The Second Track – An Opportunity for Slovenia

10.12.2012

Koper, 10 Dec 2012

The most recent study conducted within the European INWAPO project by the Ljubljana-based Ljubljanski Inštitut za Finance in Ekonomijo d.o.o. - L.I.F.E. institute, confirmed that a modern railway link between Koper and the mainline at Divača is of national strategic significance as well as an investment essential for the further development of the Port of Koper and the Slovenian logistics sector in general. Presented at today's roundtable at the Vinakoper headquarters, the Luka Koper commissioned study vindicates this necessary improvement to the efficiency of Slovenia’s only seaport.

The study conducted by Dr. Jože P. Damijan assessed the dynamics of future trade flows via the Port of Koper, as well as its impact on the national economy; it also provided three scenarios: the pessimistic, optimistic and realistic development of the transport corridors. According to the realistic scenario, cargo throughput at the port will grow, on average, by four percent annually, and would reach 30 million tonnes per year by 2030, while at the same time rail freight would double to 20 million tonnes. Most evident will be the rise in container freight, which is anticipated to account for 53 percent in the total cargo throughput by 2030. 

According to the author of the study, the anticipated throughput dynamics will result in the congestion of the single-track of Koper – Divača branch line by 2018. In the event that this line is not doubled, all excess freight will be diverted onto either Slovene roads or Italian railways. 

The study analyses three possible versions of the development of transport infrastructure linking Koper with its continental hinterland. Scenario A includes a new direct line linking Koper with Trieste; scenario B does not anticipate any investments in railway infrastructure, whereas scenario C anticipates the construction of a second track between Koper and the main line at Divača. 

Based on simulations, scenario B would be least cost-efficient. Indeed, without the construction of a new track, any additional trade flows would necessarily be redirected onto the road network; the negative external impacts (air emissions, noise, accidents, traffic jams, degradation of roads etc.) are five-fold those of rail freight. Cost implications could be as much as 1.3 billion euros. 

According to scenario A, the eventual construction of a new Koper – Trieste line decreases the external social costs, but the redirection of flows via a foreign (Italian) rail network would be a poor solution for Slovenia from a long-term strategic perspective. Indeed, it would cause a loss in the range of 166 to 538 million euros in potential revenue for Slovenian rail freight operators, a loss of potential revenue for the national railtrack provider (in the range of 23 to 77 million euros) as well as the opportunity loss of new railway infrastructure (with a residual value in the amount of 398 million euros). Special attention should also be drawn to the loss of potential economic activities facilitated by the increased dynamics of cargo volumes passing through Slovenia, and with that the consequent loss of potential jobs. "What would Slovenia and its industry be today if the railways hadn't been constructed 170 years ago?" commented Dr Damijan. 

In the event the second Koper – Divača track project fails to be realised, there is a real danger that cargo flows will be redirected from the Port of Koper to Trieste, which itself now benefits from the new high speed Pontebba line, an efficient modern railway link with the hinterland countries lying adjacent the Baltic – Adriatic corridor. Any such redirection would result in the loss of potential revenues generated by the seaport and its pertaining logistics industry, which would negatively impact the Slovene economy as a whole. 

There was unanimous consent at the roundtable moderated by Andrej Šavko, managing editor of Radio Koper that Slovenia needs a second track to the Port of Koper, and that there's no sensible alternative to it. President of the Intereuropa Management Board, Ernest Gortan, drew attention to the forthcoming accession of Croatia to the European Union which will put at risk Slovenia's competitive advantage in the field of logistics. Dušan Mes, the General Director of Slovenske Železnice (Slovenian Railways) added: "To my knowledge, the Croats haven't considered any upgrade of the track between Rijeka and Ilirska Bistrica (in Slovenia) without the prior modernisation of Rijeka – Zagreb mainline" thereby indirectly replying to the dilemma as to the construction of the railway line between Koper and Trieste. 

The roundtable also addressed the general development of the Slovenian logistics sector. Boštjan Rigler, General Director of the Directorate for Infrastructure at the Ministry of Infrastructure and Spatial Planning, said that the state is preparing the strategic documents for infrastructure development in order to increase the trade flows via Slovenia. The Port of Koper has a key role in these plans. He added that Luka Koper has clear and concrete development plans, but it is confronted by local obstacles: "The local community will have to decide if the development of the Port of Koper is in its interest." 

Due to the fact that the Constitutional Court RS has issued an order which bans the use of plots in the future Ankaran Municipality - the only land available for the disposal of silt from dredging operations - Luka Koper now faces a dilemma. Mr Rigler gave his word that the Minister will take an active part in resolving this issue which might - according to the company's Management Board President Bojan Brank - cost Luka Koper a great deal: "We can no longer afford to blush in front of shipowners when we are unable to provide them with an answer as to when they will be able to berth their larger ships at Koper." 

Because of the shallow harbour, the largest container vessels have to call at Trieste to unload, before calling at Koper. This takes clients' precious time and money, and it's only a matter of time before they redirect their cargos elsewhere.