Serbia - Country Commercial Guide
Infrastructure

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-03-08

Overview

Due to its strategic position in the heart of Southeast Europe, Serbia is often referred to as a gateway to Western Europe. It was a primary route from Western Europe to Istanbul and beyond even in Roman times and the Crusades. Serbia is home to three important European corridors: VII (the River Danube), X (the international highway and railroad), and XI (connecting Central Europe and the Adriatic Sea), providing excellent connections with Western Europe and the Middle East.

Underfunding has been a longstanding problem. The government has begun to address that in a significant building boom in recent years using grants, loans, and its strong fiscal position—most notably in highways—but much work remains. In December 2019, the Serbian government announced the new National Investment Plan, allocating approximately $14 billion for major development projects to be completed by 2025. A large portion of the funds will go to infrastructure projects, including road, rail, air, and water upgrades, which will provide opportunities for U.S. firms in these areas.

With the shared interest of bringing in more U.S. companies in this burgeoning sector, in 2018, the United States and Serbia signed a Memorandum of Understanding (MOU) on Cooperation in Infrastructure Development in Serbia. Following the signing of this MoU, U.S. construction firm Bechtel concluded an approximately $1 billion contract with the Serbian government to design and construct a 112 km stretch of highway in central Serbia, the Morava Corridor. The construction started in February 2020 and is expected to be finished by the end of 2022. 

In addition, Serbia has identified projects that may be of interest to U.S. companies in design, construction, building materials, road and railway equipment, as well as other related industries. These projects offer an opportunity for U.S. companies looking to expand their export portfolio and enter the Serbian market.  However, it is important to note that these projects are in different stages of development, from preliminary planning to tendering or direct negotiations.

Roads

Serbia’s road network is 45,220 km long, of which 952.7 km are toll highways. It also includes 2,960 bridges and 85 tunnels.

Railroads

Transport of goods via railroad is very cost effective, and through Pan European Corridors X and VII, Serbia offers access to all European destinations. As in many countries, Serbia’s railway system suffered due to lack of investments in previous years, but the country has made serious efforts to restructure and modernize it. Serbian Railways has signed contracts with 43 international forwarding companies, and “shuttle” container trains have started using Serbian railways for pan-European transport. The maximum spindle capacity of the Serbian rail system is 22.5 t. The priority now is the development of multimodal transportation (transition from road to railway and river transportation).

Air

Serbia can be reached by air through its two international airports – Belgrade’s Nikola Tesla Airport and Nis International Airport. An airport in Vrsac is currently being used only for domestic non-commercial flights and training and leisure aviation but is expected to soon be granted an international certification. Transportation by air to and from Belgrade is possible to almost every destination in the world, either directly or by layover. In 2016, national carrier Air Serbia introduced direct flights to New York City. 

Serbia owns 92% and Montenegro 8% of Serbia and Montenegro Air Traffic Security Agency (SMATSA), which controls air traffic over Serbia, Montenegro, part of the Adriatic Sea, and 55% of the upper airspace over Bosnia-Herzegovina.

In March 2018, the Serbian government awarded a 25-year concession for Belgrade’s international airport to France’s operator, Vinci. The firm will be required to finance, develop, and manage the airport’s infrastructure, and to operate the airport itself. Vinci will also need to further invest several hundred million euros to boost the airport’s capacities from between five and seven million to at least 17 million passengers per year.

River

Serbia’s river corridors offer 959km of excellent, cost-effective transportation routes. The Danube (588 km) represents the most reliable navigable route that can be used for transportation throughout the year. Artificial canals supplement this to form the Rhine-Main-Danube international canal, which allows barge traffic between the North Sea and the Black Sea, and Danube-Tisa-Danube, together offering a network of routes that provide access to all Danube-basin countries. The Sava River links the following countries in the region: Slovenia, Croatia, Bosnia & Herzegovina, and Serbia, and is in the process of gaining the status of International Navigable Route.

Leading Sub-Sectors

The highways and railroads along the pan-European Corridor 10, in addition to Corridor 11, which will run from Timisoara, Romania, to Montenegro’s port of Bar, are priorities for Serbia’s infrastructure development. The EU considers these corridors to be critical to the region’s road and railway network. As such, the EU announced a plan to set aside USD 1.1 billion to improve infrastructure in the Western Balkans, including USD 110 million in grants under the Instrument for Pre-Accession Assistance (IPA).

Serbia intends to convert all of its eight military airfields to commercial use. The government also plans to invest nearly USD 550 million in inland waterways, mainly for environmental remediation and ordnance removal projects in the Danube River basin.

The state-owned railway company Zeleznice Srbije is planning infrastructure development and rolling stock projects worth EUR 2.5 billion, much of which is allocated to the construction of the Belgrade-Budapest high-speed railroad.

The Serbian government and Belgrade authorities, in cooperation with the United Arab Emirates-based real estate developer Eagle Hills, are completing work on an ambitious development project called Belgrade Waterfront involving an investment of about USD 3.5 billion to build 1.8 million square meters of business, residential, cultural, and retail space in downtown Belgrade.

The parliament adopted a law on utility services, which is expected to draw private investment in this sector through public-private partnerships, as well as facilitate investments in the underdeveloped wastewater processing, sewerage, water supply, and waste management sectors.

Opportunities

Key projects include the Sumadija Corridor/Highway Vozd Karadjordje, Serbia-Bosnia rail modernization, and the Smederevo Port expansion. The Sumadija Corridor is approximately 220km with an estimated value of over USD 2 billion. Upgrading the railway between Serbia and Bosnia & Herzegovina is of national and strategic importance for both countries; the project includes reconstruction and modernization of the railway for electric traction and for train speeds up to 120 km/h, the provision of electronic signaling devices to railway, station and crossings, of stable electric traction plants for the entire railway, and potential reconstruction of tunnels and bridges. The Serbian government is looking to upgrade the terminal for bulk and general cargo for the Smederevo Port, with a total value of roughly USD 106 million, more than half of that amount is required for the construction of port infrastructure.

The implemenation of this plans may be subject to a number of changes, due to the economic crisis caused by the COVID-19 pandemic.

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