Original article (in Croatian) was published on 22/07/2022
The Croatian authorities announce a “decade for railways”, but the question is what will happen to the existing projects financed by the EU.
“Unfortunately, we have to get used to railway delays. The railway is not at the level it should be. (…) Since we have built, mainly, highways, we have completed three airports, ports are being built… This is the decade for railways, we will invest 3.5 billion euros. (…) Arm yourself with patience, for 10 years we will build corridors, reconstruct suburban traffic around Zagreb. There will be a lot of work, and that unfortunately means that there will be delays in one part”, said Oleg Butkovic, Minister of the Sea, Transport and Communications, in an interview for HRT.
Will the derelict system make use of the 3.5 billion euros?
The railway sector has been neglected for decades, it is uncompetitive due to a lack of investment, and transport from railways, which is more environmentally friendly, has moved to roads. This has been warned by railway workers for years, who are not satisfied with the fact that it is recognized that not investing in railways was a political decision. And the relevant minister has admitted that on several occasions.
“At the same time, we could not build highway and railway infrastructure, and in the next ten years the main investment will be in railway infrastructure. This year we will rebuild and open the section of the railway Savski Marof – Zagreb, Zapresic – Zabok, Vinkovci – Vukovar, we are actually already building railways on many sections, on Friday the decision was made to start construction of the railway from Rijeka to Zagreb. We have to be patient, these are big projects, they also require large financial resources”, Butkovic said in May, while also talking about 3.5 billion euros mainly from European Union (EU) funds and the will to restore most of the main corridors by 2030 in Croatia.
Even though the target year of 2030 is being emphasized, it has been clear since last year that the deadlines will be extended. One of the main advantages of the reconstruction and construction of the railway infrastructure is certainly the part of the lowland railway from Zagreb to Rijeka, which was planned to be completed by 2027. However, on that part of the new railway, which is located on the Mediterranean Corridor (also known as the Vb corridor), the shovel has not yet been driven into the ground.
The new deadline for the lowland railway is 2030, although it is more likely that it will not be completed until 2035. The additional extension of the deadline was proposed by the European Commission itself, which is aware that the entire railway network cannot be completed within the deadlines that the domestic authorities would like.
A “decade for railways” or a “railway renaissance” sounds good indeed. But the question is to what extent it will really be a renaissance for the neglected railway system. European funds can be used for the construction and reconstruction of nine corridors that are a priority of the EU transport policy. Two traffic corridors pass through Croatia – the Mediterranean, or Vb corridor, and the Rhine-Danube corridor, better known in our country as the X corridor. The domestic railway network is woven outside these corridors, and Croatia should invest its own funds in infrastructure development there.
The lowland railway, which should provide modern infrastructure from Rijeka, via Zagreb to the border with Hungary, and its section from Dugo Selo to Krizevci is a picturesque example of the “railway renaissance”.
We will pay for the Dugo Selo-Krizevci railway ourselves
Currently, the most valuable railway infrastructure project Dugo Selo – Krizevci, which should cost HRK 1.5 billion, of which 85 percent is financed from EU funds, began in the summer of 2016 and was supposed to be completed two years ago. The project ran into problems right from the start, in the summer of 2017, when one of Hidroelektra’s subcontractors began to fail. In 2018, Hidroelektra was replaced by a new subcontractor, Integral Engineering from Laktasi. Although it was expected that the one-year delay in the works would be compensated, this did not happen, so the construction deadline was extended.
Works on that section are practically at a standstill, this time because of DIV Group, a member of the consortium that has been in trouble for a long time and is currently in pre-bankruptcy proceedings. The new deadline for construction is 2023, the last year in which Croatia can withdraw the funds provided in the EU budget 2014-2020, but HZ Infrastructure in its business report for last year as well as the plan for the current year states 2024 as the deadline (1, 2, 3).
“Due to the financial problems of the DIV Group company, the works are being carried out on a significantly reduced scale. The consortium of contractor companies (DIV Group, Dalekovod and Zagreb montaza) is requested to redistribute the works between the members of the consortium as soon as possible, in accordance with the provisions of the Contract and the Law on Obligatory Relations, i.e., the works for which DIV Group was responsible until now to be taken by one of the remaining two members of the consortium”, explains HZ Infrastructure.
The consortium is currently not paying penalties due to the delay in the works, HZ Infrastructure explains, stating that “during the execution of the project there were justified circumstances as a result of which the deadline for the completion of the works was extended to the consortium”.
“We need to finish Dugo Selo – Krizevci by 2023. I think we will succeed in this, and if we do not succeed, the project will be declared non-functional from the point of view of investments from European funds and we will have to complete it with our own funds”, Damir Sostaric, director of the Administration, estimated last year for EU funds and strategic planning in the Ministry of the Sea, Transport and Infrastructure.
This big infrastructure project will obviously fall on the state budget, the only question is how much it will cost the state.
“The period until which we have EU funds at our disposal lasts until the end of 2023, so at this moment it is difficult to talk about specific amounts charged to the state budget”, they state in the answer to our inquiry from HZ Infrastructure.
At the same time, works on the reconstruction of the existing and construction of the second track of the railway on the Krizevci-Koprivnica-state border section, according to HZ Infrastructure, are being carried out “with the usual dynamics along the entire 42.6-kilometer section”, and “the deadline for completing the works is September of 2024”.
Funds for that section of the lowland railway were approved for Croatia in October 2016, but the start of the works was delayed and construction began two years ago. The deadline for the completion of that project was also extended by nine months due to the consequences of the Covid-19 pandemic (1, 2).
As it stands now, that section of the railway could be completed at the same time, if not before the Dugo Selo-Krizevci section, on which work began four years earlier.
Nizinska from Zagreb to Rijeka is still in preparation
On the other hand, the sections of the lowland railway from Zagreb to Rijeka are still in the preparatory phase.
The only exception is the section Hrvatski Leskovac – Karlovac. The EC approved funds for the financing of that project three years ago, but the works have not yet started due to appeal procedures after the selection of the contractor. In June, the State Commission for the Control of Public Procurement Procedures rejected the appeal of the Turkish company Kolin Inşaat Turizm Sanayi ve Ticaret A.Ş. from Ankara due to the selection of contractors for the construction and electric power railway infrastructure subsystem within the project of renovation of the existing and construction of a new track of the lowland railway on the section Hrvatski Leskovac – Karlovac. The Turkish company claimed that Strabag, which was selected as the contractor, did not meet the conditions specified in the tender (1, 2, 3). Work on that section should be completed in 2023, but that is questionable.
Recently, in an interview with Novi list, Minister Butkovic pointed out a somewhat specific problem that they are facing in preparation for the construction of the railway infrastructure – the delay in the preparation of documentation projects for certain railway sections.
“I think that we have to hurry up a lot of things on the railway, be more expeditious, but we have another problem that we have been facing lately, and that is the already contracted design, which is late. There is little talk about this in public, but some of our large design firms, which have already contracted design work, are late in handing over their projects due to the outflow of personnel. It is a big and serious problem that we face every day”, said Butkovic.
According to him, “the design of the lowland railway from Karlovac to Rijeka, i.e., Skrljevo, as well as the double-track railway through Rijeka, on the section Skrljevo-Jurdani”, is currently significantly delayed.
The minister could not say with certainty whether the tenders for the execution of works will be delayed because of this, but he explained that there were several meetings on the subject.
“Not only on this one, but also on other projects, because the deadlines and the use of European funds for their realization will be in question. We will not run out of European funding, but the dynamics of using these funds will be threatened. There are also big delays in the design of the section from Karlovac to Rijeka, where the design has not yet been completed. We are working, I repeat, on finding a solution that will speed up the design”, said Butkovic.
Although we asked the Ministry of the Sea, Transport and Communications for additional explanations related to this problem, we did not receive an answer.
On the other hand, HZ Infrastructure does not directly answer the question about the delay in the preparation of project documentation, but states for which sections the design services have been contracted, what has been done so far and what are the contractual deadlines. For example, the contract for the project “Development of project documentation for the construction of the second track, modernization and renovation on the section of the railway line Skrljevo – Rijeka – Jurdani” will last until the middle of December this year.
“The project is in the phase of creating the main project and submitting the application for the issuance of a building permit for individual phases. As part of the contract, a Feasibility Study (FS), a Cost-Benefit Analysis (CBA), an Environmental Impact Study and a Conceptual Project were prepared, and a location permit was obtained”, HZ Infrastructure states, adding that the project’s application for EU co-financing is planned for January of 2023.
For the sections Karlovac-Ostarije and Ostarije-Skrljevo, contracts for preparatory documents will last until next year.
On the former X pan-European corridor, works are currently being carried out with EU funds on the 18.7 kilometers of railway from Vinkovci to Vukovar. Although the expected construction deadline was the end of July, the works should be finished by the end of the year. The modernization and electrification of the Zapresic-Zabok railway is expected to be completed by the end of the year.
In the decade or railway renaissance, the majority of investments were based on EU funds, i.e., on shares of the former pan-European corridors. HZ Infrastructure manages a total of 2,617 kilometers of railway. Even after it is built, the railway needs to be invested in, because without investment, train speeds drop very quickly, which consequently forces both passengers and cargo off the railway.
52 percent of the track was designed for speeds of 100 kilometers, but…
In the pre-pandemic year of 2019, HZ Infrastructure invested HRK 247.71 million in the regular maintenance of railways, in the pandemic year of 2020, investments fell to HRK 227.27 million, and last year they amounted to HRK 247.98 million. However, this year, the plan is to invest much less money in that regular maintenance – HRK 176.98 million. Most of these funds were spent in the first part of the year. More precisely, HRK 147.31 million was spent.
52 percent of the total length of the railway in Croatia is designed for a speed of more than 100 kilometers per hour. However, in the real world, this speed is driven on fewer and fewer tracks from year to year.
“Given the condition or capacity of the railways in 2021, only 14 percent of the total length of railways can be driven at a speed of more than 100 km/h, which is a decrease of 3 percent compared to the previous year”, states the business report of HZ Infrastructure for last year.
“The reduction in the total length of railways on which it is possible to drive at a speed higher than 100 km/h is a consequence of the fact that in 2021 the length of railways on which the speed is reduced below 100 km/h is greater compared to the length of railways on which the speed is increased above 100 km/h. The reason is the insufficient scope of investment works in relation to the dilapidation of the railway line on the entire railway network, which is increasing from year to year”, the document states, among other things.
With the entry into force of the 2020/2021 timetable in December 2020, “the speed increased to about 55 km of track length, and decreased to about 275 km, and with the entry into force of the 2021/2022 timetable, the speed has increased to about 80 km in length, while simultaneously decreasing to about 365 km”, according to last year’s business report. Even then, HZ Infrastructure estimated that with the entry into force of the “2022/2023 timetable, in December 2022, the speed will increase to about 90 km and the length of the tracks will be reduced to more than 365 km”.
The draft of this new timetable has been published and comments can be made on it until August 16. According to current information, there will be a further reduction of speeds on part of the tracks in order to maintain traffic safety.
“From the aspect of track maintenance, and considering the dilapidation and technical-safety condition, only 35 percent of the total length of the tracks can be maintained normally or enhanced. On the remaining 65 percent of the total length of railway lines, it is necessary to carry out investment works, i.e., larger interventions, and some of them even to be closed to traffic. Namely, in the previous 30 or so years, a large part of the railways was outside the renewal cycle, which resulted in the deterioration of infrastructure capacities and the exceeding of the useful life of the railway superstructure, so it is no longer possible to maintain the railways in a technically usable condition for the safe flow of traffic at the designed speeds through regular maintenance measures. For this reason, HZ Infrastructure reduces speeds when necessary so that the current volume of traffic can be carried out safely and with the appropriate dynamics”, explains the business report of HZ Infrastructure.
In order to reverse the negative trend, according to the estimates of HZ Infrastructure, more than 200 kilometers of railways should be modernized or renovated annually during the next ten years. Experience so far shows that this is too big for Croatia.
The average speed of 44.9 kilometers per hour
Passenger satisfaction ultimately depends on the quality of the infrastructure. HZ Putnicki prijevoz can have the most modern trains in the world, but if they run on bad infrastructure, they will not develop speeds. The average commercial speed of trains last year was 44.9 kilometers per hour.
From Vinkovci to Zagreb, for example, now it takes 5.5 hours by passenger train, and 3.8 hours by fast train. In 2006, a journey by passenger train lasted a little over four hours, and by high-speed train 2.8 hours. In 2006, it took 5.4 hours to travel by tilting train from Zagreb to Split, while today it takes 6.3 hours.
However, the railways that are built need to be maintained, otherwise the actual speed will drop on them as well. For example, in 2006, it took 38 minutes by fast train from Vinkovci to Tovarnik. That line was renovated in 2012, after which the high-speed train ran for 17, while today it runs for 22 minutes.
However, the railway decade is upon us. That decade should have been entered with a comprehensive plan for the modernization and restructuring of the railway sector.
The basis for this work is the so-called Sectoral Policy Letter, which the ministry of transport prepares in cooperation with the World Bank, as well as three railway companies – HZ Infrastructure, HZ Putnicki prijevoz and HZ Cargo. This document should define the further restructuring of these companies, as well as outline measures for the financial stabilization of railway companies, as was done in the road sector. Although its adoption was planned for the summer of 2018, it was postponed several times, and last summer, the Government adopted a 16-page document entitled Modernization and restructuring of the railway sector.
This document assumes that by the end of this year, the Sectoral Strategy, as well as the National Plan for Railway Infrastructure, will be adopted “with a unique list of projects for the modernization of the railway infrastructure according to priority, regardless of the source of funding, and the elaboration of a methodology for calculating the annual renovation works necessary for continued operation existing railway network”.
In the same period, the National Plan for the management of railway infrastructure and service facilities and the development of railway transport services should be adopted. By the end of the year, the government should define a program for the modernization and renovation of railways, regardless of the sources of funding.
