The past, present and future of Port Koper

Written by Dr. Ales Pustovrh – Bogatin, EECFA Slovenia

The largest Slovenian civil engineering project in recent history – the construction of the second railway connecting Port Koper with the core international railway network in Slovenia – officially started in March 2019. Still, many questions remain to its successful completion.

Port Koper railway project – Source: http://www.drugitir.si

The past

Port Koper, which is the only deep-sea port in Slovenia, recorded an impressive growth in the last decade; it transported more than 24 million tons of goods, including almost 1 million containers (TEU) and more than 750.000 cars. Since 2009, it has increased the quantity of its throughput by more than 10 million tons. The throughput continues to grow fast.

However, its growth is encountering limitations from the infrastructure that was designed for much smaller traffic volumes. 59% of the goods has been transported from the port using rail, essentially reaching the capacity of the existing railway connecting the port with the international railway junction at Divaca.

Before recent and ongoing modernization, the existing railway had a capacity of 72 train compositions per day, allowing for the annual transportation of 9.2 million tons of cargo. When the modernization is completed, the capacity of the existing railway will increase to 14 million tons. Yet, with projections of Port Koper reaching 35 million tons of throughput by 2030, this essentially means that all additional cargo will have to be transported on road. This ultimately results in doubling the current road cargo transportation by 2030 and tripling it by 2040.

More about Slovenian civil engineering can be found in the EECFA Slovenia Construction Forecast Report. Sample report on eecfa.com

A simple solution would be to expand railway capacity by constructing the second railway next to the existing one, but unfortunately, this is not possible as the existing railway was constructed in 1967 as an industrial railway owned by the port. Due to its history and very difficult terrain with very steep gradients, it does not fulfil technical EU standards for the core TEN-T railway network. Thus, the construction of the second railway actually requires the construction of the whole new railway with two tracks to enable longer train compositions and faster speed.

Since 1996, and in the period of 10 consecutive Slovenian governments, 17 different technical plans have been prepared for the construction of the new railway.

The present

The final plan obtained a building permit in 2016 and will allow for the construction of 27.1 km of new railway. Together with the existing railway, the capacity of the new railway will be 231 train compositions per day, making the transportation of 43.4 million tons of cargo possible. Its steepest gradient will be 17%, while the existing railway has the steepest gradient of 26%. In order to achieve this key technical characteristic, 37.4 km of tunnels (including service tunnels) and 1.1 km of viaducts will need to be constructed. This plan is still being adjusted to construct a full two-track railway as the existing building permit only allows a single-track railway with service tunnels.

This will further increase the price of the project. Estimated construction value of works Continue reading The past, present and future of Port Koper

Ljubljana among cities with the fastest growing real estate prices in the world

Real estate prices in Slovenia have been increasing at a furious pace

Ljubljana, the capital city of Slovenia, has strongly rebounded from the recession. Since the bottom of the recession in 2015 till 2017, the average real estate price has increased by 15%. However, the price growth accelerated in 2018, making Ljubljana one of the hottest real estate markets in the world.

Written by Dr. Ales Pustovrh – Bogatin, EECFA Slovenia

Ljubljana Castle Hill and City Center – Source: visitljubljana.com

Following the peak in 2008, the Slovenian construction and real estate markets experienced a catastrophic slump. Total construction output decreased from EUR 4.6bln in 2008 to EUR 2.3bln in 2016 according to EECFA. The average real estate price in Ljubljana dropped by 25% between 2008 and 2015 (although the average price hides significant differences in price trends in different neighbourhoods and real-estate segments).

However, on the back of the strong economic growth in the last few years, prices started growing again. In Ljubljana, they increased by 15% between 2015 and 2017 according to GURS[1], the national database. In 2017, KnightFrank’s Global Residential Cities Index estimates that residential real-estate in Ljubljana has increased by another 4.4 %[2].

And the pace of real-estate price hikes seems to be accelerating further. Continue reading Ljubljana among cities with the fastest growing real estate prices in the world

EECFA 2017 Summer Construction Forecast and Revision

We have released our summer construction forecast on 16 June 2017 on Bulgaria, Croatia, Romania, Russia, Serbia, Slovenia, Turkey and Ukraine. This post intends to summarize the most important projections for these construction markets for the years 2017-2019. These are our main findings; for a deeper understanding, please consult our reports. You can contact us on eecfa.com.

Outlook for the EECFA regions

The highly optimistic outlook for South East Europe is maintained by EECFA. Leaving behind the transitory 2016, when the absorption of funds available in the new EU programming period (2014-2020) was still at a low level, the upcoming years are characterized by a bigger expansion of the construction market than that of GDP. Building construction is predicted to well outperform the total market, with a yearly average rate of 9% over the horizon. The small growth in the region’s total civil engineering market is attributed to the negative expectations in Romania.

Sideway moves, no further market expansion on the horizon are what we consider the most probable scenario for the 3 East European markets together. Turkey and Russia, being far the two biggest markets we cover in EECFA, is expected to show some similarities. In both countries our forecasts are moderately optimistic in the civil engineering market. While in the building construction market the outlook is clearly negative for Russia and neutral for Turkey. In Ukraine, the recovery experienced in 2016 is predicted to be sustained until 2019. Both building construction and civil engineering could expand further with a relatively good pace. Continue reading EECFA 2017 Summer Construction Forecast and Revision

Small is beautiful – and has the potential to grow!

The Slovenian economy has strongly rebounded after the recession. This is finally improving the construction industry – and might even result in the implementation of some large construction projects

Written by Ales Pustovrh, Bogatin, EECFA Slovenia

Dragon Bridge, Ljubljana -source: http://www.visitljubljana.com

GDP is forecasted to grow by 3.6 % in 2017 – its fastest growth in the last decade. However, Slovenia’s GDP has been growing steadily for three years without lifting the construction industry. This time, it might also lead to an increase in construction output in Slovenia.

Construction output has been steadily decreasing since its peak of EUR 4.6bln in 2008 to EUR 2.3bln in 2016. However, it is almost certain that construction bottomed out in 2016 and has already begun to rise. The vibrant economic growth has increased demand for residential housing, especially since the credit flows started to go up last year following several years of a severe credit crunch. At Bogatin, EECFA Slovenia, we are forecasting the increase of residential construction by 30% until 2018, but the latest growth in credit to households hints that growth might even be faster!

Continue reading Small is beautiful – and has the potential to grow!