Instead of building new railroad track with “slavery” loan from China, North Macedonia must reconstruct the current railroads

Железничката пруга на влезот во Скопје | Фото: Архива на Мета.мк

Bigger investments in the reconstruction of the railroad tracks in North Macedonia, meeting the deadlines for the reconstruction projects and raising the maximum travel speed to 120 km/h on the railroad track between Tabanovce and Gevgelija. If these goals are not reached by the government of North Macedonia, the railroad of the Corridor 10 cannot be competitive to the motorway on this corridor nor to the railroad track of the Corridor 4 that is passing through Bulgaria and Romania, when it comes to the transport of goods and passengers from Greece to the countries of former Yugoslavia and Central Europe.

Minimal investments and railroad reconstruction projects behind the schedules

The reconstruction of the Nogaevci – Negotino section of the railroad track on the Corridor 10 that has been delayed for 7 years has again shifted the attention to the question of how competent we are as a state when it comes to maintaining the strategic infrastructure facilities. By delaying the deadline for finishing the project and with the irregular railroad reconstructions, the travel time for passengers and goods transportation amplifies. Mostly because of that, the international passenger trains to Greece and Serbia were and are unattractive for the passengers, which has led to their cancellations throughout the years. Because of this, the companies are opting for truck transportation which leads to lowering the usage of railroad’ capacities and to financial losses for the state.

The Public Enterprise for Railway Infrastructure of the Republic of North Macedonia (PERI-RNM) stated for that the maintenance of the railroad infrastructure means annual expenditures of around €10 million and that that sum should be at least €15 million. They promise that this year they will finish the reconstruction of the railroad track between Nogaevci and Negotino, 31 km long, with the money provided by the European Bank for Reconstruction and Development, i.e. €3 million.

Two projects through the EU’s IPA 3 Program for the development of the railway infrastructure for the period between 2021-2027 have been approved. One of the projects is for preparing the technical documentation for the repairs of the bridges and facilities located along the Corridor 10. The second project is on the preparation of the technical documentation for the enlargement of capacities of border stations such as Blace, Tabanovce, Bogorodica, and Kremenica.

Still, PERI-RNM states that at the moment there is no money for the upgrade of the railroad track between Drachevo and Veles and between Kumanovo and Deljadrovci, for which feasibility studies were prepared years ago through EU’s IPA funds, together with studies for evaluation of the influence on the environment and the Project documentation for upgrade of these railroad tracks along Corridor 10.

All in all, the upgrade of the railroad track between Kumanovo and Deljadrovci, 17 km long, will cost €50 million, said PERI-RNM. There are two options for the upgrade, and the decision to be made is whether in the future the passenger and cargo trains would be driving with a maximum speed of 100 km/h or 120 km/h. The option for construction of a fast railroad track with the possibility of reaching 160km/h was rejected, as is the case with idea for a fast railroad track between Drachevo and Veles.

The analyzed alternatives for upgrade or construction of a new railroad track Kumanvo-Deljadrovce; A study for the protection of the environment for the railroad track Kumanovo – Deljadrovce
The construction of a fast railroad track would be a non-profitable project

Professor Zoran Krakutovski, PhD, of the Faculty of Civil Engineering in Skopje explained for that analyses were conducted about the idea to build a completely new railroad track between Drachevo and Veles, with the idea to vacate the current railroad corridor along Vardar River and enable construction of hydro power plants. Still, even the pre-feasibility studies for the Drachevo – Veles and Kumanovo – Deljadrovci had shown that there is no economic grounds for abandoning the existing corridor and constructing a track for faster speed, because that since a greater demand for passenger transportation is needed.

The current railroad trac between Skopje and Veles. If a new track is built, it should be raised to a level of the current highway to enable building new hydro power plants; Photo credit: Bojan Blaževski

“These studies have led to the conclusion that the passenger transportation in the future will not be dominant for the railroad and that high-speed trains for intercity transportation of passengers during the analyzed period are not a profitable investment,” said professor Zoran Krakutovski.

He claims that for now what is more profitable for North Macedonia is to upgrade the existing railroad track on Corridor 10 and that it would increase the maximum speed for the trains up to 120 km/h.

“A fast railroad track is a track for speeds higher than 160 km/h intended for faster passenger transportation and these tracks are built as double track. If such a railroad is built in our country, it certainly will be part of a regional or continental connection between bigger cities and demographic centers, where there is a potential for a larger number of passengers that would be traveling long distances,” said Krakutovski.

The Public Enterprise for Railway Infrastructure of the Republic of North Macedonia (PERI-RNM) reveals that several variants were outlined and according to them, the most favorable one is for a new railroad track as part of the Corridor 10, starting from the Karposh Station at Kumanovo through Ovche Pole and the eastern part of the country to the village of Miravci near Gevgelija, where it would join the existing railroad track.

“With the new railroad track, the time for the transit trains from Serbia toward Greece and vice versa would be shortened, trains that do not need to enter either Skopje, Veles, or Negotino. With the new track, greater speeds could be achieved and the distance would be shortened by 30 km. This track would be cheaper by 30% from a new track that would run parallel to the existing track,” sys PERI-RNM.

China’s interest for fast railroad in Macedonia

Even though PERI-RNM wouldn’t directly mention the potential investor, still China is the only country that at the moment is interested in building fast railroad from Budapest through Serbia and North Macedonia to Thessaloniki along Corridor 10. Using Chinese loans, Serbia and Hungary are building the railroad track between Belgrade and Budapest. Concerning Serbia, there are warnings that the country is on the edge of credit slavery to China, and the Council against Corruption in Serbia criticized that all deadlines were breached, but also the budget for this high speed track.

By the 31st of December 2019, US$521.2 million were spent on the construction of the fast rairoad track between Belgrade and the Serbian/Hungarian border. By this deadline, only 15% of the railroad between Belgrade and Stara Pazova were built and 44% of the railroad between Stara Pazova and Novi Sad, and the building of the railroad track between Novi Sad and Subotica hasn’t started at all.

The case of the Chinese loan in Serbia closely resembles the construction of the Kichevo-Ohrid motorway on the Corridor 8 in North Macedonia, at least in the way the assets were spent and the deadlines were not met. The Institute for Democracy “Societas Civilis” last year published the study “Pushed into a dead-end street: The deluded belief in the Chinese corrosive capital for building motorways in North Macedonia.”

The study stresses that what is necessary is to check the origin and the ownership of the capital before giving it a privileged position in the country’s domestic economy, in order to prevent the entrance of corrosive capital that could undermine the trust in the institutions, to weaken the rule of law, to promote non-transparency and to impose monopoly over enormous segments in the economy. The research study states that the adjustment of the public procurements for major infrastructural projects to the economic criteria for the EU accession is important, in order to ensure that this market is functional, is competitive and free, and this country is adhering to the public debt norms, as was planned with the Maastricht criteria.

What is the reason to not build at all?

Under the COVID-19 pandemic, North Macedonia faces major hurdles on the way of obeying the Maastricht criteria, at least in the part of the public debt and the norms it involves. The country’s public debt towards the end of 2020 has reached almost 61% of the GDP, which means that Macedonia is one step of becoming a highly indebted country. As a result, any new loans from China for construction of a  fast railroad track could put the country into financial slavery – without any financial justification for such a project.

The last official data provided by the PERI-RNM indicate that the utilization of the railroad tracks in North Macedonia in 2019 was only 15.62% of their full capacity.

“The utilization of the railroads capacities that PERI-RNM maintains provides the real picture of the performed transportation by this country’s only railroad transporter,” states the Annual report on the wokr of the PERI-RNM for 2019.

In 2016, the Chinese bought the port in Piraeus, announcing that they intend to turn it into the biggest container ship port in Europe. Yet, five years later, the data provided by the State Statistical Office of North Macedonia indicate that the country is far from being an important transit route for the Chinese merchandise transported to the West.

Concerning all the goods that are transported with cargo trains in Macedonia, almost solely on the railroad track of the Corridor 10, the share of the transiting trains in the total railroad transportation in 2019 was 45.4 %. If this is translated into metric tons, out of 1,838,888 tons of goods transported by trains on the Macedonian railroad, the “transiting” participated with 833,951 tons. At the same time, the transit trains which were passing through North Macedonia weren’t chartered by Chinese logistics companies only, but also by other European companies.

The data provided by the State Statistical Office for the period before 2019, indicate that there were years when the transiting trains were transporting larger quantities of goods, as is the example of 2011, when 875,908 tons of goods were transported. What is important is that the statistical data shows that the most certain partner of the cargo railroad traffic until today has been the Macedonian economy. Namely, 991,245 tons or 53.9% out of the total cargo transported by trains in 2019 represented import of goods in North Macedonia and export of goods.

Accordingly, Professor Krakutovski’s expert opinion is that so far the most economically feasible option is the upgrade of the existing railroad track along the Corridor 10. He also said that an compprehensive analysis of the track’s condition on basis of existing data and a visual inspection ought to be performed.

Corridor 10 to be reconstructed in order to shorten the the time needed for the trains to traverse between locations; Photo Credit: Bojan Blaževski

“Such analysis of the current condition of the track was performed in 2008/2009, but since then so much time has passed and I cannot give an evaluation of the track’s condition along Corridor 10 now on the basis of that study. During the analysis back in 2009 it was concluded that out of 215 km total length, an upgrade must be done for  102 km until the year 2015,” explains professor Krakutovski.

In the aftermath of the study in 2009, a reconstruction of the railroad tracks Miravci – Smokvica, Tabanovce – Kumanovo, Zgropolci- Gradsko and Smokvica-Gevgelija was done, but since then, several years have passed.

And finally, what is considered a top strategic priority for North Macedonia is the railroad connections with all of its neighbors, which could be achieved only if the Corridor 8 toward Bulgaria and Albania is put into place. Regarding the track to toward Bulgaria, loans have been taken and EU assets have been granted for all three phases of its construction, while during the past autumn, the government has decided to start the search for assets for building a railway line toward Albania. With this enormous financial indebtedness and limited resources fot the implementation of infrastructural projects, it is almost certain that Macedonia should be investing in the railroad from Tabanovce to Gevgelija, but only for the upgrade of the existing track along the River Vardar valley.

Author: Bojan Blaževski