Danube Ports – centres of intermodal logistics and economic growth ESPO 2013 Conference

Manfred Seitz, General Secretary E-Mail: [email protected] Varna,, 30 May 2013 What is Pro International?

Platform of private companies with strategic economic interest in better framework conditions and higher public investment in the Danube transport & logistics system

Industry & Ports & Barge Wholesale Logistics Terminal Shipyards & Service Operators Suppliers & “Transport Operators Providers (Associations) Others User” (Associations)

• Established autumn 2011 by companies & associations

• Non profit association based in Vienna

• Network of currently more than 120 companies

• More than a lobbying organization as we initiate and execute projects

2 Danube waterway – Key European transport axis

43 Mio. tons of cargo in 2010

High potentials – Many problems

. Danube serves an economic area of

c.90 Mio. inhabitants . Connects CE &SEE with growing markets in Black Sea (TR, RUS, UA) . Port of Constanta as a hub for hinterland traffic . River ports could serve as focal points for re-industrialization & regional economic growth . Provides cost-effective logistics for land-locked industries ensuring Source: via donau competitiveness & jobs . Environmentally friendly “green” transport corridor

3 Severest problem: insufficient waterway maintenance

 Several waterway administrations fail to ensure minimum standards in waterway maintenance (2,5 m fairway depth at LWRL according to recommendations of Danube Commission)  As a consequence: • Reduced efficiency of transport operations, loss of customers, shutdown of barging companies • Risk of total blockage of transport chains (like 25 days in autumn 2011 caused by shallow water hot spots in and Hungary) • Millions of Euros in financial losses for barging & port industry plus high extra costs & supply risks for manufacturing sector together with loss of trust in transport reliability

PDI action on better fairway maintenance: resulted into EC initiative (VP KALLAS & CM HAHN) which produced on 7 June 2012 in Luxembourg a Declaration of Transport Ministers for targeting better waterway maintenance (all Danube states except Hungary endorsed this Declaration)

Despite this declaration and clear international obligations for fairway maintenance, significant lack of short term measures in dredging & riverbed surveying can be registered

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Two realities in Danube waterway policy

Political support

Political failure in some states

5 Impact of poor maintenance: financial losses – high opportunity costs

Draft 2,00 2,30 2,50 2,70 Total revenue ( Euro ) 125.700 157.125 188.550 219.975 Total Costs 140.863 145.891 150.919 155.947 Profit -15.163 11.234 37.631 64.028 Profit % -12,06% 7,15% 19,96% 29,11% Calculation basis: Profit per to -2,53 1,50 4,18 6,10 Pushed convoy of 6 six barges, Constanta – Hungary & return, Diesel €850/ton

250,000

200,000

150,000 Total revenue ( Euro ) Total Costs 100,000 Profit 50,000

0 2.00 2.30 2.50 2.70 -50,000 6 Danube Ports: Focal points of transport & regional policies

• Danube ports are key elements for a sustainable and efficient transport system and important centres of economic activities • High potential for regional growth & cross-border initiatives

Danube Ports must be considered as catalysts for re-industrialization and regional growth with Port of Constanta as main logistics hub

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How to unlock the economic potentials of Danube ports?

• Increased public investment in port & terminal infrastructure including upgrade in road & rail access as part of the future operational program for transport & regional development • Improved/new instruments for public-private co-operation (coordinated project planning and project execution/strong & professional project management structures) • Ports shall become preferred centers for (re-)industrialization (national and foreign direct investments) • Improvement of current port legislation & active & service-oriented public port management & industry site development • (Cross-border) regional development plans and actions • Definition & implementation of state aid schemes for port & terminal investment similar to programs in Western Europe • Back-financing of state aid schemes via Structural Funds in period 2014-2020 in EU member states with Operational Programs; special attention to ports in EU support programs for Serbia, Moldova and Ukraine

Increased leverage of public spending and aligned private investment will stimulate economic growth and create jobs in the Danube region

8 How to modernize the Danube fleet?

• Challenge is to optimize existing fleet with regard to energy-efficiency, emissions, propulsion, safety of navigation and operational costs, but: • “Not everything which is technically feasible is economically viable” • Therefore we need a transition roadmap for new techniques & technologies • Important preparatory step: EC/DG Regio commissioned study „Innovative Danube vessel“ • Comprehensive Innovation Strategy including an Innovation Implementation Roadmap as part of a long-term strategic IWT development policy of the European Union • LNG as fuel for Danube vessels has an extremely high potential to meet efficiency and environmental objectives (see: LNG Masterplan for Rhine-Main- Danube) • Danube barge operators need financial support for the modernization of the fleet from national State Aid Schemes & EU programs

9 LNG Masterplan for Rhine-Main-Danube - Concept

Platform for cooperation of authorities and Regulatory industry stakeholders with the purpose to: framework

• Facilitate the creation of a harmonised European Technical regulatory framework considering LNG as fuel and as concepts cargo for inland navigation Pilot • Deliver technical concepts for new and retrofitted vessels deployment • Execute pilot deployments of vessels and terminals

Develop a comprehensive strategy with a detailed roadmap for the implementation of LNG in line with the EU policies in transport, energy and environment

• Proposal currently under evaluation by EC, funding decision expected before summer

10 LNG Masterplan for Rhine-Main-Danube – Basic data

Project proposal filed for TEN-T Multi- annual Call 2012; PP 18; Study with integrated pilot deployment • Timeframe: 1 January 2013 - 31 December 2015 • Planned eligible costs: 121 mil. EUR • Beneficiaries: 33 public / private bodies / incl. 1 member state • Active involvement of Ministries of Transport of NL, AT, CZ, SK, BG and CCNR • Non-funded partners: 35 public / private bodies & professional associations (as of 2.4.2013) • Overall and Danube region co-ordinator: Pro Danube Management GmbH; Rhine region co-ordinator: Port of Rotterdam

11 Pilot deployments - Overview

LNG terminals / bunker stations LNG tankers . Bunker station – Port of Antwerp . Combined LNG – MGO tanker (Argos Bunkering B.V.) . LNG Terminal Port of Constanta (Transport Trade Services S.A.) . LNG Tanker (Veka Mariska B.V.) . LNG Terminal in Ruse (Bulmarket DM Ltd.) . 2 LNG Inland Tankers (Chemgas Shipping B.V.) . LNG coastal carrier (Bernhard Schulte Cyprus Ltd.)

LNG vehicles & Machinery LNG propelled vessels Container vessel (DCL Barge B.V.) . Combined LNG/CNG fuelling stations . (Bulmarket DM Ltd.) . LNG pusher (Kooiman Marine B.V.) . LNG fuelled tank trucks (Bulmarket DM Ltd.) . LNG propelled chemical tanker (Chemgas Barging S.a.r.l.)

. 3 LNG Propelled pushers (Navrom S.A. Galati) . LNG Pusher (Bulmarket DM Ltd.) . LNG Propelled chemical tanker (Bodewes Binnenvaart B.V.)

12 Vision: Danube Ports for LNG distribution to the hinterland

Linz Bratislava / Komarno

Budapest / Györ Vienna

Pancevo Giurgiulesti Vukovar Galati

Lom/Vidin /Ruse CONSTANTA

Danube = GREEN „BLUE GAS CORRIDOR“

13 Conclusions

• Improvement of current situation requires higher political awareness and strong coordination by the European Commission • EUSDR/PA1A provides a valuable framework for coordination but needs high-level policy backup (many problems cannot be solved on current (administrative) level • New EU Programs (like CEF, CBC, Danube, Structural Operational Programs, etc.) must tackle infrastructure shortcomings • EU programs need to address the private sector better than currently in order to unlock the human and financial potentials of the region • Administrative barriers for Danube transportation must be reduced with the help of a joint initiative of transport, customs and immigration authorities • Low water periods cannot be avoided but safe and efficient transportation can be ensured if ALL Danube States respect the international obligations • Cost-effective Danube logistics strengthens the competitive position of the manufacturing industry and guarantees economic growth and jobs • LNG will play an important role as fuel and as a cargo

It´s time to act now!

14 Further information

Manfred Seitz General Secretary Pro Danube International Email: [email protected] Mobil: +436764067878

Alexandru Capatu Chairman Pro Danube International Email: [email protected] Mobil: +436643025874

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