Serbia Freight Transport Report 2009

A major pipeline deal with Russia, signed in January 2008, remained in the centre of political debate for the better part of the year. Under the terms of the deal, South Stream, a Russian-led pan-European gas pipeline, would be run through Serbia, on the one hand, and Russia’s Gazprom would acquire a 51% controlling shareholding in NIS, Serbia’s state-owned oil monopoly on the other. The agreement was ratified with an overwhelming majority (214 to 22) by the Serbian parliament in early September, but was queried by some members of the new, pro-western administration in Belgrade, who said that the price to be paid by Russia’s Gazprom Neft for NIS, at EUR400mn (US$582mn) was too low. The new government was also seeking reassurances over the actual volume of gas supplies that Russia would pump through the pipeline. Apart from meeting Serbian energy needs, the pipeline is potentially an important source of transit fees for the country, to be charged on volumes pumped onwards to other Balkan countries. Sergei Shoigu, the Russian emergency situations minister, visited Belgrade for talks in September, underlining his view that ‘the oil-gas agreement is the biggest investment undertaking by the Russian Federation in the Balkans’. Shoigu said he was confident that the remaining details of the agreement could be resolved within 60 days of the formation of negotiating teams from both sides.



Serbia’s government minister, Mladjan Dinkic, said he would be seeking to raise the price for the sale of NIS. Even though things can still go wrong, in BMI’s new Serbia Freight Transport Report 2009, we are cautiously optimistic, forecasting that pipeline throughput measured in million tonnes-km (mntkm) will grow by an average of 6.1% in the 2009-2013 period.



We are also optimistic on the outlook for the freight industry as a whole, projecting growth of 5.0% per annum over the next five years. Various factors support this prediction. Although the risks to growth remain high, BMI is forecasting that the Serbian economy will grow at an annual average rate of 6.6% over the 2009-2013 forecast period. The driver for freight carried growth, apart from the broadly healthy economy, will be continued recovery from the disruption caused by the wars of the 1990s and at least the potential of closer integration with the EU and in particular with neighbouring new EU members. This, together with Serbia’s role as an East-West transit corridor, should lead to greater demand for freight across road haulage, rail, pipeline and river transport modes.



By transport modes, we see greatest growth in road haulage, which will expand by an average of 6.2% per annum, lifted by expansion investment in new highways and growing trade. It will be followed by pipeline throughput, up by an annual average of 6.1% as mentioned, mainly as a result of the new pipeline agreement with Gazprom. We expect rail freight to grow by 4.7% per annum on average, as questions over privatisation have yet to be clarified. Serbia scores 52.8 in our freight business environment ranking, out of a theoretical potential maximum of 100. This places it below the average for its European peers.



The country scores best in transport intensity – a measure of the dynamism of foreign trade – and reasonably well in freight and infrastructure growth. Areas for improvement include overall economic and political risk as well as the regulatory environment.



For the 2006-2010 forecast period, we expect the transport and communications sector to continue outpacing the economy as a whole. It will achieve average annual growth of 7.3%, versus 6.6% for overall GDP. The total value of transport and communications GDP will rise to US$9bn in nominal terms by 2013, representing 9.1% of Serbia’s GDP.