The Slovenia Times

Railway still a bottleneck



The only concern for the future of port is satisfying these expectations and needs. The vision of Luka Koper, the operator of Slovenia's single commercial port, is to become the leading port and logistics system servicing the countries of Central Europe. Their development strategy originates from this demand. To achieve this goal, a new developmental step forward is needed to assure sufficient operational capacities, the best technological solutions and rational work organization in the basic activity.

"The activity on the stock exchange validates our development strategy. Our ambitious plans are reflected in enviable growth of our stock's exchange rate and the movement of our stocks to the elite first Stock Exchange quotation. The reputation and appeal of Luka Koper is growing among investors," explained Tatjana Jazbec, PR representative of the firm.

Last year's business results of Luka Koper are good. A new record throughput of 14,030,732 tons was achieved. The threshold of 200,000 standard shipping containers (or their equivalent) was also surpassed: last year's figure was 218,970 standard containers, loaded and unloaded. With 399,099 vehicles, Luka Koper almost reached a new milestone of 400,000 units. The record throughput contributed to another landmark in port railway transport: 173,667 wagons were loaded and unloaded in Luka Koper by December 31. Last year, the record traffic for the Hungarian market, amounting to 1,121,047 tons, was beaten. Another record was broken by the 2,262 vessels visiting the port of Koper last year.

"Growth of throughput in the port of Koper proves the trust of our customers, our reliability and adaptability to customer's needs. Luka Koper is systematically building such a reputation by striving for business excellence, also acknowledged by international assessors," commented CEO of Luka Koper Robert Časar.

For this year's first quarter, Luka Koper posted operating revenues of EUR 28.7m, up 14 percent compared to the same period last year. Sales on foreign markets accounted for 78 percent of total operating revenues. Net profit increased by 28 percent, reaching EUR 5.4m. Earnings before depreciation and amortisation (EBDA) were 32 percent higher than on the same period last year, at EUR 10.95m. Shipping was up two percent and amounted to four million tons of cargo. The shipping of containers increased by 38 percent, and the shipping of cars was 18 percent higher.

New business
The port operator plans to increase shipping of cars, containers, general cargo, fruit and vegetables. Luka Koper is planning to increase annual shipping to 25 million tons, including 700,000 cars, once it extends the two existing port piers and builds a new one. According to Časar, the extension of the first pier was to be completed by the end of the year. Extension of the second and construction of a third pier depend on the national zoning act, though Časar does not expect any difficulties with its adoption. Luka Koper also plans to build the biggest multi-story car park in Slovenia with a capacity of 12,000 vehicles.

Last year's highly successful operation complements the realization of the long-term strategy, adopted in April. "Last year's record throughput has been reached on account of those quality cargos, defined as one of our goals in the strategy," explained staff. In particular, cars and containers were highly valued.

The amount of shipped containers in the future will increase, since last year Luka Koper signed an agreement for cooperation with 13th biggest port in the world, Malaysian Port Klang. The container traffic between the two ports should reach 100,000 containers in a few years.

The logistic business with Korean partners for shipment of KIA cars will also contribute significantly. It is planned to ship 100,000 cars per year from a Slovakian factory through Koper to customers all over the world.

An important contract with two leading Israeli exporters of fruits and vegetables was signed last June. There is also new business in sight as Luka Koper has the opportunity to become a distribution centre for Argentinean goods.

Luka Koper and three Korean companies have established a logistics company to distribute iron products to countries of Central and Eastern Europe. The newly established Posco Europe Steel Distribution Center (POS-ESDC) was set up by Luka Koper, which holds a 10 percent stake, and Korean companies Posco, Daewoo Logistics in Daewoo International. It will build distribution centres in Koper and Sežana.

"The contract, signed with four of the world's largest steel companies, means up to half a million tons of steel per year, intended for automobile industry in the Czech Republic, Slovakia and Slovenia. The Koreans decided for Koper after a long term search for the port that best met their needs," Časar explained.

Major plans for a passenger terminal
The railway remains the bottleneck, since too little cargo is transported too slowly by rail. Luka Koper's business significantly depends on railway, since it transports 65 percent of their cargo. Upgrading of the track between Divača and Koper, including improved signalisation and electrification of the track, and the planned construction of a new two-track railway, would mean an increase in capacity by 30 percent, allowing Luka Koper could increase their total shipping by 20 percent. This should be sufficient for six years. This will be finished by 2008 and the connection to Hungary is planned to be upgraded by 2013. A new track between Divača and Koper will be finished by 2015. This will solve the problem, since the capacity will have more than doubled and the speed of transport will be much greated. This is a long-term solution to the problem of rail connection from Luka Koper to hinterland.

For the investment in equipment and facilities, EUR 79.5m is budgeted for this year, and some of important investment like new multi-story car park and highway connection to the port entrance will be carried out soon. Work on new embankment for container shipping will also start as will a roof for the European energy terminal. The purchase of real-estate in Sežana was also very important for the realization of Luka Koper's long term development strategy.

"We plan to gradually establish shore terminals on other perspective locations in the states of our broader hinterland," said Jazbec. Extensive investment, such as the extension of two piers and the construction of the third pier, will be needed to change the structure of throughput.

Another major project in the port of Koper is a passenger terminal, which is expected to accept between 20,000 and 30,000 passengers this year. Luka Koper has been working on this project along with the Transport Ministry and Municipality of Koper; a modern passenger terminal, comparable that of Venice, with all necessary facilities for passenger reception and ship supply is being constructed. Because of its location, accessibility and other advantages Koper is an interesting boarding port for Adriatic and Mediterranean cruises. The gradual introduction of liner traffic, which would connect Koper with tourist destinations in the Adriatic and Mediterranean, is planned. The whole terminal area encompasses 15,000 square meters, 2,700 square meters of this is already complete. This year, 10 ships will dock a total of 70 times. Luka Koper plans to establish a passenger line between Koper and Athens, as the passenger terminal in the port could accept more than 100,000 passengers. A new line between the Black Sea, Greece and the port of Koper will be launched.


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