Transport in Croatia: Key international Croatian port and trade corridor will develop with assistance from World Bank
The World Bank’s Board of Executive Directors today approved a new loan to Croatia in the amount of USD 75.3m for the Trade and Transport Integration Project.
The Project will support Government’s efforts to develop the Port of Ploce, the second largest port in Croatia.The Port of Ploce, situated on the Adriatic coast between the cities of Split and Dubrovnik, is the gateway for Transport Corridor Vc, one of the three major Pan-European transport corridors linking Croatia and EU markets. The port offers good prospects for trade and transit traffic, as demonstrated by the growth in traffic experienced over recent years. The direct economic activity generated by the traffic represents today about US$19 million per year for the port, the Croatian railways and other Croatian transport intermediaries.Achieving economic growth and attaining quicker convergence with European Union standards are strategic goals for the Croatian Government. The Trade and Transport Integration Project, built on a partnership between the Government of Croatia, the Port of Ploce, the World Bank and the European Bank for Reconstruction and Development, is expected to be a major driving force in achieving a direct increase in economic growth for the southern region of Croatia as well as for neighboring countries such as Hungary and Bosnia and Herzegovina. “As the Port of Ploce has been experiencing significant traffic growth, mostly resulting from industrial restructuring in neighboring Bosnia and Herzegovina, it is vital for Croatia to upgrade the infrastructure and operational capabilities of its second largest port to meet the growing demands in traffic, while maintaining its own financial viability,” said Anand K. Seth, the World Bank Regional Director for Croatia, Bulgaria and Romania. “The Port, in its capacity as the regional gateway for trade and transport, places Croatia in the drivers’ seat as a regional leader to achieve greater economic integration of the South East European region.”The project’s objective is to develop trade along Corridor Vc by improving the capacity, efficiency and quality of services on the southern end of the Corridor, with a particular focus on the Port of Ploce and on coordination aspects among all corridor participants.The Trade and Transportation Integration Project consists of three components: a port infrastructure development component for the port of Ploce, a trade and transport integration component, and a capacity building component for project implementation. The port infrastructure development component will include the construction of a new bulk cargo terminal, construction of a container/multipurpose terminal and rehabilitation of the supporting port infrastructure such as roads, rail, water and wastewater and power supply. The trade and transport integration component will focus on the development and rollout of a modern electronic port community system, integrating all members of the port community, shipping agents, rail, road transport, border agencies, into a seamless information system, and ensuring smooth and coordinated functioning of the Port. The project implementation component will, among other activities, support the successful implementation of the Project through technical assistance to the Port of Ploce Authority to implement its business plan and establish the concession for new terminals.At the regional level, successful project implementation will bring about significant transport cost savings in servicing current and projected business demands from the Eastern Slavonia sub-region, neighboring Hungary and especially BiH, building on recent foreign direct investments in some of BiH’s leading pre-war industries. Without this project, this region, whose economy is still recovering, would experience higher costs for its trade by having to use more expensive alternative transport routes. At the local level, the project activities will have a similar effect, increasing current levels of cargo traffic, directly benefiting the Port of Ploce, and at the same time generating economic benefits for the people of Southern Dalmatia through substantial, year-round economic direct and indirect activity.As Croatia gets closer to its goal of EU membership, the Bank continues to adjust the scope and nature of its support through a flexible partnership strategy, which will be next reviewed in early 2007.Since the Republic of Croatia became a member in 1993, the World Bank has actively offered its financial and technical assistance, and counsel pertaining to policies in various fields and analytical services. To date, the Bank has offered support for 31 projects with a total value of US$1.73 billion, and it has approved 48 grants with a total value of US$51.5 million. The projects completed so far have been assessed as satisfactory. The success of the overall project portfolio over the past years is also above the regional average, and fund disbursement rates are high.The Euro (€) denominated fixed spread loan is repayable in 15 years, with a 5 year grace period.
(Source: World Bank, 14 November 2006)
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