Pre-Feasibility Report For the Rehabilitation and Development Presentation of the Pre-Feasibility Report For the Rehabilitation and Development Sava River Waterway Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007 SAVA RIVER BASIN LJUBLJANA ZAGREB Sl. Brod Sisak Sr. Mitrovica B. Brod BELGRADE B. Samac Brcko B. Luka SARAJEVO Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007 SAVA RIVER RIPARIAN STATES CROATIA Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Set – up of the presentation Objectives; Analysis of the cargo and traffic movements and future developments; Prepare a cargo traffic forecast; Identify, analyse and propose works to improve; navigation using already executed design studies; Establish investment costs related to navigation; Analysis of the port development; Environmental review; Institutional and legal aspects; Economic analysis. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007 Objective To determine a development strategy for the Sava as a viable mode of transport, to: Resume navigation on the Sava and the tributaries; Promote integrated water quality and preserve ecosystems; Coordinate protection against hazards; Support sustainable, environmentally and socially responsible economic development. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007 Overview Transport Policies and Strategies – Sava Riparian States w.r.t. inland waterways Slovenia: priorities for Sava spatial planning set specifically for the 20 km stretch from Cro/Slov border to Brezice; Croatia: made in 1999 covering period 2000 – 2010, includes priorities for IWT; Bosnia and Herzegovina: Medium Term Development Strategy (PRSP 2004 – 2007), includes priorities for IWT; Serbia: plan made in 2004, includes sustainable transport modes such as IWT. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007 Upgrading of the Sava Upgrading for the section Brcko up to Sisak from SC class III to SC class IV, with basic field investigations in Slovenia; Between Sisak and Brcko larger ships can be used for transport; This will effect only transport that has an origin or destination in that section; Effects can be measured in the ports of Sisak, Slavonski Brod, Bosanski Brod and Samac. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007 Effects of upgrading Upgrading will be completed in 2011; Final horizon year: 2026; Benefits for the period 2012 – 2026 ; Forecast ton and tonkms for iww (SC class IV); Alternative modes are road and rail, and SC class III as reference; Forecasts for 2011, 2016, 2021 and 2026. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Methodology to assess transport Normal forecast sequence: present transport / economy make forecast model forecast economy assumptions transport supply changes result: estimate future demand However, present situation on considered Sava Stretch is a result of a deteriorated economy and transport after the war. Alternative approach: interviews with key players own interpretation gives base year estimates for 3 scenarios other years use change in GDP (3 scenarios) Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Interviews / information Key players have knowledge about potential transport to and from the relevant ports: Brcko, Sisak, Slavonski Brod, Bosanski Brod and Samac; Information from key players: Port Authorities Port Master Office shipping companies (Dunavski Lloyd) industrial companies, e.g.: INA steel plant Zeljezara Information from articles, reports. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007 Cargo flows forecast Overview of transports by iww in terms of tons: per port Sisak, Slavonski Brod, Bosanski Brod, Samac per port the expected cargo flows per cargo flow the estimates for: forecast years: 2011, 2016, 2021 and 2026 per forecast year 3 scenarios: low, medium and high Per cargo flow the mean transport distance has been estimated to calculate the tonkms Per cargo flow the alternative modes: % road and rail were established Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007 Projected Cargo flows B. Samac VUKOVAR 60 km ŠAMAC 60 km PLOČE Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Traffic flows from/to Samac VUKOVAR ZAGREB SAMAC 305.8 km PRIJEDOR DOBOJ BANJA LUKA BELGRADE ZENICA SARAJEVO MOSTAR PLOCE Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Forecast of Tonkms – low, medium and high Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Longitudinal profile of the Sava Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Occurrence of water levels - Sava Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Sava waterway - Navigation problems The physical parameters of the Sava cause unfavourable navigation conditions related to: limited draft during large periods; sharp river bends limiting the length and width of vessels and convoys. Other problems for navigations are: limited dimensions for passages under bridges; insufficient marking. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Sava Commission navigation classes Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Sava Commission Classifications Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007 Sava - Current fairway characteristics and required deepening (km 202.5 – 588.2) Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Sava - River Bends (km 202.5 – 588.2) Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Sava - River Bridges (km 202.5 – 588.2) Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Proposed improvement works (km 202.5 – 588.2) Construction of groynes ( concentrate river flow, causing higher flow velocities, higher erosion rates will cause deepening; Construction of bank protections to avoid erosion caused by new groynes (deepening of the river bed) and to protect eroding banks; Construction of sills on the river bed to increase the water level; Rehabilitation of existing groynes and bank protections. The majority of the rehabilitation works are related to the existing bank protection works (stability is threatened because of the continuous water level decrease); Dredging to increase the water depth. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Locations to be improved Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Proposed dredging and river training projects Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Proposed river bend improvement projects Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Proposed marking system projects Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Construction costs – SC class IV waterway dredging and training works (projects DTW1 u/i DTW14): 28.3 million EURO river bend improvement (projects RB1 u/i RB4): 1.3 million EURO marking improvement (projects M1 and M2): 0.6 million EURO bridge construction (projects B1): 10.0 million EURO Total construction costs 40.2 million EURO Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Recommendations for navigation 1) Integral approach to the Sava The development of the Sava for navigation should be considered on a river basin level 2) Environmental Impact Assessment When morphological processes are considered it might show that the proposed dredging and training works will lead to further deepening of the Sava, which is not favourable from an environmental point of view 3) Traffic simulation Establish if safe passing of these narrow bends is possible by carrying out detailed traffic simulations 4) Cooperation between the riparian countries A successful development of the Sava as a competitive, regional transport mode highly depends on the cooperation between the riparian countries. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007 Ports along the Sava Slovenia: Inland ports where cargo is (un)loaded are not present. Croatia: Port of Sisak along the river Kupa and Port of Crnac (oil terminal) and Slavonski Brod (oil terminal at Ruscica). Bosnia and Herzegovina (BiH): respectively Samac (BiH), Bosanski Brod (BIH) and Brcko (District of Brcko). Serbia: Sremska Mitrovica and Sabac (no quay wall). Various terminals exist for handling sand and gravel, as well as a number of marinas are present at various locations in the Sava riparian countries. Most of the above mentioned ports have their own Master Plan in view of future economic developments in the region. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Ownership - Sava port operating companies (2007) Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007 EUROPEAN GUIDELINES RELATED TO TERMINALS FOR INTERMODAL OR COMBINED TRANSPORT In the European Agreement on Main Inland Waterways of International Importance (AGN), terminals are considered to be important for international combined transport if these form together with the respective inland waterways and coastal routes a coherent network for combined transport and if these are already used for combined transport. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Environmental aspects EIA Directive The EU has laid down its procedures regarding Environmental Impact Assessment (EIA) in the Council Directives 85/337/EEC and 97/11/EC. (To be adopted by the Member States) Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

CONCLUSIONS on ENVIRONMENTAL REVIEW The Sava river basin is a very sensitive location and is very important for biodiversity conservation. Any future EIA should especially focus on the identification, quantification and assessment of hydraulics, river morphology, soil and water, water management and nature protection effects. Focus in detail on nature and habitat protective mitigation measures. Agriculture and recreation activities could have additionally impact. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

RECOMMENDATIONS ENVIRONMENT Future EIA should be developed according local legal requirements (Slovenia, Croatia, Serbia and Bosnia and Herzegovina), and EU Directives. Public participation, should preferably already commence during the future Feasibility Study. Elaboration of Water Framework Directive (WFD). Include mitigating measures. Existing water infrastructure improvements should follow most environmentally friendly solutions Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Institutional and legal The ministries directly involved in IWT are the following: Slovenia: Ministry of Transport, specifically the Maritime Directorate. Croatia: Ministry of Sea, Tourism, Transport and Development. Specifically the State Secretary for Sea under which the Directorate for Inland Waterway Navigation resorts. Bosnia and Herzegovina: Ministry of Communications and Transport on state level. At the same time at the level of entities the Ministry of Transport and Communications in Banja Luka (Republika Srpska) and the Federal Ministry of Transport and Communications in Sarajevo (Federation of BiH) and the transport department of District of Brcko; Serbia: Ministry of Capital Investments, specifically the Sector for Water Traffic and Safety of Inland Water Navigation. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Authorities involved in IWT Sava Riparian States International Sava River Basin Commission Port Master Offices Hydro Meteorological Institutes Plovput Agency for Inland Waterways Yugoslav Ships Registry (Jugoregistar) Croatian Register of Shipping Croatian Waters (Hrvatske Vode) Serbia Waters (Srbija Vode) Ministries of Agriculture, Forestry and Water Management Danube Commission (as Sava is a tributary to Danube) Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

The potential benefits of the Sava capacity expansion include: Direct economic benefits for existing users; Direct economic benefits for potential new users; Indirect economic benefits; External benefits. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007 Transport policies The Slovenian government (2004) adopted a special development plan for spatial planning along the Sava over a stretch of 20 km, from the Slovenian – Croatian border till Brezice. The legal system is in place to achieve this. The Croatian transport and policy paper has been prepared in 1999 covering the period 2000 – 2010 and covers all modes of transports. Bosnia and Herzegovina prepared the Medium Term development Strategy PRSP (2004 – 2007) and details infrastructure. The IWT part of the Serbian transport policy paper “Transport and Policy” was prepared in 2004. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Adjustments in the short, medium and long term In the short term, it is assumed that no severe and fundamental changes are needed. All key players per country should focus on own performance, efficiency, internal and external communication including (free) exchange of reliable (survey/research/traffic) data. In the medium term, it is expected that the Sava Commission will function with more status, mandate and executive power (similar to the CCNR) and that consequently all riparian countries must follow accordingly. In the long term, it is assumed that the status and mandate of the Sava Commission are similar to those of the CCNR. Riparian countries are economically and politically integrating in an expanding EU. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007 Framework conditions for the functioning of the inland waterways transport industry The adequate functioning of an inland waterway transport industry requires that IWT-operators and their customers will be able to conduct their business and will be able to conclude transport contracts, as efficiently as possible. The market organisation therefore will have to take place in a market environment that will support the commercial processes as much as possible and will minimize burdens that administrative and regulatory procedures inevitably impose on the market parties. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Recommendations –institutional and legal (1) the Sava Commission should play a major role in establishing decisions to safeguard, develop, enhance and maintain an integrated development in the Sava basin considering flood management, water scarcity, renewable energy sources and production (hydro power energy), water ecosystem, flora and fauna spatial planning, tourism and recreation and navigation; The member countries must be willing to provide cash and kind for the implementation of the decisions as released by the Sava Commission; the same holds for regular maintenance of waterway(s), IWT structures, terminals and fleet; Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Recommendations –institutional and legal (2) Standards for ship building and ship design should follow international standards; the outdated and obsolete elements of the existing (old) fleet must be sanitised/scrapped; Navigable channels in the Sava basin waterways must be developed and maintained in a way that the Sava Commission classification system is followed; More in particular, for at least the medium term, attention must be given to the transport of dangerous commodities, to the safety of the IWT sector in all aspects (safety of cargo, navigation, crew, environment) and to sustainable developments. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Considerations for economic analysis Economic initiatives are sensible at the time of investigation, but investments will not take place, because some circumstances have changed. Most plans of interested companies and ports to be realised after the year 2011 Prudent to take the possibility of realisation of economic activities into account. Consequences have been calculated with realisation probabilities of 100, 80 and 60%. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007 Potential costs saving per tonkilometer and options to move cargo to inland waterways transport SC class IV Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007 INVESTMENTS The costs includes the dredging works, construction and maintenance costs of the Sava improvement works. It is assumed that in the period 2016-2026 only annual maintenance costs will be necessary, at the level of the last years in the period 2007-2016. Costs and benefits are calculated in constant prices (price level 2006). Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Cumulative investments costs of Sava improvements Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Summary benefit statistics (Euro) Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Benefits for the various scenarios Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

EIRR - Probability indicators and consequences Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007 Economic evaluation In the case of a 100% realisation probability of identified transport potentials the net present value (NPV) of the investments are positive in all growth variants (high present values and internal rates of return higher than 15%). With a 60% probability the identified transport potentials the internal rate of return is still higher than 15% in both the high and medium growth variants With a 60% probability the low growth scenario has only a 8% IRR (with a negative NPV when discounting with 15% becomes). Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

PROJECT EVALUATION - SUMMARY The proposed package for the expansion of the section Brcko - Sisak to a SC class IV waterway seems to be a project with a clear positive financial result. The investment seems to sound. Furthermore, the positive results are STRONG against rather significant adverse effects and high requirements with regard to profitability, i.e. high interest rate of 15%. In the medium case scenario with a probability investment of only 51% considering the high interest rate (of 15%) the NPV calculation is breakeven. The fact that many distinct companies with different traffic flows as well as authorities see interesting possibilities of the proposed activities along the Sava is a very positive fact and a stimulation to improve the Sava to SC class IV. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

ONGOING STUDIES TO BE USED AS INPUT FOR FUTURE SAVA STUDIES SAVA COMMISSION: Pre-Feasibility Study for the Rehabilitation and Development of the Sava River; Economic Demand Study (ongoing); Institutional Study (ongoing); SERBIA: Acquis Communitaire (legal); BOSNIA AND HERZEGOVINA: Update of Transport Master Plan. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

FOLLOW UP ACTIVITIES (1) Step 1: Carry out a Feasibility Study of the entire Sava River (including also the Sava section from Sisak to Brezice) and integrate all the study results of the various studies carried out till date in the various Sava Riparian States (Serbian FS results, Pre-FS results, economic demand study, institutional, river basin studies, design studies, Acquis, etc.) on IWT; Step 2: Carry out a Detailed Field Investigation (hydraulic, geotechnics, etc.) using the results of the FS (step 1); Step 3: Carry out Detailed Design Study, designs, costs, implementation schedules, technical specifications, propose packages of works, etc. Step 4: Prepare Contract Documents to tender internationally and prepare Prequalification Document for Contractors; Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

FOLLOW UP ACTIVITIES (2) Step 5: Secure funding either from the Sava Riparian States or from international funding institutes (IFI); Step 6: Prequalify Contractors and start tender procedure; Step 7: Supervision services for the Works; Step 8: Signing of Works Contract and Supervision Contract; Step 9: Implement Works. Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007

Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007 Thank you for your attention Pre-Feasibility Study Sava River Final Presentation Zagreb 08-05-2007