prishtina to Skopje. Domestic passenger transport is only offered on the lines from Prishtina to Peja, and Fushë Kosovë to Hani i Elezit as the lines Klinë-Prizren and Fushë Kosovë- Prishtinë- Podujevë are not functional. Rehabilitation of Rail Route 10 (connecting the border of Serbia to that of North Macedonia) will require an increase in capacities of Infrakos, the railway infrastructure company. In 2016 a project to rehabilitate 35 km of railway track, from Fushë Kosovë to Mitrovicë, was devised to connect North Macedonia, Kosovo and Serbia. However, the project is going slower than expected.

Kosovo has adequate highway connections to neighbouring countries, including access to North Macedonia via the R 6, Albania via the R 7 and Serbia via the R 7.1. Except for motor- ways, the condition of roads is generally bad, and travellers are advised to be especially care- ful at night due to significant variations in the quality of the road surface. With EU support, Kosovo and Serbia are pursuing the Connectivity Agenda. They have started planning the construction works for the Orient/East-Med Corridor in Kosovo and Serbia which includes the Niš – Merdare – Prishtina road section. The 23 km dual carriageway is expected to elim- inate bottlenecks and congestion, consequently improving the efficiency of multimodal transport routes. It will also ensure the connection with Adriatic Seaports and improve eco- nomic opportunities for the citizens working and living along the new route. Finally, border issues and bureaucratic requirements remain one of Kosovo’s main hindrances to an effec- tive transportation system. Crossing the border to Albania, North Macedonia and Montene- gro remains relatively straightforward, however other countries have made it much more difficult. For example, Bosnia-Herzegovina and EU countries require visas.

Kosovo's energy infrastructure is in dire need of modernization. To this day, it still relies heav- ily on coal as a source of energy even though coal is the main source of air pollution which relies on two ageing power plants unable to meet the demand. Kosova A was supposed to be decommissioned in 2017 but is still operational for lack of a better alternative. Kosova B underwent significant repair work from September to December 2018 in order to make sure it would remain viable.

6 Despite the efforts to maintain these two plants active, they can only produce a maximum of 800MWh when the national population requires 1,100MWh in winter. Kosova e re, a new lignite-fired power plant planned to be built in Kosovo remains on the agenda in spite of requiring a new mine and predictions that it will worsen water and air pollution. A vote in April 2020 by the European Network of Transmission System Operators for Electricity, ENT- SO-E, has paved the way for Kosovo’s electricity transmission system operator KOSTT to join the regional network of operators in Europe, ending its reliance on the Serbian power grid and allowing Kosovo to create a joint energy bloc with Albania.

3.4. MONTENEGRO

In the area of transport policy and energy Montenegro enjoys a good level of preparation. Yet, the EC 2019 Country Report on Montenegro notes that despite some progress being made in aligning legislation with the acquis, the country still lags in completing key sector reforms.

Montenegro has two commercial airports: Podgorica Airport and Tivat Airport. Both are operated by the state-owned company Airports of Montenegro, with Podgorica Airport being the leading centre for air travel in the country. The government plans to offer the airports for 25 - or 30 year concessions. Tivat currently offers flights to Belgrade and Niš (Serbia) whilst Podgorica offers direct flights to Belgrade only. Flights to other WB6 coun- tries require connection flights.

The railway network in Montenegro is underdeveloped but low-cost. There are only two train lines currently running, one international from Bar to Belgrade, and one local from Podgorica to Nikšić. As it belongs to the European railway network, it is possible to arrive in Montenegro by train from any place in Europe. The final stop is Bar, and the cities the train goes through are Podgorica, Kolasin, Mojkovac and Bijelo Polje. To support rail transport, the government adopted a new 2017-2027 strategy for the development of the railway sector and the 2018-2020 national railway infrastructure program.

The network is widely accessible via several bus stations in major cities, and other regional destinations. The bus network reaches most neighbouring countries but is almost exclusively privately owned with schedules depending on season and demand.

Montenegro is the only country in the Balkans without motorways. Although the construc- tion of the from the port city of Bar to is currently underway, the proj- ect - and most significant Montenegrin investment since the country’s independence - remains highly controversial. Its high cost, compared to Montenegro’s small economy, has led some experts to deem it financially unsustainable. To finish the project, Montenegro had to take a EUR 809 million loan from China's Exim Bank and use the China Road and Bridge Corporation as contractors. As such, the highway is being built by a large state-owned Chinese company, with two-thirds of the workers being Chinese. This loan is the main reason for Montenegro’s debt-to-GDP ratio currently being at an all-time high of 70% of GDP in 2018. To date, it is still unclear whether the project is viable. Nonetheless, the Montenegrin Government insists that the project will be finished by September 2020. Among others, two connectivity projects are currently underway. The first is a corridor that links Montenegro to Croatia and Albania by 8.5 km-long bypass around the town of Budva. The primary purpose of this project is to relieve road congestion, thus minimizing the impact and disruptions happening during the summer months when traffic reaches more than 30,000 vehicles per day.

7 The second project is to update 20 km of railway track that links Montenegro to Serbia and runs from Bar to Vrbnica. The project will reduce travel times, enhance the safety and reliability of rail transport for the passengers using the route, and increase passenger and cargo rail carrying capacity.

Montenegro is a member to the European Network of Transmission System Operators in Electricity. An interconnection with is planned to be operational at the end of 2019, and others with Serbia and Bosnia and Herzegovina are also planned. However, Montenegro does not have a gas market.

3.5. NORTH MACEDONIA

North Macedonia is moderately prepared in the area of transport policy and energy. The lack of political commitment to deliver on necessary sectoral reforms have limited the country’s progress. Similar to other WB countries, more work is needed to strengthen administrative and operational capacity for all modes of transport.

North Macedonia has two commercial airports: Skopje and Ohrid Airport. Although Skopje Airport possesses a capacity of 4 million passengers annually and is well connected with major airlines, its direct flights to other WB countries are still limited to Belgrade (Serbia). In 2018, the airport exceeded 2 million passengers for the first time. Unfortunately, the national legislation in this field is only partially aligned with aviation safety and security legislation.

The railway system is well developed. It connects the country with Greece, Kosovo, and Serbia from several stations across the country but still lacks connections to Albania and Bulgaria. Macedonian Railways, a state-owned enterprise operates the domestic lines. According to the EC 2019 Country Report on Macedonia, the country has shown progress by unbundling the infrastructure management and railway operation of the railway company. Yet, there are delays in separating the accounts of the national operator for passenger and freight operations and in transposing and applying large parts of the Single European Rail- way Area. To comprehensively open the rail market, further efforts are needed. The country should implement the cross-border railway cooperation agreements with Greece and Kosovo to their fullest extent. In particular, North Macedonia should focus on implementing the connectivity reform measures on rail reform. The rail transport market should be opened for at least domestic and regional undertakings followed by the establishment of a national system that continuously collects data on road crashes.

Road transport is the primary mode of transportation. The road network is well developed. It consists of motorways, national roads and regional roads that connect to adjacent coun- tries. On-road transport, the legal framework is broadly aligned with the acquis. While legislation on dangerous goods is aligned, the country needs to continue aligning itself with the social and safety acquis, improve education and training, strengthen its enforce- ment capacity and build up the administrative and technical capacity of the State Transport Inspectorate.

The Connectivity Agenda is investing in building a subsection of the motorway between Gostivar and Kičevo. This motorway is a section of Corridor VIII that connects Albania to Macedonia, from Tirana, Durrës, and Vlorë to Skopje, and then both countries to Bulgaria, via the border crossing point in Deve Bair. The subsection is scheduled to be completed by the end of 2022. It is expected to benefit Macedonia by decreasing travel time between Kičevo and Gostivar and lowering accident rates and vehicle operating costs. Additionally, the project should create 280 new jobs and improve trade flows between countries in the region.

8 North Macedonia has been developing electricity transmission inter-connectors and undertaking preparatory activities for constructing a new 400kV electricity line with Alba- nia, first power link between the two countries. It is also taking steps to secure funding for the construction of an interconnection gas line with Greece. Finally, it continues to build the following gas transmission pipeline sections: Stip – Negotino, Negotino – Bitola, and Skopje - Tetovo - Gostivar. In general, the country has aligned its national rules with the third energy package.

3.6. SERBIA

Serbia possesses a good level of preparation in the transport area and is moderately pre- pared in the energy field with noticeable progress in the fields of road safety and rail reform. Despite this positive assessment, Serbia remains similar to other WB countries in that administrative capacity for all modes of transport need to be strengthened.

Serbia plays an essential role in air travel in the region. Its road, rail and aviation networks are comparatively well developed when compared to the WB6 but still remains 30% below the EU average. The country has two commercial airports with Belgrade Airport being the largest as it received 6 million passenger in 2019. The state airline Air Serbia flies to several countries throughout the Balkans, the EU and other areas. The second commercial airport, Niš Airport, is significantly smaller with a traffic of about 25,221 passengers in 2019. Access to other WB countries is far more accessible from Serbia, with direct flights to Tirana (Alba- nia), Banja Luka and Sarajevo (BiH), Tivat and Podgorica (Montenegro), and Skopje (North Macedonia).

The leading railway company, Železnice Srbije a.d, is a member of the International Union of Railways UIC and operates most trains in Serbia. The network is well connected, with, amongst others, high-speed lines linking the capital Belgrade with countries such as Turkey and Bulgaria with domestic Intercity trains running regularly between cities. Serbia's railways consist of a holding company and separate subsidiaries for infrastructure manage- ment, passenger and freight operations. However, progress towards the operational and financial sustainability of independent railway service/infrastructure operators needs to be sustained.

The general condition of roads within the country differs significantly. While mostly in fair condition, the standards are typically much lower in rural areas and periods following bad weather. State-owned Putevi Srbije (Roads of Serbia) is the national road utility of the country. The largest A category state road, assigned category for motorways, is the A1. It con- nects Belgrade to both the Hungarian and the Kosovar borders before reaching up to North Macedonia. With a current length of 562 km, it accounts for about 70% of the entire motor- way infrastructure, which amounts to 781,63 km. The A2 starts in Belgrade and intersects with the planned , which should, when completed, lead up to the Montene- grin border. The A3 connects to Croatia, and the A4 crosses with A1 and leads from Niš to Bulgaria.

Serbia has continued to align its legislation with the acquis on the transport of dangerous goods and market access for goods, passengers and pricing. Despite adopting new road safety legislation in 2018, the number of road fatalities remains significantly above EU aver- age. Thus this legislation must be implemented followed by education and aware- ness-raising programs.

As part of the connectivity agenda, the EU has invested €40 million in the construction of the Žeželj Bridge in .

9 The bridge is a much needed link in the Trans-European network as it will significantly improve navigation along the Danube, restore road and rail traffic, and bring a new dyna- mism to regional cooperation.

Another project aims to enhance the link between Serbia and Kosovo, from Niš to Prishtina. This road interconnection is of great importance for freight and passenger transportation in the Western Balkans as it is the region’s shortest route between the Port of Durrës on the Adriatic and South-Eastern and Central Europe, as well as with the Mediterranean and Black Sea countries.

Serbia’s legislation on the security of its supply in energy is highly aligned with the acquis. However, due to lack of reforms in the gas market, security of supply might be at risk. The EC has recommended that Serbia develops not only competition in the gas market but also unbundles and certifies Srbijagas and Yugorosgaz. Serbia is continuing to upgrade the Trans-Balkan electricity corridor but there have been no progress in the implementation of the energy agreement with Kosovo. Overall, it should fully implement the connectivity reform measures as committed to under the Connectivity Agenda.

4. CONCLUSION

In 2014, the Western Balkans countries pledged to make connectivity a priority so as to reach the goals of the Berlin Process. Since then a multitude of projects were undertaken or are currently underway. Special emphasis has been put on the preparation and financing of concrete regional infrastructure investment projects, but also on the implementation of technical standards and accompanying reform measures such as aligning and simplifying border crossing procedures, railway reforms, information systems, road safety and mainte- nance schemes and unbundling.

Despite these positive steps, all WB countries remain considerably behind the European Union average infrastructure. Progress in connectivity is hindered by lack of funding and a lack of regional coordination on tackling these issues.

When it comes to transport policies, Serbia and Montenegro possess a good level of prepa- ration followed by North Macedonia being moderately prepared and Albania enjoying some level of preparation. BiH and Kosovo are still at an early stage. Similarly, in the field of energy Montenegro has a good level of preparation, followed by Serbia, North Macedonia and Albania being moderately prepared. BiH and Kosovo are still at an early stage in this aspect as well.

For each and every one of them, work is needed to strengthen administrative and operation capacity for all modes of transport. Even though financing instruments are in place and roadmaps developed, projects as the Bar-Boljare motorway clearly demonstrate the need to enhance efforts not only in financing, but also in monitoring and regional cooperation. In addition, it has been shown that the region is dependent upon a non-renewable and gen- erally insufficient energy supply.

Implementing the connectivity reform measures should address these shortages as this is detrimental to the development of the region for several reasons. Due to underdeveloped infrastructure in transport, telecom and power networks, the region is not very attractive for much needed foreign direct investments. The pace of regional integration is greatly decel- erated by these issues. Easy and affordable travel is a core factor for regional cohesion and can benefit to overcome social gaps within and between countries as a result of stereotypes and disagreements stemming from past conflicts. A well connected region is also import- ant to stimulate tourism, which again can have a positive impact on the regions intra - and international image. 10 Thus, it is essential for the Western Balkans to not only make the most of the Connectivity Agenda but also further intraregional cooperation to reach these goals. Regional coopera- tion and good neighbourly relations are essential for progress to continue contributing to political stabilization and to create economic opportunities. The policy and decision makers of the region must think together to reach common outcomes.

Although this briefing focuses on infrastructure and connectivity issues, it is elementary to note that financing and constructing new infrastructure alone cannot change current con- ditions and must be based on intrinsic motivations on achieving structural change accom- panied by implementing policy measures. Following through with the numerous projects underway and adding new ones focusing on linking the WB6 countries and the EU must remain a high priority on each country’s agenda. It will spur economic growth and improve the WB6 stand in its negotiation with the EU on enlargement and Euro-Atlantic integra- tion, but also more immediate issues such as visa liberalization.

11 NOTES:

Throughout this text the Western Balkan Six (WB6) refers to Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Montenegro and Serbia. See: Atoyan, R. et al, Public Infrastructure in the Western Balkans Opportunities and Challenges, Interna- tional Monetary Fund, 2018, p.12, at: https://www.imf.org/en/Publications/Departmen- tal-Papers-Poli- cy-Papers/Issues/2018/02/07/Public-Infrastructure-in-the-Western-Balkans-Opportun ities-and-Challenges-45547 [accessed on 10.02.2020]. European Commission (EC), EU Connectivity Agenda for the Western Balkans, Investment projects selected for EU funding 2019, 2019, p. 7, at: https://wbif.eu/stor- age/app/media/Library/6.%20Connectivi- ty%20Agenda/connectivity_agenda_brochure.pdf [accessed on 18.02.2020].Western Balkans Investment Framework (WBIF), Sectors: Connectivity Agenda, 2020, at: https://www.wbif.eu/sectors/connectivity-agenda [accessed on 18.02.2020]. EC, EU Western Balkans, Boosting Connectivity, July 2019, at: https://wbif.eu/stor- age/app/media/Library/6.%20Connectivi- ty%20Agenda/boosting_connectivity_factsheet.pdf[accessed on 10.02.2020]. WBIF, The Western Balkans Investment Framework, 2010, at https://ec.europa.eu- /neighbourhood-enlargement/sites/near/- files/pdf/western-balkans-conference/wbif-a4-def_en.pdf[accessed on 25.02.2020]. Atoyan, R. et al. EC, Commission Staff Working Document, Albania 2019 Report, Brussels, 2019, p. 70 -72, at: https://ec.europa.eu/neighbourhood-enlargement/sites/near/- files/20190529-albania-report.pdf[accessed on 10.02.2020]. Atoyan, R. et al, p. 14. Top Channel, Government announces tender for Vlora Airport 35-year-long conces- sion, 19. 12. 2019, at: http://top-channel.tv/english/government-announces-ten- der-for-vlora-airport-35-year-long-concession/[accessed on 10.02.2020]. Flight Connections Tirana. https://www.flightconnections.com/flights-from-tirana-tia [accessed on 1.07.2020] , Linja Hekurudhore – Harta e Sistemit, 2020, at: https://hsh.com.al/index.php/linja-hekurudhore/[accessed on 10.02.2020]. Mazrekaj, Dr. sc. R. (2015): Albania - as the Bridge of Routes and Transport Corridors between the Adriatic Sea and the Black Sea, in: Academic Journal of Business, Administration, Law and Social Sciences, Vol.1, Nr. 2. EC, Factsheet, Establishing a Transport Community between the European Union and the Western Balkans, 2017, at:https://ec.europa.eu/transport/sites/transport/- files/2017-factsheet-commmunitytreaty-wb.pdf [accessed on 25.02.2020]. Albania 2019 Report, p. 71. EC, Connectivity Agenda: Co-financing of Investment Projects in the Western Bal- kans 2016, 2016, at: https://ec.europa.eu/neighbourhood-enlargement/sites/near/- files/pdf/western_balkans/20160704_paris_package.pdf[accessed on 25.02.2020]. Atoyan et al, p. 7. EC, Commission Staff Working Document, Analytical Report Bosnia and Hercegovi- na 2019, Brussels, 2019, p.127, at: https://ec.europa.eu/neighbourhood-enlarge- ment/sites/near/- files/20190529-bosnia-and-herzegovina-analytical-report.pdf[accessed on 25.02.2020].  Sarajevo Flight Connections. https://www.flightconnections.com/flights-from-sara- jevo-sjj [Accessed 1.07.2020]  Tourism Association of Federation of BIH: Getting here, 2020, at: http://www.bhtour- ism.ba/eng/[accessed on 25.02.2020]. 12  WBIF, 2015 Connectivity Project, Extension of TEN-T Core Network: Bosnia and Her- zegovina – Croatia R2a Road Interconnection, 2015, at: https://www.wbif.eu/stor- age/app/media/Library/6.%20Connectivi- ty%20Agenda/2015%20BiH%20Connectivity%20Project_Gradiska_Summary%20Sheet _ENG_Oct19.pdf[accessed on 25.02.2020]. See: Atoyan et al., p. 7, and; Balkan Green Energy News, Sarajevo world’s most pollut- ed city, poor air quality seen across Western Balkans, Svetlana Jovanovic, 4. 12. 2018, at: https://balkangreenenergynews.com/sarajevo-worlds-most-pollut- ed-city-poor-air-quality-seen-across-western-balkans/[accessed on 25.02.2020]. Analytical Report Bosnia and Hercegovina 2019, p. 127. EC, Commission Staff Working Document, Kosovo 2019 Report, Brussels, 2019, p. 83, at: https://ec.europa.eu/neighbourhood-enlargement/sites/near/- files/20190529-kosovo-report.pdf[accessed on 25.02.2020]. Ex-Yu Aviation News, Pristina Airport set for record 2019, 05.01.2019, at: https://ww- w.exyuaviation.com/2019/01/pristina-airport-set-for-record-2019.html [accessed on 2019]. NPQ “Aeroporti i Gjakovës” SH.A, Plani i Biznesit 2018 -2020: Plani Operativ, 15.10.2017, at http://www.aeroportigjakoves.com/assets/cms/uploads/- files/Plani%20Operativ%202018%20-%202020%20.pdf [accessed on 25.02.2020]. Republic of Kosovo, Ministry of Infrastructure, Sectorial Strategy on Multimodal Transport 2015-2025, 2015, p.26, at: https://www.kryeministri-ks.net/reposito- ry/docs/Strategji- a_Sektoriale_dhe_Transportit_Multimodal_2015-2025_dhe_Plan_i_veprimit_5_vjeqar.p df [accessed on 25.02.2020]. ²⁶See: Connectivity Agenda: Co-financing of Investment Projects in the Western Balkans 2016, p. 15 and; Kosovo 2019 Report, p. 84.  KFOS, (2015). Route 6: Highway Prishtina – Skopje. At: http://kfos.org/wp-content/up- loads/2015/06/8.-AUTO-ROUTE-6-HIGHWAY-PRISHTINA-SKOPE.pdf [accessed 2.07.2020]  Auswärtiges Amt, Kosovo: Reise- und Sicherheitshinweise,2018, at: https://www.aus- waertiges-amt.de/de/aussenpolitik/laender/kosovo-node/kosovosicherheit/207442 [accessed on 25.02.2020].  EC, MULTI-COUNTRY Co-financing of Connectivity Projects in the Western Balkans – 2018-2019, p.18, at: https://ec.europa.eu/neighbourhood-enlargement/sites/near/- files/ipa_ii_2018-040-818_2019_041-590-cofinancing_of_connectivity_projects.pdf[acce ssed on 25.02.2020]. Bankwatch Network, The energy sector in Kosovo, 2018, at: https://bank- watch.org/beyond-coal/the-energy-sector-in-kosovo [accessed on 25.02.2020]. EC, Commission Staff Working Document, Montenegro 2019 Report, Brussels, 2019, p. 70, at: https://ec.europa.eu/neighbourhood-enlargement/sites/near/- files/20190529-montenegro-report.pdf [accessed on 25.02.2020]. Montenegro Flight Connections. https://www.flightconnections.com/flights-from-ti- vat-tiv and https://www.flightconnections.com/flights-from-podgorica-tgd [Accessed 1.07.2020. Visit Montenegro, Montenegro Railway, 2020, at: https://www.visit-montene- gro.com/transport/transportation-railway/[accessed on 25.02.2020]. Ibid. Reuters, Chinese 'highway to nowhere' haunts Montenegro, 16.07.2018, at: https://w- ww.reuters.com/article/us-china-silkroad-europe-montenegro-insi-idUSKBN1K60QX [accessed on 25.02.2020].

13 Government of Montenegro, PM Marković: Motorway priority section is expected to be completed by 30 September 2020, 20.11.2019, at: http://www.gov.me/en/- search/214951/PM-Markovic-Motorway-pri- ority-section-is-expected-to-be-completed-by-30-September-2020.html [accessed on 25.02.2020].  Connectivity Agenda: Co-financing of Investment Projects in the Western Balkans 2018, p. 19.  Montenegro 2019 Report, p. 71.  EC, Commission Staff Working Document, North Macedonia 2019 Report, Brussels, 2019, p. 66, at: https://ec.europa.eu/neighbourhood-enlargement/sites/near/- files/20190529-north-macedonia-report.pdf[accessed on 25.02.2020]. ⁰Skopje Connection Flights https://www.flightconnections.com/flights-from-sko- pje-skp [accessed 1.07.2020] ⁴¹See: Ex-Yu Aviation News, Macedonian Airports set for another record year, 2019, at https://www.exyuaviation.com/2019/01/macedonian-airports-set-for-another.html [accessed on 25.02.2020] and; North Macedonia 2019 Report, p. 73. ²Public Enterprise for State Roads, Road Network, 2020, at: http://ww- w.roads.org.mk/255/road-network [accessed on 25.02.2020]. ⁴³North Macedonia 2019 Report, p. 72. ⁴⁴Public Enterprise for State Roads. ⁴⁵North Macedonia 2019 Report, p. 72. WBIF, Project description, at: https://wbif.eu/project/PRJ-MKD-TRA-015 [accessed on 25.02.2020].  North Macedonia 2019 Report, p. 75.  EC, Commission Staff Working Document, Serbia 2019 Report, Brussels, 2019, p. 69.  Atoyan. R. et al, p.14. See: Belgrade Airport, Belgrade Nikola Tesla Airport welcomed 6-millionth passen- ger, 20.12.2019, at: https://beg.aero/eng/node/303 [accessed on 10.02.2020] and; Air Serbia, Destinations, 2020, at: https://www.airserbia.com/en/destinations [accessed on 10.02.2020]. Serbia Flight Connections. https://www.flightconnections.com/flights-from-bel- grade-beg and https://www.flightconnections.com/flights-from-ni%C5%A1-ini [Ac- cessed 1.07.2020 See: Railpass, Trains in Serbia, 2020, at: http://www.railpass.com/trains/serbia [accessed on 2019], and; Serbia 2019 Report. Government of , Foreign and Commonwealth Office, Foreign travel advice Serbia, 2018, at: https://www.gov.uk/foreign-travel-advice/serbia/safety-and-se- curity [accessed on 2019]. Putevi Srbije, About Us, 2020, at: http://www.putevi-srbije.rs/index- .php/en/about-us/about-us1[accessed on 10.02.2020]. Serbia 2019 Report. The Delegation of the European Union to the Republic of Serbia, After 18 years, arches of Zezelj Bridge tie up Backa and Srem, 20.10.2018, at: https://euro- pa.rs/after-18-years-arches-of-zezelj-bridge-tie-up-backa-and-srem/?lang=en. [accessed on 25.02.2020].  MULTI-COUNTRY Co-financing of Connectivity Projects in the Western Balkans – 2018-2019, p.18.  Serbia 2019 Report, p. 72.

14 About The Balkan Forum Acknowledgements

The Balkan Forum works to create a This briefing was written by Marina new vision for the Balkan region. It is a Patricia Queins and Bruno A. Möller. regional, multisector platform Comments were provided by Nita designed to advance cross-border Bicurri and Ben Jones. It was edited dialogue and create a shared regional by Gresa Rrahmani and designed by vision and agenda for cooperative Bernard Nikolla. action in the Balkan region based on economic integration, prosperity, and sustainable peace. We adopt a posi- tive approach as the guiding principle for our activities; rather than re-em- phasizing the problems that have divided the Balkan populations for many years now, we focus heavily on the positive elements that unite them, including celebrating the diversity and highlighting shared values and www.thebalkanforum.org aspirations of our societies. [email protected] +381 38 728 927 We highlight good practices of Str. Tirana C4/2 LAM B-N2, Prishtina regional cooperation to policy discus- 10000 Kosovo sions and promote existing efforts to connect grassroots initiatives, knowl- edge, and successes to the deci- sion-making levels that are responsi- ble for policymaking and regional and/or EU integration. Together with our partners we focus our efforts on filling gaps and mobilizing action; facilitating consensus building and dialogue; and building political will for policy action on regional cooperation initiatives.

This briefing was made possible with support from the Rockefeller Brothers Fund. The opinions and views of the authors do not necessarily state or reflect those of the Fund.

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