Annex to the second LoI on the Alpine/Western Balkan RFC[1]

(a) the crossing by the freight corridor of the territory of at least three Member States, or of two Member States if the distance between the terminals served by the freight corridor is greater than 500 km;

The AWB corridor connects four EU member states (AT, SI, HR, BG) and one EU candidate state (SRB) which are not yet connected by an EU Rail Freight Corridor.

Furthermore, the AWB RFC provides an alternative routing to the Northwest/Southeast route covered by the Orient/East-Med (established in 2013) and the Rhine-Danube corridor (to be established by 2018). The distance between Linz (AT) and Svilengrad (BG, border crossing to TR), is approximately 1,580km via the AWB RFC, whereas the same relation via the Orient/East-Med and Rhine-Danube RFCs is 1,750km (via the Vidin/Calafat, Curtici/Lököshaza and Hegyeshalom/Nickelsdorf border crossings). Being about 160km, or 9%, shorter than the route of OEM and RD RFC, AWB RFC thus adds an attractive alternative for flows from Central Europe to Turkey and beyond.

In addition to competing for overlapping markets, the addition of the AWB route would also provide a viable diversionary route in the case of major capacity restrictions on any of the two routes. This would be particularly helpful as (i)the availability of diversionary routes providing adequate standards is generally limited in this part of Europe and (ii)as the significant rehabilitation works planed in the region (e.g. on the Romania part of the Rhine-Danube corridor) may imply significant capacity restrictions in the short and medium term.

(b) the consistency of the freight corridor with the TEN-T, the ERTMS corridors and/or the corridors defined by RNE;

The geographical consistency between the TEN-T network and the network of RFCs is important as it ensures that the complementarity between these two corridor concepts can be fully exploited. In brief, TEN-T policy focusses on infrastructure development based on common standards and requirements whereas RFCs aim to create the conditions necessary to provide competitive rail freight services on that infrastructure.

In this regard it is important to notice that the proposed principal route of AWB RFC utilises lines that are either part of the TEN-T core network (for EU member states) or the indicative core network (in the case of Serbia)for most of its length. This includes notably the entire routing of the corridor on the territory of Croatia, Serbia and Bulgaria.

Some sections of the lines in Austria and Slovenia are part of the comprehensive network only. However, these are necessary to ensure the link to the RFC network in Central and Western Europe via the link with Rhine-Danube RFC in Linz/Wels and Salzburg (see also section (e) below).

AWB RFC currently does not align with an existing core network corridor, as these have not yet been defined for the candidate country Serbia. There is a proposal tentatively identifying the extension of three CNCs (Mediterranean, Orient and Orient/East-Med) to the WB6 states.[2] However, the proposed AWB RFC provides better connectivity to the region (in particular to Central/Western Europe) and therefore corresponds closer to the (actual and potential) trade relations and transport flows.

Even though the AWB RFC precedes the definition of a potential TEN-T core network corridor on this axis, the conditions to ensure consistency between the RFC network and the TEN-T network are given. In this respect even the RNE corridor No 11 was established in 2011 to guarantee that the traffic flows and the appropriate processes developed by the Infrastructure Managers are in place. The RNE corridor 11 was in place together with other RNE Corridors until the end of 2016 when other corridors were transferred into the platform of Rail Freight Corridors while the Corridor 11 was temporarily “closed” waiting for the establishment of the appropriate Rail Freight Corridor.

Moreover, experience of work in the existing RFCs has shown that the work within the corridors’ structures tends to be more effective and efficient if the number of partners involved (IMs, MS) is not too large. The diversity of cultures and situations in different countries in combination with the principle of unanimous consent in decision-making (articles 8(4) and 8(5) of Regulation (EU) 913/2010) can result in challenging decision-making processes if many partners are involved. In this regard, AWB RFC promises a leaner structure enabling more effective work than an extension of any of the existing RFCs[3].

(c) the integration of TEN-T priority projects(1) into the freight corridor;

Comments:

  • Covered by point (b) already.
  • In any case, this point is outdated as “TEN-T priority projects” have been replaced by core network (corridors) in the new TEN-T framework (TEN-T guidelines, Regulation 1315/2013, and CEF regulation, Regulation 1316/2013).

(d) the balance between the socio-economic costs and benefits stemming from the establishment of the freight corridor;

Some studies and activities in the transport field of the Region indicate the importance and potential of the developed rail freight sector besides the passenger ones. The South Eastern European Transport Axes Cooperation (called SEETAC) Project co-financed by the EU founds besides transport flows analyses assessed also the environmental and socio-economic benefits (in its Working Package 4) of the rational developed transport system in the Region. It was underlined that such corridor might contribute to extended cooperation in the region also in relation with political stability.

The European Union Strategy for Danube Region and in particular Priority Area 1b „To improve mobility and multimodality – road, rail and air links“ also identified that corridor as important for the competitiveness of the Region.

Recent studies confirm a need to catch up in terms of transport infrastructure standards and quality in the (Western) Balkans region, in particular regarding rail.[4],[5] At the same time, another clear key conclusion is that the use of the existing infrastructure should be improved in addition to infrastructure improvements. In an analysis of border crossings points in the region, the EU co-funded ACROSSEE project found that in many cases several hours of transport time are lost at borders.

The removal of such non-infrastructure bottlenecks typically requires relatively limited resources. Such measures therefore offer high benefit/cost ratios. The strong legal basis provided by a rail freight corridor, involving key actors in the RFC governance structure (ministries, infrastructure managers, applicants including railway undertakings, terminals and others) will provide an appropriate framework to address such issues.

The pre-existence of a dedicated legal entity, in the form of the Corridor X Plus Association, furthermore means that the additional costs resulting from the establishment of the AWB RFC will be relatively limited. Nevertheless, the additional legal basis provided by the AWB RFC will make the work of the Association more effective.

(e) the consistency of all of the freight corridors proposed by the Member States in order to set up a European rail network for competitive freight;

The proposed AWB RFC complements the RFCs pre-existing in the Southeastern European region, notably by (i)adding missing links to the network, (ii)by permitting to cover new trade / traffic relations to be covered via one or more connecting RFCs and (iii)by providing an alternative route to existing RFCs.

FiveRFCs which are either operational or in the process of establishment (see table1) connect to the proposed principal route of AWB RFC. The corridor thus allows connecting the region to additional origins and destinations via these linking RFCs and – potentially – further RFCs of the network.

Connecting RFC / Connecting nodes / Key destinations / origins
Rhine-Danube RFC / Salzburg, Wels, Linz / Germany, France
Baltic-Adriatic RFC / Villach, Ljubljana, Bruck/Mur, / Italy, Czech Republic, Slovakia, Poland
Koper
Mediterranean RFC / Divaca, Pragersko, Zagreb / Spain, France, Italy, Hungary, Ukraine
Mestre/Venezia
Amber RFC / Ljubljana, Pragersko / Hungary, Slovakia, Poland
Orient/East-Med RFC / Sofia / Romania, Greece

Table 1: RFCs (existing or in the process of establishment) connecting to the AWB RFC route.

(f) the development of rail freight traffic and major trade flows and goods traffic along the freight corridor;

In geographical terms, AWB RFC will serve three main markets:

  1. Trade and traffic flows between the states, regions and ports directly served by the corridor (or in its immediate vicinity);
  2. Transport between the states and regions served by the corridor with origins and destinations located beyond the AWB corridor;
  3. Long-distance transit flows having both origin and destination outside the AWB corridor.

In each of these markets there is significant potential to develop rail freight transport, both by capturing traffic currently using other modes (mainly road) and by developing the overall volume of trade and transport.

{On point 1}

Historically, there have been close economic links between Slovenia, Croatia and Serbia due to the common past.

{On point 2}

The EU is the dominant trading partner of the Western Balkan states, including Serbia. Roughly three quarters of the trade volume of these countries, both in terms of export and import, is directed to EU countries, in particular to the core of the EU.[6]

AWB RFC establishes a key transport link between the AWB states and Central and Western Europe, catering to these strong trade relations. Moreover, the AWB corridor provides the AWB countries with an access to the North Sea ports in BE, NL, DE which are dominating the market for global logistics to overseas (and will continue to do so in the foreseeable future).

{On point 3}

Regarding long-distance transport, the AWB RFC provides a natural route towards Turkey, the Middle East and beyond. The route is the shortest access from Central Europe to the Bulgarian/Turkish border and has favourable topographic characteristics, in particular for rail freight (no steep gradients except for the Alpine crossings in Austria).

The AWB RFC can play a role as the European part of long-distance corridors linking Europe with the Far East, in particular with China, as promoted by current initiatives such as the “One Belt – One Road” and the TRACECA initiatives.

A general conclusion shared by all relevant studies is that the rail network in the AWB region is currently severely underutilised (cf. IBRD report; ACROSSEE; SEETO). The development of rail freight traffic is not constrained by a lack of capacity (a costly issue to resolve) but by the poor state of the infrastructure (due to lack of maintenance) and technical, regulatory and operational constraints. The establishment of the AWB RFC can help to overcome these limitations and complement infrastructure investment policies.

Importance of the AWB RFC route – backbone of the regional rail network

The AWB RFC route is the key rail axis in the Western Balkans region. In the REBIS update study (IBRD 2015), the rail freight flows are estimated to reach 12,000 to 14,000tons per day in the Zagreb and Belgrade areas (equivalent to about 3 to 5 million tons per year).

The significant potential of the AWB RFC is also highlighted by the fact that prior to the dissolution of Yugoslavia – which ended the functioning of the corridor as a seamless transport axis due to the violent conflicts – the volume of transit goods transported along this route was more than double the current figures. In 1989, approximately 8million tons were shipped by rail along the corridor (MZI 2010). The current market share of the AWB route is estimated at 10% only, with the remainder of the flows using the OEM RFC route.

Based on a comprehensive transport model developed for the SEE region, the ACROSSEE project estimated traffic demand growth on the horizons 2020 and 2030. In a scenario assuming improvements at border crossings (resulting in significantly shorter waiting times) but only limited infrastructure improvements, the estimated increase in the number of freight trains along the proposed AWB RFC route is above 10% per year.

(g) if appropriate, better interconnections between Member States and European third countries;

Turkey:

  • Completion of the Marmaray project in Istanbul (tunnel between European and Asian side) – scheduled completion 2018 (
  • 3rd Bosporus bridge, Halkali to Gebze, incl. 3rd Airport and Sabiha Gökcen Airport, not clear if freight trains will be allowed to use the line
  • Rail liberalisation in Turkey; network statement for 2017/8(?) published; private operators allowed as from X (2018?)

Middle East

  • Currently only Europe to Iran (and vice versa)
  • After opening of Kars – Tbilisi opening: Georgia and Azerbaijan follow (
  • Kars – Tbilisi – Baku, includes new line Akhalkalaki – Kars, will allow direct connections between Turkey, Azerbaijan and Georgia (after closure of Turkish-Armenian border in 1993); target commission date. 2017,

(h) the interest of the applicants in the freight corridor;

In 2010, Slovenian Railways, Croation Railways Cargo and the Railways of Serbia established Cargo10, a joint venture with the goal to significantly cut the cargo transport times along Corridor10, to improve the quality of service and to attract traffic from the route of the OEM RFC.

The market for intermodal transport between Europe and Turkey is currently dominated by combined sea shipping (from Turkey mainly to Italian Adriatic sea ports) and road and rail legs in Europe. Rail Cargo Group is currently the only intermodal operator offering through services to Turkeyvia rail.

This is a rather unfortunate situation for rail in the SEE region, as interest in rail services soared around 2005 to 2013 (see table2 for an overview). However, due to inadequate level of service, in particular a lack of reliability and predictability, intermodal operators preferred the slower but more dependable short sea shipping alternative.[7]

Operator
Metrans
Hupac / Borusan train (Vienna to Edirne, once weekly)
Railog / Turkey Container Shuttle
Veva Logistic / Car transport Europe to Turkey (Ford, Fiat)
Interferryboats / Cologne / Wien / Sopron
Balo / Balo Train
DB Schenker / Bosphorus Shuttle, discontinued due to congestion and delays at the end of 2013; expected to be re-started after opening of Halkali Terminal (Istanbul, European side)
Ulusoy Logistics / Semi trailer service to Germany, transit time 4 days, started in 2014, 1 train per week, discontinued after two years due to competition of ro-ro+ trail train services via Trieste (
Mars / Trailer trains from Trieste; unfortunate timing: stopped due to problems related to migration crisis in 2015
Fresh Food Corridor / Multimodal food transport from Eastern Mediterranean Region to Central /Western / Norther Europe; ship leg to Koper, Venice and Marseille; train leg further north; funded by CEF
Europe Intermodal / Joint venture of Kombiverkehr (DE) and Adria Kombi (SI); operating from 2008 to 2013 (
Express Interfracht EXIF / (same as Rail Cargo?)
Eksper Tren / Focus on conventional waggons (i.e. not intermodal), block trains and single wagons
Omsan / Only Turkish company working as operator to Europe; on behalf of joint venture company Omfesa: indirect bounds to DB Schenker; may have participated in Bosphorus Express project)
Balnak / 6th place in 2012; may cooperate with Borusan in future

Table 2: Overview intermodal operators previously running trains between Turkey and Europe

Even though not all of these trains used the AWB RFC route, the corridor could help to create the conditions required to make rail freight services competitive for transport between Central Europe and Turkey.

(i) the existence of good interconnections with other modes of transport, in particular due to an adequate network of terminals, including in maritime and inland ports.

The route of the AWB RFC provides access to the key terminals of the countries crossed by the corridor; see AppendixI for an overview.

The geographical scope of the region connected by the proposed Corridor provides also the advanced possibilities for developing the multimodal transport system particularly in connection with Inland Waterways and Transport by sea.

APPENDIXI

Overview of terminals interconnected by AWB RFC

State / Place / Name / Owner / operator / Modes / Info (capacity, types of cargo handled etc.) / Link(s)
Austria / Salzburg / Railport Salzburg / DB Schenker Rail / Rail, road /
Austria / Linz / Linz Hafen / Linz Service GmbH
Franz Frisch / Rail, road /
Austria / Linz / Railport Linz / DB Schenker Rail / Rail, road /
Austria / Graz / Terminal Graz Süd Werndorf / Steiermärkische Landesbahnen StLB
Joachim Herler / Rail, road /
Austria / Graz / Railport Graz / DB Schenker Rail / Rail, road /
Slovenia / Ljubljana / Ljubljana Container Terminal / Slovenske železnice - SŽ-TP d.o.o.
Robert Gaber Roman Bricelj / Rail, road /
Slovenia / Maribor / Under consideration for inclusion
Slovenia / Novo mesto - / Under consideration for inclusion
Slovenia / Celje / Under consideration for inclusion
Croatia / Zagreb / Kontejnerski Terminal Vrapče / AGIT d.o.o. / Rail, road /
Croatia / Zagreb / Terminal Jankomir / ZG HOLDING / Rail, road /
Croatia / Zagreb / Terminal Žitnjak / ZG HOLDING / Rail, road /
Croatia / Vukovar / Kontejnerski Terminal Vukovar / Kontejnerski Terminal Vukovar d.o.o. / Inland waterways, Rail, road /
Croatia / Zagreb / Zagreb Marshalling yard / Croatian Railways Infrastrucutre / Rail, Road /
Serbia / Sremska Mitrovica / Sremska Mitrovica Luka Leget / RTC LUKA LEGET AD
Mr. Marko Simic / Inland water- ways, Rail, road /
Serbia / Beograd / Beograd ZIT / ZIT Beograd
Svetozar Milanovic / Rail, road /
Serbia / Beograd / The Port of Belgrade / Luka Beograd / Rail, road /
Bulgaria / Sofia / Co-modal Terminal Voluyak / Trans Express
Ivan Petrov / Rail, road /
Bulgaria / Sofia / Railport Sofia / Railport Sofia / Rail, road /
Bulgaria / Sofia / Yana Sofia Intermodal Terminal / Ecologistics Ltd.
Lyubomir Syarov / Rail, road /

APPENDIXII

Letter of Support of the Infrastructure Managers concerned

{a letter signed in 2016 to be added}