Pirot getting logistics center with intermodal terminal – Value of investment EUR 13 million, opening expected in 2019
(Photo: Federico Rostagno/shutterstock.com)
Pirot Free Zone has been achieving one great result after another for years, which has recently been acknowledged by the renowned magazine Financial Times. In order to make itself even more attractive to investors, it is planning to raise a logistics center along the current railway, eKapija learns. The investment has been estimated at a total of EUR 13 million.
The future center will spread over 38 ha and contain a rail cargo terminal, a logistics and industrial part. The logistics facilities will be located in the section with privately owned warehouses, whereas the industrial section will be able to accommodate both the light industry and the medium industry. More precisely, there will be no limits for companies wishing to operate in the center.
Pirot Free Zone, as well as the local self-government, are buying off land in the area meant for production activities and logistics, developing and providing the area with electricity, water, sewer, roads and lighting in order to sell the land to private investors.
The rail terminal is supposed to have dimensions similar to that of Metrans AS Kosice in Slovakia. Two tracks with 304 m of length each and another one with 548 m of length will be completed in the first phase, enabling the construction of the fourth track and extension of the terminal to 700 m in the future.
The plan is for the railway to be able to take trains with the length of 600 m without maneuvering.
The basic type of cargo expected at the terminal is a standard container, but the terminal will be designed to accommodate other types of cargo as well, especially general cargo and bulk cargo.
Capacity of around 100 containers a day and reception and reloading of an intermodal train
At the moment, there is already a mini terminal with a logistics center in Pirot Free Zone and there's a nucleus of transport, which will increase further with the development of logistics.
– This was the idea when we were starting the project, as the current capacities are not sufficient and a so-called bottleneck is created. All the parameters, such as the number of trucks, the amount of goods, the number of trains used as the starting parameter in the 2013 feasibility study along with the planned annual increase have been exceeded by far, which shows that we are doing a good job and that there's a real need for the construction of a new, modern logistics center with an intermodal terminal – says Dragan Kostic, director of Pirot Free Zone in his interview for eKapija.
As he explains, a pre-study and a feasibility study for the project were prepared, showing good results and proving the feasibility of the entire project. As well, the complete planning documentation was prepared, from the inclusion of the LCP in the Law on Spatial Planning, through the General Urban Plan, to the Detailed Regulation Plan. The project was introduced to the System of Long Listed Advanced Infrastructure Projects (SLAP), the first unified online database of public investment projects in municipalities and has been topping the business infrastructure project list for some time now.
– In the period ahead, we need to prepare the buyout of the land, partly by expropriation, partly by direct bidding, as well as to prepare the project-technical documentation. The entirety of the project belongs to the municipality of Pirot and is in charge of the Ministry of Economy, which is negotiating, along with the Ministry of Construction, Transport and Infrastructure, with the EU Delegation to Belgrade, through the European Integration Office, on the financing of the project – Kostic says.
Around 50-70 tracks leave and 15-20 enter Pirot Free Zone a day, whereas the railway transport is at a level of 1,000 cars and 1,500 containers a year. The planned capacity of the logistics center in the first phase should enable the reloading of around 100 containers and the reception and reloading of one intermodal train. For the sake of comparison, the Port of Burgas in Bulgaria has 3 intermodal trains a week. The capacities have been carefully proportioned and will enable a constant development of the entire area for a number of years.
Value of investment EUR 13 million, opening in 2019
According to the feasibility study and the proposed manner of financing, the total value of the project is EUR 13 million. Grants by the EU in the amount of up to EUR 7.6 million and national co-financing of nearly EUR 3 million (the government and the ministries) are expected, whereas the rest is to be financed by the City of Pirot. In addition to the financial aspect, the city is to oblige to solve the issue of the buyout of the land prior to the beginning of the realization – our interviewee says.
He adds that he can't say anything about precise deadlines for the realization of the project at the moment.
– The plan is to complete the project-technical documentation and acquire the land through the buyout and expropriation processes in 2017 and to reach an agreement between the Serbian European Integration Office (SEIO) and the European Commission Delegation to Serbia on the financing of the project at the end of next year. The construction of a terminal and the procurement of equipment take at least two years and it is not realistic to expect the center to become operational before 2019.
It is only after the terminal has been built that it will be known who will be running the center.
– It's a great advantage that the City of Pirot will own the terminal following the construction and that the selection of the operator will be carried out through a public invitation and most probably through a public-private partnership. This is important because all logistics centers operate with losses in the first few years and it is necessary to subsidize their operations. After several years of operations, the turnover of goods increases and logistics centers start making returns on the capital invested. This is why we've decided to realize the LC Pirot in stages in order for it to start operating as soon as possible and for the necessary subsidies to be as low as possible. In the initial stages of the terminal's operations, the support of the state is also needed through railway operators and terminal handlers and they can all contribute, through the much needed cooperation, to the terminal's reaching its planned capacities and start operating with profit for its owners – Kostic concludes.