Case Studies: A5 Maribor - Pince Motorway , Slovenia

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Project Overview
Pince1.PNG
Figure 1: Pince Motorway, Slovenia
A5 Maribor - Pince Motorway, Slovenia
Project Type: Both
Type of Project Financing: Public
Contract duration: Construction finished in 2008
Budget: 630 MEUR
Project Time Line
2002: Pre-investment study
2004: Feasibility study
2005: Construction start
2008: Construction completion

Introduction

Slovenia covers a territory of 20.273 km2. The total length of state border line is 1.382 km, 921 km of which is on land and 413 km are formed by rivers. The nautical border is still under negotiation. The length of the state border with Croatia is 670 km, 330 km with Austria, 280 km with Italy, and 102 km with Hungary. The length of the seacoast is 46.6 km.

Slovenia has a population of 2.01million. Average density of population is 98.0 inhabitants per km2. The state is divided into 212 municipalities. Ljubljana is the capital of Slovenia with a population of 277,554 inhabitants (2014).

The existing trunk road from Maribor to Lendava, the G1-3, and then to Dolgavas, functioned as the international road connection to Hungary. Near Maribor, the road joins the Vienna – Ljubljana motorway (A1) and ends on the Hungarian border. The road leading through the settlement centers (Lenart, Gornja Radgona, Radenci, Murska Sobota and Beltinci) is inconvenient and had a negative impact on safety and environmental conditions. The road is still of great importance to the local traffic (daily movements between workplaces and local supply centers), but is no longer used by international traffic from and to Hungary.

With the implementation of the National Motorway Construction Program in the Republic of Slovenia, the motorway section Koper – Lendava gained a special position on the country’s traffic network, becoming also part of the TEN-T route Barcelona – Kijev. A part of this road from Maribor to Lendava became especially important due to the increase of international traffic from the Eastern-European countries (especially after Hungary, Romania and Bulgaria joined EU) that was directed to the trunk road G1-3.

Pre-investment studies for the construction of Maribor – Lenart – Cogetinci – Vučja vas (April 2002) and Beltinci - Lendava –Pince and Lendava - Dolgavas (May 2002) sections were carried out, based on cross section width and possible phase construction (basic cross section, economical cross section and halfway cross section). Results of the study proved that the construction of the motorway in an economical cross section is to be the most favorable. It was considered also in the subject feasibility study.

A pre-feasibility study (October 2004) for the European Investment Bank, for the construction of motorway sections Maribor - Lenart - Beltinci – Pince was carried out . In the study, each subsection was analysed from a financial and technical point of view, while the entire motorway section Maribor - Pince was analysed from an economic point of view.


Pince2.PNG

Figure 2: Motorway Subsections

The technical description, cost evaluation and financial analysis were conducted for the following motorway sections:

Motorway section Length (m)
Maribor – Lenart 9,400
Lenart - Sp. Senarska 7,200
Sp. Senarska – Cogetinci 9,490
Cogetinci - Vučja vas 11,675
Beltinci – Lendava 17,200
Lendava – Pince 13,671
TOTAL: Maribor – Pince 68,636

The final length of the motorway sections was approved by the Resolution of the National Motorway Construction Program in the Republic of Slovenia.

Motorway section Length (m)
Maribor – Lenart 11,660
Lenart - Vučja vas 26,105
Beltinci – Lendava 19,125
Lendava – Pince 12,671
TOTAL :Maribor – Pince 68,636

Feasibility study

Investment and economic significance

The Maribor – Lendava motorway section was planned to relieve settlement centers (e.g. Lenart, GornjaRadgona, Radenci, Murska Sobota, Beltinci) from transit traffic. Diverging traffic was to increase tourist attraction and possibilities for development of the settlements, but also provide a better environment for people living in the vicinity of the road. The quality of road connections (to and from Hungary) would be improved, especially the accessibility to Pomurje., which is one of the least developed Slovenian regions, and also offers several possibilities for development of non-industrial activities, especially agriculture, tourism (thermal water), trade and traffic (border position).

Existent road and characteristics

The existing trunk road G1-3, a long distant road connection to Hungary, overtakes transit in this direction. It has inconvenient course through settlement centers. Regarding inconvenient horizontal and vertical elements (minimum road width is 6 m), the road does not assure the appropriate standard and traffic safety for all users. An analysis of the conditions in the study area showed that a major part of the road network required at least an overlay.

Traffic data

The annual daily traffic in 2004 on G1-3 taken into account was:

  • 14.500 vehicles on Maribor - Lenart section (20% of which represent trucks)
  • 8.900 vehicles on Lenart – Gornja Radgona section (28% trucks)
  • 11.900 vehicles on Gornja Radgona - Radenci section (22% trucks)
  • 6.500 vehicles on Radenci – Murska Sobota section (8-15% trucks)
  • 12.000 vehicles on Murska Sobota - Beltinci section (10-24% trucks)
  • 7.300 vehicles on Beltinci - Lendava section (27-31% trucks)
  • 2.900 vehicles on Lendava - MP Dolga vas section (49-61% trucks).

On R2-443, there are 450 vehicles on Lendava - Pince section (3% trucks).

Traffic volume of the already built motorway section Vučja vas – Beltinci reaches 3.813 vehicles (46-69% trucks).

Table 1- Investment costs (fixed price of October 2004 in EUR)

SECTION EUR
Maribor – Lenart 92.351.100
Lenart – SpodnjaSenarska 59.544.400
SpodnjaSenarska – Cogetinci 102.874.400
Cogetinci – Vučja vas 124.214.100
Beltinci - Lendava 113.491.600
Lendava - Pince 135.888.100
TOTAL MARIBOR - PINCE 628.363.700

The financial cost of the construction of the entire motorway section Maribor - Pince amounts to 628.363.700 EUR.

Financial analysis

Cash flow was elaborated in variants for a 20-year and for a 30-year life period of investment. For the 20-year period, cash flow is positive only on Maribor - Lenart and Lenart - Sp. Senarska motorway subsections, while it is negative on the entire Maribor – Pince motorway section. For the 30-year period, the cash flow is negative on the Cogetinci – Vučja vas and Lendava - Pince motorway subsections, whereas on other subsections and on the entire motorway section it is positive.

Economic evaluation

20-year flow of costs and benefits were analysed according to different scenarios of traffic volume, based on the net present value criterion.

Results showed that the construction of Maribor – Lenart and Beltinci - Lendava motorway subsections, as well as the entire Maribor - Pince motorway section, is feasible from an economic point of view. The construction of Lenart - Vučja vas and Lendava - Pince motorway subsections is economically unfeasible. Even in the case of traffic outflow due to introduction of tolls, the construction of the entire Maribor – Pince motorway section is feasible.

Traffic-technical conditions on the road from Maribor to Vučja vas are, due to high density of transit and seasonal traffic, unsuitable for present and expected traffic. Traffic-technical conditions were to be improved with the construction of the motorway.

The length of the analysed motorway section between Maribor and Pince is 68,636 km and the investment value is 628.363.700 EUR (fixed prices of October 2004).

Table 2- Summary in figures Maribor – Pince motorway section

Section Length in km Investment value in EUR MEUR / km
Maribor – Lenart 9,400 92.351.100 9.824.585
Lenart - Sp. Senarska 7,200 59.544.400 8.270.056
Sp. Senarska – Cogetinci 9,490 102.874.400 10.840.295
Cogetinci - Vučja vas 11,675 124.214.100 10.639.323
Beltinci – Lendava 17,200 113.491.600 6.598.349
Lendava – Pince 13,671 135.888.100 9.939.880
TOTAL Maribor – Pince 68,636 628.363.700 9.155.016

The socio – economic evaluation showed that the construction of Maribor – Lenart and Beltinci - Lendava motorway subsections, as well as the entire Maribor - Pince motorway section, was found feasible from an economic point of view, while the construction of Lenart - Vučja vas and Lendava - Pince motorway subsections was economically unfeasible.

The Contracting Authority (Public Party)

The contracting authority is DARS, Motorway Company in the Republic of Slovenia. DARS is a joint-stock company. In 1994, the Republic of Slovenia transferred the management of all existing motorways, as well as relevant infrastructure and plant to DARS d.d. Thus, DARS d.d. has assumed the right to collect motorway tolls as a source of income necessary for the management and maintenance of Slovenia's motorway network, as well as an important source for building new ones.

Sources of Financing

The financing of motorway infrastructure projects is realized through the public budget of the Republic of Slovenia - public projects with a credit guaranteed by the state. All the main plans are approved by the parliament. The construction was financed through three key sources:

  • Public budget,
  • European fund,
  • European Investment Bank (loan).

Operation and maintenance is financed by direct tax sources (fuel tax, user fees -tolls and vignette).

Users

The users of the motorway are private and business motorists. The main stakeholders are users, DARS, Ministry of Transport, municipalities and landlords.

Key Purpose for Public Financing Model Selection

The project was economically feasible but could not be supported financially.

Project Timing

It was a time of significant GDP growth between 2005-2007, higher than what expected in 2002. DARS, Motorway Company of Slovenia, applied the standard FIDIC contract with a few exceptions in the field of dispute resolution.

Project Locality and Market Geography

The A5 is important for regional transport from Maribor to Lendava and as a freight transport road towards Hungary. Near Maribor, the road joins Vienna – Ljubljana (A1) and ends on the Hungarian border. It is included in TEN-T. Besides the TEN-T corridor, this motorway is a main connection for cities and towns in the Stajerska and Prekmurje regions.

Procurement & Contractual Structure

There were open public tenders for all phases of procurement (design, build). DARS, the Motorway Company of Slovenia, funded all phases. First, the company got a design and building permit; after that, tender for construction was opened. There were 12 design contracts and procurement of construction was divided in 15 LOTS. After construction, all highways became part of the national network. DARS is responsible for operation and maintenance.

Risk Allocation

All the risks were and are on the public side, as depicted in Figure 3, apart from part of the construction risk.


Pince3.PNG

Figure 3: Risk allocation

Performance

The performance of the motorway is positive. The indicators, which were used for the evaluation of different stages of the project, were time schedule, project finance, quality checking and monitoring of the environment. Reliability was measured by ex-ante (forecasted) and ex-post (observed) share of delayed traffic. Availability was measured by ex-ante and ex post days/year open to traffic. Maintainability was measured by ex-ante and ex-post maintenance costs. Safety was measured by ex-ante and ex-post total accidents and fatalities per 1000 vehicle-km per year. Cost of investment was almost 10% lower than expected, due to better geo-mechanical conditions (less construction). The impact of agreed request of complementary works on costs was around 5% - some claims were made, regarding unit costs.

Project Outcomes

The project is successful. Actual traffic is higher than forecasts, and revenues are higher than expected, due to the many trucks driving from east to west and vice versa. There were no delays in the initiation of works following award, nor in the completion of works. The main success was a new highway for all - local residents and others. The old road is not congested anymore and traveling time has reduced.

References

The initial version of this wiki page has been produced within the framework of the BENEFIT project that has received funding from the European Union's Horizon 2020 research and innovation programme under grant agreement No 635973.