State spending on roads has risen rapidly and new projects are being financed through deals with the private sector.

Reconstructing Serbia’s shattered transport infrastructure has been a major challenge. Now there are ambitious plans to develop the road network.

At the end of the 1990s Serbia’s transport infrastructure lay devastated by war. Bridges, roads and airports lay in ruins, leaving the republic facing enormous challenges—firstly to restore everything to its pre-war level, and then to create a platform for further development. In addition to the war damage, there was a decade of economic disruption and lack of investment to make up for.

As far as the roads are concerned, the primary objectives have been reconstruction, repair, and maintenance, but development of the infrastructure is also a priority in the National Development Plan, and a number of major projects are under consideration.

BRANKO JOCIC Director of Roads of Serbia

Spending has increased rapidly over the last six years, says Branko Jocic, Director of Roads of Serbia, the public company that manages the road network. “The complete halt that lasted for about 12 years has meant we have had to invest much faster and more intensively.”

Funding comes from the national budget, financial credits, toll collection—a new, cashless, electronic toll collection system has been introduced—and fees amounting to 10 percent of excise duty on petroleum products. In addition, international financial support has also been received from institutions such as the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), and the World Bank.

New projects are being financed through deals with the private sector, including concessions, build-operate-transfer (BOT), and public-private partnership (PPP). A consortium of Spain’s FCC and Austria’s Alpine-Mayreder recently won a 25-year concession for construction, use and maintenance of the Horgos-Pozega highway from the Hungarian border to southern Serbia—part of a project to build a traffic artery to the Montenegrin coast.

The most important projects are the Serbian sections of Corridor 10, a pan-European highway, running from Salzburg in Austria to Thessalonica in Greece, via a high-speed loop around the Serbian capital, Belgrade. These have been priced at 2 billion euros ($2.6 billion); Serbia itself has invested 800 million euros. The EIB has provided a loan of 120 million euros to build the link between Belgrade and Novi Sad, and for the reconstruction of a bridge over the Danube. A loan from the EBRD will pay for the construction of a parallel twin bridge nearby.

In December 2006, Greece announced it would be contributing 100 million euros for completion of the section from Leskovac to the Macedonian border, which is of great importance to the regional development of southern Serbia.