BELGRADE-BAR RAILWAY 1952-1976 HISTORY OF FINANCING THE LARGEST INFRASTRUCTURE PROJECT IN SOCIALIST YUGOSLAVIA

Abstract

After 25 years of uncertainty and ups and downs, Belgrade-Bar railway was finished and officially opened to traffic on 28 May 1976. There was officially completed the last big federal project in Yugoslavia. What do the results of this research tell us about the history of financing the construction of the railroad Belgrade-Bar? First of all, it strikes to the line that the railway cost much more than it could be concluded from the literature. The construction did not cost 210, i.e. 300 million USD, but about 449.6 million USD. Furthermore, there were additional costs made after opening of the railway, since it was not fully completed (e.g. it was necessary to electrify a route from Titovo Uzice to Bar), which was not calculated in this paper. The budget presented in this paper was not fully accurate either, but in any case it was much more accurate than all the previous calculations based on different sources.

Information from daily newspapers and professional journals were more than sufficient to demonstrate and confirm trends that emerged in relation to financing of the BB railway construction. A tendency, which was very clear, was that the costs of the railway construction were much higher than it had been previously planned.

Another, equally important tendency was that the Federal Republic of Serbia and SR Montenegro invested much more in the railway than it was expected. Even if the new research proved that the railway did not cost 449.6 million USD, but 480 or 420 million USD, the two above-mentioned tendencies would remain unchanged. A fact that the construction costs were much higher at the end of the line than it was planned was not unusual for the socialist countries, when it came to the construction of such huge projects. However, the fact that the Federal Republic of Serbia and SR Montenegro invested much more in the railway than the Federal Government was a very interesting finding, especially because the scientific papers and news reports about the BB railway presented a completely different picture and totally different impression.

This finding automatically opened another question – namely, whether the construction of the BB railway after 1971 was a Yugoslav Federal project at all, or, in fact, it was a project of SR Serbia and the Federal Republic of Montenegro? The purpose of federal projects in Yugoslavia after The Second World War was to support with the common means of financing only those projects which were important for the economy of entire Yugoslavia. In any case, Belgrade-Bar railway was such a project, since its construction was important for the entire Yugoslav economy. Representatives of all the Republics agreed in this regard, and no one questioned it. Accordingly, there was no doubt that the BB railway was the federal project at the beginning. However, construction of the BB railway was also the largest and the most expensive federal project, and the Yugoslav economy in the fifties and sixties was simply not strong enough to provide sufficient resources to finish the railway and open it to traffic. Finally, SR Serbia and SR Montenegro had to take almost two-thirds of the total construction costs. Therefore it was very difficult and problematic to characterize the construction of the railroad Belgrade-Bar as a federal project. In any case, it could be said that the construction of the railroad Belgrade-Bar, which started as a federal project in 1952 was completed as a project of SR Serbia and SR Montenegro in 1976. On the other hand, without help of the other republics sent to the Federal Republic of Montenegro in critical moments after 1972, it would not be possible to finish the railroad. Taking into account this fact, the construction of the railroad Belgrade-Bar could be seen as a joint success of all six republics.

That the construction of the railway made sense, especially from the economic point of view, was proved by the development of traffic on this line after 1976. During 1977, only 3,198 tons of goods were transported on the BB railway, because the railway had not been electrified yet in its whole length, and the port of Bar was not fully completed. However, already in 1981, 5,827 million tons of cargo and 3,387 million passengers were transported on the railway, what made it profitable. After that, more passengers and goods were transported every year, thus in 1985, there were transported 6,9 million tons of cargo and 4,8 million passengers. Only after the collapse of Yugoslavia in 1991, the railway was no longer profitable.

It also raised the question why the construction of the BB railway was so challenged in SR Croatia and SR Slovenia after 1965, if more than two-thirds of the construction costs were borne by SR Serbia and SR Montenegro? I think there were several reasons for that, and none of them was directly related to the BB railway. An important reason was certainly that the BB railroad was the last federal project, and also it was the only federal project after 1971. Therefore, it was reminiscent of the time and the system before 1971. The primary aim of criticism coming from SR Croatia and SR Slovenia was not to question the purpose of construction of the BB railway, but to permanently abolish federal projects as a form of investment. It means that challenging of the BB railway was more politically than economically motivated.

Another reason was that after 1971 the republics had to finance the construction of the railway BB through Montenegro by loans, unwillingly, and often under strong political pressure. The construction of the Port in Bar should not be forgotten, since it was financed at the same time by the loans of the Federal State and the other republics. The very fact that the republics had to finance any project outside the republic after January 1, 1971 was far more important than the amount of funds which should be allocated. According to my opinion, it was exactly the main cause of dissatisfaction and negative attitudes of the other republics towards the Belgrade-Bar railway.