Friday, 5 November 2021

Concession Agreement for Zagreb Deep Sea Terminal Signed

ZAGREB, 5 Nov 2021 - An agreement on a concession to develop and commercially use the Zagreb Deep Sea container terminal in the Port of Rijeka, estimated at HRK 20 billion (€2.7 billion), with the concession fee fixed at €2 million annually for a period of 50 years, was signed in Rijeka on Friday.

The agreement was signed by Rijeka Port Authority head Denis Vukorepa, the director of the international terminal operator APM Terminals, Morten Engelstoft, and Energia Naturalis Grupa Management Board chair Pavao Vujnovac on behalf of the concession holder ENNA Logic of Croatia.

The concession holders undertake to build the necessary infrastructure and fully equip the Zagreb Deep Sea container terminal, including building another 280 metres of pier and its equipment, and they also guarantee container turnover of one million units in the first two years of the terminal's operation.

Phase 1 of the Zagreb Deep Sea terminal, with 400 metres of pier and a sea depth of 20 metres, was completed as part of the Rijeka Gateway project in May 2019. The public opening of bids for a concession to operate the terminal was held in May 2021, and an offer by APM Terminals and ENNA Logic was assessed as valid, after which the Rijeka Port Authority Management Board in June decided to award the concession to operate the terminal to the consortium of the two companies.

Prime Minister Andrej Plenković, who attended today's signing of the agreement, said it successfully wrapped up long-lasting efforts regarding the Rijeka Gateway project.

"The agreement will create conditions for the Rijeka Port to take the role of the leading cargo port in the northern Adriatic, thus becoming the most important point of entry to Central and Southeast Europe," said Plenković.

The terminal means an opportunity for economic development and is important also because of strategic autonomy, Plenković said, adding that the government would continue investing in infrastructure projects, notably those that bring long-term economic benefits.

Sea, Transport and Infrastructure Minister Oleg Butković said the agreement would make the Port of Rijeka the most important intermodal centre in the northern Adriatic.

Once the Zagreb Deep Sea terminal starts operating in 2025, the container turnover in the Port of Rijeka will reach one million units, and by 2028 it will reach 1.5 million units, Butković said, noting that with that, Rijeka would overtake the Slovenian port of Koper.

Construction work on the D-403 road, which is to connect the terminal with the Rijeka ring road, is proceeding well, he said, adding that another important project is the construction of a lowland railway from Rijeka towards Croatia's interior and expressing hope it would be completed in about ten years.

Rijeka Port Authority director Vukorepa, APM Terminals executive director Engelstoft and Energia Naturalis president Vujnovac underlined the importance of the Rijeka Gateway project for the development of Rijeka and Croatia, with Vujnovac noting that along with the lowland railway, the Rijeka Gateway project was the most important national project connecting Rijeka and the country's interior.

It will secure the flow of large quantities of cargo thus enabling economic growth, he said, adding that it would make Rijeka an important spot on port maps.

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Sunday, 3 January 2021

Rijeka Port Chinese Investment Stopped Owing to EU, US Pressure

January the 3rd, 2020 - The much talked about Rijeka Port Chinese investment has been forced to stop owing to pressure from both the European Union and from across the Atlantic from the United States of America, who do not want the Chinese there for strategic reasons.

As Morski/Josip Bohutinski writes, the Rijeka Port Authority has annulled the tender for a concession worth a massive 20.5 billion kuna despite the fact that two binding offers had been received for that tender from global players in the field of port management. The problem was that one offer, and ironically the best one of them all, came from a consortium of Chinese companies.

According to Vecernji list, the pressure being put on Croatia from both the USA and the EU to ensure that the Chinese don't get the 50-year concession for the container terminal in Rijeka Port was huge. The US and the EU do not want this Rijeka Port Chinese investment for various strategic reasons. The decision on the tender for the concessionaire was therefore weighed up and postponed for a long time. Croatia could choose the Chinese offer despite opposition from its Western allies, or it simply cancel the tender. According to current information, the possibility to choose another, less favourable offer was not taken into account.

A new tender

According to the decision of the Managing Board of the Rijeka Port Authority, the pressure to reject the Chinese was indeed enormous. Namely, the Governing Board made the decision to cancel the tender on Wednesday, and this news went almost unnoticed in the shadow of the utterly tragic events in Petrinja and its surroundings. The Rijeka Port Authority didn't provide an explanation as to why the tender was annulled, it only stated that the Board made a decision on the annulment of the concession procedure and on the initiation of a new procedure. It has also been stated that the Board of Directors decided on this unanimously, with all of its nine members. It was said that, in accordance with that decision, the Rijeka Port Authority will start a new procedure for granting a concession for the development, operation and management of the Zagreb Deep Sea container terminal as soon as possible.

The new tender will be conducted through a public tender in an open procedure lasting 35 days from the publication of the notice of intent to the final granting of the concession. The best bid for the concession at that container terminal was made by a consortium of Chinese companies comprising Ningbo Zhoushan Port Company Limited with a 70 percent stake, Tianjin Port Overseas Holding Limited with a 20 percent stake and the China Road and Bridge Corporation (CRBC), which is constructing the Peljesac bridge in Dalmatia, with a 10 percent stake.

The Chinese offered a permanent portion of the annual concession fee of two million euros, with a commitment to complete the second phase of work within five years. The second offer came from a consortium consisting of the Dutch company APM Terminal BV with a 51 percent stake in the consortium and the Croatian company Enna Logic with a 49 percent stake, and they offered a permanent part of the concession fee of one million euros per year, with the obligation to complete the second phase in a decade.

Ningbo-Zhoushan otherwise operates the largest port in the world, and Tianjin is among the 10 largest ports in the world. APM terminals BV is the operator of 74 terminals worldwide, and is part of the largest shipping container company - A.P. Moller-Maersk. Binding offers arrived in March 2020 and the decision has only just been made, although it was expected to be made back in September. Therefore, the bidders were also asked to extend the guarantee for the seriousness of their bids from the 31st of December 2020.

The invitation to participate in the tender for the concession, development and management of the Rijeka Port container terminal was published back on March the 4th, 2019, and those interested could submit a request to participate by May the 3rd, 2019. The first round of the competition ended on June the 30th, 2019, after the evaluation of the received applications for participation. The second round of tenders began on the 1st of July 2019, and on the 2nd of December 2019, the Rijeka Port Authority sent the candidates a notice of the conclusion of the dialogue and an invitation to submit their final bids. The deadline for submission of those bids expired on March the 4th, 2019.

A fifteen day appeal time

CRBC, which, as stated, is building the Peljesac bridge, has filed an appeal against the tender for the Hrvatski Leskovac - Karlovac railway, and the move was interpreted as a Chinese maneuver and pressure to make a decision on the now dropped Rijeka Port Chinese investment, Vecernji notes. The Chinese, as well as the Dutch-Croatian consortium, may file an appeal against the decision to cancel the concession procedure within fifteen days of receiving such a decision. The appeal in that case would be submitted to the Ministry of Maritime Affairs, Transport and Infrastructure. Otherwise, the tender documentation states that the concession grantor reserves the right to cancel the tender procedure in accordance with the appropriate law, to reserve the right not to accept all bids received if they don't fully comply with the tender conditions, and to do so in accordance with the Regulation on the concession procedure.

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