TTFSE II Program Team Leader, World Bank Vision for Integrated Trade and Transport Corridors - Regional Constraints and Opportunities - June 17, 2005 Paulus Guitink TTFSE II Program Team Leader, World Bank

TTFSE II Program Team Leader, World Bank Vision for Integrated Trade and Transport Corridors – Presentation Structure - SEE trade and transport corridors Performance of SEE rail transport Rationale for trade and transport facilitation This presentation will discuss the following three issues: - SEE trade and transport corridors (what is a corridor, which are the core regional corridors and how do they connect to trade) - Performance of SEE rail transport (we will show several examples of how, in this case, rail corridors in SEE function - Rationale for trade and transport facilitation (I will shoe the savings achieved through supporting TTF activities) PUSH BUTTON To start with the first issue: MOVE TO SECOND SLIDE June 17, 2005 Paulus Guitink TTFSE II Program Team Leader, World Bank

Trade and Transport Corridors: Definition Physical and functional dimension Consist of links, nodes and gateways Different corridor types: domestic, foreign and transit corridors Single mode vs. competing modes Support economic growth and serve both passenger and freight traffic Different development objectives Corridors have a physical and functional dimension In terms of physical components, a corridor includes one or more routes that connect centers of economic activity. The routes are composed of links over which the transport services travel, and nodes that interconnect the transport services. Gateways allow traffic with origins/destinations outside the corridor to enetr or exit the corridor. Corridors provide transport and logistic services that promote trade among the cities and countries along the corridors, serving both passenger and freight traffic – having different characteristics of demand and required equipment. While our focus is on freight transport, the quality of transport and logistic services will be affected by passenger transport competing for route capacity. Corridors may have different development objectives, some are developed to promote economic development along the corridor (e.g. Maputo corridor, developed as part of a Spatial Development Initiative. Others are developed to increase the activity of international Gateways at the end of the corridor (Kalahari Corridor, Port of Walvis Bay). Others again were developed to provide an international gateway for one or more landlocked countries. Still other corridors have been developed as part of a broader effort to develop an economic area, and this may include extending to expanding an existing economic union (e.g. EU TEN T network expansion, TRACECA). June 17, 2005 Paulus Guitink TTFSE II Program Team Leader, World Bank

TTFSE II Program Team Leader, World Bank SERBIA AND MONTENEGRO The map shows that all corridors together form the infrastructure “fabric” of Southeast Europe. While there is scope for competition between some corridors, e.g. Corridor IV and X, the core transport infrastructure capacity in the region is provided by the overall network. Countries in the region should closely cooperate to optimize the use of the existing capacity by enhancing throughput of transport systems. June 17, 2005 Paulus Guitink TTFSE II Program Team Leader, World Bank

Evaluation of Corridor Performance Infrastructure: capacity of nodes and links, level of service provided Transport services: quality, time, costs, reliability, flexibility Domestic, bilateral and multilateral regulations and policies The infrastructure perspective looks at the physical capacity of links and nodes, the level of service provided, management of infrastructure, etc. This approach is the basis for decisions on expanding the infrastructure, introducing other management systems for maintenance, etc The second perspective examines the quality of the services provided for the goods moving on the various routes. .Performance is measured in average time and costs for transport units moving along the this corridor. Two additional parameters have become increasingly important in modern logistics, being reliability and flexibility. Regulation and policy is a common barrier, especially in relation with border crossing procedures for import, export and transit shipments. June 17, 2005 Paulus Guitink TTFSE II Program Team Leader, World Bank

Vision for Integrated Trade and Transport Corridors SEE trade and transport corridors Performance of SEE rail transport Rationale for trade and transport facilitation Although much work remains to be done, especially on administrative and regulatory procedures, performance of road corridors is slowly improving. However, border crossing procedures in rail corridors, aggravated by the recent establishment of 5 railway companies in the former Yugoslav Republic, remain a key cause of delays and unpredictability, as shown in the following example. June 17, 2005 Paulus Guitink TTFSE II Program Team Leader, World Bank

Time breakdown on Corridor IV/IX rail transport This corridor represents one of the main axes which serve the traffic between Western or Central Europe and Turkey. As such, the corridor has potential for attracting increased transit traffic and serving as the main connection for the countries exports headed towards Western Europe, but has still not managed to attract this traffic. The chart presents the time necessary to travel by rail from the Turkish-Bulgarian border (border crossing point Svilengrad) through Bulgaria and Romania all the way to the Romanian-Hungarian border in Curtici. Red squares represent the stopping time spent at each border crossing and includes activities undertaken by all border and railway authorities, meaning: customs, border police, other border agencies and railway teams for technical checks. The blue line represents the movement of the train. As you can see, it often takes from 5 to 19 hours to pass a border, and it takes almost 100 hours (5 days) merely to travel through two countries and reach the Hungarian border. June 17, 2005 Paulus Guitink TTFSE II Program Team Leader, World Bank Source: TTFSE II - Railway Corridor and Border Crossing Study (ECORYS, 2005)

Transport and Processing Times on Corridor IV/IX Stopping time Curtici Travel time CFR Stopping time Giurgiu Stopping time Ruse Travel time BDZ Stopping time Svilengrad hours I have mentioned the necessity for reliability in transport, which for a trader means ability to calculate time and cost of bringing goods to market. The uncertainties associated with border crossing create an increasing problem not only for ensuring that the train arrives on time to pick up a load, but increasingly so that the train can deliver a load and then pick up another both required fixed delivery schedules. An exporter’s success increasingly depends on the increasing quality of production (private sector responsibility) and improve reliability of deliveries while reducing lead times (mainly dependent on public sector initiatives and investments). June 17, 2005 Source: TTFSE II - Railway Corridor and Border Crossing Study (ECORYS, 2005) Paulus Guitink TTFSE II Program Team Leader, World Bank

Time breakdown on Corridor X rail transport Here, we have a similar chart on railway transport, but on corridor X traveling from the Port of Piraeus to Munich, in this chart being focused on the corridor section from the border between Greece and Macedonia, moving through Serbia and Montenegro and Croatia and finishing at the Croatian-Slovenian Border. This rail corridor shows similar deficiencies regarding transport, with slightly better traveling time, mainly deriving from the compatibility of the countries’ railway systems and easier cooperation due to smaller language barrier. Again, as in the previous case shown, a trader is faced with different travel and border crossing times and unpredictability in time necessary to reach destination point. June 17, 2005 Paulus Guitink TTFSE II Program Team Leader, World Bank Source: TPPF in the Balkan Region. Railway Border Crossing Study (Scott Wilson, 2004)

Operations Performance at BCPs This is what is currently taking place at each border crossing: Yellow squares show time spent for administrative matters The red squares show Customs activities And black squares shows time spent for railway operation activities, such as change of locomotives, technical and breaks checks. The consecutive manner in which all actions are taken leads to BCP times of in this case 4 hours. June 17, 2005 Paulus Guitink TTFSE II Program Team Leader, World Bank Source: TPPF in the Balkan Region. Railway Border Crossing Study (Scott Wilson, 2004)

Vision for Integrated Trade and Transport Corridors SEE trade and transport corridors Performance of SEE rail transport Rationale for trade and transport facilitation The current interest in corridors follows earlier efforts to promote regional growth Most recently, there were attempts to create ‘growth triangles’ and other relationships between neighboring countries, but these efforts added little to what could be expected from ‘regular’ development of intraregional trade. The development of trading blocs has been more successful since these efforts focused on removing barriers to intra- and inter-regional trade. June 17, 2005 Paulus Guitink TTFSE II Program Team Leader, World Bank

TTFSE II Program Team Leader, World Bank 47 hours Benefits 98 hours 51 hour Going back to the first slide of this session, TF measures which would improve border connections, cross-border communication and inter-agency coordination would lead to significant savings both for the private sector (as a result of faster turn-over and decreased cost of transporting goods) and for the public (improved utilization of transport infrastructure and increased revenues by national transport entities). PUSH BUTTON In the case of the travel from Svilengrad to Curtici, the streamlining of procedures can significantly reduce stopping times at border crossings, thus contributing to a travel time reduction from 98 hours to 51 hours, a reduction of 47 hours. June 17, 2005 Paulus Guitink TTFSE II Program Team Leader, World Bank

Why TTF and corridor development? Enhances quality of transport services Supports innovative transport techniques Efficient logistics are a competitive advantage Encompasses ‘electronic corridors’ Supports administrative, operational and legislative reforms in transport sector The quality of transport services is measured in terms of speed, flexibility and reliability. Since the 1990’s these aspects have increased in importance for freight transport as greater attention has been given to supply chain management and new logistical concepts, e.g. JIT. Supports development of innovative transport techniques, such as Ro-La and multimodal transport. Unitization of cargo (containers, swap body’s) took off worldwide in the 1970’s and allowed for more efficient inter-modal transfers. While increasing the flexibility of transport systems and vaialable shipping options, it also requires efficient multimodal terminals and systems. Efficient logistics along streamlined transport corridors contribute significantly to reducing economic distances to markets. This is even more true for landlocked countries which require port gateways to access global markets. An important component of corridor development is timely interchange of information through EDI. Modern supply chain management requires advance access to selective information by different stakeholders (shippers, forwarders, customs, border police, etc). In combination with improved telecommunication systems along corridors, EDI is an important component to modernize procedures at gateways and border crossings. Optimizing corridor performance also requires the reduction of administrative, operational and regulatory barriers to enhance traffic throughput and to facilitate the further development of modern logistical concepts. In summary, the transport corridor concept not only includes a collection of routes, nodes, and gateways, but also a portfolio of transport services. It provides a mechanism for focusing efforts of the public and private sector on a common objective: moving goods efficiently from origin to destination. The concept does not avoid issues related to multimodal transport and integrated logistic systems and creates an environment in which regional initiatives can be defined, appraised and evaluated for cross-border freight movement. June 17, 2005 Paulus Guitink TTFSE II Program Team Leader, World Bank

Client Ownership and Partnerships to define a Common Framework Prioritization and phasing of activities Harmonization of regulations, administrative and operational procedures Synchronization of multi-national activities Sustainable financing mechanisms Client ownership in recent implementation of various EU, WB and other trade and transport facilitation programs has been strong. In our view the time has come to move to a next level, forming partnerships to complete a coherent physical and functional transport corridor network. Issues that remain to be tackled need to be framed by a common approach – the elements of which are tentatively listed here but need to be fleshed out in more detail. In the discussion we hope to elaborate on this a bit more. June 17, 2005 Paulus Guitink TTFSE II Program Team Leader, World Bank

Vision for Integrated Trade and Transport Corridors Thank you June 17, 2005 Paulus Guitink TTFSE II Program Team Leader, World Bank