The intermodal logistics capacity in the region of Záhony – Future developments Judit Thomka Regional Development Holding Ltd. Usti Nad Labem 17th April 2009.

The area of Záhony

Záhony – A strategic location at EU’s Eastern borders Vicinity and easy accessibility to the markets of the Ukraine, Russia and Europe; A road and railway interchange along the Pan-European Transport Corridor V; Re-loading capacity at the junction of the wide and European standard rail tracks; Intermodal logistical centre; Access to five countries within a 100 km radius;

Short history The infrastructure of the region was established to handle 17-18 million tons of goods/year; Due to its geographical location the main economic activities are linked to the railway, the transshipment of goods and to all logistic services linked to these two activities; After the decline of the Sovietunion, the quantity of goods passing by the region decreased to 1/3 of the former quantity; Left behind non competitive, too big, and too expensive infrastructure which is not exploited;

The future… Expected growth of goods passing by the region; Because of the intensive development of trade between the EU and the Far-East This will lead to the growth of the economic performance and revenue making in the region; To achieve this, it is necessary to develop infrastructure and the structure of services;

4. The Logistics Infrastructure in Záhony Railway infrastructure Záhony is in the main railway route number 100, this line connects Moscow with Budapest, and through Budapest with several big cities of Europe (V. European Corridor) Connection of normal and wide gauge railway In an area of 84 m2: 157 km wide and 335 km normal gauge railways. Today prices not competitive with other transport modes, and neighbouring countries;

4. The Logistics Infrastructure in Záhony Road Distance from Budapest: 320-370 km Main road number 4 goes through the region: bad conditions, heavy infrastructure, dangerous; Quantity of goods transported on road increasing Waterways River Tisza can be used for shipment only to the south, towards Szeged; The river is today not used for shipment;

5. The Logistics Sector in Záhony Most important sector in the region due to the connection of wide and normal gauge railways; The capacity of transhipment of goods is around 11-12 million tons, but in 1987 the region handled 17 million tons. Due to the political and economical changes, today only 6 billion tons are passing through, and being reloaded in Záhony; For this reason the capacity is not exploited, the use of logistics infrastructure is not cost efficient; The neighbouring countries have more competitive prices, this may lead to further decrease of traffic in Záhony and its surroundings;

5. The Logistics Sector in Záhony The other big problem of competitiveness is that the Hungarian State Railway Company has the monopoly on moving goods through the border. (based on an international agreement between the Hungarian and Ukrainian government) All logistic companies depend on the prices and service of MÁV Zrt. Calculation of prices and different discounts is not evident, and all together more expensive than in neighbouring countries;

6. Conclusions The built infrastructure is not worse than in the neighbouring countries, still the Záhony region suffers several disadvantage in international competition; Main reasons are not the quality or quantity of the built infrastructure, much more there is a problem in organising and harmonising logistics services, the monopoly of MÁV Zrt. and the not clear pricing of railway reloading services ; Because of bad organisation too long waiting time, increase of costs, decrease of competitiveness;

7. Government programme for the complex economical development of Záhony and its region Key development targets identified in the „New Hungary” Development Plan, the development strategy for the years 2007-2013, accepted by the European Union; A total of nearly 128 million Euros will be invested in this project from EU and domestic budget resources;

7. Government programme for the complex economical development of Záhony and its region Main elements of the programme include: Development of an intermodal industrial and logistics area, to accommodate manufacturing and distribution facilities; Infrastructure development to boost the economy and logistics potential; Support for small and medium-sized enterprises in the region Development of medium and higher education to support local requirements Economic and transport policy diplomacy and international marketing programs

7. Government programme for the complex economical development of Záhony and its region The developments of the Intermodal Industrial and Logistics Area in Fényeslitke-Komoró: Developing a 160 ha industrial and logistics area Construction of Road and Railway (wide and normal gauge railway will connect to the area) Construction of water, waste-water and rainwater network; Development of electricity and gas infrastructure; Broad band Internet connection and telecommunication network; Other works related to the realisation of these works (e.g.: archaeology, geodesy, …ect.) Total budget: 12,2 million Euros

7. Government programme for the complex economical development of Záhony and its region Actual situation: The construction works of the development of railway and road network have already started; The development of the intermodal industrial and logistics area have also been launched; In June the public procurement for electing the building contractor will be published, hopefully construction works will start in October;

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