From Berlin to Beijing?

A new Balkan rail company is just a step towards even bigger things
Sep 16th 2010 | LJUBLJANA

IN JULY, when the railway companies of Serbia, Croatia and Slovenia said they would form a new joint company, you could almost hear nostalgic tittering across former Yugoslavia. Between 1918 and 1929 Yugoslav railways was formally called the railway of the Kingdom of the Serbs, Croats and Slovenes. Perhaps mindful of this grandeur, when the three companies actually merged this month, they chose the dullest name they could find: Cargo 10.

Yet the business behind Cargo 10 is anything but boring. The name refers to Corridor 10, a pan-European road and rail corridor linking central and south-eastern Europe (see map). It is another example of companies in the former Yugoslavia co-operating as they realise how small their domestic markets are. And it has big international ambitions.

Today it takes more than 60 hours to move freight from the border of Slovenia and Croatia to Istanbul. Igor Hribar of Slovenian railways laments that, if a train arrives at night and customs officers do not feel like getting up to process it, “they don’t.” With greater Bulgarian and Turkish co-operation, the journey time should fall to 37 hours. The aim is just 25 hours.

Until the Balkan wars of the 1990s most freight between Turkey and western Europe crossed Yugoslavia. Then it was diverted to Romania and Bulgaria. Now only 2% of freight between Turkey and western Europe is carried by rail. Some 22% goes by road and 75% by ship. Goran Brankovic, director-general of Slovenian railways, says Turkish companies find it cheaper and faster to send containers by sea to Trieste and then fly truck drivers in to take the goods to their final destination.

The founders of Corridor 10 hope for a big shift of freight to rail. They want to be more than just a link in the chain between Istanbul and Europe. In the next few years a rail tunnel will open under the Bosporus, 150 years after it was first mooted. The Bosporus is a rail-freight bottleneck between Europe and Asia. When the tunnel opens, the possibilities will be endless. Before the first world war the Germans had dreams (and the British nightmares) of a Berlin-Baghdad line. Now the Turks and Chinese talk of a rail service linking Istanbul (and so Europe) to Urumqi in western China. One day, the call could be: all aboard the Berlin-Beijing express, via Belgrade.

ECONOMIST