Speaker: Lazar Radaković, assistant minister

TOPIC: Current status of railway system in Republic of Serbia and policies for better transport connectivity

• Serbian railway system – characteristics

• Serbian railway system – current investment cycle

• Serbian railway system – new investment cycle

• The development of intermodal terminals

• Reform of the railway sector

• Soft measures towards connectivity

OUTLINE

Total length of railway lines on the territory Republic of Serbia is 3724,5 km. Of these,3435,8 km of single-track and 288,7 km of double-track railway lines.

The total length of the electrified railway lines is 1272,7 km. Of these, 984 km are single-track and 288,6km are double-track railway lines.

The railway line with strategic importance for Serbia is part of the Pan-European railCorridor X which go through Austria, Hungary, Croatia, Serbia, North Macedonia, Bulgariaand Greece. This very important corridor through Serbia has a total length of 872 km,which makes up 23% of the Serbian network.

The Republic of Serbia has set the reconstruction of Corridor X as one of its main priority.The aim is to raise competitiveness, bearing in mind the importance of rail transit throughSerbia.

In order to increase the efficiency of the railway transport system, its positive economicimpact on the economy and to establish the compatibility of the Serbia rail transportsystem with the European Union system, in the previous period Government of Republic ofSerbia (hereinafter: GoS) started a large number of RAILWAY INFRASTRUCTURE PROJECTSand implementation of POLICIES FOR BETTER TRANSPORT CONNECTITIVITY.

SERBIAN RAILWAY SYSTEM - CHARACTERISTICS

Funds were provided through three sources of funding.

1. Through international financial institutions, most often through the European Bank forReconstruction and Development (EBRD) and the European Investment Bank (EIB). Also, forsome projects, funds for the reconstruction and modernization of the railway infrastructure areprovided through grants from EU fund established for Balkan countries (up to 50%) withcombination of loans from aforementioned banks.

2. Bearing in mind that the Republic of Serbia has a statute candidate for membership in theEuropean Union, it has possibility to use grants for railway projects from Instrument for Pre-Accession Assistance (IPA) Fund which provides 85% of grants with the participation of theRepublic of Serbia of 15%.

3. In addition, the funds were provided through bilateral cooperation with other countries, withthe Russian Federation, People's Republic of China and Kuwait Fund for Arab EconomicDevelopment.

SERBIAN RAILWAY SYSTEM – CURRENT INVESTMENT CYCLE

After decades of underinvestment where infrastructure was not maintained properly fortwo life cycles, the GoS embraced ambitious investment program, aimed in significantlyimproving railway infrastructure quality in next 10 years.

In the past 3 decades, the investments in the railway sector were mainly amounted forcovering salaries and urgent works. There were insufficient funds for maintenance andfor capital investments. Then the railway sector was simply not in focus.

Since 2014, the GoS has been carrying out intensive activities on the realization ofcapital investments in railway infrastructure. Since then, half a billion euros have beeninvested in reconstruction of 227 km of main railway lines and 281 km of regionalrailway lines. On figure marked with blue color.

Currently, works on reconstruction and modernization of two double-track sections ofthe Belgrade-Budapest railway project are underway for speed of up to 200 km/h with atotal length of 74.9 km and the value of 821.5 million euros. Also, there is areconstruction of the one section for speed up to 120 km/h in the length of 60 km worthof 39.3 million euros. In addition to works on the main railway lines, the renewal ofregional railway lines are currently undergoing in length of 259 km, with a total value of97.72 million euros. Marked with red.

Also, in the next year will start works in value of EUR 1.44 billion on important railwaylines with lengh of 280 km on Corridor X and also rehabilitation of regional lines with atotal length of 229 km worth EUR 105,76 million.

SERBIAN RAILWAY SYSTEM – CURRENT INVESTMENT CYCLE

Beside investment in projects related to railway infrastructure, GoSsimultaneously invests in modernization of railway vechile fleet. So, from2013 in Republic of Serbia operates:

• 21 Stadler FLIRT EMUs

• 27 Metrovagonmaš DMUs

• 8 Siemens Vectron multi-system locomotive for freight transport(contracted 16)

• about 18 EMUs (loan under the negotioan with EBRD)

SERBIAN RAILWAY SYSTEM – CURRENT INVESTMENT CYCLE

Currently, intensive activities are underway related to preparing thetechnical documentation for planned projects, with a totalinvestment value of approximately € 2.5 billion for 835 km ofrailway lines.

Technical documentation is prepared through funds obtained from:

• bilateral cooperation with the Russian Federation

• bilateral cooperation People's Republic of China

• grants provided through the Western Balkans InvestmentFramework - WBIF.

SERBIAN RAILWAY SYSTEM – NEW INVESTMENT CYCLE

THE DEVELOPMENT OF INTERMODAL TERMINALS

• New intermodal terminal in Batajnica

• Reconstruction of the Belgrade Marshaling Yard and construction of objects for the needs of the company "Železnički integralni transport Beograd" LTD

REFORM OF THE RAILWAY SECTOR

1. Restructuring of railway incumbent and establishing the rail marketSince August 2015, three state companies have been operating on the railway market:• Serbian Railways Infrastructure JSC - public railway infrastructure asset management

company; • Serbia Train JSC – the national rail passenger transport company; • Serbia Cargo JSC - the national rail freight transport company.Beside this companies on Serbian railway market also operates five private operators for freight transport and three private operators which carrying out maintenance activities.

2. Harmonization with EU acquisFrom may 2018 three new laws in accordance with third railway package are in use in railway sector:Law on RailwaysLaw on Interoperability of Railway SystemLaw on Safety in Railway Traffic

REFORM OF THE RAILWAY SECTOR

1. Integrated border crossingsLack of interoperability, immigration policy and customsprocedures are some of the main reasons that impede theefficient transport of people and goods between countries.

This problem can be overcame by BILATERAL AGREEMENTSbetween states, which would enable reduction of dwell time at theborder crossings by using the integrated (joint) border procedures.Bilateral agreements have been signed with Montenegro andRepublic of North Macedonia, but they are still not being used inpractice because the station buildings are not adapted for suchpurposes. There is also bilateral agreement with Republic ofBulgaria which does not functioning because of bulgarian side.Serbia have an intention of establishing a common border stationwith integrated procedures with all neighboring countries.

SOFT MEASURES TOWARDS CONNECTIVITY

SOFT MEASURES TOWARDS CONNECTIVITY

2. Transport Community - Regional Rail StrategyRail transport in the Western Balkans has been recognized asone of the priorities in the EU Connectivity Agenda.

In December 2018, the Ministers of Transport of the WesternBalkans endorsed a declaration on Regional Rail Strategy. Theobjective is to develop a comprehensive action plan to revitalizethe rail system in the region and bring it closer to EU standards,in line with the Transport Community's objectives.The Permanent Secretariat of the Transport Community, basedin Belgrade, developed a first set of actions for developing aRegional Rail Strategy in the Western Balkans.The set of actions covers three areas: Rail market opening,Governance of the rail system and Interoperability.

SOFT MEASURES TOWARDS CONNECTIVITY

2. Alpine-Western Balkan Rail Freight CorridorSerbia is one of states within Alpine-Western Balkan RailFreight Corridor (AWB RFC 10). This corridor connects four EUmember states - Austria, Slovenia, Croatia, Bulgaria andSerbia as EU candidate state.

This railway link represent „revival“ of the shortes routebetween South-East Europe and Central Europe which willcontribute to competitivnes of the railway transportregarding to other transport mode and also to other railwayroutes.This corridor is expected to become operational in March2020.

Thank you for your attention!

Q&A