Case Studies: Adriatic Gateway Container Terminal, Rijeka, Croatia

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Project Overview
Figure 1: Adriatic Gateway Container Terminal
Adriatic Gateway Container Terminal, Rijeka, Croatia
Project Type: Both
Contract Duration: 30 years
Budget (2010-15):
Rijeka Port Authority: EUR 30M
Adriatic Gateway j.s.c:


Another EUR 65M will be invested over the remainder of the concession .
Project Time Line

Luka Rijeka d.d. was created in 1999 as a mixed public-private company and in 2000 was awarded a concession to operate the dry cargo terminals in the port of Rijeka. In 2009 a subsidiary company Jadranska Vrata d.d., was awarded a 30 year concession for the operation and expansion of the Bradjica Container Terminal, also known as Adriatic Gateway j.s.c.

In 2011, the Philippines-based container terminal operator ICTSI purchased a 51% stake in Jadranska Vrata d.d., and assumed control of the terminal. Luka Rijeka d.d. holds 49% of the shares


The port of Rijeka is a gateway to Central Europe, serving Serbia, Bosnia Herzegovina, Hungary, Austria, Slovakia, and neighbouring countries such as the Czech Republic, west Ukraine, and south Poland as well as Croatia.

In 2011 the capacities of its main terminals were:

  • Containers: 250,000 TEU;
  • General cargo: 3.5M tons;
  • Dry bulks (mainly coal and iron ore): 4.5M tons;
  • Liquid bulks: 24M tons.

It is the largest port in Croatia with a 2011 cargo throughput of 9.4M tons, including oil, general cargo, bulk cargo and containers (150,677 TEU.). Container throughput has since increased to 152,016 TEU in 2012 and 169,963 TEU in 2013.

The oil terminal, with a 2010 throughput of 6.4m tons, is operated as a concession by Jadranski Naftovod d.d., the company managing the national oil pipeline system.

Luka Rijeka d.d. is responsible for dry cargo operations in the port. It was originally awarded a 12 year concession from 2000-12, which has now been extended to 2042. The part of the concession relating to the Adriatic Gateway Container Terminal (AGCT), which was operated by its subsidiary Jadranska Vrata d.d., was converted in 2009 into a 30 year contract in order to facilitate the modernisation and expansion of the terminal. Part of the funding for this investment programme was obtained from the World Bank as part of its Rijeka Gateway programme.

Following an international competitive tender in 2010 ICTSI, a terminal operator based in the Philippines, was selected as Luka Rijeka’s strategic partner for the development of AGCT, purchasing a 51% stake in Jadranska Vrata d.d. (also known as Adriatic Gateway j.s.c) for EUR 15M.

Since then Rijeka Port Authority has invested over EUR 30M in the construction of a new 328m berth with 14.2m water depth. For comparison, the original 300m berth had a water depth of only 11.7m.

The EUR 34M investment programme put forward by Adriatic Gateway j.s.c for the period 2010-15 is mainly concerned with the reconstruction of the terminal’s operational areas and railway infrastructure, as well as the purchase of new equipment and IT upgrades.

The Contracting Authority (Public Party)

Port of Rijeka Authority, a non-profit legal entity, was established in 1996 by the Government of Croatia. It is a landlord port authority, tasked with port planning and infrastructure development, the issuing of concessions and permits, regulation of port users and port service providers, safety and security, fire protection, and waste management.

Luka Rijeka d.d., the JV partner in AGCT, was created in 1999 as the main terminal operating company. In September 2013 it was owned 71.4% by the Government of Croatia (State Property Fund), 14.1% by the Croatian Institutes for Health and Pensions Insurance and Croatia Osiguranje d.d., and 0.6% by the national shipping line Jadrolinja. The remaining 13.8% was owned by small shareholders, and is traded on the national Stock Exchange.

Luka Rijeka d.d. provides port services, warehousing, cargo transportation and other logistics activities.

The Concessionaire (Private Party)

The strategic investor is ICTSI, a Philippines-based container terminal operator which has developed a large portfolio of overseas projects (19 terminals worldwide).

ICTSI was established in 1987 as a joint venture between the Soriano and Razon Groups, large Filipino conglomerates, and Sea-Land Services Inc, an American container shipping company, to bid for Manila container terminal, which is still its largest single concession.

In 2001 ICTSI sold its foreign container terminals to Hutchison Ports Holdings in order to recover from cash flow problems caused the Asian financial crisis. It has since rebuilt its portfolio, mainly through successful competitive bidding for new terminal concessions.


The terminal is operated on a common user basis for shipping lines, port-related logistics services, and container shippers/consignees.

Key Purpose for PPP Model Selection

The main objectives in bringing in a strategic investor appear to have been:

  • Improvements in quality of service;
  • Extension of the port’s hinterland into Central Europe through the upgrading of rail infrastructure and the introduction of scheduled block train services;
  • Access to technical expertise, particularly in relation to equipment purchases and IT systems.

The use of a joint venture rather than a standard concession agreement reflects Luka Rijeka’s desire for continued participation in a profitable operation, and the opportunities this offers for knowledge transfer and increased public sector control.

Project Timing

The concept of involving a strategic investor emerged following a period of strong traffic growth between 2006-8, and was influenced by increased competition for Central European traffic from the port of Koper in Slovenia, which was beginning to substantially improve its inland rail connections.

However the tender took place in 2010 after a sharp drop in traffic resulting from the global recession, which may account for the relatively low price that ICTSI paid for its 51% stake in Adriatic Gateway j.s.c.

Figure 2: Adriatic Gateway Container Terminal Throughput (‘000 TEUs)

Project Locality and Market Geography

Rijeka is well placed to compete for Central European traffic, particularly now that it can accommodate larger ships, but further strengthen¬ing of rail communications along the Baltic-Adriatic Development Corridor will be required to make this happen.

Regular train services to/from Serbia and Hungary have been operating since November 2012, and there is likely to be a substantial increase in the proportion of containers moving by rail once the new rail yard at the terminal has been completed.

As a result, AGCT’s management forecasts that the proportion of container traffic accounted for by the Croatia market will fall from 51% in 2013 to 32% by 2016.

Figure 3: Adriatic Gateway Traffic Forecasts (‘000 TEUs)
Source: AGCT (

Procurement & Contractual Structure


The strategic partner was selected by an international competitive tender managed by the Dutch transaction advisory firm MTBS on behalf of Luka Rijeka d.d. and the World Bank. Advisory services provided by MTBS included design of the tender strategy, preparation of the tender documents, evaluation of the bids and support in negotiations with the preferred candidate.

There were a total of five bidders including, in addition to ICTSI, the TCB Group of Spain, DP World of Dubai, APMT (a sister company of the container shipping line Maersk), and the German terminal operator HHLA.

Contract Structure

There are three main components to the contract:

  • The original 30 year concession agreement between Jadranska Vrata d.d. and Rijeka Port Authority, signed in 2009;
  • The Share Purchase Agreement transferring 51% of Jadranska Vrata’s shares to ICTSI;
  • The Shareholders Agreement between Luka Rjeka d.d. and ICTSI defining their future relationship and setting out how the new joint venture is going to be managed and controlled.

Risk Allocation

Some of the most critical risks affecting AGCT are:

  • Union resistance to increased private sector participation in the port;
  • Technical and cost risks associated with maritime constructionworks;
  • Insufficient corridor capacity, limiting the project’s impact andability to increase its share of more distant markets;
  • Negative environmental impacts.

The Law on Maritime Domains and Seaports makes the port authority responsible for construction and maintenance work (including superstructure), although AGCT j.s.c has had an important advisory role in respect of terminal design, and also undertakes the maintenance of its own equipment.

Commercial risks borne by the joint venture include:

  • Continued growth of world and regional trade;
  • Global and regional economic conditions;
  • Increases in vessel size;
  • Consolidation among ocean carriers;
  • Willingness of users to pay for port services, which is directly related to competition from other ports

Commercial risks are borne by the quasi-public and private parties (Luka Rijeka d.d and ICTSI respectively) in roughly equal proportions, to reflect their shareholdings in AGCT. Financial risks are apportioned between AGCT shareholders in a similar way.

Figure 4: Risk allocation


It is not known whether any performance targets are included in the 30 year concession agreement or the Shareholders’ Agreement. Performance monitoring has been mainly in respect of traffic volumes, which are compared with the forecasts included in the concessionaire’s business plan.


  • Port of Rijeka. Traffic statistics

  • Luka Rijeka d.d. Ownership structure

  • Rotterdam Maritime Group (2002). Rehabilitation of the Port Function and Development Study Croatia.
  • S. Juretic, S. Farrell, 2014, Adriatic Gateway Container Terminal, Rijeka, in A. Roumboutsos, S. Farrell and K. Verhoest, COST Action TU1001 – Public Private Partnerships in Transport: Trends & Theory: 2014 Discussion Series: Country Profiles & Case Studies, ISBN 978-88-6922-009-8