18th Annual JAA/FAA International Conference

Geneva, June 4-8, 2001

Topic: REGIONAL CO-OPERATION MODELS

Hand-out material

SEGMENTS OF CROATIAN TRANSPORT STRATEGY DRAFT WITH REGARD TO AIR TRAFFIC

Ass. Prof. Sanja Steiner, Ph.D.

Ass. Prof. Borivoj Galović, Ph.D.

Boris Popović, B.Eng.

University of Zagreb, Faculty of Traffic and Transport Engineering

1. INTRODUCTION

Considering the significance of transport sector there are two levels of influence that may be identified – one on the quality of living of the population and the other on the overall economic development of a country. Traffic has direct impact on the lives of people, on the one hand regarding individual mobility and accessibility of narrow and wider regions, and on the other hand regarding rational use of time and in the most general sense of the quality of living. Transport policy greatly determines the extent to which the influence of transport will have positive, i.e. negative effects.

There is little doubt that traffic infrastructure directly contributes to the activation of economic potentials, and that transport sector revenues have a significant share in the GDP structure of a country. A coherent transport policy can also contribute to the reduction of budgetary expenses into the transport sector, either by providing conditions for efficient infrastructure management, or by means of instruments to reduce external costs (congestion, fatalities, pollution).

Therefore, it is understandable that the government is interested in setting the foundations and long-term framework of traffic development as well as in elaborating a Traffic Development Strategy.

Transport strategies had also been developed in the past, and they will certainly be the crucial element of all the future national economic strategies as well. The difference, however, lies in considering the significance of traffic and its influence, both positive and negative one on the implementation of the strategic objectives of the overall development, as well as the inter-sector approach to understanding of traffic as a system, and the methodology of searching for and implementing systemic solutions

Transport strategy is not to be considered as the final and eternal document, but with a certain flexibility regarding revisions and additions, depending on specific characteristics of economic changes and needs over the time. Since transport has the characteristic of extreme sensitivity to changes in a wider environment.

The aim of transport project task is to define the objectives of sustainable transport development with the premise of horizontal implementation of subsidiary goals.

Within the framework of the project task, the guidelines need to be set for the development of traffic infrastructure at the level of the whole system, on the principle of intermodality i.e. complementary implementation of all the transport modes, and to the greatest extent of using all the available capacities.

Furthermore, this project needs to define the frame guidelines so as to improve the efficiency of the existing and the future transport sector.

2. CONTEXT – BACKGROUND

The starting points in defining the strategic frames within which transport development goals will be realised include evaluation of the development level of the transport sector, its functional parrying in realising the economic development objectives, as well as its harmonisation regarding development strategies in international environment.

The conceptualisation of the strategic guidelines of transport development of Croatia has been determined by the aim of integrating into the European transport system. In this sense it is important to detect the specific features of development programs and transport policies at national and international levels, and also the trends of market opening and transport flow dynamics.

Activating scientific and professional potential in modelling a coherent transport policy is especially important due to the need for systemic approach to development – considering all the influencing factors, detecting development specifics of the environment, harmonisation of national transport systems from the infrastructure, technical, technological and institutional-management aspects, and recognising special requirements in the integrated transport network planning.

2.1 Status Evaluation in the Croatian Transport Sector

2.1.1. Transport Policy

Transport policy in Croatia was inconsistent and fragmented according to traffic branches (there was no sector analysis) without any clear development concept at the systemic level, without comprehensive objectives and recognition of real conditions. It was exclusively based on financial sources of the public sector (government budget), thus lacking the cost and benefit and construction feasibility analyses. There was a lack of inter-sector co-ordination and harmonisation of regulation measures in key issues, mainly regarding legal, tax and social policies, and then also a lack of solutions for critical problems – restructuring of unprofitable government companies in transport sector, irrational management of traffic infrastructure, lack of equal conditions of marketing for all the transport branches, failure to implement traffic management principles (mainly urban and suburban) by inducing demand on non-road transport modes and public transit, failure to determine (and then failure to implement measures to reduce) external transport costs, and the most important of all, failure to use the scientific potential.

A striking example of inconsistency in transport policy is the field of investment policy. The investments into commercially unjustified projects regarding construction of new infrastructure were pressed ahead, and at the same time the current maintenance investment fund was intolerably reduced. This resulted in lower efficiency of the transport sector (poor service level, low speeds, irregularity of transport, etc.), inadequate technical and technological characteristics of transport network and increased external transport expenses.

In Croatia, the investments in transport sector (excluding investments into telecommunications and post) between 1996 and 1998 amounted to 2.1% GDP, and were mainly related to the development of road network, whereas a lot less was invested in other transport branches. In 1999 the share of transport sector (affairs and services of transport and communications) in budgetary expenses was 11.2% or 3.7% GDP. The capital expenditure referring to road construction and maintenance amounted to 1.6% GDP. The revenue share of the transport sector (transport, storage and connections) within the GDP structure amounted to 9.2%.

Neglect of the principles of intermodality and planning of integrated transport network, as well as the absence of a comprehensive transport development plan as a system, have led to a disproportion between the investments in road infrastructure and the investments in railways, to an extent not seen in any of the neighbouring countries nor in the EU countries.

A very striking indicator of the past investment policy in transport sector of Croatia is the ratio between the investments into new infrastructure and into the maintenance of the existing one. Excessively low funds allocated for the maintenance represent constant drawback of the transport investment policy.

2.1.2. Traffic Infrastructure and the Level of Integration

Seven airports have runways that can accommodate conventional airplanes almost without any restrictions. Two are located in the continental part of Croatia (Zagreb and Osijek-Klisa, which is still out of service), and five along the coast (Pula, Rijeka, Zadar, Split and Dubrovnik). Eleven aerodromes have also been registered (for aircraft with up to 50 seats or smaller aircraft), and the first four are international aerodromes: Brač, Lošinj, Osijek-Čepin, Vrsar, Lučko, Varaždin, Čakovec, Sinj, Grobnik, Otočac and Ploče.

Ten international aerodromes represent almost 1% of the world infrastructure, and according to the realised passenger traffic, the Croatian airports and aerodromes participate only with about 0.5‰. Still worse are the indicators of freight transport and aircraft operations.

2.1.3. Management

Although government has expressed readiness for the processes of economic transition, the preconditions for structural reforms directed towards commercial management have not been provided regarding administration and organisation. Therefore, the management and exploitation methods, except partly telecommunications, have kept all the attributes of public sector as an irrational manager.

In the attempt to separate the regulatory function from the operational level, the newly founded public companies i.e. public liability companies predominantly state owned (Croatia Control, Croatian Waters, Croatian Road Administration, Croatian Railways) were left without commercial management (managing functions were performed according to a political and not professional key), and at the same time the regulatory authority of management within the relevant ministry has been reduced.

Due to redirecting of international air routes and loss of air transit, which participated in pre-war conditions with 75% in the total traffic, and due to direct war damage on facilities and air traffic control systems, it is logical that the loan for air traffic control was also reallocated to the reconstruction program, mainly of the aerodrome air traffic control centres. The most significant investments were realised in communications, radar control and the essential navigation systems. The equipping of the Zagreb area control centre failed to be realised, as well as appropriated staffing. Therefore, the traffic demand in conditions of substantial growth of overflying traffic is not being followed, after the expected opening of the existing international air routes and establishing of the new important Adriatic corridor. Therefore, operational restrictions, and even overflight traffic limitations can be expected on the international level.

The efficiency of the Croatia Airlines fleet measured by load factor was 51.2%. The profitability limit, however, is at more higher efficiency level. Since the national air carrier is predominantly state owned, the data on efficiency of the modern aircraft fleet leads to the conclusion that there is a need to revise management business policy, a need for greater involvement of private sector, and for re-analysing of development guidelines of further fleet purchase.

2.1.4. Institutional and Legal Frameworks

Traffic planning and transport policy at the government level should be under exclusive responsibility of the Ministry of Maritime Affairs, Transport and Communications. This is not actually the case, and the problems of strategic transport development at the government level are dealt with in Government departments for public works, construction and reconstruction, tourism, internal affairs, foreign affairs and elsewhere.

The main problem of the existing managerial organisation of the Ministry of Maritime Affairs, Transport and Communications is the absence of a central body for transport policy as a system, including also international relations (mainly co-operation with EU regarding regulatory harmonisation).

The Ministry of Maritime Affairs, Transport and Communications contains eight authorities that independently submit proposals regarding development programmes and policies, each in its own field of activities. This makes the strategic planning of a transport system on the principle of integrity and intermodality impossible, and results in parallel and non-complementary development concepts of individual transport branches. These authorities contain also the incompatible functions of development planning and policies on the one hand, and regulation, control and evaluation of implementing these same policies on the other hand. The problem is also lack of autonomy of these authorities since it is the Minister, and not the directors, who carries the responsibility of representing the authorities and of accepting the implementing acts.

After gaining independence, Croatia has adopted the federal transport acts from the former Yugoslavia. They were to provide legal frameworks for the functioning of the transport system in the transition period until original Croatian acts were brought. The taken over acts were substantially incompatible with the required strengthening of market relations in the transport sector, role of transport management in transition processes and in numerous other segments.

Then the newly adopted acts partly took into consideration the basic provisions of relevant international conventions, but the implementation of international standards failed. This particularly refers to technical and safety standards in sub-Act regulations.

3. KEY OBJECTIVES

3.1. Strategic Objectives

Previous assumptions result in the following strategic objectives of transport development in Croatia:

  • Better integration in the Trans-European transport network
  • Fair pricing in transport
  • Environmental protection
  • Greater transport safety
  • Social cohesion
  • Internal market growth
  • Growth of the external market dimension
  • Justified deregulation of the transport market.

3.2. General Development Objectives

The development objective is to insure competitiveness of transport activities on the international and domestic market, consequently affecting the increase of the transport system efficiency and implicitly contributing to the budgetary disburdening. In this sense, the priority is stressed regarding restructuring of the public sector of infrastructure and transportation (state-owned companies: Croatian Railways, Croatian Roads, Croatian Post, airports, ports, etc.). Legal and administrative predispositions for commercialisation and privatisation of the state-owned companies need to be insured as well.

The development objective is the efficient transport sector management. Here, the establishment of an integrated information environment is essential, using transport policy instruments to insure at all levels – the widest introduction of modern systems of recording, counting, monitoring of relevant phenomena (traffic flows – speed, density, environmental levels). At the managerial level it is necessary to establish an information centre for collecting, processing and distribution of relevant data, standardisation in introducing informatisation in the operational activities, as well as implementation of intelligent transport systems (especially in traffic flows management).

Considering the experiences of the transport-developed European countries regarding adverse effect of traffic increase on the environment, expressed by high external costs, the transport development policy of a country should ab initio depend on the subsidiary objectives and be based on a sector analysis in the selection and future supply of optimal transport options, i.e. on the intermodality principle.

In accordance with the assumptions of the EU Common Transport Policy, as well as ECMT strategy of sustainable transport development,[1] the following are the main objectives of a complementary transport policy:

  • Targeted planning and traffic flow management
  • Reduction of adverse effect of traffic on the environment
  • Improvement of transport safety
  • Improvement of transport system efficiency
  • Compensation for the consequences of market deregulation and liberalisation in the transport sector.

The implementation of transport policy objectives presupposes a consistent co-operation of the transport and other government departments, in order to insure the efficiency of transport policy instruments in crucial aspects:

  • Regulative policy
  • Traffic management
  • Investment policy
  • Tax and pricing policy
  • Physical planning
  • Social policy.

Based on the evaluation of the level of infrastructure development and the need for restoration and the upgrading of the existing national transport network, the modelling of infrastructure development plans and the activities in the transport sector need to be based on the targeted induction of public demand and dictated shift of public demand from one transport module to another.

4. BASICS (GUIDELINES) OF THE STRATEGY

4.1. Transport Policy

Based on the defined development objectives it is necessary to elaborate a national plan and a dynamic development programme of the whole traffic infrastructure and supra-structure, with the following basic contents:

  • Objectives (strategic; structural);
  • Starting points (legal framework at the level of international projects; at the regional level; at the European level; at the national level, economic and functional justification);
  • Basic elements (evaluation of the condition, throughput capacity and exploitability of the existing infrastructure, evaluation of trends in transport demand, transport safety, ecological aspects);
  • Proposals (transport network; traffic-technical characteristics; investment expenditures; maintenance and management; financial possibilities and sources; priorities - dynamics);
  • Implementation (preparing project documentation; insuring financial means; regional and inter-government co-operation; co-ordination of the authorised departments; responsibility for programme implementation).

The investment policy and the programmes of investing into the traffic infrastructure have to be based on the identification of the relevant critical elements of infrastructure management, such as:

  • Problem of the relationship between investing into construction or maintenance of infrastructure facilities, mainly in lagging behind of the reconstruction and regular maintenance;
  • Inadequate infrastructure charges (institutional restrictions, which prevent from charging of actual costs);
  • Problem of productivity (lack of competitiveness, overstaffing);
  • Market and regulatory reforms;
  • Partnership between public and private sector;
  • Adaptation to European standards;
  • Methodology of making investment decisions.

The basic contents of complementary transport policy can be generalised as follows:

  • Redirecting demand to ecologically friendlier transport modes
  • Application of maximally sophisticated technologies
  • Fair pricing in transport
  • Inter-branch co-operation in transport sector
  • Timely changes in legislation
  • Flexible charging of transit traffic
  • Preventing unnecessary transport
  • Socially and ecologically more acceptable organisation of urban transport
  • Easing the integrative function of transport network (border problems).

4.2. Traffic Infrastructure

In comparing the existing and the potential air traffic in transit, apart from the North (Pannonian) and Adriatic corridor, the development guideline is the establishment of a transversal corridor Baltic-Adriatic/Mediterranean.

The development guideline of air traffic infrastructure (verti-ports or small aerodromes 2C) in the Adriatic coastal area may be considered only in the context of tourist development options offering higher level services and dominant financial share of local government and private sector i.e. it is not the priority in budgetary investments.

4.3. Management

State-owned traffic infrastructure management has to be gradually delegated to autonomous commercial units, for which legal framework of controlled transfer into commercial/private sector has to be provided. The programs of restructuring the current state companies have to insure the separation of infrastructure management function from the transportation operational function and the related services. Infrastructure management means also creation of a certain group of private infrastructure maintenance service providers.