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Halfway Down The Danube-Serbia's Waterway System

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SUBJECT: HALFWAY DOWN THE DANUBE - A ROUGH PASSAGE THROUGH MURKY WATERS

SUMMARY

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1. With 2850 kilometers of navigable waterway snaking through nine European countries, the Danube is the second longest river on the continent and the only major river to flow from West to East. It presents a major economic opportunity for Serbia, which has 25 percent or 588 km of the waterway, making it a natural connection between neighboring countries. The river is a low-cost transport corridor for bulk shippers, and it is now starting to show its potential for container shipping, as well. With neigbors Bulgaria and Romania now in the EU, and the signing by all countries in South East Europe of a new and improved CEFTA, the Danube signifies an integral symbol of potential for a further unified Europe. END SUMMARY.

VOLUME OF WATERWAY TRANSPORT IN SERBIA

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2. The most important use of the Danube is the movement of freight. According to the "Master Plan and Feasibility Study - Inland Waterway Transports for Serbia" commissioned by the European Agency for Reconstruction (EAR), the current river network of Serbia has sufficient capacity for shipping at least 15-20 million tons of cargo per year. In theory, the Serbian section of Danube, with improvements, has a capacity of 60 million tons of cargo per year. However, during the 1990s, river traffic dropped to about 5 million tons annually, from some 25.7 million in 1988, with the bulk of traffic, local trade in raw materials. It since has rebounded to 15 million in 2005 and 14 million in 2006.

3. The overall transport volume on Serbia's inland waterway transports comes from two sources: industrial and commercial traffic (freight), and cruise traffic and yachting (passengers). Traffic flows from these sources fall into several categories: 1) domestic traffic between ports and industrial areas within Serbia, mainly via the Danube and Sava but also by the Danube-Tisa-Danube (DTD) canal system; 2) export freight traffic from Serbia, either to the Black Sea or upstream to Western Europe, via the Danube; 3) import traffic via the Danube through Romania to the south or Hungary to the north; and 4) transit traffic either up or downstream, 100 percent by Danube; 5) tourism in commercial passenger craft plus local leisure craft.

INLAND WATERWAY TRANSPORTS NETWORK

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4. Serbia's inland waterway transport network (IWTN) comprises three major classes of waterways: international, inter-state and national. The river Danube forms a transportation corridor recognized by the EU as "Transport Corridor VII," which links 10 different nations and over 100 million people. It is linked to two major European rivers, the Rhine and the Main by the Rhine-Main-Danube canal. This has created a full trans-European waterway system from the North Sea to the Black Sea.

5. Significant waterway routes in Serbia that are considered part of the overall IWTN include: 1) the Danube river from the Hungarian to Bulgarian border (588 km); 2) Danube-Tisa-Danube canal system in Vojvodina (600 km); 3) the Tisa river, from the Hungarian border until joining the Danube in Vojvodina (164); and 4) the Sava river from Vojvodina to neighbors Croatia, Bosnia and Slovenia (207 km). The total navigable length in Serbia for vessels weighing up to 650 tons deadweight is 1,300 kilometers.

SERBIAN RIVER FLEET

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6. The regulation of river shipping in Serbia is directly under the supervision of the Ministry of Capital Investments. Its Department for Inland Waterways and Safety Navigation is divided into two organizational units and two state-owned enterprises, covering safety and legal issues: the Department of Inland Waterways and Group for Inland Navigation and RIS (River Information Services); the state-owned company Yugoslav register of shipping, Jugoregistar; and the state-owned company Plovput, for Inland Waterways Maintenance and Development Agency.

7. Data on the number of registered vessels in Serbia in operation varies considerably. Vessels can be entered into the Jugoregistar, but are only permitted to operate under an annual license. Owners may take their vessels off license, yet still remain on the register. The principal owners are: Jugoslovensko Recno Brodarstvo (JRB); an operator of pusher vessels and barges; Bagersko (dredging) Brodarsko Preduzece (BBP), operator of a varied fleet of barges and dredges; Heroj Pinki in Novi Sad, operator of a diverse fleet including pusher and towed barges as well as self-propelled vessels and sand dredgers, and Preduzece Milan Milutinovic (PIM), an operator of a fleet of dry cargo barges and sand dredgers. Apart from privately owned BBP and Heroj Pinki, the remaining two are completely state owned.

8. In accordance with data from Jugoregistar, the Serbian register of shipping, in 2001 there were 484 total registered vessels, while by November 2004 this had increased to 871 vessels of all types owned by 547 companies. Today, some 180 companies have more than 1000 vessels used in inland shipping in Serbia. According to Jugoregistar, the average vessel is 36 years old. The major owners are JRB with 216 vessels, BBP with 100, PIM with 91 vessels and Heroj Pinki with 71 vessels. There are 105 registered companies that own only one vessel.

9. Milos Kosanic from Serbian Chamber of Commerce explained that since traffic on the river has dropped drastically, the majority of shipping companies have been unable to stay afloat. He pointed out that there although there are many domestic shippers registered, only a handful are currently active.

TOTAL FREIGHT TRANSPORT

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10. According the data from the Serbian Statistical Office provided for the Master Plan, the volume of cargo transported by IWT operators in 1988 on inland waterways amounted to 25.7 million tons, of which 13 million was in domestic transport. During the period 1988-2002, cargo transport by water declined and during the 1990s amounted to only 5 million tons annually, of mostly domestic cargo. In 2002, figures rose slightly to 8.8 million tons, a mere 25 percent of the volume achieved in 1988.

11. In 2003, inland waterway transport went down to 6.9 million tons, of which 4.4 million was carried by Serbian shippers and 2.4 million,

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