BOSNIA-HERZEGOVINA AUTHORITIES WANT CONTROL OVER THE PORT OF PLOCE Croatia is building a motorway to Dubrovnik. After completing the sections to Dugopolje and Sestanovac, construction of the Zagreb-Split-Dubrovnik motorway is currently on the segment from Zagvozd to Ravce. This will be followed by construction to Vrgorac and the Ploce 1 and Ploce 2 interchanges, where a connecting road will be built to the Port of Ploce. The company Croatian Motorways claims that construction will be completed by the end of 2009. The next phase of construction will include the segment from Ploce 1 to Osojnik and the connecting road entering into Dubrovnik. It is on this segment that the Croatian authorities are expecting to encounter problems with neighbouring BiH. Namely, BiH has already opposed the Croatian plans for the motorway to pass from Opuzen to Dol through a part of BiH territory, south of Neum. Croatia is prepared to send an official request. Sarajevo has already expressed its negative opinion over the construction of the Peljesac Bridge, and it is expected that they will also reject Croatia’s request for the motorway route through the Neum corridor. What are the real reasons for the lack of cooperation and the establishment of complementary economic and transport interests of Croatia and BiH?

Though the inability of BiH to function as a unified state due to the many internal conflicts and blockages, the real reason behind Sarajevo’s resistance is the Port of Ploce. Regardless of how unrealistic it may seem, and despite all the talk of Neum, Sarajevo views the Port of Ploce to be its true natural point of entrance to the Adriatic Sea. Despite the confusion ruling among the entities and cantons, Sarajevo is still living in the past, and is still holding that full or majority control over the Port of Ploce is possible, based on the Washington Agreement, and a full thirteen years after the silent abandonment of its provisions.

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In this whole story, the Ploce 1 interchange is of particular significance. Ploce 1 will mark the starting point of the future trans-European motorway Vc Corridor through BiH. The border point between Croatia and BiH has already been agree to, and Croatia will construct its part of Vc Corridor to this point. This corridor will lead through Capljina, Sarajevo and Osijek towards Budapest and beyond and, at the end of next year, the Port of Ploce will be connected to this motorway. Some 2 million cubic metres of rock and materials from tunnels, from the connecting road to the Port of Ploce, have been used to build embankments and the shoreline for new terminals. It is realistic to expect that the extraordinary development plan for Ploce, envisaging the construction of a container terminal for bulk cargo through the assistance of the Croatian state and loans from the World and European banks, will be passed, and that certain disagreements as to its realization will be resolved. Such development of the port, which would make this the second largest cargo port in the Mediterranean and the backbone of cargo transport for the entire region, is in the interests of Ploce, the entire Croatian south, the Croatian economy and all foreign economic entities, particularly those in Bosnia and Herzegovina. A few days ago, after long negotiations, the World Bank agreed for the first time to allow the domestic operator to be the concession holder in the Port of Ploce. This great success by the Croatian negotiators means that for the first time, the state investment in a Croatian port, will be paid back by a private company through concession fees, and this company will take on all operative risks.

FINAL BLESSING Premier Sanader, Minister Kalmeta and former boss of Croatian Motorways Mario Crnjak at the blessing of the segment Dugopolje–Sestanovac When the Ploce 1 and Ploce 2 interchanges are completed, the question will arise as to where the motorway route to Dubrovnik will pass. According to the national and county physical plans, the next point on the motorway is Opuzen, which brings the route to the BiH border. Croatia has envisaged that the motorway pass through 8 km of the neighbouring country before continuing through Croatian territory to the Doli interchange, and then further towards Osojnik, which would be where the connecting road would branch off for entry into Dubrovnik. Just above Osojnik, the motorway would continue to the BiH border, where it would connect at the Hum interchange in the direction towards Trebinje, to the future route of the Adriatic–Ionian motorway, towards the direction of Montenegro.

Croatia will begin construction of the route to Dubrovnik, but it first needs to resolve the issues surrounding passage of the motorway by Neum. In the first half of 2009, Croatian motorways will begin working on the segment from Osojnik towards Doli, to send the clear message that Croatia is intent on building a motorway here. In the second half of 2009, Croatia will begin construction of the motorway from Ploce 2 to Opuzen, and finalize the segment to Dol.

Of course, the official procedure requires obtaining consent from Bosnia and Herzegovina for passage through its territory. All reactions from Sarajevo to date suggest that there is not inclination, or consensus by the BiH authorities to give Croatia consent. The same as in the case of the construction of the Peljesac bridge, which BiH is opposed to. If BiH does not give its consent or, due to the Schengen border regime, the motorway may not pass through another state which is not an EU member states, then Croatia will construct a fast highway from the Opuzen interchange to the Peljesac bridge, which will pass over the Mali Ston Channel and over the whole of the Peljesac peninsula, to the Doli interchange. This route, a fast road with four lands without a shoulder belt, but with a separation belt, is Croatia’s reserve option if BiH decides to not give its consent for passage of the motorway through its territory south of Neum. In this case, the motorway to Opuzen, and again southwards from Doli, would be full profile.

In its physical plans, BiH has not envisaged the variation of passage of the motorway past Neum. BiH intends to being its motorway on the Vc Corridor from the border control point north of Metkovic, along the southern side of the difficult marshland terrain of Hutovo Blato, to the Neum interchange. However, a road along the Hutovo Blato wetlands will be a serious ecological problem, as this natural reserve could be seriously impacted and polluted from road construction. Also, works in such marsh land are very difficult to execute, and significantly more expensive. Furthermore, BiH is planning a new segment, from Capljina and Pocitelja, via a northern bypass around Hutovo Blato, via Stolac to Neum. This motorway would run through BiH territory to Turkovici and Popovo polje all the way to the Hum interchange. According to BiH plans and desires, the construction of a Croatian motorway to Ploce 1 and to the Vc Corridor, would have to stop, thereby eliminating the existence of a motorway through Croatia. In fact, BiH is of the opinion that Croatia has no need to build a motorway to Dubrovnik, just as it has no need to build the Peljesac bridge.

JOVIAL PRESIDENTS Croatian President Stjepan Mesić should make efforts to explain the true economic interests of BiH to his BiH colleagues On the other hand, the Čapljina-Stolac-Neum-Hum motorway is not a priority for BiH, despite being viewed as the corridor of the Adriatic–Ionian motorway through BiH, and it is not known whether its construction will being in the next decade. Instead, BiH’s priority is construction of the Vc corridor, in the direction Banja Luka–Okucani. Croatia cannot wait for such a solution, and wants to fulfil its plans to construct a motorway all the way to Dubrovnik. If this is not possible, due to rejections from the BiH side to allow passage through its territory, Croatia will have to put the Peljesac option into motion. Sarajevo is well aware of Croatia’s intentions, and is against them. The question is why.

It is perfectly clear that this is due to the same reasons why BiH is against construction of the Peljesac bridge, which does not impede on BiH’s right to exit to the territorial sea. BiH has never given expert, transport or financial reasons for its opposition to the motorway route through its territory, thereby giving their rejection a purely political tone. The idea of constructing the Peljesac bridge was rejected with shaky arguments, appealing to international maritime law. A strong political animosity to Croatia’s plans, even when they stimulate BiH’s developmental plans, and the desire for management control over the Port of Ploce are the true hidden reasons for blocking Croatia’s infrastructure plans. BiH can only have economic benefits from the passage of the motorway through its territory, and the construction would cost them nothing. BiH does not need the segment of the Adriatic–Ionian motorway from Capljina to Hum, but Greece, Albania, Montenegro and Croatia need this segment. What BiH does need is the Vc corridor that leads to the Port of Ploce, connects to the Zagreb–Dubrovnik motorway, and leads on towards Slavonia and Hungary.

This rejection is simply a matter of political pressure or spite, due to the complex neighbourly relations, and is becoming an increasing burden on the relations between Croatia and BiH. These political tensions, in a state where none of the sides can agree on anything, is enveloped in the theory that BiH needs an exit point to the sea. Several days ago, an explanation was given that BiH has the right to demand a corridor one hundred kilometres in width from Croatia, all the way to the island of Vis. Considering that BiH’s right to an exit point to the sea is not an issue of contention, anyone with any knowledge of international maritime law knows that such demands are absurd and service only to “scientifically” argument a political position, due to the fact that a port for passenger, let along cargo, transport cannot be built in Neum, and the town does not even have the proper conditions for construction of a tourism port. Thus, the use of the Port of Ploce is becoming a key issue and reason for opposing the construction of the Peljesac bridge and the motorway to Dubrovnik. Issues of an exit point to the sea at Neum will become insignificant if BiH can obtain greater or unlimited rights to use the Port of Ploce. In fact, it appears as though Sarajevo does not know how it can obtain control or greater influence over the Port of Ploce, as for many years, the BiH economy has had the greatest benefit from the extraordinary model of corporate cooperation in the current model of use and management of the Port of Ploce.

PREMIER SANADER has had solid cooperation with BiH to date; here shown with members of the BiH presidency BiH Silajdžić, Radmanović and Komšić Back in 1994, the Washington agreement outlined that the BiH confederation would see the establishment of three entities, and that Croatia would allow BiH unhindered access to the Adriatic via Ploca, without Croatian customs and police control, and that port management would include two to three representatives from BiH. However, nothing ever came of the Washington Agreement. The Dayton Agreement that followed established two entities in BiH, while complete sovereignty over the Port of Ploce remained fully in Croatian hands. However, the issue of status and use of the port were never completely resolved.

Today, under conditions of completely different work and operation conditions, which BiH businessmen are quick to praise their cooperation with the Port of Ploce, Sarajevo wants to apply the Sclar model of an Executive Council of the Port of Ploce which would include international arbitration alongside the Croatian and BiH representatives. Clinton’s special delegate for BiH and Ploce, Richard Sclar, proposed the establishment of Port Management and an Executive Council which would be comprised of eight Croatian and three BiH members. In cases where this Council could not agree, a three-member arbitration commission, with a Croatian, Bosnian and foreign expert, would then rule. However, this model was contrary to Croatia’s jurisdiction over the Port of Ploce and never passed.

It is purely illusionary to call upon it today, when mutual economic ties have been re-established with the restored BiH economy. Today, even the ownership structure of the leading BiH companies has changed. For the most part, they are under foreign ownership, like the former Zenica Steelworks, today Mital Steel from India, the Lukavac cox plant, also owned by one of the Mital brothers, and Biraca from Zvornik, owned by a Russian from Lithuania, Vladimir Romanov, or Aluminij from Mostar, which is likely to soon be taken over by Switzerland’s Glenkor. These large companies are not interested in managing or controlling the Port of Ploce, but only want high quality port services at low prices, allowing them to transport large quantities of coal, ores, steel and aluminium. A quick and simple procedure is in the interests of both the port and the BiH users.

BiH has its own assets within the port – the Federation Terminal. Also, the BiH Federation is owner of the derivatives warehouse, with tanks of 80,000 tonnes. The Federation Terminal is registered within the port under Croatian laws, and this company has management based in Ploce, with a Supervisory Board seated in Sarajevo. At the port, the company Aluminij has a silo for petrocox and clay. No one impinges on these BiH companies, moreover, they have been granted privileged status. Namely, the Port of Ploce regularly pays a concession fee, which the BiH companies are not required to do.

In the economic sense, no one has created any barriers for the BiH companies. They are free to work, build and invest and, once the new bulk cargo terminal in the port is completed, the BiH companies will have the greatest benefit, as they will pay USD 30m less for the transport of raw materials than they have paid to date. Calling for rights to the port is pointless. The maritime demesne has no owner, and is managed by the Port Authority, while the police and customs do their jobs. It is in the interest of businesses on both sides of the border to allow this procedure in the port, and in rail transport which is further simplified through the work of independent operations, to have only one company as the concession holder on the railroad route from Ploce to Budapest, as to date, due to borders and divisions, there are at least four concession holders on this route. The Port of Ploce is dependent on the BiH economy, and this will continue to be the case. Currently, the priority concession holder is the company Luka Ploce d.d. For all these reasons, BiH control over the Port of Ploce should not be a key political issue and reason to block Croatia’s infrastructure and economic projects, which are certainly of interest to both states.

Despite BiH’s political oppositions, Croatia has every intention of building the Peljesac bridge. All stories of backing away from works or the bridge as a HDZ election trick are just speculation. The technical requirements of the construction and proper preparations will set the pace of construction. The contractors, a Croatian consortium of Konstructor, Vijadukt and Hidroelektra, must first complete extensive preparations in order to begin construction. These companies are currently in the phase of procuring the specific equipment required to build the underwater sections of the bridge and are reserving the large quantities of steel required for the bridge construction. Preparatory works have been completed in the design offices and beginning individual elements in workshops has begun, such as the massive steel columns, three metres in diameter and seventy metres long, which will be driven into the seabed. Seven such columns will be driven into the sea bed, each as tall as the Zagreb Cathedral. These will be filled with concrete and the capital, which will form the base of the construction, will be leaned against them. The consortium will lease one of only a handful of platforms in the world in order to drive these columns into the seabed.

Serious works are already underway to build the Peljesac bridge. Croatia intends to connect its southern territory with the rest of the state. If the passage of a motorway near Neum is blocked, Croatia has an interim solution in a fast road and bypass along the Peljesac peninsula. The Adriatic–Ionian corridor is fast becoming a reality, which is exceptionally important, both for Croatia and the southern Balkans. It is in the Croatian south that this highway will be connected to the existing motorway for Zagreb, Rijeka and beyond. Croatia will certainly connect to his motorway before BiH will, aiming at inclusion in international transport and economic flows. In its plans, Croatia will support BiH and allow its quick inclusion into these flows. This also means better use of the Port of Ploce in the BiH economy, with cooperation and an agreement with all economic entities of the neighbouring state, though under Croatian jurisdiction.

From Sestanovac to Ploce, from Ploce to the ramp

The last segment of the motorway to Dubrovnik to be completed was the segment from Dugopolje to Sestanovac. Next year, the segment to Ploce will be completed, after which point, construction towards Osojnica will continue. Within this segment, problems have arisen concerning the segment from Opuzen to Dol, as 8 km of this segment would pass through the territory of neighbouring Bosnia and Herzegovina, just south of Neum. The BiH authorities consider this to conflict with their plans to build a motorway north of Metkovic, via Hutovo Blato.

BiH dependent on Ploce Given the cooperation to date, control over the Port of Ploce must not be a key political issue for Bosnia and Herzegovina and a reason to block Croatia’s infrastructural and economic projects, which can only be of benefit to both states. Furthermore, the BiH Federation has been permitted to have its own terminal for petroleum derivatives, with a capacity of 80,000 tonnes.
The fact is that the Port of Ploce is dependent on the BiH economy, particularly on the Zenica Steelworks, Lukavac cox plant, Birač from Zvornik and Aluminij from Mostar. Today, all these companies are under foreign ownership, which is more concerned with receiving high quality services at low prices than bureaucratic control over the port.