ANCHORS AWEIGH

by Andrew Macdowall*

Bulgarian ports regain importance in wake of EU membership

Bulgaria's sea and river ports are enjoying a renaissance as trans-European transport networks continue to develop and investment and traffic increase. Water transport, which had been superseded in most sectors by cheaper air freight and improved roads, has reasserted itself and is being integrated with other forms of transport.

Several factors have helped this revival: Bulgaria's location on the River Danube, its ever-improving links across the Black Sea and to Europe and Turkey, and the fillip of EU membership have all boosted its potential as a transport and logistic hub.

On 1 August Slovenian port operator Luka Koper announced plans to expand operations into Romania and Bulgaria. The firm said it planned to open an office in Ruse, on the Danube, a short distance from the Romanian city of Giurgiu on the north bank. The cities are linked by the only bridge spanning the river between the two countries. Luka Koper issued a statement saying EU accession meant that the countries “represent great potential for us”.

Two future projects, already of interest to the Slovenes, are a roll-on/roll-off ferry service between the Slovenian Adriatic port of Koper and Burgas, and the overland transport of cargo originating in Bulgaria to Sezana, a transport hub in Slovenia, whence it can be transported to Italy. Investments worth $11.9 million are already underway in Sezana, Luka Koper said.

Of all the cities benefiting from these developments, it is Ruse, the country's fifth largest city, that could emerge as the prime player. Bulgaria's major Danube port and border post with Romania, Ruse lies on pan-European transport corridors VII - along the Danube - and IX – from Helsinki to Alexandropoulos, a Greek port on the Aegean. The corridors, major long-distance transportation routes through central and eastern Europe, are highlighted for development.

Ruse also enjoys good connections to the Romanian port of Constanta, as well as to Burgas and Varna. The city has declined in importance over recent decades, but the increase in funding for the development of the corridors and the effects of EU accession will raise its profile. Several other port cities are also seeing a rebirth thanks to an increase in both waterborne and overland freight.

Dockland Port-Burgas, a subsidiary of Industrial Holding Bulgaria, is to invest $16.2 million in developing a commercial port in the city. The Burgas-based firm is already active in the repair and reconstruction of vessels, machine building and equipment as well as cargo loading and unloading. The three-year construction project should get the green light by the end of 2007, according to the firm's executive director, Veselin Statev.

Statev said the main idea behind the project is to build a grain terminal to exploit a niche in the market. The private commercial port will compete with the state-owned docks and aims to provide improved, faster services. The port will handle an annual 1.2 million tonnes of freight, 800,000 tonnes of which will be grain and 400,000 tonnes general cargo.

In another sign of the renewed importance of sea ports on the Bulgarian, and indeed European, transport scene, there is a plan to construct an “intermodal” transport terminal in Burgas. The intermodal aspect of the project comes from the integration of sea, river, road and rail transport.

The terminal will be centred on sea and river port facilities and will also include bus and railway stations.

“A large transport centre with all the services which Bulgaria has lacked until now, (even) in Sofia, will be set up,” Transport Minister Petar Mutafchiev announced. Office and leisure areas will also be zoned and the project will be financed by EU funds or public-private partnership deals, he added. Mutafchiev said a design project would be chosen by the end of this year. Three blueprints have already been submitted and more are expected.

A third port set to benefit from Bulgaria's transport boom is Vidin, on the Danube in the northwest, which was severely affected by the war in the former Yugoslavia and the sanctions imposed on Serbia. In May, Spain's FCC Construcción started work on a $317.5 million bridge between Vidin and the Romanian city of Calafat, previously linked only by ferry. The road link should revive the city's economy and renew interest in the port, for which tender bids were recently opened. Vidin also lies on corridor IV, and the opening of the bridge is just the sort of development that the corridor plans aimed to promote.

With the exception of Varna, Bulgaria's ports have been somewhat overlooked in the post-Communist era. However, with new impetus to building transcontinental transport links and improving intermodality, they look set to take centre stage as Bulgaria reclaims its rightful place as the gateway between East and West.

*Andrew MacDowall Oxford Business Group analyst www.oxfordbusinessgroup.com

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