Zekulic S., Batur T. (2007). of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, , 316-334.

PORT OF PLOČE DEVELOPMENT THROUGH THE TRADE AND TRANSPORT INTEGRATION PROJECT

Svemir Zekulic, Tomislav Batur Port of Ploče Authority Trg kralja Tomislava 21, 20 340 Ploče, e-mail: [email protected]; [email protected]

Summary The port of Ploče is the second Croatian port by size. It is a port of special international significance for Croatia; however, due to its position, it is also of an exceptional importance for the economy of in view of the fact that more than 60% of the port traffic refers to the foreign trade of B&H. The port of Ploče is located at the starting point / end of the Corridor Vc, which constitutes a gateway for the flow of merchandise to and from Central European countries. After some exceptionally difficult years of operation with a reduced capacity as a result of the war operations, the destructions and the slow recovery of the economic entities and the reconstruction of the infrastructure in its gravitational area, the port of Ploče has been recording a permanent growth in traffic in the last few years. As an answer to the restructuring of the industry in its hinterland, the entry of foreign capital in the operation of the most significant port beneficiaries and the announcement of considerable increases in the quantities of goods on this route, the Port of Ploče Authority is launching an exceptionally important project aimed at developing the port of Ploče, whereby its overall development objective is to improve the capacity, efficiency and quality of service on the whole Corridor Vc and in particular in the port of Ploče. The economic subjects of Bosnia and Herzegovina will also enjoy the benefits of this project due to an increase in the competitiveness of their activities as a result of an increased productivity of transshipment in the port as well as of savings on transport costs.

Key words: Port of Ploče, Port Authority, Corridor Vc, Traffic, Development

INTRODUCTION The Port of Ploče is the second largest Croatian port in terms of annual cargo volumes. Pursuant to the legal provisions, the port of Ploče has been classified, according to its size and importance, as a port of particular (international) economic importance for the Republic of Croatia due to the fact that it has met the criteria regarding the “average volume of more than 3 Million tons of cargo per annum, whereby transit volumes were represented in the aggregate traffic structure with 10% during the period from 1985 to 1990, then regarding the railway and road connections with the hinterland and, finally, the existence of installed port facilities for a volume of 5 Million tons of cargo per annum, i.e. fitted piers and berths to accommodate ships of a length of more than 130 m and a 6 m draft”. Once having met the above mentioned conditions, the port of Ploče formally became a port open to international public traffic. By decision of the Government of the Republic of Croatia, the port area is managed by the Port of Ploče Authority, as a non-profit institution, the responsibility of which, in addition to the port basin in Ploče, extends also to the basin of the Metković river port, which is located 24 km to the North East of Ploče.

1. LOCATION AND CONNECTION Due to its location, the port of Ploče is of exceptional importance for the economy of the neighboring Bosnia and Herzegovina, the state borders of which are located only 25 km away from the port of Ploče, and also for its partners from Serbia and Montenegro, Hungary and other countries of Central Europe.

316 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

Illustration 1: The area gravitating towards the port of Ploče.

In addition to the location, the technological equipment and the quality of the provision of services, the level of the traffic infrastructure connecting the port to the hinterland and the market is of an invaluable importance for the competitiveness of any port. At the 1997 Helsinki Conference on the Pan-European Transport Corridors, corridor – Osijek – Sarajevo - Ploče is defined as the Branch C of the European corridor ( - - Budapest - Uzgorod - Lvov).

Illustration 2: Pan-European Corridor V

The port of Ploče is therefore directly connected to its hinterland in Bosnia and Herzegovina, and further to the Northeastern part of Croatia and to Central Europe with the railway line Ploče – Sarajevo – Doboj and further in the direction of Vinkovci and Zagreb, as well as with the road (E-73), which extends mainly along the route of the future Branch C of the Pan-European Corridor V, as a consequence of which the port of Ploče becomes a seaport of this branch. With the above mentioned roads, and in particular with these railway lines, the port of Ploče is directly connected to its major beneficiaries in B&H (, Zenica, Lukavac and Zvornik). The travel time for cargo trains, which is currently more than 25 hours, is expected to be decreased to 17 hours upon completion of all necessary investments in the whole section of branch C of the Corridor V. The road infrastructure in the direction from Ploče to Sarajevo and further across B&H has also suffered huge damage during the war in B&H; however, the major roads have been reconstructed after the war. During the war and after the war, the road transport sector has significantly developed and took a

317 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

considerable share in the total transport. This transport sector represents a real competition to the railway in spite of the fact that the road from B&H to the port of Ploče is characterized by major slopes and bends. In April 2007 the public tender for the expression of interest for main design of the first three sections of the highway through Bosnia and Herzegovina north of Sarajevo in the length of 130 km (out of overall length of 330 km) was published . The construction of these sections is planned to be finished until 2014. The construction of this future road segment of the branch of Corridor V section would cost € 3.2 Billion (without VAT). The port of Ploče is also located next to the Adriatic Highway (E-65), the road route, which extends from Trieste over and Split to the very south of this part of Europe. The remaining part of the modern motorway is currently being constructed, as a result of which the port of Ploče will be connected to Zagreb in the speediest way. This refers to the Split (Dugopolje) – Ploče section of a length of 97 km; the contractor was selected in the scope of a public tender procedure in May 2005 and the construction, which will cost US$ 1 Billion, is expected to be completed until the end of 2008. This summer the construction of the road which will connect the main gate of port of Ploce with the motorway will start. The international airports in Split and are located in the immediate surroundings of the port of Ploče (approximately 120 km away), as well as Mostar Airport in B&H (60 km away). The position of the port of Ploče enables a maritime connection of quality both with the cities on the Adriatic coast of Croatia and as well as with the throughout the world. Increased quality was achieved by establishing a regular feeder line, which connects the port of Ploče to the major container ports in the Mediterranean. At the beginning this line was maintained only by ships of “Lošinjska Plovidba” (capacity of 300 - 520 TEU) and is supported by State subsidies, but recently another shipping line was established. The development strategy of the port of Ploče continues to be oriented towards to a major extent to meeting the requirements of the economy of B&H, and following the construction of a modern road and rail infrastructure towards the inland the port will also be in a position to offer its services to the other markets (especially Central European countries), which it used to service in the past.

2. PORT DEVELOPMENT Ports are considered to be one of the most important parts of the national transport infrastructure; for most of the countries with which do trade, they are: - the main transport connection to their trade partners and therefore an exceptionally important point in the road and railway system, - the main economic initiator of national progress. The ports are not a door for trade only; they also attract the commercial infrastructure in the form of banks, agencies, forwarding agents, etc., as well as various industrial activities. Their importance is therefore exceptional, not only for the national economy of the state in which they are located, but also for the economy of the states gravitating towards it in its hinterland. In the course of history, the ports have been changing and developing in terms of equipment and efficiency in order to meet the requirements of their users; the intention here is therefore also to describe port development in broad outline (as an exceptionally important part of the traffic infrastructure) and its transformation in the course of time.

2.1. First generation ports Until the sixties, the ports were practically a place for the handover of cargo between maritime and land transport and they can usually be described with the following features: - isolated from transport and trade activities and their role is perceived for the purpose of the transshipment of cargo from the ships on shore; - these ports usually consider themselves as “untouchable” with little or no cooperation at all with the local authorities; - different port operations isolated from each other; - they are frequently only ports of loading or discharge.

2.2. Second generation ports Second generation ports developed themselves as transport, industrial and commercial service centers. They are characterized by the following features:

318 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

- they perform and offer industrial and commercial services to their users, which are not directly connected to the port with their loading and discharge operations; - port policies and development strategies are based upon a wider concept and more complex management positions; - industrial facilities are being integrated within the port areas; - a closer cooperation is established between transport and trade partners, who have erected their processing facilities within the port area, which usually benefits the big shippers only; - they develop a closer cooperation with the local authorities; - different activities are becoming more integrated in the scope of the port organization (community).

2.3. Third generation ports Third generation ports appeared in the eighties, mainly due to the containerization and the intermodal transport in connection with the increasing requirements of foreign trade. Ports of this generation present the following properties: - ports are becoming hubs of the international, manufacturing and distribution network; - the management structure is more proactive than reactive; - besides the usual operations, different specialized operations, which successfully integrate into the port system, are being introduced; - new values are added in the ports to primary products, so that the ports are becoming “value-added” hubs, where new values are being created in different manufacturing processes. In the ports as distribution hubs, value added can be created in various ways, such as: assembly and disassembly of cargo, filling and emptying of containers, packing, palletization, marking, weighing, repacking, etc.; - ports care for environmental protection; - ports are oriented towards meeting the requirements of their users; - customs procedures are made easier; - the organizational structures are fully integrated in the single port system.

2.4. Fourth generation ports In the nineties, port development was oriented towards globalization, in particular in large international companies. The globalization features are reflected in the standardization of information and procedures, as well as in the increased and more complex use of automation in port processes.

3. BASIC CHARACTERISTICS OF THE PORT OF PLOČE The port of Ploče extends over 233 hectares of land surface area in Ploče and Metković, and disposes of 5 wharfs in Ploče basin, where the depth of the sea is up to 13.5 m, which makes it possible for Panamax ships (60,000 DWT) to call at port. In the port of Metković, the depth of the river at the wharfs is 4.5 meters, which makes it possible in practice to moor ships of a length of up to 100 m and of a capacity of approximately 1,500 tons. A further limiting factor thereby is the existence of the bridge, which crosses the Adriatic Highway (in the town of Rogotin); ships are allowed to navigate under the middle of the bridge if their highest immovable point (masthead and the like) is at a height of no more than 14 meters. The port in Ploče (and therefore, the area in Ploče and Metković) is a universal purpose port, which means that it is used for the transshipment of most cargos, which are usual in international maritime transport. Inside the ports itself, there are areas specialized for the handling of particular types of cargo. Consequently, the port disposes today of complete transshipment, storage and all other accessory port facilities for the provision of quality transshipment of: - general cargo - container and RO-RO traffic - dry bulk cargo - petroleum by-products (liquid cargo). The port in Ploče disposes also of capacities for the handling of passenger vessels, both in local transport to the Pelješac Peninsula and in international transport in particular with the Republic of Italy.

319 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

Illustration 3: Ploče port area

3.1. Organisation on the port area Pursuant to the Seaports Act, at its session held on February 13th, 1997, the Government of the Republic of Croatia passed the decision establishing the Port of Ploče Authority. This event changed the organizational structure of the port area due to the fact that until that time there was only a so-called socially-owned company “The Port of Ploče”, which, in addition to transshipment services (that it is providing today), was also in charge of the management of the whole port area, including the maintenance of the port infrastructure and superstructure, the short-term and long-term development of the port and was also engaged in other operations (pilotage, mooring, unmooring, catering services, maintenance of the machinery, etc.). In its endeavors to organize its large ports as the so-called “Landlord” ports, the State established the port authorities under the Seaports Act passed in 1995.

3.1.1. The Port of Ploče Authority The Port of Ploče Authority is a non-profit legal entity (institution) performing the following activities: care for the development, maintenance, management, protection and improvement of the maritime domain, which constitutes the port area. The whole port area is a maritime domain, on which no form of ownership may be created; the port infrastructure and superstructure can be used on the basis of a concession, which is granted by the Port Authority in accordance with a special procedure; development and maintenance of the port infrastructure, which is financed with funds from the State Treasury; ensuring the permanent and undisturbed development of port traffic, the technical-technological unity, safety of navigation and port traffic; management of the free zone in the port area; planning, guidance, harmonization and supervision of the operations of companies exercising an economic activity in the port area.

320 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

3.1.2. The “Port of Ploče” d.d. operative company In 2003, the company “Port of Ploče” transformed itself from a socially-owned company into a trading company (joint-stock company). The “Port of Ploče” formed its organization in such a way that it established companies owned by it (7 subsidiaries - Ltd.). These companies are performing certain activities that the socially-owned “Port of Ploče” company used to perform in the past, such as the operations of maintenance and construction, mooring and unmooring of ships, forwarding agent and catering services, and they are also engaged at market principles in certain new operations such as the management of the liquid products terminal, the supply of the ships and other. The basic activity, transshipment and storage of goods, is performed by the company “Port of Ploče” d.d. itself. It should be mentioned that at the end of the eighties of the last century, the socially-owned company “Port of Ploče” had almost 1,900 workers employed, while upon completion of the transformation the company “Port of Ploče” d.d. has now approximately 800 employees. In accordance with the law regulating seaport matters, the Port Authority granted a concession (priority concession) to the “Port of Ploče” d.d. for the performance of port operations and the use of the infrastructure and superstructure facilities in the port area for a 12-year term, which is an attempt to valorize the investments made over several years by the port officers in the port facilities. Also the “Port of Ploče” dd will probably be the operator on new terminals which are planned to be constructed within the scope of the long term development project with the participation of the Government of the Republic of Croatia and international financial institutions.

3.2. The Free zone of the port of Ploče After the Government of the Republic of Croatia granted its consent to the Port of Ploče Authority in 1999 to establish a free zone for a period of 30 years, almost the whole port area is now also the area of the free zone of the port of Ploče at the same time. The following activities may be exercised in the area of the free zone, of a surface area of 214 ha, in accordance with the Free Zone Act: production, processing, port operations, wholesale and brokerage in trade, provision of services, banking and other monetary operations, as well as services of insurance and reinsurance of property and individuals. The activities, which are currently being performed in the free zone of the port of Ploče, come down to the typical port operations (transshipment and storage of goods) and to trade activities with goods, which were transshipped in the port. The classical zone activities (production, processing, improvement and the like, i.e. the so-called “Greenfield investments” in particular) are missing in the free zone. The general opinion is that the problem also lies, in addition to the general economic situation in Croatia and in Bosnia and Herzegovina, in an inappropriate legislation, which does not provide the relevant long-term incentives for investments and operations in the free zones. The attractiveness of the free zone of the port of Ploče for potential investors is based upon the following key facts: - the geographic and traffic position of the port of Ploče in relation to the potential market (vicinity of the EU, vicinity of B&H and Central European countries); - savings on road transport costs; - existence of a developed infrastructure in the port area; - existence of the port capacity and labor for transshipment and storage as well as for the provision of other services in the organization of transport and the performance of trade.

It is of particular importance to encourage the so-called “value-added services” (establishing distribution centers, services of assembly, packing, labeling, testing, grouping of consignments, distribution, filling and emptying of containers ...). In view of certain limitations in terms of space of the zone inside the port area, which result from the fact that free spaces are reserved for the classical port terminals (dry bulk cargo terminal, container terminal…), the Port Authority will favor the zone activities, which require a greater utilization of the port capacities, which distinguishes the port free zones from the inland ones as far as the selection of the potential investment programs is concerned. As a consequence, the operations in the zone can be expected to generate additional port traffic in the future.

321 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

3.3. Concessions for the exercise of activities in the port area The right to perform port operations, to use the available infrastructure and superstructure and to build new buildings and other infrastructure and superstructure facilities is acquired pursuant to a concession, which is granted for a term of up to 99 years. The procedure for the grant of a concession is conducted pursuant to special legal provisions. Once the resolution on the grant of the concession passed by the Administrative Board, the Port Authority and the concessionaire enter into a concession agreement, which defines all the details in connection with the performance of the activities, for which a concession was applied for, and, among other things, the concession fees, which, as a generally rule, consists of a fixed amount and a variable amount (it is usually a percentage of the financial value achieved on the basis of the concession).

4. ANALYSIS OF PORT TRAFFIC The table below shows the traffic of the port of Ploče since the end of the eighties, which confirms once more the dependence of the port traffic on the economic situation in the hinterland of the port.

4.1. Cargo volumes in the port of Ploče since the end of 80-ies until now

DIRECTIONS / TYPE OF GOODS 1989 1991 1992* 1994 1999. 2003. 2004. 2005. 2006. BY YEAR TOTAL TRAFFIC IN THE PORT OF 4.495 2.214 934 268 934 1.284 2.031 2.815 3.181 PLOČE EXPORT 882 556 31 0 8 2 4 19 14 IMPORT 2.922 1.244 46 16 6 118 182 172 182 TRANSIT 191 158 853 243 840 1.018 1.673 2.314 2.613 COASTWISE 500 256 4 9 80 146 172 310 372 GENERAL CARGO 891 522 255 206 415 420 347 301 405 DRY BULK CARGO 3.307 1.357 490 39 341 675 1.518 2.211 2.291 LIQUID BULK 297 335 189 23 178 189 166 303 485 CARGO

Table I: Cargo volumes in the port of Ploče (in 000 tons) * since 1992, cargo traffic for the countries of former is treated as “transit” cargo

5.000

4.500

4.000

3.500

3.000

2.500 in 000 t in 2.000

1.500

1.000

500

0 1989 1991 1992 1994 1999. 2003. 2004. 2005. 2006. year

Graph 1: Throughput in the port of Ploče by year

322 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

4000

3500

3000

2500

2000

1500

1000

500

0 1988 1991 1994 2000 2004 2005 2006

general dry bulk "liquid"

Graph 2: Throughput of cargo by cargo structure

The end of the eighties in last century represents the period when the port of Ploče recorded the major volumes in its history. These volumes came close to 4.5 Million tons, whereby almost 80% thereof referred to goods originating from or destined for B&H. The major share in the cargo structure was held by dry bulk cargoes with almost 75% of the total volumes. The importation of coal for the coke plant in Lukavac and the Zenica Steelworks (both companies from B&H) was of particular importance and in 1989 the total quantity of coal imported from the former USSR and from the America was 2.6 Million tons. These systems also generated the exportation of goods through the intermediary of the port, in particular the Zenica Steelworks with a delivery of more than 350,000 tons of finished products (reinforcing steel). A very significant, in financial terms in particular, transit of goods from/to the former Czechoslovakia (ammunition, tanks, special military equipment), Hungary (cattle, artificial fertilizers, soy, military equipment), Poland and Austria was also recorded in these years. The beginning of the war in Croatia (1991-1995) and then in Bosnia and Herzegovina (1992-1995) represents the beginning of an exceptionally difficult period for the port of Ploče community. Communications from the port of Ploče to the inland were interrupted and the war destructions destroyed the major manufacturing capacity in Bosnia and Herzegovina. The traffic in the port constantly decreased to a level of 5% only of prewar volumes. During these years, the traffic came down to humanitarian assistance only, which was brought by the international community to B&H, as well as the supply of the peace-keeping forces in B&H. Once an end had been brought to the war operations and upon the arrival of the financial assistance, which was provided to B&H by the international community, a speedy reconstruction of the manufacturing capacity was expected, which, unfortunately, did not came true. The big complexes, which used to be major port users in the past, did not succeed in adapting to the principles of market economy, and a political stabilization did not take place in the region either. It is true that a certain upward trend in volumes started to be recorded, in particular for the goods of “Aluminij” Mostar, and thereafter an increased transit of wood from B&H; the beginning of the container traffic, after a feeder line had been established with Malta and Gioia Tauro (Italy) in 1999 with a State subsidy, was also pleasant. It is only in the last 3-4 years that more significant positive changes were experienced, mainly as a result of the arrival of foreign multinational companies in B&H, which took over the shareholdings in the prewar economic giants in B&H, which had experienced a major decline. After their initial investments in equipment and raw materials and once they solved the social issues (redundancies), they started the manufacturing capacity, which also produced forthwith an impact on the volumes of the port of Ploče. The table below shows the type of goods, which dominated in the overall throughput in the port of Ploče in 2006. This table shows that the major share is held by dry bulk cargos, more precisely by alumina (“Birač” Zvornik, “Aluminij” Mostar), coal (“GIKIL” Lukavac, transshipment for Italy and Slovakia), petroleum coke (“Aluminij”, “Dalmacijacement”) and bauxite (“Birač”). Containerized goods, exports of wood from B&H

323 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

and import of bananas and sugar have a dominating position in the structure of general cargo. Also it can been noted the increase of transport of steel billets for “Mittal Steel Zenica” which is the part of the biggest world steel producer “Arcelor Mittal Steel Group”. The market of B&H is importing to a great extent its supplies of regular and diesel gasoline, partly through the port of Ploče.

Table II: Main types of goods in the port of Ploče in 2006

Type of goods category quantity containers general cargo 147.233 steel billets general cargo 98.517 beech-timber general cargo 50.194 bananas general cargo 25.972 sugar general cargo 25.521 aluminum billets general cargo 23.880 alumina dry bulk 575.888 coal dry bulk 734.797 petroleum coke dry bulk 421.606 bauxite dry bulk 387.932 cement clinker dry bulk 60.849 gas oil (diesel) liquid bulk 341.866 motor gasoline liquid bulk 131.548 sunflower oil liquid bulk 11.445

4.2. Overview of the major port users by share in volumes The table below shows the major users of the port of Ploče during the period from 2002 to 2006 on the basis of the achieved annual volumes of cargo for their own purposes as well as their share in the total volumes of the port.

Table III: Share of the particular port users in the port volumes from 2002 to 2006

2002 2003 2004 2005 2006 NAME OF PARTNER TONS % TONS % TONS % TONS % TONS % "ALUMINIJ" MOSTAR 291.262 27,4 313.760 24,6 310.013 15,3 307.625 10,9 327.500 10,3 "DALMACIJACEMENT" SPLIT 136.780 12,9 226.250 17,6 319.395 15,7 343.049 12,2 431.609 13,6 BH STEEL/ MITTAL STEEL ZENICA 123.559 11,6 92.181 7,2 0 0 14.675 0,5 112.155 3,5 "GIKIL" LUKAVAC 0 0 0 0 392.814 19,3 670.868 23,8 205.650 6,5 "KAUNO TIEKIMAS" LITVA 0 0 19.928 1,6 438.021 21,6 674.110 23,9 729.047 22,9 “ATEL” MILANO 364.26311,5 TIMBER / VARIOUS PARTNERS 87.420 8,2 84.521 6,6 79.517 3,9 49.117 1,8 51.466 1,6 CONTAINERIZED GOODS / VARIOUS 51.776 4,9 99.138 7,7 109.546 5,4 132.246 4,7 147.233 4,6 TERMINAL "NTF" 130.544 12,3 168.470 13,1 158.505 7,8 228.078 8,1 290.631 9,2 TERMINAL LPT 62.671 5,9 20.127 1,6 8.212 0,4 74.761 2,7 194.229 6,1 % SHARE IN TOTAL 89,3 VOLUMES 83,2 80,0 9 88,6 89,8

324 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

The major port users are situated in locations, which are closer to the port of Ploče than the competitors, such as the port of Rijeka or Bar, both from a geographical point of view as well as on a cost basis due to the more appropriate railway lines available between the port of Ploče and Mostar, Zenica, Sarajevo, Lukavac and Zvornik. Table IV shows the railway distances, which are important because of the type of goods which are mainly transported by railway (bulk cargos), the unit value of which is generally not high and the transportation costs by unit of measurement have a great impact:

Table IV: Rail distances between the centers of the economy in B&H and the port of Ploče and the potential competitors such as the ports of Rijeka and Bar

Location in B&H Ploče Rijeka Bar Mostar 60 km 821 km 1.100 km Zenica 235 km 616 km 929 km Sarajevo 192 km 693 km 980 km Lukavac 370 km 560 km 930 km Zvornik 435 km 610 km 730 km

In addition to the distance expressed in kilometers, a comparison of the tariffs (pricing) of transport between the ports of Ploče, Bar and Rijeka compared to the key locations in B&H is also of exceptional importance, especially the costs of railway transport of dry bulk cargos, which are prevailing in the whole structure of port volumes. Information received from various railway operators and forwarding agents shows that the port of Ploče has significant advantages above the competing ports. At this point, it is necessary to point to a certain competitiveness of the river port of Vukovar in relation to the destinations of Zvornik and Lukavac, but only for the dispatch of minor ship consignments due to the limited capacity to receive ships in the port itself and the fact that it is conditioned by the water level and navigability of the Danube River.

The graphs below clearly show that the port of Ploče is the major port for the overseas trade of Bosnia and Herzegovina.

Graph 3: Share of Croatian ports in the total overseas imports to B&H through Croatia Source: Statistical Office of the Republic of Croatia, 2004.

325 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

Graph 4: Share of Croatian ports in the total overseas exports of B&H through Croatia Source: Statistical Office of the Republic of Croatia, 2004.

From the table III it can be seen the presence of the new port users who are related mainly to the transshipment activities (unloading from the bigger vessel on the storage area and then later reloading to the smaller vessels) for the final destinations in Slovakia and Italy. Contrary to the previous years when the economy of Bosnia and Herzegovina participated in the port throughput in the amount of 80%, now this share is decreased to 60 % only (graph 5). This fact represents diversification of the port business as the reflection of the new strategy which is based on the penetration to the new markets.

SLOVAKIA OTHERS ITALY 3% 3% 13%

CROATIA B & H 19% 62%

Graph 5: Traffic in the port of Ploče in 2006. by countries

4.3. Container traffic in the port of Ploce In spite of its sporadic appearance in the eighties last century, the container traffic in the port of Ploče really started to appear only after the feeder line was established in March 1999 with significant subsidies from the Republic of Croatia as well as with the application of preferential tariffs of all participants in the service of this line. This project was aimed at a major increase in container traffic in the Republic of Croatia and the entry of the Croatian ports of Rijeka and Ploče on the map of container ports in the world. As a result, the connection of these ports to the hub ports of Gioa Tauro, Taranto and Malta on the basis of a weekly service with ships of “Lošinjska Plovidba” from Rijeka contributed to the increase in container traffic in the port of Ploče, due to the fact that feeder traffic represents 95% of the total container volumes in the port (the rest refers to containers with military equipment for the peacekeeping and stabilization forces in B&H and the transport of bananas). The features of the ships serving on this line matched the technological capacity of the operator – the “Port of Ploče d.d.”; at the beginning RO-RO (roll-on roll-off) manipulation was used for transshipment with the ship machinery as well as forklift trucks and trailers, a new reach stacker

326 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

with the necessary spreader was purchased only 2 years ago. The Port of Ploče Authority has purchased a new multipurpose mobile crane (capacity of 63 tons) and handed over to port operator “Luka Ploče” dd. This crane will be used for the transshipment of containers (“lift on – lift off” manipulations) and bulk cargos. Besides “Losinjska plovidba” another shipping line with hub port in Italy and Malta was introduced recently.

Table V: Container volumes in the Port of Ploče

CONTAINER 1999 2000 2001 2002 2003 2004 2005 2006 TRAFFIC in TEU 1.410 4.492 5.497 8.638 14.121 15.686 17.965 18.504

20.000 18.000 16.000 14.000 12.000 10.000 TEU 8.000 6.000 4.000 2.000 0 1999 2000 2001 2002 2003 2004 2005 2006 ye ar

Graph 6: Container traffic in the port of Ploče

Although the achieved volumes are exceptionally low on an international scale, the figures on the growth in container volumes are very important for the participants in the port process in Ploče due to the fact that it makes it possible to connect the economy of the whole gravitating area with the international market. However after deeper analysis of the structure of the container traffic, it can be concluded that there is dominant share of empty containers in the total number of containers which are loaded in this port. This fact is most concerning because it is obvious that there is still not enough goods from B&H and Croatia, which are exported in containers; this situation can be explained partly by the overseas export structure of the economy of B&H, which is based on bulk cargoes. However, all options should be investigated in order to find goods suitable for container transport. In this respect, support should be provided to activities aimed at increasing, for instance, the level of wood processing on the occasion of exports from B&H such as, for instance, the manufacture of furniture, which represent a more favorable type of goods by far for shipment in containers. Therefore, the initiative to establish a wood cluster in B&H is praiseworthy. On the other hand, it is obvious that a certain number of containers is transported through the ports of Koper and Rijeka and that belong to the area gravitating towards the port of Ploče; it is therefore necessary to undertake certain marketing activities to divert them to the port of Ploče in connection, of course, with the possibility of providing a quality service and more favorable (cheaper) total transport charges.

5. ESTIMATE OF FUTURE VOLUMES IN THE PORT OF PLOČE Based upon the data provided by marketing analyses, in particular on the occasion of contacts with the major port users, an estimate of port cargo volumes was made for the period from 2007 to 2011. The economy of B&H was taken into account but also some other business activities for markets in Croatia, Slovakia and Italy which were also important for port traffic in last few years. The figures show that 60% of the GDP of B&H is achieved along the Corridor Vc, that more than 30% of the total foreign trade of B&H is achieved through the southern branch of the corridor (i.e. through the port of Ploče), and the data on the

327 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

recovery of the economy of B&H, which can be noticed from the 6,2 % growth rate of the real GDP achieved in 2006, provide a basis to expect a further growth in the port volumes for the purposes of B&H. However, some unexpected events may have impact on the realization of long term forecasts.

Table VI: Forecast of the volumes of the port of Ploče for the period from 2007 to 2011

TYPE OF CARGO 2007 2008 2009 2010 2011 General cargo wood 60.000 60.000 60.000 80.000 80.000 aluminum ingots (Mostar) 30.000 30.000 30.000 40.000 40.000 military equipment 5.000 0 0 0 0 bagged cargo (sugar etc.) 50.000 50.000 50.000 40.000 40.000 iron products (Zenica) 100.000 150.000 200.000 200.000 250.000 bananas 30.000 30.000 30.000 35.000 35.000 containers 180.000 200.000 220.000 250.000 300.000 other general cargo 20.000 30.000 30.000 30.000 40.000 TOTAL GENERAL 475.000 550.000 620.000 675.000 785.000 Bulk cargo petroleum coke ("Aluminij) 50.000 50.000 50.000 50.000 50.000 petroleum coke- DC (unloading) 150.000 150.000 150.000 150.000 150.000 petroleum coke -DC (loading) 150.000 150.000 150.000 150.000 150.000 grain 50.000 50.000 50.000 80.000 80.000 aluminum oxide ("Birač") 150.000 200.000 250.000 250.000 300.000 aluminum oxide ("Mostar") 230.000 250.000 250.000 250.000 300.000 scrap 100.000 150.000 150.000 200.000 200.000 coal "GIKIL" Lukavac 500.000 600.000 600.000 600.000 800.000 coke "GIKIL" Lukavac 100.000 150.000 200.000 200.000 200.000 coal "Mittal Steel Zenica" 0 600.000 600.000 600.000 600.000 coal - unloading ( Italy) 500.000 500.000 500.000 500.000 600.000 coal- loading (Italy) 500.000 500.000 500.000 500.000 600.000 coal (for other users) 60.000 60.000 80.000 80.000 80.000 cement clinkers - unloading 120.000 120.000 120.000 120.000 200.000 cement clinkers - loadingj 120.000 120.000 120.000 120.000 200.000 bauxite ("Birač") 100.000 150.000 150.000 150.000 150.000 iron ore 0 200.000 200.000 250.000 300.000 cement (DC) Metković 60.000 60.000 60.000 60.000 80.000 artificial fertilizers (Metković) 20.000 20.000 20.000 20.000 20.000 other dry bulk cargoes 130.000 130.000 180.000 180.000 180.000 TOTAL BULK 3.090.000 4.210.000 4.380.000 4.510.000 5.240.000 Liquid bulks terminal NTF 400.000 400.000 500.000 550.000 550.000 terminal LPT 180.000 200.000 200.000 200.000 200.000 TOTAL LIQUID 580.000 600.000 700.000 750.000 750.000 TOTAL 4.145.000 5.360.000 5.700.000 5.935.000 6.775.000

The analysis shows considerable leaps in the increase in volumes of the port of Ploče, which exceed the usual annual oscillations in international ports, which represent up to +/-10%. Volumes in 2007 should be increased by almost 30% compared to 2006, while volumes in 2008 should be almost 70% higher than in

328 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

2006. This results from the dramatic changes expected in the operations of the major port users, which should, however, be taken into account with a certain amount of risk (reserve) due to the fact that the disturbances in the prices of certain commodities on the markets worldwide (which is currently the case of the price of coke, which as a direct impact on the operations of “GIKIL” Lukavac) as well as certain changes in the business policy of the major port users can change the forecasted quantities of goods transported through the port of Ploče. The precondition for a quality handling of these increased quantities of goods is not only the construction of the future port terminals but also the capacity of the whole transport route from Ploče to the hinterland, whereby this refers in the first place to the throughput of the partly reconstructed railway line and to the construction of the motorway of the future branch C of Corridor V. The Republic of Croatia is also paying a considerable attention to the branch C of Corridor V, which crosses its territory, and the activities on the works on the northern (from the border with Hungary to the border with B&H) and the southern branch (25 km from Ploče to the border with B&H) have been intensified. The railway section on the southern branch in Croatia (Ploče - Metković) has already been completed and also the construction of the road section in Slavonia is under way.

5.1. Projection of container volumes The container traffic through the port of Ploče is shown in Chapter 4.3 and a permanent growth can be noticed. Such a trend is also expected in the forthcoming period (as can be seen in Table VI, where the traffic of goods in containers is presented on the basis of average quantities of 10 tons), although there are still no doubts that bulk cargos will prevail in total volumes. The competition in attracting container volumes is much stronger than for other types of cargo, both because of the possibility to select other competing ports and of the road transport used to deliver containers to B&H from Europe. Container traffic volumes will depend to a great extent on the implementation of the project of development of the new container terminal, which is expected until the end of 2009, as well as of it being fitted, if possible, also with a container crane in order to increase the attractiveness of this transport route for containers. The projection of container volumes is based on the forecasted level of foreign trade of goods in this part of Croatia and in Bosnia and Herzegovina in particular, which takes place on the , the assumption of the market share of the port of Ploče as well as the percentage of containerization for the main import and export goods of this area gravitating towards the port of Ploče. It is thereby necessary to express the expectation that imports of goods in containers from the area gravitating towards the port of Ploče, and from B&H in particular, will also be increased so that the currently exceptionally negative ratio of full to empty containers at loading in the port could be changed.

Table VII: Projection of container volumes for the period from 2007 to 2012

2007 2008 2009 2010 2011 2012 CONTAINER VOLUMES 22.000 25.000 27.000 30.500 37.000 43.000

LONG-TERM DEVELOPMENT PLANS THROUGH THE TRADE AND TRANSPORT INTEGRATION PROJECT In the last view years, the port of Ploče has been recording a considerable growth in volumes, in particular in dry bulk cargos (coal, bauxite, aluminum oxide, coke, petroleum coke), and the projections pointing to an even larger share of these goods during the period from 2006 to 2010 is also quite realistic. On the other hand, there is also a constant growth in the number of containers transported through the port of Ploče. All these facts indicate that the port will not be in a position, as early as 2009, to ensure the quality handling of these increased quantities of goods, due to the fact that it is considered that the existing capacity and developed areas can handle a maximum of 4.8 Million tons of cargo. This is the reason why the Port of Ploče Authority started, as early as 2004 after having obtained information about the plans of the new owners of the major port users from B&H, with its activities directed at the construction of two entirely new port terminals: - the container terminal - the dry bulk terminal

329 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

The potential of the port of Ploče has also been identified by recognized financial institutions such as the World Bank and the EBRD (European Bank for Reconstruction and Development), which have assessed these projects as being of exceptional importance for regional development and regional cooperation as well as for the development of the Corridor Vc; the development project of the Port of Ploče entitled Transport and Trade Integration (TTI) Project, which is finally defined, and officially approved in October last year. A Loan agreement between World Bank and Port of Ploce authority with guarantee of Croatian government has been signed on November 20 2006, and agreement started to be effective on March 20 this year.

The overall objective of the project is to improve the capacity, the efficiency and the quality of services along the Corridor Vc in order to satisfy the projected high traffic demand, with a special focus on the port of Ploče as well as on the support to regional development. The specific objectives of the project are: - to increase the port capacity, - to improve the port efficiency, - to achieve a higher level of quality of port services, - to reduce the administrative barriers, - to develop the port capacity through the Public-Private Partnership (PPP) models. Although this project will be implemented with the financial participation and guarantee of the Croatian Government, it is absolutely clear, and this was also shown by an independent economic analysis, that both Croatia and B&H will mutually benefit from this project. While Croatia will try to achieve a return on investments from the increased cargo volumes by means of the collection of port dues and charges, the major economic benefits thereof will also be experienced by enterprises from the neighboring B&H, which will increase the competitiveness of their commodities in view of the more efficient and more modern transshipment options available in the port of Ploče. Without these projects, while bearing in mind the limitations of the existing capacity compared to the expected volumes to be handled by the port, the goods should be shifted to other more remote transport routes, which would thereby be burdened with higher transport and other charges. Illustration 4 shows the location of the new port terminals.

CONTAINER TERMINAL

BULK CARGO TERMINAL

Illustration 4: Strategic long-term development projects in the port of Ploče

330 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

6.1. Container terminal The technological changes which occurred in the maritime transport of goods as well as the trends to a global containerization make a good case for the investment – the construction of a container terminal -, which would result in the integration of the port of Ploče in the international flows of goods. More than 60% of the general cargo volumes are containerized, while this percentage exceeds 80% in the trade of goods between highly developed countries. The only regular connection for the dispatch/delivery of containers through the port of Ploče is via the feeder line, which was established in 1999 and which connects the port of Ploče to the Italian hub ports of Taranto and Gioia Tauro as well as to Malta. Container volumes in the port of Ploče show a continuous upward trend, which is depicted in detail in the part containing the analysis of the port traffic volumes. The increasing share of bulk cargos in the port, as well as the share of other types of general cargo (aluminum, wood), reduces the existing storage facility available for the storage of containers; it has been assessed that a maximum of 25,000 TEU per annum could be handed on Pier No. 3 under a maximum utilization of the space. As a consequence, any further increase in the number of containers requires the development of new capacities. For all the reasons mentioned above, the Port of Ploče Authority, as a non- profit institution managing the port area, started the procedure for the construction of the container terminal; now the final design has been completed and that the construction permit almost obtained, it is expected that construction works will start end of September this year. Following a detailed analysis and assessment of the costs involved and of the future container volumes, it has been decided to proceed with the construction of a container terminal; the facilities of the container terminal will indeed be in the foreground, but it will also be appropriate to handle general cargoes, in particular upon the multipurpose 63 tons mobile crane has been purchased last year. The estimates are that it would increase the utilization of the terminal capacity and provide for an accelerated return on investments. The selected approach is an approach in phases to the construction of the terminal, which is planned on the non-developed location, entitled “Area of Pier No. 7”, of a landside surface area of 154,000 sq. m., whereby the following has been planned in Phase I: - a 280 meter long pier for the accommodation of PANAMAX vessels (60,000 DWT), with a possible draft of 13.5 m, a RO-RO ramp, part of the central storage facility for a capacity of 60,000 TEU / per annum; - road connection to the terminal, part of the marshalling group for the communication. This terminal will be designed in such a way that it will provide, once finally developed, for an annual capacity of almost 300,000 TEU. The preliminary design and other available project documentation show that the total amount required for the construction of the terminal would come to somewhat more than € 27 Million, whereby the development of the pier accounts for more than 50% of this amount, while the assessments for the whole superstructure, to be invested by the future operator the “Port of Ploče” d.d., on its own or in cooperation with strategic partners, are being finalized. According to the plans, the construction is expected to be completed at the end of 2009.

6.2. Dry bulk terminal The dry bulk terminal will make it possible for the port of Ploče to considerably increase its transshipment capacity for dry bulks, while taking particularly into account the increased flows of goods for the account of “GIKIL” from Lukavac, “Aluminij” Mostar, “Mital Steel Zenica”, “Dalmacijacement” and Kauno Tiekimas (formerly “Birač”) from Zvornik. The location permit has been issued in May this year. The construction is expected to start at the end of 2008, while the construction of this indispensable terminal is planned to be completed during 2011. The terminal will be built in two phases and it will meet the requirements for annual volumes of approximately 5.5 Million tons of coal, coke, petroleum coke, bauxite and ore. The quay will be approximately 350 m long in order to make it possible to accommodate ships of 80,000 DWT in Phase I, and ships of 150,000 DWT in Phase II. Upon completion of the construction, a daily unloading quota of 35,000 tons and loading quota of 12,000 tons will be made possible at the terminal, while the capacity of a single storage will be 900,000 tons. Although the preparation of the project main design is still under way, it has been assessed that the value of the construction of the infrastructure of the future dry bulk terminal would amount to approximately € 45

331 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

Million. Once again, it should be emphasized that the Port of Ploče Authority will finance the construction of the basic infrastructure of the terminal (dredging of the access, wharf, storage facilities and other), like it is the case for the container terminal. The selection of the machinery and technology at the terminal will be the responsibility of the future operator, the “Port of Ploče” d.d., i.e. its potential strategic partner.

6.3. Development of the Port Information System Six main factors used to have an impact in the past on the competitiveness of a port: • the location • the infrastructure and equipment (machinery) • the quality of the transport routes to the hinterland (gravitating area) • the safety of the goods, transportation means and of the operations in the port in general • the costs • the speed and quality of the provided services.

These traditional elements provide the basic infrastructure; however it has recently become a necessity to add another essential factor: information services, which enable the interconnection of all the participants in the transport chain as well as various transaction services, which are usual in maritime transport. Therefore, although there is a great number of different partners involved in the whole transport chain, many of whom have different views on the transport process, they all have to communicate with each other. Communication between all the participants in the port community and connection between them is precisely the objective that should also be pursued by the integrated information system of the port. There is no integrated port information system based on modern information technology available in the port of Ploče; however, as already mentioned above, the construction of this component (entitled Port Community System-PCS) has been planned in the scope of the Loan from the World Bank for the development of the port of Ploče. The design of the system will take into account its openness and compatibility in view of the connection of the particular individual systems of the participants in the port area in Ploče but also in order to make an exchange of data possible with other port information systems (such as that of the railways, customs, etc.), the systems of sea-going or river-going ship owners and to allow other users (importers and exporters and the like) to use the databases, exchange messages and perform various transactions. The specificity of establishing a PCS lies in the vicinity of the border with B&H, which makes it necessary to ensure the compatibility of the information system of all the participants along the Corridor Vc in order to enable more speedy and more efficient flows of goods and to increase the competitiveness of the whole transport corridor in general.

6.4. Development of the other infrastructure In order to enable the functionality of these strategic terminals, the Port of Ploče Authority has to continuously invest in port infrastructure, including the railway tracks, roads, electrical installations and substations, the water supply and sewage systems, etc. The construction of the appropriate access roads from both the municipal roads and the Adriatic Highway as well as of the junction to the future Ploče – Split – Zagreb Motorway (to be completed until the end of 2008) and to the motorway of the Corridor V is also of great importance.

7. THE STRATEGY OF PORT DEVELOPMENT AS PART OF THE LOGISTICS CHAIN For the purpose of investigating all aspects of the business opportunities, it is necessary to make a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis of the port of Ploče: “Strengths”: the location, the geographical and traffic position; the port resources: an undeveloped area is available for the development of the port capacity, as well as the appropriate and qualified labor.

“Weaknesses”:

332 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

the port resources: lack of equipment and storage facilities to meet the expected growth in dry bulk and container volumes; the lack of funding (from their own capital) of the Port Authority and the Company the “Port of Ploče”d.d. to invest on their own in capital port terminals such as the bulk cargo terminal and the container terminal; the lack of a major number of regular shipping lines; the condition of the infrastructure and in particular of the railways from the port towards the hinterland (in B&H in particular); the non-existence of an integrated information system; the issues related to the transport route from/to Ploče (waiting time at the border crossing for customs clearance and border control formalities, non-harmonization of several railway companies on the route).

“Opportunities”: the reorganization of the port and the establishing of a Port Authority creates the preconditions necessary for the financial participation of the State in the construction and the reconstruction of the port infrastructure and, on the other hand, it has been made possible with the concession system to involve entrepreneurs and private capital in general in the construction of the port capacity and the modernization of the equipment. the positive breakthrough in the economy of Bosnia and Herzegovina, in particular after the entry of big international corporations in the ownership structure of the major port users (Zenica Steelworks, coke plant in Lukavac, aluminum oxide plant in Zvornik) and the situation in connection with their export products; various logistics operations in the port (free zone), distribution centers etc.; international projects (Corridor Vc, INTERREG projects, “Motorways of Sea”, SSS...); the possibility to expand the market to those which used to be serviced by the port of Ploče a long time ago (Serbia, Italy, Hungary, Slovakia, …).

“Threats”: the political and economic disturbances in the gravitating area; the changes in prices on the market worldwide (coke, steel, aluminum oxide, aluminum, ...) can influence the main port users to suspend their intensified activity for a certain time.

It is absolutely clear that the port of Ploče is aware of its position, its advantages and its current weaknesses. There is no doubt that the so-called Focus Strategy will continue to manifest itself with a focus on services to the economy of B&H, but attempts will so be made to penetrate into new (old) markets. The great technological changes, such as the globalization in production and distribution, the development of container ships, ship owners joining in, the development of information technology and the imperative of the development of the port and logistics infrastructure, have had a significant impact on the ports. It is absolutely clear that, in the future, development will not be possible anymore in the field of traditional transshipment services only. As a consequence, there is an increasing number of ports that focus on “value-added” services, as an instrument to achieve the competitive advantages, in such a way that they develop close relations with their users by providing them with an increased scope of services. Ports can expect the effects of synergy of such logistics centers, due to the fact that they can attract additional cargos, which can be dispatched through the port, achieve thereby an additional income and increase the rate of utilization. Modern ports have to be completely integrated in the logistics chain and they have to be more active in satisfying the needs of their end users. The nature of the competition between the ports has changed due to the fact that the competition today is not only between ports but also between the logistics chains, and the advantage belongs to the one, which is in a position to offer the most favorable charges and productivity to its end users. The Port of Ploče Authority, as one of the parties involved in the logistics chain, is planning to undertake all actions necessary to fulfill its role and assume its part of responsibility; however, it is also indispensable

333 Zekulic S., Batur T. (2007). Port of Ploče Development Through the Trade and Transport Integration Project. In: D. Kereković (ed). Richness and Diversity of GIS. Croatian Information Technology Association – GIS Forum, University of Silesia, Zagreb, 316-334.

to the same extent for users to become aware of their belonging to this chain and of the fact that the entire functionality of the chain depends on the quality of the provision of services of all its integral parts.

8. CONCLUSION After several years of reduced traffic volumes as a result of the war operations in the surroundings, the port of Ploče is now recording again a growth in traffic volumes, which results in the first place from the economic recovery in the neighboring B&H and in particular due to the resumption of production in the metalworking industry. The projections show that the transshipment capacity of the port of Ploče will be insufficient in view of the forecasted growth in traffic volumes; as a consequence, the Port of Ploče Authority decided, in cooperation with the World Bank and the European Bank for Reconstruction and Development, to launch a new development project designated as Trade and Transport Integration Project. A significant increase in traffic volumes and an increased competitiveness of the international transport / logistics chain through the port of Ploče are expected from the project of reconstruction and modernization of the port (bulk cargo terminal, container terminal, port information system). The particular objectives include increasing the port capacity, efficiency and quality of the provided services, reducing the administrative barriers and improving the financial, social and environmental conditions in the Port of Ploče, reconstructing the infrastructure and replacing the equipment as well as improving the international road and railway lines connected to the transport route of Ploče. Upon consideration of the projected increase in traffic volumes through the port of Ploče, it can be confirmed with a fair amount of certainty that such investments in new port terminals for the purpose of the modernization of the port are essential and economically viable due to the fact that they represent, according to all indicators, the basic precondition for an increase in port traffic volumes as well as of the scope of operations of other actors (agencies, forwarding agents, etc.) in connection with the port operations. The economic advantages of these development projects will be directly felt by all the users of the port services and of the whole transport route, and in particular by the enterprises in Bosnia and Herzegovina as a result of the increased competitiveness of the goods imported or exported by them through the port of Ploče.

LITERATURE: 1. ”ORDINANCE ON THE CLASSIFICATION OF PORTS OPEN TO PUBLIC TRAFFIC WITHIN THE DUBROVNIK – NERETVA COUNTY (“Official Gazette” of the Republic of Croatia No. 96/96) 2. “DECISION ON THE CRITERIA FOR THE CLASSIFICATION OF PORTS OPEN TO PUBLIC TRAFFIC” (“Official Gazette” of the Republic of Croatia No. 31/96) “MARITIME DOMAIN AND SEAPORTS ACT” (“Official Gazette” of the Republic of Croatia No. 158/03, 100/04, 141/06) 3. “LAW ON FREE ZONES” (“Official Gazette” of the Republic of Croatia No. 44/96, 92/05, 127/00) 4. P. Alderton, “PORT MANAGEMENT AND OPERATIONS”, Lloyd’s Practical Shipping Guides, London, 2005 5. Various documentation related to TTI Project (prepared by: “Royal Haskoning, “World Bank”, Port of Ploce Authority)

334