Danube regulation: submerged plans

Deals

Improving shipping conditions of the Danube would greatly contribute to the competitiveness of the country, but the government has decided to focus on preserving the natural environment instead of developing freight shipping.

Back in 2005, when preparations for improving the navigability of the Hungarian section of the Danube were started, no one argued that this was necessary. Now, however, a lack of consensus is slowing things down.

Before taking over the EU presidency, Hungary claimed at the end of 2010 that the Danube strategy would be a key priority during its six months in the hot seat. The EU commission’s Danube strategy aimed at improving navigation and cleaning up pollution on Europe’s longest river, involving some 14 countries through which it flows. But in March this year, state secretary in charge of environmental protection Zoltán Illés announced that Hungary has decided to pursue a green Danube strategy that focuses on preserving the natural environment, rather than developing freight shipping.

Illés said that Hungary has no Danube fleet and developing freight forwarding on the river would mainly serve German, Austrian and Russian interests.

“Instead of adjusting the river to boats, the boats must adjust to the river,” Illés said, emphasizing that the river bed will not be excessively swept and new dams will not be built.

Stirring up the water

The statement from the state secretary caused turmoil amongst players on the freight shipping market. “Hungary would be paralyzed without transport and logistics, so maintenance of our main waterway should be a priority,” Botond Szalma, president of the Hungarian Shipping Association said.

In Hungary, favorable shipping conditions exist on 200-250 days a year only, instead of the 300 that would be optimal for logistics firms. This causes extra financial burdens for freight forwarders, but on top of that, if plans for improving navigation aren’t submitted by the end of November, Hungary has to pay back more than HUF 1 billion in EU funding it has already received for the project, according to a recent article by Hungarian business weekly HVG.

Planning improvements to navigation on the Hungarian Danube started in 2005 when the transport ministry assigned a consortium led by Vituki Nonprofit Kht with completing a feasibility study. That study, along with environmental assessments and technical plans, was submitted on time, but the process came to a standstill in March after Illés refused to issue further permits for realizing plans to resolve depth and width at pinch points along the river.

According to expert calculations, losses caused by reaching the optimal navigation conditions result in decreased competitiveness.

For ideal freight shipping conditions, a consistent depth of 2.5 meters is required; it is only around 2.1-2.2 meters at the moment, depending on weather conditions. The lack of depth caused a total loss of €27.4 million in 2009, of which €15.1 million hit ship owners and €12.3 million was burdened on freight owners, said Attila Bencsik, president of the Association of Hungarian Inland Freight Forwarders.

 

BOX

By connecting the Danube to the 170 km long Danube-Main-Rhine Canal in 1992, a 3,300 km inland waterway system – Europe’s longest – was established. One significant section – the middle part – runs via Hungary. Thus, the condition of this section substantially influences utilization of the entire waterway. The Hungarian-Slovakian and the Hungarian stretches of the Danube currently do not meet navigation requirements applying to the Danube. Present transport of goods on the Danube is only 10-15% of the potential capacity. The Danube would be capable of bearing ten times more traffic than currently, both in the number of vessels and in the quantity of goods transported. Compared to the regulations of the United Nation’s Economic Commission for Europe, depth and width restrictions need to be reckoned at nearly 50 spots, which considerably hinder the utilization of the waterway.

 

TABLE:

 

Freight shipping on the Hungarian Danube section

                                                                                  number of ships          forwarded freight

In 2009 (with average river depth of 2.1 meter)           4996                           4.8 million tons

Potential with the desired 2.5 meter depth                    3630                           an additional 665 tons

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