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A project of European Unions TRACECA programme

Motorways of the Sea for the Black Sea and the Caspian Sea

Road MAP

March 2011

This project is funded by the European Union

A project implemented in association by

Motorways of the Sea for the Black Sea and the Caspian Sea

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Egis Bceom International in association with Copetrans, Italferr, Euro-Ukraina Consulting

Table of Contents
1 2 3 4 5 Introduction and general objective ................................................................................................... 2 Background, principles and general guidelines for the development of MoS Pilot Projects............ 3 Implementation of MoS Pilot Projects: Specific objective and activities .......................................... 6 Extension of Motorways of the Sea................................................................................................ 12 Dissemination of MoS concept, design and technicalities ............................................................. 14 5.1. Objective in relation to MoS criteria .......................................................................................... 14 5.1 5.2 5.3 5.4 5.5 5.6 Commercial conditions / market expectations .......................................................................... 16 Project partnership.................................................................................................................... 18 Port conditions .......................................................................................................................... 19 The facilitation challenge .......................................................................................................... 24 Railways integration in MoS projects........................................................................................ 24 Inland Waterways ..................................................................................................................... 24

5.8. Project financing ....................................................................................................................... 26 6 Motorways of the Sea and other TRACECA related programmes ................................................ 28 6.1 At regional level ENPI / TRACECA / all Countries ................................................................... 28 ENPI................................................................................................................................. 28

6.1.1 6.2

In the Region and at national level for some beneficiary Countries ......................................... 30 TRACECA........................................................................................................................ 30

6.2.1 7

Matrix of Activities .......................................................................................................................... 31

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Introduction and general objective


This Road Map for the future developments of MoS pilot projects has been prepared in the final stage of the MoS I program with the following general objectives: o o Implement and establish the first Motorways of the Sea pilot projects; Prepare the development future of Motorways of the Sea within the Black Sea and the Caspian Sea.

The goals of Motorways of the Sea defined as high quality door-to-door maritime intermodal services are: o o Modal shifts and cohesion through the concentration of freight flows; On sea-based routes using improved or new viable, regular and frequent maritime links.

The general objective of this document is to lay down concrete proposals resulting from: o o The team permanent contacts with the users and operators throughout the project; The lessons learnt from the preparation of MoS Pilot Projects, as regularly reported and assessed by MoS stakeholders and pilot project partners who participated and, for some of them, were involved in the design, pre-feasibility and feasibility studies of these Pilot Projects; The conclusions and recommendations of the TRACECA Regional Meetings on Motorways of the Sea until the meeting of 11 February 2011; The feasibility conditions of the five Pilot Projects assessed at this latest meeting.

o o

Consequently, the Road Map is based more particularly on: o o The first draft lines of the Road Map as set out for the Brussels TRACECA Regional Meetings on Motorways of the Sea of 29 June and 11 October 2010; The proposals and suggestions received during the project period up to February 2011 from stakeholders of project Countries, represented by participants from each Country at these regional workshops; Three sets of reports and studies prepared by the project team in coordination with Pilot Project partners and stakeholders:

MoS Country reports describing the pre-MoS conditions in each country, synthesised in SWOT analyses and technical notes on barriers and expectations from the trade side; Thematic reports for all MoS relevant issues of trade and transit and for all beneficiary Countries of the project. Feasibility studies for each MoS Pilot Project approved in February 2011.

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Background, principles and general guidelines for the development of MoS Pilot Projects
Historical background: o The Black Sea Basin is and has always been an open area. Its bordering Countries - direct and associated beneficiary Countries of the MoS project -, have a long common history, culture and trade traditions. Being the European gate of the Silk Road, close to Western Europe, and even part of the EU today for some of them, they are committed to adapt to their specific environment within the scope of regional / inter-regional and international policies, including TRACECA and EU Neighboring Policy programs. Boosting their everlasting relations at bilateral and regional levels and stimulating their trade with other continents and ties to the global economy should result from new modern transport solutions, particularly for high value cargo carried in intermodal transport units, - rail wagons, containers and trailers. In comparison, the closed Caspian Sea is looking like a remote and close area. Ecologically endangered, it much resembles a regional playground surrounded by its five coastal Countries and beyond in Central Asia. The question of the property of resources of the oil-rich sea remains a cause for distrust between these relatively young and promising markets. Besides, specific rules, practices and behaviors are less favorable than in the Black Sea to the revival of the "Silk Road spirit" adapted to the global economy. In this context, and as a consequence of the afore-mentioned differences between the two sub-regions, it is a big challenge for the TRACECA programs to establish attractive sustainable intermodal transport schemes and solutions along the whole TRACECA corridor, between the "West of the West" of Black Sea and the "East of the East" of Caspian Sea, which is the key objective of MoS projects in the region.

Economic traits: o The Countries around the Black Sea have limited commodity resources and financial statebacking, so they must remain pragmatic, skilled and competitive to support their economic balance and growth. Private operators (shipping companies, ports, transport logistics providers) are leading the game there, whereas the public sector is dominant and holds control of the market in the Caspian; The general shipping tradition and culture and some leading transport companies working at advanced standards of technology and organization are located in several parts of the Black Sea, whereas the business drivers in Caspian Countries are oil and gas, or mineral and grain (Kazakhstan), hence transport networks and policies which primarily based on the optimal production and export of these commodities.

Institutional patterns: o The feeling of belonging to a community is much stronger among the Black Sea neighbors than among the Caspian Sea Countries. This results in regular exchanges and meetings at the highest level of the States. Numerous bilateral and multilateral agreements have been signed. Private, public and mixed forums and governmental and non-governmental cooperation bodies are at work. Sizeable common projects in the transport industry including infrastructure are being carried out. Transport-related agreements exist and the Country members seek to enlarge/strengthen/improve them. All international agreements have more or less been ratified everywhere and all Countries have joined the relevant trade, Customs and transport (including safety matters) organizations. However, the Black Sea countries have been sitting in international bodies for a long period of time already and are therefore well-acquainted with the purposes, contents and constraints of these Treaties so they can implement them more easily at their national level, whereas the enforcement of the increasing number of changing agreements and regulations at a national level in the Caspian countries obviously needs more time.

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Consequently: o The need for involvement and support of Ministerial offices in favour of the TRACECA MoS is not the same in the two Seas: - Though desirable in the Black Sea, it does not represent the essential pre-requisite condition for the successful implementation of pilot-projects and it could focus more on the support to project promoters to solve or reduce administrative or similar "soft" type difficulties; On the contrary, nothing seems achievable in the Caspian without the strong willingness, formal approval, and sustained commitment of the authorities at the highest level of the States to establish most of the MoS project conditions; Infrastructure development is definitely a major issue for all Countries; it is dealt with at the highest levels in the frame of the general national transport strategy and policies. In that sense it is beyond the objectives and scope of MoS projects, albeit these projects should pave the way for modernized intermodal maritime transport solutions and, reciprocally, benefit from the future new facilities. All Countries have not the same level of awareness about their asset management: - Where resources are scarcer the organization and management issues matter more and the cooperation between public and private sectors is encouraged. A technical assistance program like MoS which mainly deals with such issues is therefore perceived in a positive manner and better fitted for short term completion and full implementation of projects; On the contrary where the infrastructure is less developed, missing, obsolete or not used at an optimal level, building new infrastructure is the very first priority on the agenda. The benefits of such technical assistance programs, obviously less visible, and not always immediately understandable, are lying more in a gradual process: several part solutions which have been identified as feasible in the short term should sustain the preparation of enhanced projects when the new / updated infrastructure is ready. As a result of the above situation the projects are in fact of a different nature:

Pilot projects in the Black Sea


These projects are discussed first and foremost between private operators: o o UkrFerry and Navibulgar and the ports, for the Varna-Illyichevsk-Kerch-Poti-Batumi one, UkrFerry, Navibulgar and Samsun port for the Illyichevsk-Samsun-Poti-Batumi project

Based on the operators' market knowledge, the needs have been identified and the projects therefore relate exclusively to purely technical matters: o o o o Acquisition of new container handling equipment, Rehabilitation of wagons, Rehabilitation of port rail ramps, Trade facilitation matters.

The very same applies to the non-TRACECA Istanbul-Constanza Ro-Ro project: o o The discussion is between the Turkish trucking association UN-Ro-Ro and the Port of Constanza, The issues are road permits, commercial tariffs and border crossing facilitation.
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Governmental Authorities have already brought their official support and help to improve the projects in all above cases and this will be all the easier as the intergovernmental working frame already exists and functions, which is a fundamental asset in case of difficulties.

The Container Block Train pilot project


This is a middle case: o o o o It links a Black Sea Country and a Caspian Sea Country, It lies in the backbone of the TRACECA Corridor connecting the two seas, A joint transport cooperation committee has been very recently set-up under the auspices of the Presidents of both Countries, Pushing supports at the political level are needed in order the necessary coordination between the two main involved stakeholders (i.e. the Georgian and Azerbaijan National Railway Companies) can start and an action plan can be further implemented, To work out an attractive solution based on experience of similar cases and on the users' requirements to give their support and commitment, the involvement of an independent company having a deep professional experience of block train operations seems to be necessary.

Pilot projects in the Caspian Sea


o The important point is the strong market demand and potential. In actual facts the users (Turkish business associations) are ready to participate in the implementation of the projects, bring their know-how and experience and even possibly support the operation financially. Stakeholders at the operating level (Ports and Shipping line) are all showing good will and understanding. The main issue remains to ascertain if and how much the pilot projects fit in with the national economic and transport policies set up by the Authorities at governmental level in the concerned project Countries.

o o

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Implementation of MoS Pilot Projects: Specific objective and activities


The priority objectives are to implement the Pilot Projects which passed the pre-feasibility and feasibility phases within the framework of the first Motorways of the Sea Project (MoS I) and to set up concretely the concept of Motorways of the Sea in the TRACECA Region, in accordance to the key objectives, features and criteria retained at the first stage of the project: o To establish a safe, modern, efficient and environmentally sustainable maritime based intermodal transport schemes to attract cargo flows from the dominant all road routes North and South of TRACECA corridor; To develop a seamless interconnectivity between maritime transport, ports and land transport, prioritizing railway and inland waterways (this latter mode being less ready than the former: see below); To help the next project (MoS II) in the elaboration of a program of actions not only for the implementation and consolidation of Pilot Projects but also to set up and launch new Pilot projects and to prepare future developments.

Note: it is worth noting that the assessment of the feasibility conclusions at the TRACECA Regional Meeting of 11 February 2011 is not a complete final clearance of the Pilot Projects: as reported in the conclusions of the meeting below, these are still subject to essential conditions and commitments that must be confirmed by key stakeholders.

QUOTE
The fourth TRACECA working group on the Motorways of the Seas in the Black and Caspian Seas Project - held during the final presentation of other EU-funded Projects Inland Logistics Centers in Western NIS and Caucasus, Inland Logistics Centers in Central Asia and Strengthening of Transport Training Capacity in NIS Countries: o Reviewed the final assessment from the feasibility studies conducted over the period November 2010- January 2011 for the draft pilot projects which had been retained after the th pre-feasibility assessment of the third meeting 11 October 2010 and the conclusions of the study on Ro-Ro services for Turkey; Emphasized the positive results achieved in disseminating the MoS concept and working on reducing barriers hampering competitive and attractive intermodal transport solutions in the TRACECA region and on raising awareness and interest for Pilot Projects from direct key stakeholders; Welcomed the final assessment from the feasibility studies, including the recommendations and the key pre-conditions for each of the projects; Agreed that five pilot projects of the short list have significant potential to fulfill the MoS criteria, hence these projects are considered feasible, however for certain of them subject to certain pre-conditions to be met before the start of the pilot projects; Encouraged and supported the ongoing and scheduled direct negotiations and discussions between key operators and appreciated and welcomed the contributions of the TRACECA National Secretaries in creating a favorable environment for such talks; Noted with a high interest that in this pilot phase projects could be developed using existing infrastructure and transport means meaning that direct added value should be drawn from projects if successfully implemented;

o o

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Understood that some investment needs are required to sustain projects and recommend that the finance raising for these investments should follow during the next project alongside the technical assistance activities; Agreed to include the present conclusions of the meeting in the Road Map for the development of Motorways of the Seas in the Black and Caspian Seas; Welcomed the Georgian invitation supported by the European Commission to organize the 5 TRACECA working group on Motorways of the Seas in the framework of the follow up project in Tbilisi preferably around the beginning of July 2011;
th

o o

Thanked the expert team for its excellent contribution as a key facilitator towards the results of the project.

Final assessment from the feasibility studies


1. The project Varna Ukrainian Ports Georgian Ports is considered as realistic and feasible as it meets most criteria and conditions: o o o o o Based on existing service supported by Authorities within frame of governmental agreements and operators' Joint Venture; Longstanding experience with fair market bases / knowledge; Technically well prepared, with identification of operation solutions and equipment needs to improve efficiency and quality; Benefits of increased cargo volume and consolidation of freight on the axis and linked corridors are expected from higher regularity; Added value for end users, maritime operators (same vessels), ports terminals (existing infrastructure), and railways companies (infrastructures and network connections).

Recommendations:
o o o o o o Prioritize the objective of service regularity and target fixed day service to meet customers' expectations; Involve more the Railways companies in their double quality of operators and users of maritime services; Continue between all concerned stakeholders to work out cost / tariff issues and progress towards competitive gate-gate prices (port-THC / sea freight / port-THC); Elaborate promotional plan including market targets; Define performance targets and indicators within the technical agreement under negotiation and monitor service performance; Strengthen high level official approval and longer term commitments within the frame of the existing intergovernmental agreements.

Key preconditions
o The formal involvements and firm commitments by high level Authorities of concerned Countries, materialized by inter-governmental and technical working agreements;

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2. The new Black Sea Ro-Ro + Rail ferry Project Ukrainian Ports / Samsun (Turkey) / Georgian Ports under preparation seems feasible (depending on tests): o o Fair and fast track preparation by / with Samsun port and involving interested key partners of the existing service High market potentials at inter-regional crossroads in Turkey

Recommendations:
o o o Prepare action plan based on results of tests and customers' interest to integrate Samsun calls in service schedule with the key objective of regularity; Focus on best relevant trades and target optimal cargo mix fitting with vessel regular schedules and yielding best freight value; Work out attractive cost / tariff conditions for the 3 techniques and for each segment from / to Samsun, benchmarking existing tariffs on other cross Black Sea routes (Turkey Ukraine and Turkey Russia); Elaborate promotional plan including market targets; Define operational targets and performance indicators and monitor the service performance.

o o

Key preconditions
o o The formal involvements and firm commitments by high level Authorities of concerned Countries, materialized by inter-governmental and technical working agreements; Complete the short term tests of port operations and vessels' calls and evaluate the results.

3. The Inter-Seas Project Train Poti Baku container block train is technically feasible but commitment of key partners needs further materialisation. o o o o o with existing infrastructure and equipment operated by the two National Railways Companies; long awaited service (since earlier discontinued experience) by container carriers (beyond NATO users) who need regularity and competitive tariffs to use the corridor by Rail; high level intergovernmental agreement to develop the railways corridor; progressively set up door-to-door schemes for containers with East Caspian Sea, and create new containerization opportunities; Contribute to alleviate road traffic along the Central Caucasus corridor.

Recommendations:
o o o Focus on shuttle-type regularity and frequency to meet required quality conditions; Adopt service operational and commercial conditions in close liaison with the small number of high potential users; Agree, within the framework of bilateral Committee, an action plan for the establishment of a regular block train, including a transparent monitoring scheme with targets and performance indicators; Elaborate promotional plan including market targets; Define performance indicators.

o o

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Key preconditions
o o o Confirm commitment of all key public and private partners to the project; The formal involvements and firm commitments by high level Authorities of concerned Countries, materialized by inter-governmental and technical working agreements; Short term establishment of bilateral committee to materialize high level Agreement enabling inception of block train Agreement under ratification process.

4. The Transcaspian Baku Aktau project is commercially feasible but subject to commitment of key partners o o o Noticeable increase in rail ferry trade in 2010; Actual and potential concrete demand on the truck (Ro-Ro) and container markets (beyond NATO); Targeting first a reasonable share of Ro-Ro (trucks) and container trade fitted to current capacities for which predictability of intermodal transport service in essential to test reliability and; Using existing rail ferry service and Ro-Ro vessel and upgrading port call organization with the aim to offer regular schedule; Prepare future Ro-Ro operations with new Ro-Ro freighters to meet more volumes.

o o

Recommendations:
o o o o o o Translate the ongoing improvements in the service (resulting from conjonctural opportunities) into firm commitments at high State level; Focus on regularity through a close coordination between the two ports and the maritime company; Plan implementation of practical measures to set up regular operations and services starting with reduction of waiting times of vessels and trains in ports; Pilot project solutions to be retained and adapted for large volumes when future port infrastructures are ready in both ports; Elaborate promotional plan including market targets; Establishment of a joint Committee involving all key partners for the implementation of the pilot project, including the definition of targets and a transparent performance indicators scheme.

Key preconditions
o o Confirm commitment of all key public and private partners to the project; The formal involvements and firm commitments by high level Authorities of concerned Countries, materialized by inter-governmental and technical working agreements.

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5. The Transcaspian Baku Turkmenbashi project is commercially feasible but subject to commitment of key partners o o actual and potential concrete demand on the truck (Ro-Ro) and container markets; targeting first a reasonable share of Ro-Ro (trucks) and container trade fitted to current capacities for which predictability of intermodal transport service is essential to test reliability and; using existing rail ferry service and Ro-Ro vessel and upgrading port call organization with aiming at offering regular schedules; Prepare future Ro-Ro operations with new Ro-Ro freighters to meet more volumes.

o o

Recommendations:
o o o o o o materialize interest and intentions to develop cooperation and partnership through formal agreement at high State level and technical bilateral Committee for operational matters; focus on regularity through a close coordination between the two ports and the maritime company; plan implementation of practical measures to set up regular operations and services starting with reduction of waiting times of vessels and trains in ports; pilot project solutions to be retained and adapted for large volumes when future port infrastructures are ready in both port; elaborate promotional plan including market targets; Establishment of a joint Committee involving all key partners for the implementation of the pilot project, including the definition of targets and a transparent performance indicators scheme.

Key preconditions
o the formal involvements and firm commitments by high level Authorities of concerned Countries, materialized by inter-governmental and technical working agreements;

Conclusions of Turkey Ro-Ro study


Black Sea o o o The Turkish Ro-Ro market is showing maturity with new developments resulting from good practice of combined users' and operators initiatives; Examples: Tekirdag Yuzhnyi new service (Jan. 2011) and Pilot Project Samsun Ukrainian ports and Georgian ports; The idea of a coastal Ro-Ro services Istanbul / Marmara Sea ports Georgian ports has been considered by users and operators as not commercially and economically viable since not competitive vs all road transport; The strong market demand from Turkish users and operators for Turkey Constanta Ro-Ro link being outside the scope of the current MoS will be included in Road Map for further consideration within the next MoS project or through other appropriate channels.

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Caspian Sea o The strong market demand from Turkish users is representing a strong commercial market basis for the corresponding Transcaspian pilot projects, beyond the existing vessel type capacities; Contacts are established between Turkish users and operators and key stakeholders in Caspian project Countries.

Recommendations o o o receive official confirmation of high level commitments to support implementation of pilot projects with the involvement of Turkish stakeholders materialize the interest and intentions of participants to develop actual cooperation and formal partnership through corresponding technical agreement follow up of planned meetings between regional stakeholders

UNQUOTE

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Extension of Motorways of the Sea

The above recommended actions on the implementation of Pilot Projects (MoS I) are for the short term. The extension of Motorways of the Sea and new projects are more for the midterm, after a period of preparation. The principle of this schedule should be consistent and in line with the duration of the contract (MoS II). Lessons expected from the Pilot Project implementation

The essential conditions to be met for the implementation of the selected Pilot Projects are those of each and all feasibility studies, as reported in the above conclusions of the TRACECA MoS meeting of 11 February 2011. The technicalities of these conditions are found in the individual project feasibility reports. Most expected decisions and planned activities are detailed in these reports and will clearly result from the description of each feasibility condition. Several of those conditions pertaining to the fields linked in V. below could be replicated in future projects. The issue of investment financing will require a particular attention. Pilot project operators are keen to know what type of needs could be financed, by what source, and under what conditions. The results obtained in this field with the help of the Technical Assistance project team will be important for the development of pilot projects and new projects. "Fund finding" and assistance to prepare subsidy or loan applications in accordance with the financing institutions processes and procedures should be the case for a specific activity. Extension of MoS concept to new beneficiary Countries (direct and associated)

In parallel to the technical assistance activities which will have to be fine-tuned for these actions, new activities of awareness, promotion and mobilisation should be launched in Countries which were not or less directly associated in the MoS I project. This should start with the non beneficiary Countries of MoS I, namely Moldova as a Black Sea Country and all direct and associate beneficiary landlocked Countries. Proposals for future projects

The identification of potential markets and feasible links within the scope of MoS I can be considered as complete and exhaustive enough to cover all existing and possible port-to-port links in the Black Sea and in the Caspian Sea between direct beneficiary ports Countries as well as between the two seas with the container block train project, albeit other technical schemes could be envisaged on this latter axis. Whichever the above limits, it will be useful to seize the opportunity of the new project (MoS II) to update the answers to the following questions that were raised during the (MoS I) project about: New routes linking associate beneficiary Countries which were not directly eligible to the technical assistance of MoS I and other TRACECA / EU funded projects. This concerns more particularly: o the project of a Ro-Ro link Turkey / Romania launched at the end of MoS I for which both TRACECA National Secretariates asked some form of integration in the Black Sea MoS network; the demand expressed by the TRACECA General Secretary to include Moldova in the next (MoS II) Technical Assistance program; the ways to integrate inland / landlocked Countries in MoS projects through improvements in port-inland transport and border-crossing points; the possibility to work on maritime links between beneficiary / non beneficiary country ports within both the Black Sea and the Caspian Sea, some of which being strongly supported by stakeholders of direct and associate beneficiary Countries (Bulgaria / Russia / Iran, Turkmenistan / Iran).
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More and better connections between the whole TEN-T and TRACECA Transport Networks and Motorways of the Sea projects are required by connections between TRACECA General Secretariat and by the European Commission for the development of MoS projects. This was taken into consideration during the MoS I project, but without any significant move, except: o o when checking that ports of MoS projects are duly acceptable as gates between inland routes of the Transport Network and the sea; in the particular case of the pilot project involving Ukraine, which has planned to look for synergy with the Viking (and similar South-North) Railway service.

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Dissemination of MoS concept, design and technicalities

5.1. Objective in relation to MoS criteria


As shown in the impact assessment report, and confirmed at all TRACECA MoS meetings, there is now a sound degree of awareness and mobilization among stakeholders of beneficiary Countries of the first project (MoS I). However it must be observed that: o o o o o information should be maintained and enlarged when new staff responsible are designated in each Country; a high level of mobilization is needed with the support of TRACECA National Secretaries the market side, - users and operators - must be convinced at all times, the best of arguments being the implementation of pilot projects designed taking the demand into due account; all stakeholders of the new beneficiary Countries must be informed and made aware of the concept and value of Motorways of the Sea; Indirect stakeholders or observers whose views and position could be of importance, for instance from the financing sector should be also informed regularly and associated in certain cases.

Action fields The following is a synthesis of the recommendations retained for all pilot projects and for the future in the main domains of Motorways of the Sea, as first reviewed in the series of thematic reports and relevant to the approved characteristics and criteria, then deepened in the case of feasibility studies. o o o o o o o Potential trade market report and its annexes (July 2010) Report on Facilitation in all countries (July 2010) Legal environment synthesis (July 2010) Railways thematic report (July 2010) Report of Inland waterways (July 2010) MoS Market approach (July 2010) Port and Maritime links (July 2010)

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MoS criteria 1. Partnership o Three levels National partnership: key stakeholders Bilateral: between stakeholders of: land neighbouring Countries port linked Countries. Regional:

between stakeholders of all concerned Countries contribution to TRACECA network.

Involvement of institutional stakeholders - Political support Public stakeholders' involvement.

Operation and commercial partnership: - Between port operators both sides of sea links and with maritime operator (a pre-requisite). With other market and operation players.

2. Market relevance o o Shared awareness and understanding of market expectations and challenges. Competitiveness vs all land corridors.

3. Quality criteria o o Organization of operations and services Maritime Ports Intermodal Indicators and milestones

4. Facilitation o Domains - Port transit procedures and controls o Inland border crossing Indicators and milestones

5. Maturity / Visibility o o o Existing / current situation Plans before / after pre-feasibility Perspectives

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5.1

Commercial conditions / market expectations

The Pilot Projects designed and studied thoroughly until approval at the MoS Regional Meeting of 11 February 2011 have proven market potentials and existing demands. The commercial and competitive market conditions identified to capture a share of these potentials are recalled hereafter. It will be of the utmost importance that a regular follow up of these conditions is conducted during the implementation phase of pilot projects. The approach might be improved then for the next projects based on these experiences. The market approach carried out with market players throughout the project has ascertained the following basic expectations and requirements from the users' and transport operators' viewpoints. These should be retained to guide the MoS implementation and developments. Attractiveness o Reliability The transport chain must be seamless and remain fully operational throughout the whole transport operation. The service established should be closely/regularly monitored in order the solutions retained to eliminate or reduce the factors of irregularity remain efficient / are timely and successfully adapted as well as to create a ready mechanism for solving unexpected difficulties. o Predictability The components of the offer, on the basis of which the transport operation is performed in terms of mode of transport, costs, transit-times, legal and regulatory frame (customs procedures, administrative and other formalities of all kinds), must be always and easily accessible, transparent, precise and without unexpected (or unexpectedly changing) conditions (including of public tariff levels). Operators and users should timely exchange information between them and anticipate measures to limit the impact of delays or other problems. o Safety The safe delivery without damage, loss or theft of the cargo to the final consignee must be a guarantee of the MoS product service. o Information Cargo-owners and their contractors must be sure that the information is clear, complete and unaltered during the movement of the cargo. The status and location of the cargo must be determined and known easily at all times along the chain.

Competitivity

It was made clear in the preparatory phase that existing commercial conditions should be improved to make the project and TRACECA corridor competitive versus the overland corridors from / to inland (West and East of Black Sea), in port transits, and at sea. This implies that: o o When aggregated, tariffs must be trimmed at levels comparable with those of competing alternatives; Integrated door-to-door transport offers should be aimed at and progressively implemented in order to facilitate for customers the comparison with all land transports and help them make their decisions easier and quicker; Transit-times must be reduced to the lowest / most adapted levels, end delivery time must be forecasted and kept as precisely as possible;
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Export, import and transit customs procedures and all other administrative formalities must be easy to understand, simple and consume as less time as possible. Complexity must be reduced when and wherever applicable.

To ensure the sustainability of the pilot-project all these conditions must remain valid over fixed periods of time and be changed only with due and sufficient notice to all users. As far as feasible the consultative advice of the users should be taken into account when working out and implementing changes, whichever the nature of these changes.

MoS indicators o MoS pilot project partners have agreed on the principle to keep indicators in order to follow the implementation and development process of their project. This will be all the more necessary as the MoS approach and method aim at adopting improved competitive solutions matching the dominant land corridors. o The outstanding questions are: - identifying key indicators how to adopt and how to apply improvements confirming these improvements are successfully leading to the desired effects This should be addressed in the very short time, together with the partnership agreement below, and involve the key project operators, namely the maritime companies and port operators as the core MoS partners. o It is suggested that the KPI list is not too lengthy or complex, and should rather cover the essential conditions and factors and be of easy use. Pilot project partners should be assisted by the project team in the selection of the most relevant, adequate and feasible KPIs to be chosen among the best practitioner' measuring tools. o o A reporting process should be adopted simultaneously.

The following "board" type to monitor the price / cost advantage of competing corridors vs MoS pilot project should be updated regularly.

From MoS Point A Point B Haulage cost Port handling costs (Point A) Sea-freight Port handling costs (Point B) Haulage cost TOTAL MoS COST COMPETITION / LAND CORRIDORS Eastbound

TO Westbound TOTAL

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5.2

Project partnership
Cooperation between key stakeholders is a success key for the implementation and development of Motorways of the Sea. A one-sided or non-collaborative behavior is a major cause of failure of several unsuccessful MoS experiences in other regions. The project Team (MoS I) prepared in the feasibility phase the structure of a draft memorandum of agreement to be used as a model for MoS project partnership. It is recommended to avoid an excess of formalism for these agreements in consideration of the following: o Motorways of the Sea are primarily operators' projects, irrespective of their public or private status; the draft agreement structure is open to operating partners, prioritizing project ports and maritime carriers. as stressed in the conclusions of the TRACECA MoS Meeting of 11 February 2011, the involvement of high level officials is most necessary to support MoS projects, but this does not imply for them to be part of technical or commercial agreements. Bilateral or multilateral cooperation and letters of endorsement would be much more important. single and clear commitments by these operators as well as indicators and milestones (action plan) will be a guarantee of the shared willingness to implement action.

MoA / MoU structure.

1. Context and objectives References of Motorway of the Sea Pilot Projects. General objective: a technical / operational Agreement

2. Core partners / operators' side Role of all and each partner

3. Institutional partners and supports Transport Institutions Other sectors f.i. customs National and regional Authorities

4. General terms of agreement 5. Technical agreements (examples) Operations and services Procedures and I.T. solutions Marketing

6. Partners' commitments 7. Action plan 8. Exchange of information 9. Monitoring: Indicators and milestones
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10. Reporting Performance-related information: traffic, transport conditions, etc. partnership's achievements on-going developments and prospects updated action plan including solutions

11. Promotion / Communication 12. Financing 13. Contacts

Annex: Documents attached to the Memorandum of Understanding

These documents are to specify the technicalities of the project and attach letters of support, related agreements, technical notes etc. Indicative examples of specific technical agreements: Agreement between Port Authorities Exchange between Custom Authorities Information system agreement Operators / users contract model (Ex: service contract draft)

5.3

Port conditions

The following lists of measures concern each MoS related project port. This way to detail the activities has been retained in consideration of the importance of ports in Motorways of the Sea, as the node where all intermodal operations, services and formalities must be improved significantly in a MoS perspective.

AKTAU (Aktau International Sea Commercial Port)


Keep in touch regularly with AISCP and the MoT of the Republic of Kazakhstan regarding port planned developments and contemplated allocation of berth facilities at the proposed new port and revamped existing port, Assist the promotion of a more structured + effective relationship between AISCP and CASPAR, Based on the reciprocal commitment from CASPAR to issue regular sailing schedules, strive to obtain a permanent berth priority for the existing rail-ferry service at the rail ferry ramp, With the support of Turkish truckers associations, keep on raising awareness about the substantial Turkish demand for Ro-Ro services via Baku, underlining the need for easy / predictable / reasonably-priced port transit procedures (including Customs),

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Endeavour to obtain AISCP principle agreement to the allocation of a dedicated berth and a corresponding priority for this Ro-Ro service, Assist AISCP in nurturing the growth of containerization in conjunction with Baku/ Alyat and Turkmenbashi, Initiate discussions with the Aktau Economic Free Zone, assess and monitor the potential effects on the sea-borne trade to/from Aktau, Maintain and develop contacts with freight-forwarders based in Aktau.

BAKU (Baku International Sea Commercial Port CASPAR)


Considering the overall growth of the traffic, the development of the container trade based on the NATO traffic (although unwanted and due to political reasons only), the planned developments at Alyat on one hand and the on-going plans at other Caspian Sea ports and fleets on another hand, assist CASPAR in changing its market approach, developing a marketing capability, introducing free-market economic concepts in its management methods, getting ready for outside competition and altogether improving the efficiency of its performance, Induce BISCP / Alyat together with CASPAR to respond now to the demand of the Turkish truckers for efficient / scheduled Ro-Ro services to /from Turkmenbashi and Aktau, Get the same stakeholders to start discussing, now, also, with Turkmenbashi (TISCP) and the SSMR of Turkmenistan to check if and how CASPAR existing service and the Turkmen proposed Ro-Ro line could be operated complementing each other in order to ensure the smoothest and most efficient possible use of respective port facilities and the best possible service to customers, Assist BISCP and CASPAR in nurturing the growth of containerization in the Caspian in conjunction with AISCP and TISCP, Assist BISCP and CASPAR in nurturing the growth of containerization in conjunction with ADDY with a view to attract/diver international container flows via Alyat through the Poti-Baku-Poti Block Container Train, To this effect, assist BISCP, CASPAR and ADDY in establishing a permanent dialogue with the Global Container Carriers, Permanently gather and up-date traffic data and prospects helping CASPAR redefine the fleet needed to cover present and future MoS transport demand to/from Baku/Alyat and accordingly raise IFIsawareness and interest as/if and when needed, Help averting any operational gap between running down operations at Baku port and the start up of Alyat, Maintain and develop contacts with freight forwarders based in Azerbaijan.

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TURKMENBASHI (Turkmenbashi International Sea Commercial Port State Service of Maritime and River Transportation of Turkmenistan)
Keep in touch regularly with TISCP and the SSMRT of Turkmenistan regarding port planned developments, especially the Ro-Pax terminal, Ro-Pax fleet acquisition and contemplated implementation of service to Baku and Anzali, Promote a more efficient coordination between the Railways of Turkmenistan, TISCP and CASPAR with a view to optimize the use of the railferry ramps at Turkmenbashi and reduce the duration of railferry calls, enabling CASPAR to run a regular schedule, perform a greater number of voyages and free space for additional rolling cargo, Follow-up and assist if/as/when needed in raising IFIsinterest in the rehabilitation of the second railferry ramp, Raise awareness of the progressive siltation of the lengthy approach channel that now has only just sufficient dredged depth to accommodate the current ferry vessels, and assist in obtaining IFIssupport if/as/when needed, With the support of Turkish truckers associations, keep on raising awareness about the considerable Turkish demand for Ro-Ro services via Baku, underlining the need for easy / predictable / reasonably-priced port transit procedures (including Customs), Assist TISCP and SSMRT of Turkmenistan in nurturing the growth of containerization in conjunction with BISCP and CASPAR, Initiate discussions with the Avaza Economic Free Zone, assess and monitor the potential effects on the sea-borne trade to/from Turkmenbashi, Maintain and develop contacts with freight-forwarders based in Turkmenistan,

POTI (Poti Sea Port)


Continue discussions with Poti Sea Port regarding provision of appropriate Ro-Ro / railferry berth facilities at the proposed new port and revamped existing port, Promote Ukrferry and Navibulgar fixed liner schedule initiative, ensuring the coordination between shipping, port and railway operators is enhanced, Reassess port handling tariffs for TIR trucks to promote sea transport versus driving overland, Considering: o o o Poti Sea Port has already attracted 7 out of 10 of the worlds major container shipping lines, Vessels of up to 1,000 TEUS can already be handled at the rehabbed berth number 14, The new North port construction where vessels of up to 6,000 TEUS could be berthed - is scheduled to commence later in 2011 with the initial phase scheduled for completion in 2014 The growth of containerization needs to be continued to be promoted. However, a vast majority of the inbound containers are currently stripped in Poti and cargo reloaded into covered rail wagons because this is reportedly easier, quicker and cheaper than railing full containers to final destination. While NATO non combat containers bound for Afghanistan (via Baku / Aktau / Hairaton) are regularly carried on non scheduled block trains, attempts by GR and ADDY to run commercial block trains have so far failed. This further fosters the afore-mentioned container misuse hampering the development of containerization at Poti.
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Technical meetings should therefore be organized between all concerned stakeholders (including main users) for the purpose of making the carriage of containers by rail more attractive and competitive, Reassess port tariffs (Disbursement Account) for container vessels (calling at the existing facility and forecasted to call at the new Port) taking into account: o o The tariffs of other ports around the Black Sea, especially those which have served or still serve as hub ports (Constanza, Turkish Maramara) for feedering containers to/from Poti, The resulting cost per each handled box based on the total volumes handled per call,

Initiate discussions with the Poti Economic Free Zone, assess and monitor the potential effects on the container trade to/from Poti by sea and overland through Caucasus, promoting rail carriage inasmuch as feasible.

BATUMI (Batumi Sea Port - Batumi International Container Terminal)


Continue discussions with Batumi Sea Port and BICT regarding provision of appropriate Ro-Ro / railferry berth facilities, Promote Ukrferry and Navibulgar fixed liner schedule initiative, ensuring the coordination between shipping, port and railway operators is enhanced, Reassess port handling tariffs for TIR trucks to promote sea transport versus driving overland, Keep in close touch with and assist all local, national and foreign business associations and public organizations involved in the process of reforming the Georgian Customs system to: o make the Customs Code easier in terms of procedures (aiming, in particular at reducing the paperwork/number of required documents to perform the clearance of the cargo) and unequivocal, bring it in line with European standards and international conventions and treaties signed by Georgia (WCO in particular).

ILLYICHEVSK / ODESSA / YUZHNIY (TIS) / KERCH


Preamble The Ukrainian multi-port system of Illyichevsk (Black Sea terminus of the TEN-T corridor IX), Odessa, Yuzhniy (TIS) and Kerch account for the vast majority of the total relevant MoS trade volume handled at Ukrainian ports. Kerch, in the Crimean Peninsula, is the first deep-sea port at the mouth of the Azov Sea and primarily serves all the heavily industrialized Eastern Ukraine, break-bulk commodities being the main cargo (over 60% of the port trade is coal and coke). Ukrferry having built a ramp, the port started receiving railferries in October 2007. The development of TIR truck would call for significant investments in adhoc parking areas outside and inside of the port. This last one seems however hardly feasible owing to the layout of the port area. The 3 other ports, the biggest in Ukraine, are located along the Black Sea Coast over a total distance of 62 km only. None of these ports is specialized: all 3 of them can handle all types of cargo, bulk, roll including car-carrier- and container, with the notable exception of rail wagons which are handled at the Illyichevsk Ferry Terminal only. As a result, and although Illyichevsk and Odessa are still State run (Yuzhniy belongs to private company TransInvestService), ports compete for a share in all segments of the shipping market. Odessa however is at a disadvantage due to the location of the port right in the center of the city.

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One of the recurrent reasons given by users for receiving their cargo at one port rather than another is a variable customs approach (i.e. a different reading of the Customs Code resulting in a different level of duty and taxes) depending on the type of cargo between the various port Customs offices. Given the above and taking into account the already existing well-developed infrastructure and the significant on-going and planned investments in all ports (for instance, Ilyichevsk Port Authority, with MoT approval, has designated a substantial area to be made available for a multimodal rail ferry / RoRo and container terminal able to handle 120,000 Teus plus 10,000 trucks per year with a berthing place of 240 metres long at 12.5m draft between berths 25 and 26), the MoS port issues to be addressed at Ukrainian ports and activities to be performed relate mostly to regulatory matters: Keep in close touch with and assist all local, national and foreign business associations and public organizations involved in the process of reforming and straightening the Ukrainian Customs system to: o o improve Customs officers and Customs brokers vocational training (including compulsory periodical up-dates and exams), make the Customs Code clearer, easier, unequivocal and predictable in terms of procedures (aiming, in particular at reducing the paperwork/number of required documents to perform the clearance of the cargo) and costs, bring it in line with EU standards and rules and international conventions and treaties signed by Ukraine, introduce a real risk-management system entailing a shorter dwell of the containers in ports, allow as swift transhipment of containers at Ukrainian ports as at other Black Sea ports,

o o o

Reassess port tariffs (Disbursement Account) for container vessels taking into account: o The tariffs of other ports around the Black Sea, especially those which have served or still serve as hub ports (Constanza, Turkish Maramara) for feedering containers to/from other Black Sea ports, The resulting cost per each handled box based on the total volumes handled per call,

Initiate discussions with the MoT in this respect to check how/if Ports could be given a freer hand in their commercial deals with mainly Ship-owners, Follow-up the development of container feeder services from Ilyichevsk and/or Odessa up the Dnepr River.

VARNA
Assist in obtaining IFIssupport for the needed revamping of the Varna Ferry Complex, Keep in touch with users and public organizations concerned with and involved in improving Customs officers vocational training (especially regarding EU standards and rules), Follow-up possible railferry service development with Turkey, Follow-up possible developments of Ro-ro and container trades along the Danube.

CONSTANTZA
Follow-up the recent implementation of the Ro-ro (TIR truck) service with Turkey (Pendike), Follow-up the development of the AGRI (LNG) project and its possible impact on the implementation of a railferry service with Georgia, Follow-up the development of existing container services along the Danube.

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5.4

The facilitation challenge

All stakeholders are fully aware trade and transit procedures and formalities can be major barriers that might hamper the development of Motorways of the Sea in general and more particularly in the TRACECA region and it is firmly recommended: to insist on these issues in all activities of the implementation and developments of MoS Pilot projects, to recall the challenge to reduce the complexity and difficulties which are not faced to the same extent by the competing land corridors, with: o the number of Border Points (BCPs) in ports and on land routes along the transport chain. The number of B.C.Ps in a single sea service is two (2), but the cargo carried by inter-seas services linking Western Black Sea Countries and Eastern Caspian Sea Countries must pass through a minimum of five (5) BCPs and more in the case of longer multicountry transit (e.g. at EU border) trades; the number of modal movements, handling and intermediate operations taking place along sea based transport chains, commonly three (3) transfers plus minimum six (6) handling operations (on / off) plus two (2) storage / terminal transit waiting's in the case of a single sea leg, and more in the case of the inter-seas link; the difficulties leading to actual barriers which have been identified, analyzed and discussed with operators and users, and practical solutions including legal measures and IT solutions being prepared in project Countries.

The Technical Assistance required in this field will have to be re-assessed regularly in all beneficiaries Countries with a particular focus on issues concerning neighboring Countries and sea linked Countries and ports.

5.5

Railways integration in MoS projects

Railways operators have been associated in the preparation of MoS pilot projects when these projects are involving Rail ferries and of course for the Container Block Train project. As explained in 5.2. above (Market expectations) and in the thematic report on Railways, the role and functions of these companies in Motorways of the Sea projects are to ensure the most efficient and attractive intermodal / co-modal conditions, through: Adequate capacities in terms of infrastructure and equipment. Organisation / management of operations. Coordination between themselves at bi/multi lateral levels. Cooperation with port terminals and maritime companies.

5.6

Inland Waterways

The specific study conducted on the existing and planned River transport systems and organisations in and between Project Countries concluded that Inland Waterways could not be included in Pilot Projects at this early stage of Motorways of the Sea in the TRACECA region. This study (website ...) comprises an assessment of the situation and analyses the possibilities of MoS-type solutions integrating Inland Waterways, as also explored in field missions and discussions with national and regional stakeholders.

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The main conclusions for the potential development of MoS as door-to-door maritime based intermodal transport chains using inland waterways are that the key operational criteria of Motorways of the Sea should be worked further for: Intermodal transport units, dedicated to container first, or to a cargo mix of containers and other unit loads. Regular services / preferably fixed day. Optimal located river ports and seaport connections. Integrated operations services, information system and marketing between river and seaports. Quality factors of competitiveness and attractivity.

Opportunities for future development of MoS type projects should be explored for both: Sea-river (single leg) services linking inland ports and sea ports in the Black Sea, the Caspian Sea and between the two seas through the Volga-Don Complex. Inland River + maritime transport (two legs).

The opportunities for the three rivers / inland navigation systems of the region are all the more significant as: These systems are the most advantageous in environmental terms and, They may become a real economical alternative to all road transport, Several first market potentials have been identified.

The Dnepr
The challenge for inland navigation on the River Dnepr in relation to MoS projects lies in the rehabilitation and upgrading of port facilities, navigation, equipments and operations to restore the credibility of river based transport solutions in line with the main MoS characteristics. Unless innovative and dynamic operators are investing in this type of projects, the high scepticism and weak cooperation between stakeholders will be the first barrier to overcome before working more concretely at real developments.

The Volga-Don Complex


The challenges here will be: To clarify some conditions of utilization of these non-TRACECA waterways. To update the information and preliminary work on the pre-feasibility conditions for seasonal (not year round) regular services linking the Caspian Sea and the Black Sea. And more particularly to test the demand side's interest in spite of the inactive season.

The Danube
Although the Danube was not in the direct scope of the MoS project, opportunities for the development of MoS-type solutions should appear progressively clearer, mainly for containers, with the ongoing investment programme for river port facilities and the extension of the Inland Waterway system in the delta.

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5.8. Project financing


The investment sheet below was designed to describe the possible investment needs directly related to MoS projects. It was filled for each MoS Pilot Project in liaison with their key promoters based on the following principles and grounds: o Motorways of the Sea are not infrastructure projects. As organizational and operational on maritime based intermodal transport solutions, MoS are utilizing the existing main ports, railways and road infrastructure, and vessels are not considered as infrastructure. Future MoS developments should benefit from ongoing or planned infrastructure developments, particularly for ports and railways (and inland waterways in a longer term), and MoS projects are designed in turn to bring the benefits of their expected efficient and competitive practices to these new or upgraded facilities.

As a consequence, MoS investments are of a particular nature, for a shorter term than for infrastructure, and should rather help to meet the project characteristics. Generally and for all projects, stakeholders and experts have identified the following types of investments, among which each project had its own specific needs: o o o o o adaptation / upgrading of existing port and intermodal facilities purchase or adaptation of transport units and handling equipments inland facilities: dry ports, container depots and associated to logistic centres IT systems and solutions - hardware and software Related training assistance.

The next project team (MoS II) will be in charge of the follow up of the financing of these investments, as well as possible new requirements.

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INVESTMENT SHEET

MOS PILOT PROJECT

COUNTRIES

1. Objectives of investment in relation to MoS pilot project

2. Type and Description of the Investment

3. Project partners
MoS project Project Investors

4. National stakeholders support

5. Current status / Maturity

6. Indicative cost

7. Financing sources
Self financing External funding

8. Expected effect on MoS project

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Motorways of the Sea and other TRACECA related programmes

The MoS initiative is related to earlier and ongoing transport projects which have been taken into consideration and account during the pilot project preparation phase as much as they might inter-act and benefit from each other, and when national / country stakeholders suggested so. The main following links between MoS projects and other programme have been identified for this Road Map ^

6.1
6.1.1

At regional level ENPI / TRACECA / all Countries


ENPI

Support to the Integration of Ukraine in the Trans-European Transport Network, TEN-T


(2008-end 2011)

Providing assistance to the MTCU in achieving a closer harmonization of transport policies and practices should bring positive results for freight transport services by all modes and, by strengthening the links with the EU, improve Ukraines transit transport potential. The project also aims promoting a wide range of transport modernization issues that cover such areas as multimodal transport, cross-border transit arrangements and the all-important area of logistics and ensuring that Ukraine has well trained people in the right positions in every transport mode. Given the geographical location of Ukraine at the mouth of the Pan European corridor number IX, reaching the afore-mentioned goals is crucial for the sustainable development of MoS links through the Black Sea and, more generally, for the efficient operation of the TRACECA corridor .

Ukrainian ports strategy development and feasibility (as part of the above-described project)
(2008-end 2010)

The overall objective of the project which is to contribute to the development and promotion of transport on a west-east axis from Europe, across the Black Sea, through the Caucasus, across the Caspian Sea to Central Asia by developing ports on the corridor IX in Ukraine, improving logistics capabilities, interoperability and multimodal transport falls completely in line with the MoS one. The project aims at reducing ports congestion, increasing the carrying capacity of rail, road and logistical corridor connections to ports, optimizing the ports' cargo handling capacities and improving cargo handling efficiency to enable them to handle increased traffic volumes, reduce ship waiting time and associated costs. All these are major concerns for the implementation of attractive and competitive MoS solutions whereby the corresponding barriers have been addressed by the MoS I project and will have to be addressed by the following projects.

Support to Integrated Border Management Systems in the South Caucasus (SCIBM)


(2009-2012)

Encouraging closer inter-agency (such as the Border Guards and the Customs Authorities) border management cooperation, at national, bilateral and regional levels and between the countries of the South Caucasus region, EU Member States and other international actors in order to facilitate the movement of persons and goods, is of fundamental importance for enhancing the performance of the backbone of the TRACECA corridor. More harmonized procedures and better information flows facilitate easier and therefore quicker crossing of borders. And predictable + guaranteed transit-time whether at sea or ashore (in ports, overland) is a key component of MoS solutions.

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The SCIBM, apart from training on Integrated Border Management at executive level and promoting strengthened bilateral cooperation between Georgia and Armenia and Georgia and Azerbaijan in areas of export/import declarations, risk analysis, primary and secondary control standards and identification of fraudulent documents, also launched pilot border crossing points that implement activities on the borders, in areas such as mobile checks (train or ferry) and implementation of risk information exchange systems which bear a close and direct relation to the MoS I pilot projects, especially the Block Container Train Poti - Baku - Poti. The development of containerization in the Caucasus and beyond to Central Asian countries is one if not the main stake for the TRACECA Program as it does not result in higher cargo flows only but also in a progressive modal shift from road to rail transport and has therefore a vital and highly need in this part of the world - ecological and economic impact. However, it primarily depends upon the fluidity of the borders. Owing to the short duration of the MoS I project and rather long time taken by the stakeholders in designing the contents of the pilot projects, the issue of cooperation between border-controlling agencies, users and operators and the need for a much improved EDI network has been identified only at a very late stage. It is therefore recommended the next project team liaises with the SCIBM and pays special attention and efforts to scrutinizing these questions and bringing forward adequate, reasonable proposals in order a number of the already selected MoS I pilot projects can be implemented.

EC multi-country cooperation instruments for reform and transition processes: TWINNING The experience of MoS I evidence that, given the lasting heritage of Soviet Union and specific cultural traits of the Caucasian and Central Asian countries, a number of public sector transport operators are in need of new ideas and concepts to design and plan their future in order to integrate the global economy. Developing structural reforms is a matter of survival for some of them. Nevertheless the adaptation of existing systems or implementation of new ones call for a guiding partnership with and transfer of expertise from EU public enterprises and bodies which already went through the same process. Railway and shipping companies seem to be the most likely candidates. TWINNING has been successfully implemented with candidate countries in the past including in the transport industry. It would therefore be worthwhile the next project team checking the possibility and willingness of a number of public stakeholders such as GR, ADDY and CASPAR to apply for the benefits of TWINNING with a view to a quicker and sustainable implementation of the already selected pilot projects in which they are involved.

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6.2
6.2.1

In the Region and at national level for some beneficiary Countries


TRACECA

1. Practically all TRACECA past and on-going projects relate to MoS. 2. Recent projects, such as Land Transport Safety and security - which include all TRACECA direct beneficiaries as well as associated countries - as well as Maritime safety Black Sea and Caspian Sea and Strengthening of Transport Training Capacity - which both also include Turkmenistan - support the implementation of the very basic frame of global, state-monitored reliability needed to build confidence and attract users to ship via the TRACECA corridor and therefore potentially use MoS-related transport solutions (likewise the Civil Aviation Safety and Security project is of paramount significance for the International Logistics Centres projects). 3. Former ones, such as Aktau Port Development, Master plan and feasibility study for Port of Aktau in Kazakhstan and Navigational Channel for Turkmenbashi Port respectively completed in 2008 and 2007 addressed maritime technical issues which remain unfortunately unsolved and still represent challenges for the implementation of MoS pilot projects. 4. Among on-going projects, Transport dialogue and interoperability between the EU and its neighbouring countries and Central Asian countries (2009-2012) aims at facilitating cooperation in the field of transport through capacity building and training measures, developing transport forecasts and investment appraisals and promoting effective regional transport dialogue among the TRACECA countries and between them and the EU. 5. The Traffic Forecasting and Database is a long-awaited measurement tool for effective trade and transport forecasts, which could prove useful for planning MoS developments in the future.

The Interregional Transport Dialogue is meant to strengthen regional transport cooperation through developing coordinated strategies. Along the same lines, the design, development and implementation of any MoS project implies the mobilization, shared willingness and views, sustained commitment and interactive dialogue of a great number of stakeholders at national, bilateral and regional levels: MoS pilot projects each involve minimum 2 countries and usually many more as a rule. Indeed the geographical scope of any such project reaches far beyond the ports it is linking. As an example the development of containerization into Central Asia through the TRACECA central corridor requires the set-up of a seamless uniformly-standardized transport chain through 3 to 5 countries. This can obviously be achieved only through a close regional cooperation. Finally there is an evident potential synergy between MoS and the recently completed projects, International Logistics Centres for Western NIS and the Caucasus and International Logistics Centres for the Central Asian countries (ILC). All 3 projects had the same overall objective of supporting international trade and facilitate the movements of goods along the TRACECA corridor through improving logistics capabilities, interoperability and multimodal transport. The target groups of stakeholders included, in all three projects, the same entities (MoTs, Customs Authorities, public and private transport operators - Ports, Railways, Trucking companies, freight forwarders and national and international business associations - main users). And they also included either the same or widely converging tasks such as an extensive review and analysis of the ports infrastructure and management and their hinterland connections (road, rail, inland waterways), an identification and description of main issues encountered by operators (legal framework, customs, technical standards, public policies, training and capacity building) and corresponding recommendations for the improvement of condition of performance of logistic activities.

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Where MoS is aiming at the development of efficient inter/multimodal sea-links based on the market demand, ILC primarily rely on efficient hinterland connections to major economic centres. Together they represent the core components of the TRACECA intermodal transportation network. The work performed separately by the MoS and ILC projects to help improve the asset-management of the existing infrastructure, up-grade its condition and develop new one, and enhance the performance of the whole transport and logistics operation through the implementation of new or revised economic, legislative and administrative concepts and rules, is therefore reciprocally beneficial for both. The set-up of an efficient, sustainable, integrated multimodal transport system is also necessary to give a number of countries directly or indirectly (with no direct access to open seas such as Caspian bordering countries) landlocked in the TRACECA region, an alternative for their foreign trade through new hubs and routes. This seems feasible capitalizing on MoS and ILC achievements. Being located in existing or planned ports and capital cities (which could be connected by regular block trains), the projected Logistics Centers in the TRACECA countries will form cornerstones to achieve the critical mass by feeding additional cargo flows and allow high service frequency that is essential to the success of the MoS links.

Matrix of Activities
(See following pages)

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Project partnership & cooperation


Objectives Ministerial / institutions level Obtain as supportive endorsements, encouragements and involvement of high level officials. Official letters with clear endorsements and commitments as agreed at TRACECA MoS Meeting February 2011, with dissemination at Ministry and possibly public stakeholder's level. Coordination by / with TRACECA National Secretaries. Involvement of TRACECA ISG. Needs / requirements Activities Expected results

- Reference frameworks helping to


enforce project implementation and development.

Establish cooperation between institutional stakeholders.

- Possibility to retain this reference


vis--vis Ministries / institutions in case of administrative difficulties or delays.

Project partnership operators and users level Structure MoS pilot projects partnership. Adopt milestones, indicators and follow up method.

Formal agreement (MoA / MoU) general framework technical annexes Short list of easy concrete indicators to monitor performance and quality. - Plan steps for implementation of project measures. interoperability. - Interconnections into / with TRACECA and TEN networks.

- Assistance to complete draft MoA


and specific project technicalities annexes. - Sustained support and follow up of project developments. - Regular milestones through previously agreed periodic project meetings and reporting.

- Implementation

/ development planning based on commitments, milestones and indicators. - Regular reporting / progress review and technical notes on difficulties and solutions.

Multimodal interoperability operability and network connections / integration.

- Global attractive and competitive Objectives to be pursued in the frame


of all activities of the Road Map.

- Synergies with network related


programmes of TRACECA, EU / ENPI and EU programmes.

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Marketing / Commercial conditions


Objectives General market knowledge Update statistical review. Fine-tune trade forecasts in relation to TRACECA data basis. Needs / requirements Activities Liaison with IDEA / general TRACECA forecasts / database. Expected results

- Extend

study of MoS trade potentials for new project Countries. - Update statistics for all project Countries. - Compare and harmonize traffic forecasts. - Prepare a synthesis of existing potentials and forecast based on reliable statistical analyses, hypotheses and scenarios.

-Availability of regularly up dated


trade and traffic data: - General, use for institutional stakeholders. - Close to market changes and trends, for project operators. - Synthetic clear and concrete forecast figures to support pilot and future projects.

- Meet
Follow market demand and expectations.

end users' and intermediaries' expectations to utilize MoS project axes and solutions.

- Extend contact lists of large


users: shippers, traders, forwarders, Road hauliers. - Annual survey of market conditions.

- Update

contact list for all Countries. - Knowledge of market conditions, changes and trends, focusing on door-to-door prices and cost structure. - Assessment of MoS competition position and other attractive factors.

Promote MoS projects and solutions.

- General promotion. - Specific supportive marketing.

- TRACECA Web site and MoS


link. - Participation in regional transport logistics events. - Tailor made activities to support individual pilot projects.

- Dissemination of information
on markets.

- Involvement

/ possible commitments of large users.

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Port conditions
Objectives Improve conditions project: Port transit of each Pilot Needs / requirements Activities Expected results

- Implement pilot project solutions.

- Involvement / commitments of
project port partners as assessed by performance indicators.

- Implement

and develop the upgraded or new conditions of projects.

In all port related fields involving vessels, cargo and intermodal operations.

- See Road Map and conclusions


of TRACECA MoS Meeting February 2011 for specific technical, operational and commercial conditions expected from project ports.

- More and better awareness of


inland stakeholders on the importance of the role of ports.

- Extend good practices for other


MoS (non-project) ports.

For duplication of MoS port conditions.

- Work at harmonizing: common /


shared project ports conditions. - Solutions and good practices.

- Information and awareness of


stakeholders of new project Countries including landlocked Countries.

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Integration of railways in MoS projects


Objectives Involvement of Railways transport system and network in MoS projects and more generally in intermodal sea based in transport schemes: for MoS pilot projects for new project Countries for future projects Needs / requirements Activities Strengthen or establish contacts and consultation: - Between Railways, Ports and maritime Companies. - Between Railways Companies concerned by pilot projects. - With intermodal railways based services as relevant (f.i. Viking). Expected results

- Identify

better the role and potential contributions of railways in the development of projects. - Share information; reach common assessment of barriers or other difficulties. - Work jointly on pilot project solutions.

- Higher involvement of Railways in


MoS projects "from Railway station to Railway station". - Improved transport of freight by rail from / to inland and land locked markets of new project Countries.

Integration of inland waterways in MoS projects


Objectives Prepare future MoS projects using Inland Waterways. Needs / requirements Activities stakeholders in each concerned Country to explore conditions and improvements needed for: inland ports river / seaport connections potential operators Expected results

- Pre-feasibility

conditions of transport schemes integrating Inland Waterways + Sea + other land modes. - Based on knowledge acquired in beneficiary Countries. - To be identified for new project Countries.

- Contacts with Inland Waterways Technical / commercial conditions for


pre-feasibility / feasibility of projects integrating river and canals: for existing Pilot projects for future projects

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Facilitation
Objectives Assess / re-assess the technical assistance (T.A.) needs in facilitation fields including: Legal measures IT solutions Needs / requirements Update review of barriers resulting from complexity / lack of clarity in procedure, formalities and controls: based on an synthetic survey of all MoS pilot projects and other TRACECA projects. for ports as operations and border crossing nodes. for land border crossing points. along the physical and non physical (information / procedural) transport chain. Activities Expected results

- Regular re-assessment with MoS


I Pilot Project Countries. - Assessment with national stakeholders of new project Countries.

- Clearer

views and shared knowledge / understanding of the facilitation challenge to reduce complexity of multi-country intermodal sea + land based transport chains. - Focus on common key difficulties.

Work on details of framework and practical solutions reducing complexity in order to establish attractivity of MoS intermodal operations and services.

- Liaise at national and regional


levels with: - Ministerial and other institutional structures in charge of facilitation professional bodies. Trade and transport associations: Chambers of Commerce (national, bilateral, ICC). Integrate facilitation issues in the mechanism to solve difficulties of Pilot projects.

- Good

practices method and output at national, regional (TRACECA) and international levels.

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Fund finding solutions for MoS related investments


Objectives Follow up and support finance raising for MoS related investment needs Needs / requirements Activities Expected results

- Information on subsidy or loan


sources, project eligibility and procedural process - Specific requirements for each pilot project: See pilot project feasibility studies and conclusions of MoS Meeting 11 February 2011

- Identify

financing sources, channels and contacts (EBRD...) - Clarify eligibility conditions and funding process

- Support implementation of pilot


projects - In case of success (depending also / more on other supports than project): - Stimulus for the development of projects Positive signals for MoS Pilot and future projects.

[Ref: Decision of TRACECA MoS Meeting 11 February 2011]

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