Financial Times

By Andrew MacDowall

The Stambul Kapiya, A robust but elegant gateway, stands at the heart of Vidin, a quiet town on the Danube in northwestern Bulgaria. The Istanbul gate, as it is known in English, and the nearby Baba Vida fortress are signs of what Vidin once was – a strategically important way station between the Balkans and the rest of Europe.

Recent years have not been kind to this Bulgarian city, which was hit hard by the sanctions imposed in the 1990s on nearby Serbia. Its citizens have left in droves, particularly the young. But since June, things have been looking up for Vidin, with the opening of the striking €300m New Europe Bridge across the Danube to Calafat on the opposite shore in Romania. Could Vidin, sitting between three countries and near the mouth of the Danube's Iron Gates, once again be an important link between east and west?

Possibly, if not quite yet. The 1.97km New Europe bridge is only the second across the stretch of Danube that acts as the partial frontier between Romania and Bulgaria. The other, which opened in 1954, links the ports of Ruse and Giurgiu downstream. Heavy traffic passes through Bulgaria between Turkey and the rest of Europe, but many hauliers prefer to cross into Serbia rather than Romania.

The hope is that the new bridge, as well as reducing transport times for local people, will be an alternative route for longer-distance traffic, lowering pressure on the older Danube bridge and other bottlenecks such as Serbia’s Sicevo gorge, while putting competitive pressure on motorway tolls in Serbia and Macedonia.

Unfortunately for Vidin – and Calafat and the surrounding region – the bridge itself has suffered early difficulties with recent reports of pothole problems. Furthermore, roads either side of the New Europe bridge are much in need of improvement. The bridge seems unlikely to be a major boon for regional transit without substantial upgrades to connecting infrastructure. Its initial impact has been limited to the relatively small – though not insignificant – number of people commuting to work and school across the Danube. Since Romania and Bulgaria joined the EU in 2007, Ruse, Bulgaria’s fifth-largest city, has had a boost from Romanian companies moving to it to take advantage of lower taxes. Whether Vidin – further from centres of economic activity such as Bucharest – will experience a similar fillip is unclear.

“Talking to the hauliers, I have not concluded that there is a major shift of traffic towards the new bridge,” says Nikolai Bozhilov, executive chairman at Sofia-based Unimasters Logistics.

“The bridge improves connectivity and shortens access to western Europe via Hungary. However, taking into account the lack of proper road infrastructure on both sides of the bridge, it will take years until we see the real benefit.”

This is a view shared on the other side of the great river. Some argue it will only make sense for hauliers to use the bridge when travelling between Turkey and Hungary and beyond once the road linking Calafat to the Hungarian border at Nadlac is improved. The stretch from Calafat to Drobeta to the north is in bad shape, and there are questions as to whether it remains an investment priority for the Romanian government. Its stop-start approach to its transport infrastructure is a regular gripe of investors. Shortage of cash is one reason. With the government under pressure to rein in its deficit, it has become more reliant on EU money, yet has a notoriously low level of absorption of EU funds. The country lacks the administrative capacity to design and execute enough projects. Bureaucracy, a lack of strategic direction and the tendency of governments to stall projects initiated by their predecessors (sometimes because of concerns about corruption) complicate matters. Responsibility for infrastructure is split between overlapping agencies and ministerial briefs.

“The Transylvania [Highway] is a very good example,” Farrukh Khan, a board member of the Foreign Investors Council, says. “It should have been completed several years ago but is still nowhere near being finished. Project rollout is very cumbersome and causes delays, leading to loss of economic activity. Land acquisition, evaluation, management and monitoring need to be improved. Romania needs to establish an entity to deal with large infrastructure projects.”

Mr Khan is hopeful that once Romania gets the infrastructure in place, it can build on its geographical position, its Black Sea port at Constanta and strengths in sectors such as carmaking. A transport master plan mapping out investments to 2030 should help establish priorities and highlight opportunities for contractors and investors.

It may be some time before the New Europe bridge fulfils its potential as a catalyst for economic development.

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