Original publication: October 2015
Authors: Piero Soave and Christina Ratcliff, Research Administrators
Short link to this post: http://bit.ly/2mLopuZ
This overview of the Croatian transport and tourism sectors was prepared to provide information for the mission of the Transport and Tourism Committee to Croatia (3-5 November 2015).
The territory of Croatia comprises 1,244 islands (602 islands and islets and 642 rocks and reefs) that makes it second largest archipelago in Mediterranean after Greece. Croatia is a Parliamentary Republic, where the Croatian Parliament, named the Sabor, is the only legislative body (151 members elected for a term of 4 years). The next elections (the 8th since the 1990 multiparty Sabor) will be held on Sunday 8 November 2015. The Croatian Parliament consists of 29 Committees, including the Tourism Committee and the Committee on Maritime Affairs, Transportation and Infrastructure. Croatia has three levels of governance: the national level, the regional level with 20 counties plus the City of Zagreb, and the local level with 429 municipalities and 126 towns. The City of Zagreb has a special status, as it is both a town and a county. Croatia’s decentralisation process started in 2001 when certain functions and responsibilities were transferred from the national to the local level.
Croatia had one of the wealthiest economies among the former Yugoslavian Republics. Unfortunately, the country suffered heavily during the war of 1991-95, and lost part of its competitiveness compared to other economies of central Europe that were benefiting (at the beginning of the 1990s) from democratic changes. Also due to the subsequent introduction of reforms, Croatia had rapidly developed until 2008. Nevertheless, the country’s economy turned out to be more vulnerable to shocks than that of the EU-28 average, and the economic crisis affected Croatia strongly. In 2009, its GDP shrank by 6.9 %, and the prolonged crisis has led to Croatia losing over 12 % of its output.
The economy of Croatia is a service-based economy with this sector accounting for 70 % of total GDP (over €43 million in 2014 at market prices). Tourism is one of the most important and visible sectors of the Croatian economy. And the transport sector accounts for 8 % of the total GDP of Croatia.
According to the analysis of the World Bank, even though the outlook in the short term remains difficult, privatisation, the availability of EU funds and structural reforms should help growth prospect, stimulate jobs and social cohesion in the medium term.
The main strengths of the transport sector in Croatia come from its geostrategic position as a natural access to the Balkan region, an area of natural expansion of Europe towards the East.
There are two Core Network Corridors of the Trans-European Transport Network (TEN-T) that cross Croatia: the Mediterranean Corridor and the Rhine-Danube Corridor. The aim of the multimodal TEN-T Core Network (with the Core Network Corridors) is to strongly contribute to European cohesion and strengthen the internal market. A more competitive economy is expected to produce higher employment. Enhanced multimodality, as well as innovative technologies in the field of transport, will induce modal shift, reduce congestion on road, cut emissions of greenhouse and polluting gases and boost transport safety and security.
The Mediterranean Corridor links the Iberian ports of Algeciras, Cartagena, Valencia, Tarragona and Barcelona through Southern France, with links to Marseille, and Lyon to Northern Italy, Slovenia and a branch via Croatia to Hungary and the Ukrainian border. It covers rail and road, airports, ports, RRT’s and, in Northern Italy, also the Po river inland waterway. The Corridor’s integral part is the Rijeka-Zagreb-Budapest rail and road corridor, i.e. the Rijeka traffic route. The main feature of the Rijeka traffic route is the possibility of intermodal approach which can connect the port of Rijeka with rail and the Danube waterway, representing the shortest distance from the Adriatic to the Danube region. A continuation of the Mediterranean Corridor and its integral part is also the road and rail corridor from Zagreb to Slovenia.
The Rhine-Danube Corridor connects Strasbourg and Mannheim via two parallel axes in southern Germany, one along Main and the Danube, the other one via Stuttgart and Munich, and with a branch to Prague and Zilina to the Slovak-Ukrainian border, through Austria, Slovakia and Hungary to the Romanian ports of Constanta and Galati. It covers rail, road, airports, ports, RRT’s and the inland waterways system of Main, Main-Danube Canal, the entire Danube downstream of Kelheim and the Sava river.
Croatia’s Transport Development Strategy (TDS) sets out the basic guidelines for the development of the country’s transport sector over a medium and long-term horizon (2014-2030). Its aim is to define an overall and coherent framework to ensure the linkage of infrastructure and transport policy and enabling decision making. The TDS has taken into account the concern for sustainable development and the environmental criteria. As a result, it constitutes a decisive commitment to the future of Croatia, to its economic development and its competitiveness, to its social and territorial cohesion and to the improvement of the quality of life of its citizens. It includes a set of measures designed to create a transport system which is more integrated, safer, efficient and respectful of its environment.
a) Maritime Transport
The land area of Croatia is 56,594 km2 and the sea and interior sea waters account for 31,479 km2. The coast line is 6,278 km long (mainland 1,880 km and islands 4,398 km) and Croatia has more than a thousand islands, islets, rocks and reef, a fact that is of importance for the “geographical identity” of the country.
There are six major ports in Croatia (Rijeka, Zadar, Šibenik, Split, Ploče and Dubrovnik) which are located along the mainland coast and all are declared ports of special (international) economic interests for the country. They are essential ports both for freight and passenger transport, especially Split being the most important port of call of cruise ships of the Adriatic, with over 4 million passengers travelled in 2014.
The Adriatic Sea is a strategic maritime transport route used by merchant ships in international and national trade, by yachts, cruise ships, fishing vessels, war ships and other non-merchant ships. A significant number of important industrial centres are located along the western Adriatic coast and several mid-European (and in many cases landlocked) countries heavily depend on the northern Adriatic ports (such as Rijeka in Croatia) for the import of energy. In addition, several of the deep-water ports in Croatia could host super-tankers. It is believed that maritime transport will increase in the future: existing routes will be used more intensively, new routes will be introduced and new south-eastern transit ports will gain importance (among others Ploče).
Major international container operators are now present in Croatia. An increase in container traffic in the port of Rijeka has had and is expected to have an impact on the rate of rail utilisation. The development plans of the port include the intention to increase its market share in central European-Mediterranean trade flows. A clear advantage of Adriatic ports serving central Europe could be demonstrated by the comparative distance for shipping from Shanghai (China) to Rijeka (Croatia) that is 9,741 nautical miles, while the shipping distance from Shanghai to the port of Hamburg (Germany) is 12,277 nautical miles. Indeed, when geographical advantages of the Adriatic-Ionian route are accompanied with economies of scale and volume of transport, it translates into a reduction of unit transport cost, a reduction of congestion at major European railways and a reduction of transport and energy costs, as well as CO2 emissions from transport.
b) Inland Waterway Transport
The overall length of the inland waterways in Croatia is 1,016.8 km, of which 601.2 km has been integrated into the European network of inland waterways of international importance. The Danube part of Croatia’s inland waterways system forms a part of the Rhine-Danube Corridor. However, the Croatian network of inland waterways represents a significant, but at the same time, underexploited part of the Croatian national values.
There are four inland waterways ports in Croatia: Vukovar, Osijek, Slavonski Brod and Sisak. The ports of Vukovar and Slavonski Brod are classified as core ports in the TEN-T network, while Osijek and Sisak are classified as comprehensive ports. All four ports have cargo transport, while only the Slavonski Brod port has no passenger transport. Passenger transport is most important in the Vukovar port and is increasing (mainly due to cruising transport on the Danube). The port of Sisak has also recorded an increase in local passenger transport in 2013.
Cargo is mostly linked to industry or agriculture activities located in the surroundings of the ports. For instance: – Port of Vukovar: Trans-shipment of mostly bulk cargo, as well as bagged and liquid cargo. – Port of Osijek: Trans-shipment of bulk cargo accounts for nearly 60 % of trans-shipped cargo, agricultural products (wheat, sunflower meal, oil seed rape) for 10 %, with bagged and general cargo accounting for the remaining percentage. – Port of Slavonski Brod: Trans-shipment of crude oil accounts for the greatest cargo transport together with sand, gravel and general cargo. – Port of Sisak: Trans-shipment of crude oil accounts for the overall cargo transport.
All four ports and port areas have been characterised by an undeveloped infrastructure and unconnected logistical port network. Therefore, according to the TDS, a thoroughly elaborate and rational approach regarding the future development of this transport mode and of inland waterways management is necessary. There is a need for systematic work on the elimination of weaknesses and deficiencies within the sector, in terms of improvement of the organisation, fleet modernisation, education, construction of infrastructure (waterways and ports), as well as maintenance and safety of navigation (full operation of the RIS system).
Croatian inland waterways are specific in that most of the waterways are rivers which follow Croatia’s borders. In consequence, the river bed regulation projects have to be coordinated with neighbouring countries, which brings added difficulty to the sector’s development. Improved cooperation is therefore also a TDS objective.
c) Air Transport
The aviation sector is mainly composed of air navigation, airlines, airports, and aviation authorities. The main airport is Zagreb but there are eight other relevant airports in Croatia: Osijek, Rijeka, Pula, Mali Losinj, Zadar, Split, Brac and Dubrovnik. The air navigation system is well equipped and aligned with European regulatory framework (Single European Sky I and II, SESAR, European ATM Master Plan, etc.). Demand in aviation is above all linked to the tourism sector, with seasonal behaviour generating bottlenecks especially in some key destinations. The number of competitors (traditional carriers and low cost carriers) in international scheduled traffic increased from 16 in 2004 to 44 in 2013, which mainly operate during the high season (summer).
The historical legacy and political, market and financial circumstances resulted in one main national airline, Croatia Airlines, originally registered under the name “Zagreb Airlines d.d.” in 1989, but operating under its current name since July 1990. In 2015, Croatia Airlines had an average of 95 daily departures, to 18 different countries (35 different airports), moving 1.83 million passengers. In 2014, passenger traffic at Croatian airports totalled 6.703 million passengers.
Croatia Airlines has been a member of Star Alliance since 2004 and its hub airport is Zagreb. The company contributes significantly to the development of Croatian tourism considering that, annually, one third of all tourists arriving in Croatia by aircraft fly with Croatia Airlines. Moreover, in 2014, the company was the country’s fourth largest exporter.
d) Road Transport
Road infrastructure is by far the most developed in Croatia, with nearly 27,000 km of roads including just over 1,400 km of motorways. Freight transport by road reached 74.5 % in 2014, compared to only 11.7 % by rail or 6 % by inland waterway, whereas passenger transport by road is as high as 71.1 % (compared to 28.9 % by rail) . As shown in Figure 1 below, road fatalities have decreased by 28 % between 2010 and 2014 (from over 100 to 73 incidents per million inhabitants). However, the fatality rate of 73 is still above the EU average of 51 for 2014.
Croatia used to have the second highest fatality rate in 2010 below only Romania. In 2014, five other Member States had a higher fatality rate than Croatia. In 2010, the EU renewed its commitment to improving road safety by setting a target of reducing road deaths by 50 % by 2020, compared to 2010 levels. Croatia is one of the Member States on track to reaching this target, achieving the fourth best reduction between 2013 and 2014 with -16 % (please see Figure 2 below).
Another positive aspect regarding road safety in Croatia is that the motorcyclists and the cyclists’ share of all road deaths are both below the EU average respectively.
e) Rail Transport
The Croatian railway network comprises 2,604 km and presents a good ratio of railway kilometres over the population of the country, 1,556 people per kilometre, close to countries like Switzerland and higher than others like Czech Republic or Hungary. The Croatian railway network is classified into three categories: International, Regional and Local.
However, 90 % of the railway network is single track lines and only 36 % of the lines are electrified. Almost 55 % of the network is dedicated to those lines that are significant for international and cross-border transport. Of these 2,604 km of tracks, only 5.4 % are capable of reaching speeds between 141 and 160 km/h, 17 % have a maximum speed above 100 km/h, and 37.5 % have maximum speeds below 60 km/h. The low speeds, together with the long distance between stations and the outdated traffic control and signalling systems have a direct impact on the transportation capacity of the lines.
The particular morphology of the Croatian territory together with the high degree of completion of the motorway network and the existence of several international airports makes the rail transport system hardly competitive against other modes like roads and/or air. However, according to the TDS, the well-developed rail networks in Zagreb and other cities are considered as strengths because of the opportunity they bring for the inclusion of rail within the urban transport system.
Passenger transport by rail is only 3.5 % and only 17.4 % of freight is transported by rail. Freight traffic has a clear international component as it connects Adriatic ports with the Continent. All ports are connected to the railway network, however the infrastructure is in poor condition. The port of Ploče doesn’t have a direct connection to the Croatian railway network but is connected to it via Bosnia and Herzegovina. The freight railway traffic is predominantly transit, as Adriatic ports serve as an entry-point for international cargo to mid-European countries. To increase intermodal maritime-rail traffic, the TDS suggests developing a logistic intermodal platforms network and building up these platforms at ports sites and at the main consumer centres.
The opportunities for the rail sector in Croatia are connected to the potential increase of its share within the total inland transport which can be achieved by improving or constructing infrastructure, including intermodal terminals and industrial tracks, purchasing or modernising the rolling stock, integration with other transport modes and with a user-oriented approach. Shift-to-rail transport will also increase the effect of intermodal transport, which will result in a reduction of noise and greenhouse gases, using rational energy consumption and increasing efficiency. Indeed, one of the main objectives set out in the TDS for the rail sector is to increase the sustainability of the railway network by performing a reorganisation of the sector, to improve the efficiency of the maintenance, reduce the environmental impact and implement measures to increase the safety and the interoperability of railways.
The reform of the railway sector in Croatia is well underway and the country is in the process of unbundling and liberalising its railway markets. The intention of these reforms is to align the sector with EU rules and regulations, to provide third party access to fixed infrastructure and to increase utilisation of available infrastructure. Growth in utilisation rates in Croatia provides an interesting example: all major international container operators are now present in the country and undertake operations with local rail companies. In the port of Rijeka for instance, the increase in rail utilisation is based on a significant increase in container traffic.
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