Fic rEcommEndationS - Eurobank EFG

struction of the Ada Ciganlija bridge is in its final stage and
its commissioning is expected in late 2011 or early 2012.
rEmaininG iSSUES
Even though the Government has allocated significant funds
for the repair of existing and construction of new infrastructure,
the lack of funding for comprehensive infrastructure reform is
still a burning issue. Due to insufficient budgetary revenues in
2011, it is likely that some of the foreseen projects will not be
implemented.
This raises another issue, that of insufficient participation of the
private sector (PPP projects) in the development and realisation
of infrastructure projects. The concession granted to Alpine–
Porr consortium for the construction of the Horgos–Pozega
motorway was terminated due to lack of funding, and that was
the first PPP project in Serbia. The absence of more investors
who would engage in this kind of projects may be explained by,
among other reasons, a deficient legal and regulatory framework.
At this point, the Government will not have options other
than borrowing for funding construction works. However, experts
are warning that Serbia should avoid heavy borrowing for
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Fic rEcommEndationS
funding construction works and instead should provide all necessary
preconditions for partnership with the private sector in
the realisation of these fundamental endeavours. It is expected
that the enactment of new PPP and Concession Law scheduled
for the autumn of 2011 will bring more PPP investment in
this area in Serbia. With this Law in place, investors will have a
more precise and thorough legal framework governing PPPs in
Serbia, which will, hopefully, attract more of them as potential
partners to the government (both central and local).
Another issue in this area is the very high road tolls which deter
freight transport from Serbian routes. Although road tolls are
now equal for domestic and foreign vehicles, they are still significantly
higher than in the neighbouring countries, which has
resulted in a decrease of transit tourism revenues since the bulk
of the (primarily) freight transport has moved to Romania and
Bulgaria, where road tolls are lower. The investors who would
participate in PPP projects have to count on steady revenues
from road tolls for a return on their investment. Serbia also
failed to introduce a cheaper and more efficient system of vignette
(toll) stickers, implemented throughout Europe instead
of road tolls. It is disturbing that every few months the road administration
calls for increase of already high road tolls.
Increase funding of maintenance and rehabilitation of major roads in order to stop the long- term deterioration of
the road network;
Increase efforts towards boosting institutional reform and capacity building in the area of infrastructure, with focus
on transport;
Upgrade the quality of the national road administration to enable it to provide an adequate institutional framework
in this area;
Increase efforts towards private sector development and increase private sector participation in the construction of
major roads and railways in Serbia;
Increase efforts to minimise public costs of the reforms by charging users wherever reasonable and through increased
private sector participation wherever there is a sufficient scope for competition;
Set up an efficient road user toll system in Serbia and decrease road tolls in order to bring back transit tourists (passenger
and cargo vehicles) to Serbian roads, or introduce the “vignette” sticker system instead of the toll-road system.
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