Spotlight on FYR Macedonia’s transport system

The Bank is providing a €107 million loan to finance the construction of a modern motorway between Macedonian towns of Demir Kapija and Smokvica in the south-eastern part of the country.

The new 28-kilometre road section is part of the Pan-European Corridor X that runs from Austria through Slovenia, Croatia, Serbia, FYR Macedonia, to Greece. It is one of the two remaining segments of the 1,451-kilometre long route that requires upgrading to motorway standard. Modernisation works on the other segment, in Serbia, are currently under way.

With the completion of the new road between Demir Kapija and Smokvica, Corridor X will have four lanes and a hard shoulder along its entire length.

“This project is paramount on several levels. For Macedonian citizens and the country’s economy it will mean better and safer transport links, easier and faster access from north to south, but also more favourable conditions for regional trade and integration,” says Sue Barrett, EBRD Director for Transport.

The project will introduce Electronic Toll Collections to FYR Macedonia for the first time, replacing the current cash payment system. As part of the project four new toll stations will be built along Corridor X. In addition the five existing toll stations will be refurbished with modern equipment. The introduction of electronic payments will cut losses from the system and will allow the application of different charges for different types of vehicles.

In addition to the obvious benefits brought to the population, businesses and the economy as a whole, the EBRD investment, which goes hand in hand with continuous policy dialogue, is laying the path for further reform in the Macedonian roads sector.

“With this project the EBRD and the Macedonian authorities will continue their cooperation for further reorganisation of road maintenance through implementation of performance-based contracts and introduction of public-private partnerships (PPP) in the road sector,” says Agnieszka Lukasik, Senior Banker in the EBRD Transport team, and leader of this project.

“This is an important step for the preparation of a concession for the Corridor VIII road, the second major transport link passing through FYR Macedonia, linking the country with Albania in the west and Bulgaria in the east,” adds Elena Urumovska, Head of the Skopje Resident Office.

The construction of the road in FYR Macedonia is part of the EBRD’s integrated approach to improving transport links in the region. In recent years the Bank has invested a total of €845 million to modernise various parts of Corridor X in Hungary, Croatia, Serbia, and FYR Macedonia, in rail and roads.

With project costs exceeding €334 million, the construction of the new road in FYR Macedonia is co-financed by the European Investment Bank and the European Union’s Instrument for Pre-accession Assistance.