faces up to the challenges of the future

Co Administration of Kosovo - Resurrecting the Economy - Building the Future -
Order & Legislation in the Banking and Insurance - The roads to Europe -
The Backbone of the new economy - Kosovo's gold - Telecomunications - Privatization


Mr. Zef Morina, Minister of Transport, Telecommunication and Post of Kosovo

Infrastructure development is perhaps the number one priority that Kosovo must satisfy in order to move forward with the many other pending structural economic issues that it has to resolve. As Mr. Zef Morina, Minister of Transport, Telecommunication and Post of Kosovo states; "the current state of the road infrastructure in Kosovo is in pretty bad shape; it goes without saying that its improvement will be our priority number one. (.) The direct impact of the improvement of infrastructure will be tremendous to the economy of Kosovo, it is more than necessary, and it is essential."

The first serious project study after the war regarding road infrastructure deficiencies and needs in Kosovo was, the Master Plan for Maintenance and Development of the Kosovo Road Network for the period 2001-2010. It was financed by the European Agency for Reconstruction. Partly involved in compiling data for this project was also The Ministry of Transport and Communication and Directorate for Roads

The Balkan Regional Transport Infrastructure Master Plan lays out the necessary steps needed for the development of Kosovo´s road network, and it includes a long-term plan. The study of the state of transportation infrastructure of the Balkans, TIRS (Balkan Regional Transport Infrastructure) is still in the process of being completed. This plan however does not foresee Kosovo being connected within the major arteries of quality Pan-European corridors of transport. This is regardless of the fact that integration of Kosovo within the European road network is very suitable due to its location by virtue of the obliged transition point it represents for many goods origination from the Far and Middle East to and from Europe, as well as being a major hub within the Balkan region. Kosovo currently has about 647 kilometers of main roads; there is an additional 1278 kilometers of regional roads, and above 5 thousand kilometers of local roads. This road web was mainly built and properly maintained until the year 1990, the foundations of most of the main roads is estimated to be in good condition which makes their rehabilitation more affordable and speedy. After the war came the realization of the first three year Project of an Urgent Road Intervention (2000,2001,2002) for the maintenance and rehabilitation of approximately one thousand kilometers of roads. The first results were seen through the monitoring of the traffic and burden of the road network of Kosovo. The study ordered and financed by the EAR shows that in the main and regional roads there are 90-100 thousand cars circulating per day and with weight above what was foreseen in projects (10 tones in spindles). This means that the solution for the strategy for the main plan for maintenance and development of a road network must be found and that is the main goal of the project. But Kosovo lacks quality roads, their structure is unfavorable. The main roads are in somewhat better conditions but they represent only 11.5% of the total road network. The weakest point of Kosovo´s road system is its poor connection with neighboring countries, especially with regards to transit of international corridors within its territory.

There are twelve projects ready for the development of the communications network including road, railway, air, Post and Telecom, which is among the strategic priorities of development of Kosovo towards its integration within Europe. The under development state of the communication network has various basic necessities that must first be addressed and resolved to enable Kosovo to become fully integrated in regional and international economic relations and trade. Achieving this will require the modernization of the existing road network. The enhancement and improvement of the existing network must be made according to the European standards. Further improvements must also be made towards building higher capacities of traffic in, addition to increasing the number of international connections. The existing network is already congested with a high volume of vehicles and commercial transport. In order to relieve some of the congestion there are projects for 12 new regional roads linking the towns of: Besiane (Podujeve)-Samadrexhe; Deçan-Junik; Deçan -Kozhnjer; Ponoshec - Qafë Morinë (kufi); Dardanë (Kamenice) -Tugjec; Shipashnicë - Desivojcë; Palatë-Reçicë; Xërxë - Kramovik; Zheger-Stançiq; Besiane-Shajkovc; Komoran-Caralevë dhe Optorushë-Therandë Suhareke.

The need for additional regional roads has already been identified, but there before that is realized they must compile and categorize the existing roads, many of them dirt roads or mere paths that connect very small population groups. Categorization of all roads must be done according to a set of criteria compatible with that utilized in Europe so that this may be included in official maps and guides.

Fast developing urban centers like Prishtina and towns like Gjilan, Prizren or Peje are showing signs for the need of city rings in order to relieve some of the traffic congestion already being experienced. The large number of vehicles in circulation is further aggravated by the minimal and not widely patronized public transport service. There are only a handful of public buses, and the only passenger train in use is exclusively utilized to transport Serbian Kosovars to and from enclaves. The decongestion of conflicting traffic points so that fluent and efficient communication is achieved is also a factor in developing the competitiveness of Kosovar business in their day-to-day activities.

Downtown Pristina on a quiet day
Downtown Pristina on a quiet day

This will surely increase the level of entrepreneurship, trade and regional integration.

Studies by BCEOM, Master Plan for maintenance and development of the road network in Kosovo 2001/2010 are in a developing phase. Thought up to recently, this plan has been mainly orientated towards analyzing and implementing the most urgent needs for the maintenance of the existing roads.
The idea of building new roads has to be based on: the long-term needs of development of Kosovo and its desire to see the region fully integrated within Europe physically. This must occur so that Kosovo may also be economically as well as politically integrated.

Kosovo and its connection with the Balkan Road network and how much Kosovo is to be included in the EU plans for the development of infrastructure, for example like programs for development of the road network, main roads, E-roads, TEM-roads, PAN-European and AIMSE network of highways is still to be determined. The Master Plan report only observed that Kosovo must be included in the routes of international connections, according to the study done by TIRS (Regional Transport Infrastructure of Balkan). How important it is to initiate in this moment, including this study and our development aspirations of road network, can be seen in the objectives of TIRS studies.

TIRS foresees the forming of a multimode plan with adequate perspective that will consider not just the environmental impact, but also the existing inter-regional network. This plan must also consider the level of expansion and upgrade that the existing network can sustain. In order to start defining the initial webbing of the network, that will be used as the base for future enhancements, identification of the main international roads in the region and their links must be accomplished. There is also need to better coordinate the investments allocated to infrastructure programs by regional governments and intitutions such as the EAR. The objective should be the drawing of a master plan directed at the full integration of all the western Balkan nations within the same network. It is imperative to bring regional leaders and ministries to projects that need immediate implementation and are suitable for assistance from international organizations. Kosovars would like to see the EU financing the total development of their infrastructure.
These objectives need a considerable amount of diplomacy and political consensus in order to be achieved. There is no doubt that it will be a very long process. In the Pact of Stability the project for the regional infrastructure was recognized as a major priority. There are projects for new roads, which include the border points in: Ponoshec-Qafe Morine, Zheger-Stancic dhe Decan-Kozhnjer.

The highway that will connect the cities of Durres in Albania-Kukes Prizren South East Kosovo-Prishtina North west Kosovo - and Merdare, Italy is of essential importance in order to support the efforts of integrating Kosovo within European Highway corridors. It is the only long-term solution and the shortest method to integrate Kosovo within the European road network. The new President, Mr. Ibrahim Rugova, points out with this project; "Kosovo will be properly connected with Europe, the Balkans, and through Albania and the port of Durres with the Adriatic Sea and with the rest of the world. In our plans we have the construction of a highway from Prishtina to Durres, Albania that would give a boost to the economy and facilitate the rapid movement of goods and products in our region". There is complete consensus amongst institutional and political leaders in Albania and Kosovo regarding the need for this very important network link; the agreement from both governments is the first condition for the realization of this project. It is estimated that this project will cost around 250 million USD. The Albanian Government, in view of the importance of this road for the development of Albania itself, has already approved an additional tax payment portion increase for businesses. The Albanian government has also approved a tax increase payment to businesses for the next three years in order to pay its share of the commitment. While the Italian Government has already allocated 30 million USD to finance the stretch that will be running through its territory. The World Bank has also expressed its willingness to support the project with 15 million USD. .
Kosovo´s railway system however is in somewhat better shape than its road network. The 10th Pan European corridor that runs through Prishtina is expected to be reactivated. Nevertheless, the desks where tickets are sold are empty. Daily train schedules are written in two distinct languages, Albanian and Serbian, but they don't really give information for arrivals and departures of trains.

Until 1999, local and international railway transportation was in full bloom. The Kosovo Railway system realized 67 departures and arrivals of trains per day with a turnover of 4 million USD per year, but everything has drastically changed from the year 1999. From 66 lines that existed then, only two are functioning today. From 36 locomotives in use only 14 remain, and 4 of them don't function or are considered too unreliable. Six of these locomotives are a donation of the German government while another 4 have been donated by the Danish nation. Today the only lines that are currently functioning are those used for transportation of the ethnic Serb civilian minority from Fushë, Kosova to the Mitrovica Serb enclave. This train was reestablished late last year. Another of the few railway lines in use is a local line that connects Pristina with Peja and Ferizaj.
Late last year Kosova Railways and Macedonian Railways signed an agreement that would allow the reestablishment of railway services for the transportation of goods between Kosovo and Macedonia. As far as an international railway connection is concerned, things seem to be looking up for Kosovo. During a recent visit of SRSG's Mr. Michael Steiner to Belgrade, he promised that very soon the Kosovo railway system would be functioning to allow international transportation that would link Kosovo with the rest of the continent.

Air travel is also a major priority that could certainly profit from the involvement of the private sector in its development. Prishtina´s Airport is the only airport in Kosovo; this is one of the reasons why it must be modernized and Europeanized as soon as possible. The airstrip and hub was originally projected and used for military means. The end of hostilities turned it into a commercial airport. Today, Prishtina´s Airport can no longer serve the big number of Kosovar and foreign travelers. During the year 2000, almost 500,000 people have traveled through the airport and over 2.500 flights were realized. One year later the number of passengers increased to 800 000, and the number of flights has increased to 4.500. According to airport officials, by the end of the year 2002, it is expected that 2.4 million passengers will travel through this airport. According to these figures, Prishtina´s Airport is number one regarding the number of the passengers as compared to the other airports in the Balkans. Officials of the airport claimed that in the year 2000 their income was 5 million Euros, while the following year 2001, it was 9 million Euros. All incomes have been reinvested in further development of the Airport. A new terminal for passengers and goods is being built; as one of the first phases of the Airport's macro plan for development in the next 50 years. Management of the Prishtina Airport has a very difficult task ahead. Before the end of 2003 they have to meet certain conditions in order to get the permission for flights from this airport to connect with other parts of the world. The medium term prospect for Prishtina´s Airport will not be clear until the end of 2003. Until that date the airport will ultimately be controlled by KFOR troops. Officials at the airport hope that they will fulfill the necessary conditions to get the approval of the IAA. Together with the government of Kosovo, they have to buy about 40 hectares of land currently property of the villagers who live in the area.

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© World INvestment NEws, 2002.
This is the electronic edition of the special country report on Kosovo published in Far Eastern Economic REVIEW. September, 2002 Issue. Developed by AgenciaE.Tv