World News – February 2019
The European Union is planning to finance major infrastructure projects across the Eastern Partnership countries (EaP) the European Commission and the World Bank have co-authored a Trans-European Transport Network (TEN-T) Investment Action Plan that identifies priority projects across the EaP countries. The combined amount of investment projects is about €12.8 billion.
The official document published by the EU notes Anaklia Deep Sea Port as a top priority project in Georgia. The amount of financing of the second phase of construction will be about €233 million. In addition, EU is committed to finance the construction of a new railroad with 100 million euros. New railroad will connect Anaklia to the central railroad system of Georgia.
Anaklia Deep Sea Port will be constructed in 9 Phases. The total investment value of the project is $2.5 billion USD.
Projects identified as top priority are:
The second phase of construction of Anaklia Port – €233 million;
Construction of railroad to Anaklia Port – €100 million;
Construction of Chumateliti-Argveti highway – €1 billion;
Construction of Grigoleti-Poti bridge – €25 million;
Construction of Grigoleti-Kobuleti highway – €101 million;
Construction of Batumi bypass road – €115 million;
Construction of Kutaisi airport cargo terminal – €61 million;
Construction of Rustavi-Red Bridge Highway – €115 million.
European Commissioner Johannes Hahn, responsible for European neighbourhood policy and enlargement negotiations, said: “The completion of the Indicative TEN-T Investment Action Plan is a joint commitment to deliver tangible results for citizens across the region. The plan will assist decision-makers in prioritising strategic investments in transport infrastructure with the aim of completing the TEN-T network defined as one of the 20 deliverables for 2020 in the Joint Declaration of the last Eastern Partnership Summit in Brussels.”
European Commissioner for Transport Violeta Bulc added: “Enhanced transport connectivity both within the Eastern Partnership region, and between the EaP region and the EU has the potential to bolster economic growth and create job opportunities. The plan shall also serve to highlight the importance of road safety as well as digital solutions in new projects, and to align design standards with current EU practices.”
The projects included in the investment plan were identified together with the Eastern Partnership countries and with the assistance of the international financial institutions. Those projects will make possible the construction and rehabilitation of new and existing roads, rail, ports, airports as well as logistical centres and border crossing points. The priority investments include both short-term projects to be completed by 2020 and long-term projects aiming to improve transport links on the TEN-T by 2030. Along with infrastructural investments, the plan aims to bring forward key reforms for the transport sector and improve road safety in the region. The development of project on the TEN-T is expected to foster regional development by improving access to economic opportunities, harnessing the benefits of industrial agglomeration and increasing market competition.
Koper, Slovenia (PortSEurope) February 24, 2019 – Luka Koper Group has reported a net operating profit for 2018 of €60 million ($68.05 million), up 71% on 2017. Net revenue was €226 million ($256.32 million), an increase of 7%.
Operating profit (EBIT) increased 90% to €70 million ($79.39 million) from €33 million ($37.43 million), and EBITDA was €99 million ($112.28 million), a rise of 52% (€34 million/$38.56 million). The EBITDA margin was 43.8%, up 42%.
In 2018, Luka Koper invested €16 million ($18.15 million), a decrease of 56%. The number of employees increased by 12% to 1,242, and the return on equity was up 16.1%, up 57%.
Further financial details can be accessed here, in the Luka Koper report submitted to the Ljubljana Stock Exchange on February 22, 2919.
Piraeus, Greece (PortSEurope) February 22, 2019 – Greece’s Port Planning and Development Committee gave a partial approval of the master plan of Piraeus Port Authority SA for further development of the port, following a committee meeting,
The committee approved the extension of the passenger port, the repair of rail rails and gantry cranes, the conversion of a warehouse into a cruise passenger terminal, the underground road link, and maintenance of port infrastructure, the supply of port equipment, the dredging of the main port, the development of studies, the construction of a new oil tanker, the expansion of a station to improve the infrastructure of the shipbuilding belt.
It ruled against the construction of a hotel and against some new new parking and storage developments.
In 2016, China’s COSCO Shipping Ports Limited acquired the operating rights to Piraeus Port Authority which is operated by China’s COSCO Shipping Ports Limited, in addition to already being operator of Piraeus Container Terminal SA. Since then, investment has expanded the port to become one the leading container hub in the Mediterranean region, part of COSCO’s plan to develop the port as key staging post in the new Silk Road, China’s economic trade policy to improve access for Chinese-manufactured goods to European markets.
Part of the PPA contract with the state is for further investment and PPA submitted a €500 million ($567.21 million) master plan for further development of the port, including a number of activities which are not directly linked to commercial port activities.
The plan includes a new shopping mall within PPA’s premises, hotels and high-rise construction. COSCO plans an approximate €200 million ($226.89 million) investment in a new cruise port hub, and sees additional facilities such as hotels as a key part of this strategy.
Some politicians, local traders and shop owners are objecting to this expansion within the PPA location.
COSCO would also like to develop its own logistics centre on site, rather than the preferred government project of a logistics centre at the Thriasio industrial district, west of the port. COSCO has already been frustrated by the slow process followed by the government to review the plan, and is unlikely to welcome the current outcome.
Poti, Georgia (PortSEurope) February 21, 2019 – A new deep water terminal will be built in the Georgian port of Poti, which will enable it to receive additional 2.5 million tons of cargo per year, the Prime Minister of Georgia, Mamuka Bakhtadze, said.
An agreement for the new project was signed between the U.S. Overseas Private Investment Corporation (OPIC) and the Georgian-American transport company PACE Group. OPIC will loan PACE Group $50 million ($44.11 million) to build the new terminal which will be located on the territory of the former shipyard in Poti, on an area of 25 hectares. The project is expected to be completed within 18 months. PACE Group bought the plot in 2013. PACE Group already operates another Poti port terminal.
The total project cost for the new deep water terminal in the port of Poti is expected to be $120 million ($105.87 million) and includes two phases. The total cost of the first phase is $93 million ($82.05 million), of which $50 million ($44.11 million) is provided by OPIC.
The total length of the berths will be 650 metres. The capacity is calculated on 2.5 million tons of bulk and general cargo, as well as 100,000 TEU. The depth in the port water area will be 12-15 metres, which will allow to accept vessels with a carrying capacity of 50-60,000 tons.
The development of transit routes through Georgia is one of the declared priorities of the country’s government. The main infrastructure, which is being built nationwide, is an integral part of the financed by China new Silk Road project (part of the Belt and Road initiative also known as One Belt, One Road, or OBOR).
These include the East-West highway, the modernization of the railway, the Baku-Tbilisi-Kars railway line and the project for the deep-water port of Anaklia in western Georgia. To promote U.S. interest in infrastructure development in the region, OPIC is also considering investment in a port project in Anaklia. The Anaklia port will serve large cargo vessels and help reduce transshipping costs to and from central Asia. Poti port is expected service regional vessels transporting grain, dry bulk, and general cargo to the southern Caucasus.
Poti is located in the delta of the Rioni River on the Black Sea coast and 340 km from the capital Tbilisi. The city is seen as a link between Europe and Asia. Poti occupies an important strategic position between the markets of Europe, the Mediterranean, Russia and Central Asia. Bulk and general cargoes are what the port of Poti port specializes in.
Georgia wants to be part of the newly revived Lapis Lazuli Corridor, a transport route connecting Europe and Asia by road, rail and sea thanks to a long-awaited new international trade and transport corridor deal. Lapis Lazuli is an international transit route opened in 2018 linking Afghanistan to Turkey via Turkmenistan, Azerbaijan and Georgia.
The name Lapis Lazuli is derived from the historic route that Afghanistan’s lapis lazuli semi precious stones and other semiprecious stones were exported along, over 2,000 years ago, to the Caucasus, Russia, the Balkans, Europe, and North Africa along the ancient Silk Road.
Tbilisi, Georgia (PortSEurope) February 21, 2019 – The European Investment Bank (EIB) has said that it will lend €250 million ($283.7 million) to Georgia to upgrade a section of the country’s East-West Highway (EWH), which is the main connection for long distance road traffic in Georgia and a direct part of Europe’s TEN-T infrastructure.
The wider aim is to improve Georgia’s connectivity to Europe via a highway that connects Baku in Azerbaijan on the Caspian Sea via Georgia (the start of EWH is in the capital Tbilisi) to Turkey and the ports of Poti and Batumi on the Black Sea. The EWH is also vital for landlocked Armenia as it provides the country with access to Georgian Black Sea ports.
Approximately 100 km of the 410 km highway will be upgraded which will improve road safety and travel conditions, lower travel times and reduce vehicle operating and maintenance costs. The EIB loan is covered by the European Union (EU)’s Comprehensive Guarantee. As a financial institution of the EU, the EIB activity outside the EU is directly contributing to the implementation of the EU’s external policies.
The East-West highway is the main artery for long distance road traffic in Georgia and is being used by most traffic from Azerbaijan and Armenia to the Black Sea ports and to Turkey, as well as long distance traffic to and from Tbilisi. This highway is also part of the Pan-European corridor linking the EU with Central Asia through the Caucasus and part of the Transport Corridor Europe-Caucasus-Asia (TRACECA) programme.
The upgrading of the East-West Highway, which started in 2006, is one of the top priorities for Georgia. It will enhance the country’s position as the main conduit of regional trade. By supporting this project, the EU Neighbourhood Investment Facility (NIF) and the EIB help regional integration through increased connectivity.
Officially launched in 2008, NIF was renamed the Neighbourhood Investment Platform (NIP). It is a mechanism aimed at mobilising additional funding to finance capital-intensive infrastructure projects in EU partner countries covered by the European Neighbourhood Policy (ENP) in sectors such as transport, energy, environment and social development.
It does so by pooling grant resources from the EU budget and the EU Member States and using them to leverage loans from the European Financial Institutions as well as contributions from the ENP partner countries themselves.
In September 2018 the Asian Development Bank’s (ADB) Board of Directors has approved a $300 million loan to finance the construction of a four-lane, 12 km long section of the East-West Highway between Khevi and Ubisa.
The EWH, an integral part of one of the six key corridors connecting member countries of the Central Asia Regional Economic Cooperation (CAREC), currently carries about 60% of Georgia’s foreign trade despite representing only about 2% of the country’s entire road network length. The EWH serves some 13,000 vehicles per day with an annual traffic growth rate of over 10% since 2005.
Financing for different projects for the improvement and development of the East-West Highway is provided by the World Bank, Asian Development Bank, Japanese International Cooperation Agency (JICA), European Investment Bank, Chinese Development Bank (CDB) and the European Bank for Reconstruction and Development.
Supported by Maritime Knowledge Centre, the Green Maritime Methanol project consortium includes the ports of Rotterdam and Amsterdam; shipowners Boskalis, The Royal Netherlands Navy, Van Oord and Wagenborg Shipping; shipbuilders, Damen Shipyards, Feadship and Royal IHC.
“Together the consortium partners – which include all the main stakeholders in the transport supply chain – bring extensive experience and knowledge which will help to make this project a success,” said Pieter Boersma, business director maritime & offshore of TNO.
He added: “As part of the project, the partners will look at concrete possibilities to adopt methanol as marine fuel on either newbuilds or conversions of the existing fleet.”
Large support base
Stakeholders working to study the infrastructure and supply chain for methanol also include marine engine manufacturers Pon Power and Wärtsilä together with their trade association VIV; specialised marine equipment suppliers like Marine Service Noord; maritime service providers including C-Job Naval Architects; as well as methanol suppliers BioMCN and Helm Proman and trade organization The Methanol Institute.
Netherlands’ research institutes including TNO, TU Delft, NLDA and Marin are providing knowledge-building and research capacity for the project by studying operational profiles, ship configurations, engine configurations, performances and various emissions, in addition to multiple other relevant topics.
The Green Maritime Methanol project is supported by TKI Maritime and the Netherlands Ministry of Economic Affairs and will be completed within two years.
Belintertrans — Transport-Logistics Center (BTLC) of the Belarusian Railway is implementing a new project — a regular container train in Belarus—Romania direction. The BTLC partners are Rail Cargo Logistics d.o.o. (Slovenia) and Zakhid Trans Service transport company (Ukraine).
The new container train carrying wood products will depart from Hancavičy railway station in the first decade of March. The train will consist of 124 containers placed on flatcars. For such transportation it is required to use Open Top containers with increased capacity.
One of the main advantages of this new project is speed of delivery — 39 hours. The expected volume of transportation is 120,000 tons of freight in 2019.
The representatives of the Belarusian Railway and BTLC administrations, project representatives from Slovenia and Ukraine will take part in official ceremony.
In 2019, the Belarusian Railway plans to launch new export train projects. The Belarusian Railway, in cooperation with Russian and Azerbaijan rail operators, is working on a new container transportation project Minsk—Baku. This project will allow deliver Belarusian products to Azerbaijan in 7 days and at competitive rates.