The Impact of Odessa Sea Port on Agglomeration Tendencies in the City

The Impact of Odessa Sea Port on Agglomeration Tendencies in the City 

by Valeriia Sehstak

“The port is itself an existence of Odessa” Lanzheron A. (1763-1831) - former governor of Odessa, made the port of Odessa a free port (selling and storing imported goods with no customs duties) in 1819


The port of Odessa is one of the largest sea ports on the Black Sea and the Sea of Azov. It is considered to be the biggest passenger port on the Black Sea and a leader in cargo handling volumes among all of the 17 Ukrainian sea ports. The capacities of the port are such, that it can handle more than 21 million tones of dry and 25 million tons of bulk cargos every year. The passenger terminal is being used by roughly 4 million tourists annually. 

The port, stevedoring companies, other state and private companies related to the sea port activities, employ around 110,000 people. Given the aforementioned data, it is not hard to come to the conclusion that regional economics and the city prosperity and development are closely connected to this piece of infrastructure. This transport hub serves as a cluster of crewing agencies, logistic companies, building and wholesale trading firms, etc. In this regard one can see how the first nature conditions (the presence of the Black Sea) and the so called “one and a half geography” (meaning sea port as an infrastructure) can explain not only the fact that Odessa is one of the most developed cities in the whole country, but even agglomeration processes occurring throughout the whole history of the city, leading to the fact that Odessa became the regional center with more than 1,4 million people population of various nationalities and backgrounds.

The presence of port contributed to relatively high wages in the city, even despite the fact that Odessa is not the capital city of Ukraine. According to the data released in the end of 2011, the city not only has the lowest level of unemployment along with Kiev, but also has the highest level of relative wages if to compare with the cities similar population wise. Those effects can be partially explained by the presence of the sea port and high local market potential. However, here not only the local market matters. The city itself and the port have a rather crucial strategic location, as via using the port infrastructure and capacities, the region and the country itself are able to trade with 100 countries worldwide because of the transport lines that are eventually connected to 600 ports. The port also services ferries directly connecting the region with Greece and Turkey, two countries that also have a large market potential and have a spillover effect on the development of Odessa region.

However, I would argue that despite all of the benefits that the region gets from this piece of infrastructure and the market potential effect, the pace of development that can be extracted from this is far from its limit. The port cannot handle the economies of scale that arises with the development of shipping industry and especially a very rapid and far going growth from the Turkish side. Thus, major changes are desperately needed in order to benefit from the opportunities that globalization along with the extensive trading can give to the region and eventually the country itself.

One of the possible ways out has been presented by the U.S. Agency on international development, when the Plan for potential development of industrial zones and logistics territories has been introduced in 2011 and is supposed to be fully implemented by 2025. According to this development plan not only the capacity of the port will be considerably increased, but also a lot of industries and logistics companies will be established due to the port territory enlargement. The project will also require building new highways and roads and will create a lot of transportation hubs. The conceptual scheme of the whole enlarged area being under development can be seen on the picture below.



*The area that is currently being used is marked with orange circles; the rest should be built according to the 2011 Plan for potential development of industrial zones and logistics territories by the year 2025.

Thus, the enlargement of Odessa Sea Port will not only create enhanced clustering of the logistics and industrial firms nearby the port facilities, but will also enhance international trading in the region and create a basis for growing number of intermediate industries that will arise immediately after the port will obtain a bigger scale (such as maritime agencies, financial firms, etc.). According to the plan described above, the area will also have some space for non-commercial real estate, hence, enlargement of the facility will lead to the concentration of both enterprises and people in the area.

The benefits of such a development plan are clear when one refers to the New Economic Geography model, where larger scale and lower in costs trading in the sea port zone under development will lead to agglomeration tendencies. The city itself will also benefit and attract more firms and labor force; however, one should also take into account whether the activities of local authorities will be beneficial in terms of favorable business environment in the region.

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Kosovo Albania - Highway of Nation

Kosovo Albania - Highway of Nation

by Vahidin Nurshaba


As of 2007 Republic of Albania, and then in 2010 Republic of Kosovo, have started the largest project in the last decade in road building across the Balkan countries, respectively the highway between Kosovo and Albania. The Albania’s part of the highway is known as “Rruga e Kombit” (Highway of the Nation), and in the part of Kosovo it is named after its first president since declaring its independence, Dr. Ibrahim Rugova. 

It is a four lane highway, and it is being built by the distinguished Turkish American company called Bechtel & Enka. The cost of the highway is overseen to be more than 1 Billion Euros. The Project is part of the South East Europe route, to start from the city Lezhe in Albania and end at the E75 Corridor X in Doljevac in Nish, Serbia. Once the Kosovo part of the project is completed, the highway will join Adriatic Sea ports of Dures and Shengjin in Albania with the Pan-European Corridor X in Serbia through Prishitna, Republic of Kosovo. So far, one part of the project is finished, and the new route from Duhel, Kosovo to Thuanene, Albania is already accessible.

This project has helped in reducing the transportation cost and time between Prishtina (the capital city of Kosovo) and Tirana (the capital city of Albania). In comparison with the old poor mountains road, the contributed reduction was from 9 hours to just 3 hours in time. The road is financed by its respective governments. The emphasis goes around on occurring agglomeration along the highway between two countries, the highway that goes through the villages; there are modern shopping malls, hotels, gas station and restaurants opened along the highway because there is a demand for travelers to access those facilities for their use. However, the most significant feature is the comfort ability of traveling from Prishtina to Tirana for only three hours time of travel distance and the highways complies to high European standards which includes the tunnels and bridges.

From economic geography point of view, the advantages are for both countries. First, the patriotic feelings of nationalism between the two nations that will contribute in unification of policies that will culturally confine them. Second, it is a massive boost for tourism in Albania enabling Kosovars, Macedonians, and other neighboring countries to go for the summer to Albanian beautiful coastline. Furthermore, trade and labour mobility is increased further among the two countries due to reduced transportation cost and time span. Meanwhile, road opened new opportunities for new investments in which case Kosovo telecommunications companies started to open their branches in Albania, and vie-versa Albanian companies are present now in the Kosovo markets. Finally, it helped create jobs as long as the constructions were taking place since both of the Governments have specified in their contracts that labor force shall be employed locally.

The former Albanian Prime Minister believes that the road will “crystallize a year-round tourism industry and double the size of the Albanian market while allowing both communities to rationalize the market, Kosovo will probably start planting wheat while Albania deals with livestock and vegetable growing”, said Majko. Same has happened on the Kosovo side. Initially, there were villages with no prosperity whatsoever. However, now that the highway passes through those less developed villages, there are new shops, hotels and restaurants opened, providing those villages hope to prosper and commute more with the capitals. Another important aspect of agglomeration that occurred is that at the points of the borders between two countries, there are some services done well at the points of the border because it is much expensive to move to the capital.

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Building physical infrastructure in Singapore-first step towards agglomeration

Building physical infrastructure in Singapore-first step towards agglomeration

by Ivan Vovkanych

Singapore 40 years ago was a poor in all aspects area. In 1971 the strategic development plan was first introduced by the government. The reforms in housing, government expenditure, economic and infrastructure areas have been introduced. Now Singapore is a thriving city and an international business center. So what exactly Singapore government did that made such a progress?

Housing problem and unemployment were one of the most important issues after obtaining independence. Therefore the Housing and Development Board (HDB) and the Economic Development Board (EDB) have been established to deal with these problems. Cheap public housing has been introduced along with building schools, medical clinics, community centers etc. Government fostered mixing up homes of different classes, races and provided subsidies for lower income families in order to create balanced multi-racial, multi-class community. Along the salvations of class problems, sense of regional identity has been formed by building location-specific environments. These actions increased the fixed capital accumulation in the region and by this positively influenced efficiency.



Another important asset that Singapore government improved is the seaport. Port Authority of Singapore (PSA) has been created to coordinate actions with other logistics means like the air and land transport in order to create a global integrated logistics hub. 




Government used the following steps to achieve the given goal:

1. The port has been increased to play bigger role in the international trade,

2. Competition from other port, the Jurong Port, has been introduced to increase the quality and decrease the price of services offered.

3. World business executives were invited to join the team as board and executive committee members.

The first airport in Singapore was based at Paya Lebar, close to residential areas. In 1970s an airport has been build at Changi site. This place had better approach via the sea, better road access, there were less residential areas affected by noise and much less economically useful land has been used for it.

Moreover, advanced system of radial roads converging to the city center was built and The Mass Rapid Transit (MRT) railroad connection systems between Changi Airport, the North-east of Singapore, Sentosa, and Marina were introduced.
As the result a cargo arrived by plane, transported by a truck and sent further by ship via the seaport would be treated as a free trade zone regulated under single the special customs treatment mechanism. This decreased the transport costs and improved the trade dynamics in Singapore in order to make it a tread center of the region.

It is almost impossible to evaluate the influence of investments in the physical infrastructure on the development of Singapore and the agglomeration of firms and population without consideration of education, science, innovation, healthcare etc. But, based on theories of urban development a number of effects can be seen. First, transport cost for importing and exporting goods decreased. Bigger variety of goods supported competition and improved quality of products. This also allowed domestic producers to become competitive on the international markets. Secondly, increasing production and services capacities in the transportation industries led to increased market share and reduced cost. This helped Singapore to have comparative advantage and become one of the dominant players on the transportation market. Thirdly, according to New Economic Geography models, low transport cost, cheap housing (decreases price index) and home market effect made real wages relatively higher, ensured agglomeration in Singapore and improved efficiency of labor. Singapore development also proves the importance of History in migration dynamics. Since Independence transport costs were decreasing. After reaching breaking point agglomeration in terms of business and population occurred. This is an empirical demonstration how reaching the breaking point by reducing the transport costs changes the equilibrium from a spreading one to an agglomerated one.

Therefore Singapore is a perfect example to illustrate how physical infrastructure produced Home Market Effect, Price Index Effect, and Extent of Competition Effect with other externalities and contributed towards business and population agglomeration in Singapore.

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Consumer dissatisfaction with Hungarian railways

It was 6 AM when I got on the train in a town called Cegléd, about 70 km from Budapest, the capital of Hungary. It was a cold morning in mid-January, so I was glad that the train arrived only 5 minutes late. The wagon was dimly lit, and without the sun it was hard to find my way to an empty seat, even though there were plenty of them. I did not bother with the cold on the train and quickly fell asleep.

When I woke up, the train stopped in a station and people were swarming into the wagon. It was overwhelmed in a second, full with the noise and odor of the early morning commuters, heading Budapest. Most of them were young adults and pupils. The vapor and thickness of the carriage was hard to bear. The wagon was way too small for all us, but it seemed that it was just the everyday routine, as I haven’t heard any complaints about the situation.

The delay, the cold, the lack of proper lights, the odor, the noise and all the other inconveniences were just regular for the notorious Hungarian railway company, the MÁV, which affects the everyday life of at least 700 thousand commuters around Budapest.

According to a study by Eboli & Mazzula (2010), there are ten crucial characteristics of a rail service that determines passenger satisfaction:

•             Timetable: frequency and travel time

•             Reliability: trains on time

•             Completeness: number of stops, station accessibility, etc.

•             Information: time table and price information

•             Comfort: journey experience, odor, noise

•             Cleanliness: both train and station

•             Safety: against accidents

•             Safety: of private property

•             Price

•             Other: environmental protection, etc.

I decided to create my own consumer satisfaction survey on the commuters’ preferences living in the outskirts of Budapest. The question that I wanted to answer was the following: „How could the MÁV enhance its consumers’ satisfaction effectively?”

In March 2012, I have created a survey and sent it to the most famous MÁV blog (mav.blog.hu) , and posted it on the Facebook wall of the largest commuters’ towns near Budapest. Answerers had to show their preferences on a five-point scale. It worked reasonably well, as I have been able to reach 300 answerers, and half of them were real everyday commuters. The results are quite interesting.

There seems to be only a small difference between the views’ of commuters and rare-users. Commuters use train services everyday, and their most important needs are to get into town quickly, reliably and cheaply. Most of them are living on the outskirts of Budapest, getting up everyday early to arrive to work before 8 or 9 am, and travel home in the afternoon. They chose to buy a cheaper and greener house, but in turn they have to commute everyday, that consumes time and money.

In my sample, most of the rare-users travel only occasionaly, but several times a year. We may imagine them living in Budapest, but they regularly take the train to visit relatives or to go on holidays.

So, How could the MÁV enhance its consumers’ satisfaction effectively? – Results

Travel time, punctuality and cleanliness. By far these are the three most important factors that affect the whole sample. It is interesting that for the commuters, top3 are travel time, punctuality and the price of the journey. We can see that cleanliness of the train is not as important for them as the price of the service. An other, not surprising difference is that the frequency of the service is only important for the commuters. The most unimportant factor was environmental protection.

It is not enough to see how satisfied people are with a certain aspect of the service. The most important factor is how they feel about the importance of this aspect. I have also asked on a five-point scale how important they find these aspects, and I created the „relative dissatisfaction” of the most important factors. It shows how dissatisfied the answerers are, according to the factor’s importance (the larger the number, the more dissatisfied).

I have also performed some more advanced methods to enhance precision. These results show that if the MÁV would be able to increase the average answerer’s travel time satisfaction with 10%, the average overall consumer satisfaction could increase with 3,7%. Punctuality could have 3,5%, price of the journey 2,5% and cleanliness 2%. We can see that all of these improvements have small effects on the overall satisfaction of consumers.

A possible improvement could be the broader use of new suburban trains, like the FLIRT electric regional train (on the photo). On those lines where these new models are running, the average passenger is significantly more satisfied, both with the overall performance of MÁV and the comfort of the journey.

How could the MÁV enhance its consumers’ satisfaction effectively? – what could the MÁV do?

Travel time and punctuality are strongly related to the quality of the rail network. Experts on this topic also stressed out that the most important improvement would be the modernisation of the network, taking into consideration the 21th century needs of a commuter. That takes a lot of time, money and effort; therefore, at best this process would yield results after long years.

But comfort and cleanliness are easier and cheaper to achieve with a new, more effective cleaning company. The frequency of the trains could be enhanced by new, well-organised time tables. For that, the attitude of this state-owned company has to be changed.

Csaba Gábor Pogonyi

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The story of Liverpool

Beatles, Everton FC, Lusitania and River Mersey; they are all hallmarks of Liverpool and made it once famous. But the question is whether or not Liverpool connects to and fits into the world of new economic geography and if so, then how. Furthermore, can Liverpool be one of the famous textbook examples of agglomeration forces and trade like Chicago? Concerning these questions, I will do my best to show that the story of Liverpool is far more intriguing than one thinks at first and it is worth to be taught since it has strong links to theory.

Once upon a time, the place of Liverpool was a muddy, fishermen’s village, until all of a sudden King John decided to make a new borough with a new port on it to trade with Ireland. The port was a kind of agglomeration force; a couple of settlers arrived and settled down. Thus the village grew but after some time it reached a steady state and stayed unimportant compared to the nearby centre, Chester. The economy has been in a stable equilibrium for centuries with a population around 1000 people.

Then an accident happened again, the location of Liverpool became more valuable when trade evolved with the 13 British Colonies of America. To preserve this preciousness the first commercial wet port was built here, which allowed the ships to be unloaded and uploaded anytime of the day regardless of the tide. Of course, this invention attracted more and more ships, which is a good example of cumulative causation: the wet port was established in Liverpool because there were many ships as a result of trade with the colonies and more and more ships arrived to Liverpool because the wet port was there. Later, a large amount of profit was realised by the local merchants due to slave trade in the 18^th century. The slave trade line was in fact a triangle connecting Liverpool, Africa, and America. In spite of its success, the business with the colonies was suddenly terminated when the American War of Independence broke out. Interestingly, this shock – that is losing one of the most important trade partners – could have led to the end of the golden days of the city, yet, it did not happen. Liverpool also kept its major position even when the slave trade was abolished, as the trade of tobacco, cotton, sugar, and other goods easily substituted it.

Steam ships were invented in the 19^th century and eventually became common on the seas. The docks of Liverpool – since they were not deep enough – were not appropriate for these ships. In answer to this, the city quickly overcame the technological shock by establishing new ports to be able to serve steam ships. From this time on, hundreds of people travelled to North America from Ireland and Eastern Europe via Liverpool, which was at this time the second largest port in the country.

In the First World War Liverpool docks were very busy building ships, and the city itself was still very vivid. In contrast, between the two world wars, world trade declined and so did Liverpool. A few years later, in the Second World War, the location of the city became favourable again: troops, food and weapons arrived from the USA to Liverpool. Unfortunately, its importance made the city a major target of the German air force, which bombed it several times.

After the war, Liverpool never recovered. Containerisation was then the new wave in shipping and there was not any dock where these containerships could port until the 1970s so the city soon found itself on the margin. Furthermore, United Kingdom enhanced trade with the European Union, joining it in 1973, thus ports on the Southern and Eastern coast of the country benefitted, and for the first time, Liverpool was on the wrong side of the country. The companies, once located near Liverpool moved closer to the centre of the EU thus the agglomeration force in the city declined. Since that time, the economy of Liverpool reached an equilibrium again, but at a lower level, with a population of 435 000 people.

Focusing on the future: will the story be a fairytale? Certainly, nothing can be declared, but the Objective One Merseyside program of the European Union between 1994 and 2008 probably enforced the agglomeration forces of the city with its projects. Moreover, a new container dock is planned for extra huge containerships. However, it is still doubtful whether these projects can offset the handicap of being far from most of the EU members.

To give you an overview of the last centuries, here states a graph of the population of Liverpool.

Source: Liverpool Core Strategy Preferred Options 2010

All in all, location matters. What seemed to be a perfect position for centuries can become a disadvantage after all, due to some accidents of history, just as in the case of Liverpool. Some events do not even have an effect, but some affect the economy very intensively and move it to a new equilibrium. And if the agglomeration forces deteriorate, the size of the particular city will decrease. Good luck, Liverpool.

Andrea Kiss

Resources:

Lambert, T. (2012). A Brief History of Liverpool.

ScouseTimes (2011, February 13). Special Lost Dock ofLiverpool

LiverpoolCore Strategy Preferred Options 2010. (n.d.) p. 32.

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Success of the Vasco da Gama Bridge?

Background:

The constructions of the Vasco da Gama Bridge, in Lisboa, Portugal started in 1995 and after 3 years of work it was opened to the traffic in March, 1998. This is the longest bridge in Europe with its length of 17,2 km. The two goals of the bridge - clearly declared before this project - were accepted.

1. First, it aimed for the decongestion of the other bridge of Lisbon. The 25th of April Bridge was built in the sixties and the traffic has heavily increased since then, thus some measures needed to be taken.

2. Second, it meant to create the north-south connection around the capital city.

After the first bridge went into use, many inhabitants and firms moved to the other side of the river Tejo opting for a further location. However, it led to an increased congestion cost for those who traveled from Spain in order to trade or who decided to commute instead of living in the central business district. To sum it up, the goals of a new bridge were focused on lowering both transportation costs and congestion.

Theory: What is expected according to the theory?

As the Vasco da Gama Bridge is not the first connection between the north and the south side of the river Tejo (Tagus), the main goal was the reduction of congestion on the 25th of April Bridge. In our analysis we should ignore the impacts of the first bridge and focus on the second one. According to the theory, the bigger the city is (that means a larger number of firms), the higher the congestion costs are. If there are many companies in the city, congestion acts as a spreading force that stimulates firms to move from the central business district to the periphery zone, where traffic is lower.

The core model of new economic geography (congestion is not included) says that if transport costs are low then agglomeration is the stable equilibrium. Adding congestion to the theory, spreading equilibrium becomes more general and agglomeration is only an exception. According to the two-region core model (Brakman et al.), even a small change in congestion can easily lead to a new long-run equilibrium. As transport costs start to decrease, first partial then total agglomeration will develop. The further shrinking of costs result in spreading as a stable equilibrium again.

Although in Lisbon’s case it is not about cities. Decreasing congestion is the main aim of the bridge. So, based on this theory, the new equilibrium after the opening of the bridge depends on the previous balance in Lisbon. Assuming that building the 25^th of April resulted in spreading equilibrium, the Vasco da Gama Bridge should foster agglomeration and at the same time reduce congestion on the other bridge.

Reality: What had happened?

As for the decongestion of the 25th of April, traffic experts agreed that this aim can be reached without building a new bridge. Another, even better solution could have been achieved with focusing on the significant improvements of the railways and public transport connections between the two banks of the river. However, the Vasco da Gama Bridge was built.

According to a document from 1994 it had been estimated in advance that the new bridge would stimulate traffic above the annual transport growth rates without having too much impact on the other bridge. As we see on the table below, the expectations came true.

Source: Melo, J.

As data shows, after opening the Vasco da Gama Bridge the total amount of vehicles grew dramatically while the traffic of the 25^th of April Bridge did not represent significant decrease. Why? A new bridge always generates urban and traffic growth, as we can see in our case.

So, can we explain these empirical evidences with the transport coming from the East in order to trade with the Centrum of Portugal? As they do not have to either be in the traffic jam or bypass the whole river in order to get into the city, it should be the appropriate solution to reduce transport costs. Interestingly, according to a paper (Melo, J.), these traders prefer to use the bridge in Carregado that is about 30 km from Lisbon to the North and was built after the Vasco da Gama Bridge. This latest bridge seems to have become the main part of the north-south connection...

To sum it up, decreasing this level of congestion theoretically drives agglomeration forces. As the bridge did not stimulate so far development in the south, the theory seems to be confirmed on this side. However, we cannot observe any significant reduction in congestion on the 25^th of April Bridge either. So, the Vasco da Gama Bridge does not seem to reach its initial goals, although it has clearly positive effects in other areas.

Noémi Szabó 

References

Brakman et al. (2009). The New Introduction to Geographical Economics. Cambridge University Press, New York.

Melo, J. (2000). The Vasco da Gama Bridge on the Tagus Estuary: A paradigm of bad decision making, but good post-evaluation. World Transport Policy & Practice, 6(2). 20-30. p.

„Portugal celebrates opening of giant bridge” (1998).

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What is the use of a bridge? The impacts of the Danube Bridge 2

Constantine’s Bridge, the largest bridge of the ancient times was built in the 4^th century, under the reign of the Roman Emperor Constantine I the Great. It was also the first bridge in the Romanian-Bulgarian section of the Danube, followed by the Ruse-Giurgiu Bridge more than 1600 years later, in 1954, which was built under the initiative of Joseph Stalin.

Accordingly, when finished in November 2012, the Danube Bridge 2 will be the third bridge ever built in this section of the river in the past 2000 years. The total cost of the construction is estimated to be € 226m from which € 70m is covered by the European Union as a part of its regional policy. The bridge will be 1971 m long, and include road and pedestrian paths to both directions and a railway track connecting the towns of Calafat (Romania) and Vidin (Bulgaria).

The costs of the construction are clear, but how can one estimate the benefits of building such a bridge? According to the European Union, by integrating Bulgaria’s road and railway system into the European transportation network, the Danube Bridge 2 will be an important part of the European Transport Corridor IV, which runs from Dresden to Istanbul connecting Western and Eastern Europe. In terms of economic geography, the most obvious effect of the construction will be the substantial reduction of the transport costs. The two towns are now linked by a ferryboat for which it takes around 20 minutes to cross the Danube. The ferry has no schedule, and it takes off only when all of its six trucks are filled. With the bridge, the same journey will take only one and a half minute.

As it can be seen in the map, there are several smaller towns around Vidin, while the Romanian side is relatively drear. According to the core model of economic geography which assumes two sectors and mobile labour force in one of the sectors, the main beneficiaries of the construction will be the towns of Vidin and Calafat which will be directly connected by the bridge. The model suggests that the reduction of transport costs will induce agglomeration in the town with a production cost advantage. Since wages are considerably lower in Vidin, it will experience the largest growth in size (and therefore, in welfare), while Calafat will have only a modest benefit from the construction.

However, the model cannot account for several other factors which also affect the spatial distribution of economic activity: there might be other factors influencing the workers’ ability to migrate (e.g. differences in language as Bulgarian is a Slavic while Romanian is a Latin language), and the construction will undoubtedly attract investments from other parts of the country or even from other countries. In addition, the sectorial composition of the economy is much more complex in real life than in the model (e.g. industry, transport, agriculture etc.).

Nevertheless, some of the potential effects are predictable. Vidin is a main town in north-western area of Bulgaria with a population around 47 000. The region is borders Romania and the Danube to the north and Serbia and Montenegro to the west and south. During the Yugoslavian wars in the 1990s, the region suffered badly from the trade embargo against Serbia. As a result, in spite of its advantageous geographic and transport location, it is considered to be the most under-developed region in the country. The unemployment rate is twice as high as the country’s average, and young people either emigrate or move to other parts of the country. Because of the high unemployment, hundreds of people commute to Romania from Vidin every day. By inducing agglomeration, the bridge is expected to change this deteriorating trend: the construction already created 1000 jobs, and attracted foreign investments which have increased the real estate prices in the area. In addition, as the city has several famous landmarks, the bridge may attract tourists and create other employment possibilities.

In the Romanian side, the town of Calafat is considerably smaller than Vidin with a population around 16 000. Although they say that the bridge is not as important for them as it is for the Bulgarians (this was actually predicted by the model), the people of Calafat also expect positive long-term economic impacts from the construction mainly through new employment possibilities. The construction is expected to pump an estimated € 57m into the local economies on both sides.

Besides stimulating local economies, the bridge has key importance in strengthening the relationship between Romania and Bulgaria. In the past, in spite of their shared history the two countries were largely separated from each other by politics and language. The construction of the bridge can be considered as an evidence for the countries’ willingness to cooperate with each other. This is essential, given the fact that the countries’ border areas, like Vidin and Calafat have similar development problems that could be overcome only by common solutions.

Anna Trendl

References

History. (2010). 

New Danube bridge to speed up international traffic. (2010, January 16). from Regional Policy-Inforegio

The Romania-Bulgaria Cross Border Cooperation Programme. (2010). from Partnership for Active Cooperation and Encouragement in the Cross-border Region Silistra-Calarasi

Cost of 2nd Bulgarian-Romanian Danube Bridge Up EUR 26 M. (2012, January 27). from novinite.com - Sofia news Agency 

Two new bridges to be built over the Danube. (2012, February 11). from Europost - Weekly for politics, business and culture

Brunwasser, M. (2006, June 14). Bridge to a new era for Bulgaria and Romania - Europe - International Herald Tribune. from The New York Times

News on the construction of Danube bridge 2. (n.d.). from Vidin Estates

Sommerbauer, J. (2007, January 2). Danube II: bridging united waters. from cafebabel.com - The European Magazine

VIDIN - Geography and history. (n.d.). from Portrait of the Regions 

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