Through the development of a modern, sustainable, efficient, interoperable and integrated transport network, a sound transport policy can promote closer co-operation with neighbouring economies and be a key driver of competitiveness for Bosnia and Herzegovina and the region. The first sub-dimension, planning and management, measures the extent to which an orderly, coherent, consistent and transparent process is in place for developing transport policy and implementing infrastructure projects. The second sub-dimension, regulation and connectivity, determines how well transport modes and networks are regulated and operated and how they are leveraged to promote regional connectivity. The third sub‑dimension, sustainability, measures progress towards resource efficiency, environmental protection, reducing health impacts and increasing safety and social inclusion.
Western Balkans Competitiveness Outlook 2024: Bosnia and Herzegovina
12. Transport policy
Abstract
Key findings
Bosnia and Herzegovina (BiH) has made minor progress in improving its transport policies and their implementation since the previous assessment (Table 12.1). Overall, BiH continues to underperform in this area compared to the region, despite improvements in specific sub-areas such as procurement procedures, rail reforms and some small-scale progress in developing smart and sustainable transport.
Table 12.1. Bosnia and Herzegovina’s scores for transport policy
|
Dimension |
Sub-dimension |
2018 Score |
2021 Score |
2024 Score |
2024 WB6 average |
|---|---|---|---|---|---|
|
Transport |
11.1: Planning and management |
2.0 |
2.6 |
||
|
11.2: Regulation and connectivity |
1.0 |
1.9 |
|||
|
11.3: Sustainability |
1.8 |
2.1 |
|||
|
Bosnia and Herzegovina’s overall score |
1.2 |
1.3 |
1.5 |
2.2 |
|
The key findings are:
The procedures for selecting transport infrastructure projects in BiH have not evolved since the previous assessment and need improvement. The state-level single project pipeline (SPP) has not been updated since 2019, putting into question its continued relevance. Co-ordination on priority projects for investment between the state and entity levels needs to be improved and be properly reflected in transport policy planning at all levels.
The state-level Law on Public Procurement was updated in 2022, aligning the legal framework with the EU acquis on service contracts, including in the transport sector. However, the legal framework requires further alignment to be fully compliant in key areas such as requirements for public-private partnerships (PPPs). A new Strategy for the Development of Public Procurement 2024-28, aiming to improve the procurement process and align it with the EU acquis in areas such as green procurement, integrity, and digitalisation, has been adopted.
Progress on constructing important road and rail projects along Corridor Vc continued during the assessment period. Slow progress is being made in restructuring Republika Srpska (RS)’s railway company to bring the sector in line with the EU acquis on railway unbundling. However, no such progress has been made in the Federation of Bosnia and Herzegovina (FBiH). The railway market remains closed to competition, and rail infrastructure in BiH needs significant modernisation and development.
Some progress was made in promoting environmentally sustainable transport. For instance, the Framework Transport Strategy until 2030 was updated in 2022 to integrate measures and targets related to greening transport in line with the Smart and Sustainable Mobility Strategy for the Western Balkans. BiH also deployed five electric vehicle (EV) charging stations (EVCS) on its TEN-T road network and plans to deploy additional ones.
State of play and key developments
Sub-dimension 11.1: Planning and management
BiH has continued efforts to improve the planning and management of its transport sector since the last CO assessment. The Framework Transport Strategy (FTS) (2016-30), which consists of transport strategies in the two entities and the Brčko District, sets out the transport vision for the sector’s development. It considers the four main pillars of transport: infrastructure, services, regulation and technology, and lays out the actions to meet the objectives. Consultations with public institutions and implementation agencies were held during the strategy development process. It identifies the integration of transport infrastructure into European and regional transport corridors and further harmonisation of regulation with the EU transport acquis as a key issue (European Commission, 2021[1]).
The strategy has clear and measurable objectives and defined implementation plans with timelines and budgets to meet them. The implementation timeline is segmented in the strategy as short-term (2016-20), mid-term (2021-25), and long-term (2026-30). However, no interim evaluation and reporting activities are planned either at the state level or in the entities, and no processes have been defined to update the strategy, which is concerning considering its long-term scope.
No further improvements have been made to the transport project selection in BiH since the last CO assessment. The FTS or the domestic legislation does not mention the methodology for project selection. A SPP has been in place in BiH since 2015 but has not been updated since 2019. The SPP is also not publicly available, limiting the transparency and accountability of investment decisions for key stakeholders and the general public. Whereas the FBiH directly refers to the state-level SPP, the Annual Programme of the Government of RS represents an input for the SPP, defining the rail and road projects to be undertaken at the entity's level. Contrary to the SPP, the Annual Programme is updated every six months, potentially conflicting with the state‑level SPP and sending conflicting signals to stakeholders such as international financial institutions (IFIs) and the private sector. No tailored cost-benefit analysis (CBA) guidelines exist for transport projects in BiH or the entities, meaning that BiH relies on international guidelines for projects where these apply.
The Law on Public Procurement of Bosnia and Herzegovina governs the procurement processes in BiH. It applies to road, rail, aviation, and maritime transport. The Law, amended in August 2022, aligns the procedure for awarding service contracts with the relevant EU Directives from 2014. The Agency for Public Procurement of BiH oversees initiating, implementing and monitoring the public procurement policy in all sectors, including transport. A Plan for Integrity and a Plan for the Fight Against Corruption were both adopted in 2022 and are being implemented by the agency. A new 2024‑28 Strategy for the Development of Public Procurement and a corresponding Action Plan have been adopted. These documents aim to align BiH’s public procurement framework with the EU acquis in areas such as green procurement, digitalisation of procurement processes and integrity of the procurement process. Alternative procurement methods such as PPPs are currently not considered in BiH for the transport sector. Exemptions to public procurement, such as concession contracts and PPPs, exist for limited services in other sectors of the economy. Procurement procedures and project outputs are not consistently monitored, and no evidence of ex post evaluation of procurement procedures exists.
While some action has been taken to improve asset management in the road transport sector, BiH could make further progress. Although asset management systems do not exist for all modes of transport, procedures are being developed for road and transport. By 2022, a Road Asset Management System (RAMS) was set up in three of BiH's four public road enterprises responsible for the TEN-T Core and Comprehensive Networks (Transport Community, 2022[2]). Asset management systems for rail have not been implemented, limiting the ability to regularly monitor the condition of the assets and subsequently inform maintenance spending allocation.
Sub-dimension 11.2: Regulation and connectivity
BiH’s rail infrastructure density, at 1.98 kilometres (km) per 100 square km in 2021, is below the regional average (2.4 km per 100 square km) and the EU average of 5.7. The rail network is in significant need of maintenance and refurbishment, as well as modernisation, as at least half of the network is currently considered unsafe and unreliable (European Commission, 2023[3]).
BiH has advanced significantly in updating and aligning its rail regulation more closely with the Transport Community Treaty (TCT) Rail Action Plan. Several pieces of legislation have been adopted over the assessment period. A new Railway Safety and Interoperability Law has been drafted, aligning BiH’s railway system more closely with the EU’s Technical Specifications for Interoperability (TSIs), but it has yet to be passed. In 2022, BiH adopted a new Rulebook on passenger rights and obligations, fully compliant with EU Regulation 1371/2007 on passenger rights. The rail market in BiH is still closed, despite the intent to start opening the market to competition, as progress in this area has been slow. Over the last years, BiH has carried out several projects to improve its rail network. The interstate bridge construction between BiH and Croatia at Gradiška was completed in 2022. The border crossing was due to be operational in 2023 upon completion of the access expressway on Croatian territory, but it has been delayed (European Commission, 2023[3]). The restructuring of RS’s railway company “Zeljeznice Republike Srpske”, which began in 2017, is still ongoing and is set to be completed by the end of 2024 (SEE News, 2023[4]). The restructuring aims to establish a holding company divided into three sectors: transport of passengers, transport of freight and infrastructure management. On the other hand, no such plans have been reported in FBiH and the railway market remains vertically integrated and closed to competition. BiH is currently undertaking modernisation projects on Corridor Vc, along the Samac – Doboj – Rjecica, and Rjecica – Sarajevo sections, which should facilitate connectivity along this key transport corridor (Transport Community, 2023[5]). RS also adopted several bylaws1 on both road and rail transport during the assessment period, improving alignment with important secondary legislation under the EU acquis. BiH’s rail network utilisation is presented in Table 12.2. Between 2019 and 2021, rail utilisation decreased for passenger and freight transport. It is substantially lower than the EU average. Rail capacity can be improved, especially for passenger transport, which could positively impact air pollution, climate change, and overall connectivity in BiH.
Table 12.2. Rail transport in Bosnia and Herzegovina and the EU (2019-21)
In terms of road infrastructure, the density of BiH’s roads has been slowly increasing (Table 12.3), but remains considerably below the regional and EU averages, showing significant potential for developing additional road infrastructure to improve connectivity within BiH and with its neighbours.
Table 12.3. Road infrastructure in Bosnia and Herzegovina, the WB6 economies and the EU (2017, 2019, 2021)
Kilometres per 100 square kilometres
|
2017 |
2019 |
2021 |
|
|---|---|---|---|
|
BIH |
17.47 |
17.62 |
18.15 |
|
WB6 |
37.69 |
37.92 |
39.33 |
|
EU |
146.49 |
146.77 |
145.30 |
Source: ITF (2024[7]).
Little progress has been made on road regulation in BiH at both the state and entity levels. Works have been steadily progressing on the Corridor Vc motorway with the completion of several subsections during the last CO assessment period, including the Zenica bypass, the Svilaj bridge and border crossing, the Buna-Pocitelj section, the Johovac-Rudanka section and the Tarcin-Ivan section, including the Ivan Tunnel (European Commission, 2022[8]). The slow construction and the lack of adequate financing hinder the timely construction of the Corridor Vc motorway in the FBiH (European Commission, 2023[3]).
Limited aviation reforms have taken place in BiH since the last CO assessment. BiH is a Functional Airspace Block Central Europe (FABCE) member, which aims to deliver the European Union’s vision of a Single European Sky (SES) by facilitating air traffic control co-ordination. FABCE aims to enhance safety standards, optimise airspace utilisation for more efficient flight routes, reduce flight delays, and increase capacity. These improvements contribute to smoother air traffic operations, lower airline costs, and make BiH’s air transport sector more attractive and competitive within the region. The SES I package has been fully transposed into domestic law, while the SES II provisions have been partially transposed. BiH’s Air Navigation Services Agency, which took over responsibility for air traffic control of BiH’s upper airspace in 2019,2 is operational but lacks adequately trained and qualified staff and is experiencing lapses in the institutional setup within the BiH Directorate of Civil Aviation (BHDCA) (European Commission, 2022[8]). New management was appointed in BHDCA in 2021, but it has not yet been able to address these issues adequately. The Airport Charges Directive has not yet been transposed, which could result in varying regulations on airport charges and therefore reduced competitiveness within the European aviation sector, potentially affecting international collaborations and accords.
Maritime and inland waterway (IWW) reforms and regulations are in the early preparation stage in BiH, and very little has been done since the last CO assessment. There has been limited progress in transposing the maritime acquis and structuring the legal framework for transposition on the state level. Currently, there is no national-level legislation relating to navigation in BiH. Efforts have continued on the rehabilitation of the Port of Brčko, which aims to improve the port’s operational efficiency, increase cargo-handling capacity, and enhance the safety of rail operations in Brcko (Transport Community, 2023[5]).
BiH has continued to cooperate well with the neighbouring economies to enhance regional connectivity. A bilateral agreement on rail border crossings with Serbia is being finalised. Negotiations are also ongoing between BiH and Croatia for an agreement that aims to provide conditions for facilitated crossing of the state border and establish an efficient control system at the border crossing points (BCPs). The latter agreement includes rail transport through rail BCPs Samac-Slavonski Samac (North) and Capljina-Metkovic (South) on the Corridor Vc (Transport Community, 2023[5]).
BiH adopted the necessary customs legislation, allowing it to implement the NCTS (New Computerised Transit System), and so enabling the exchange of electronic data between the customs authorities and economic operators, thus substituting paper documentation (Administration for Indirect Taxation, 2024[9]). BiH completed the modernisation of the road BCP Vardiste with Serbia in 2021. This is expected to significantly improve the quality of travel and working conditions of customs officers and border police. The new BCP has three traffic lanes each at the entrance and exit, significantly speeding up traffic. The quality of freight traffic is also expected to improve, as trucks will have a separate cargo terminal and a truck scale (Transport Community, 2022[2]). BiH and Serbia have also started discussing an agreement on joint rail border crossings (Transport Community, 2023[10]). New advancements have been made in the Agreement between the Council of Ministers of BiH and the Government of Montenegro for conducting border controls at Joint Border Crossing Points (JBCPs). In 2022, the locations for the JBCPs were finalised, and in 2023 the budget was adopted to implement the reconstruction projects of BCP Zupci and BCP Klobuk (Transport Community, 2023[5]). This lays down the framework for establishing joint border crossing points on the side of BiH. BiH has not yet started developing policies, institutions, or legal and regulatory frameworks for supporting combined transport. The draft National Energy and Climate Plan (NECP) includes a measure that aims to conduct preliminary work to analyse the needs and potential for developing an incentive system and legal framework to govern the development of combined transport.
Initial efforts are being made to support the development of smart transport systems. Through CONNECTA, the ITS Strategy and operational concept for Road Traffic Management Centres have been developed and are now pending approval (Transport Community, 2023[10]). These documents aim to ensure harmonised national ITS developments aligned with regional and European principles, ultimately enhancing transportation efficiency and management in BiH. In 2023, BiH successfully established e‑tolling interoperability across the economy, and a single tag is now applicable across the entire road network. The ITS Directive 2010/40/EU has not been transposed, and more effort is required to fully implement the intelligent transport systems.
Sub-dimension 11.3: Sustainability
BiH has taken some steps to advance towards an environmentally sustainable transport system. The FTS was revised with technical assistance in 2022 to include measures that encourage modal shift, reduced emissions from the transport sector, and the uptake of low and zero-emission vehicles. However, the official adoption of this revision is still pending. BiH also developed its draft NECP, which aims to reduce the emissions and energy intensity of the transport sector and increase the share of renewable energy sources used for transport. With dedicated Technical Assistance from CONNECTA and the TCT Secretariat, BiH deployed five EVCS on its TEN-T road network in 2023. As an incentive for EV owners, their use is free of charge. 17 more EVCS are planned to be deployed in BiH in the coming years (Transport Community, 2023[10]).
The Strategy for Environmental Protection of the FBiH further identifies actions that promote the uptake of biofuels and other renewable fuels (Stockholm Environment Institute, 2024[11]). FBiH is actively encouraging the uptake of zero-emission vehicles through financial incentives to subsidise the purchase of new electric and hybrid vehicles. The value of the incentives for the electric vehicles is EUR 5 000 and EUR 2 500 for the purchase of plug-in hybrid vehicles or full hybrid vehicles (Sarajevo Times, 2022[12]).
Road fatalities in BiH have been reduced, falling by 15% between 2019 and 2022 (Table 12.4). The mortality rate per one million inhabitants is slightly higher than the EU average, but lower than in other economies of the region. BiH has continued efforts to improve road safety, but these could be further accelerated. The Road Safety Council was established by the Council of Ministers in 2019 and 2020 held its first meeting. The Road Safety Framework Strategy and Action Plan for 2021-25 has been drafted and is currently under review by the Road Safety Council. RS is working on updating its Road Safety Strategy, as the previous one expired in 2022. However, the new strategy’s development process has experienced challenges and its adoption, initially planned for 2023, was delayed.
Table 12.4. Road safety trends in Bosnia and Herzegovina and the EU (2012-22)
|
Change 2012-22 (%) |
Change 2019-22 (%) |
Value 2022 |
|
|---|---|---|---|
|
Change in the number of road fatalities (BIH) |
-27 |
-15 |
|
|
Change in the number of road fatalities (EU) |
-22 |
-9 |
|
|
Number of fatalities per million inhabitants (BIH) |
69 |
||
|
Number of fatalities per million inhabitants (EU) |
46 |
Sources: European Commission (2023[6]). Bosnia and Herzegovina data – Information provided by the government for this assessment.
During the assessment period, the Terms of Reference were finalised for establishing a road crash data system in BiH, but the work has not progressed due to lack of funding (Transport Community, 2023[5]). At the entity level, RS has developed key performance indicators (KPIs) for road safety and has an operational Road Safety Agency since 2011, while no such agency exists in FBiH. Data on road fatalities and injuries are collected by authorities in both entities and aggregated at the state level.
Creating a just and fair transport system is not explicitly addressed in BiH's state- or entity-level strategic framework. However, encouraging policies are in place at the level of cantons in FBiH and municipalities across the economy. For instance, Sarajevo Canton has been implementing its Sustainable Urban Mobility Plan (SUMP) since 2020, which contains objectives related to improving the accessibility of transport for persons with disabilities and using public transport to improve social inclusion and cohesion. SUMPs are also being implemented in the municipalities of Zavidovići in the Zenica-Doboj Canton and Bijeljina in RS. While these are encouraging developments at the local level, their development is sporadic and relies on international funding; the overall co-ordination and articulation of policies can be reinforced by integrating policy objectives at the entity and state levels.
Overview of implementation of Competitiveness Outlook 2021 recommendations
BiH has overall made limited progress in following up on the Recommendations of the CO Assessment 2021 (Table 12.5). Efforts have been undertaken to complete the actions of the EU Rail and Road Action Plan, aligning these sectors more closely with the EU acquis. Moderate progress has also been observed in advancing towards an environmentally sustainable transport system in FBiH.
Table 12.5. Bosnia and Herzegovina’s progress on past recommendations for transport policy
|
Competitiveness Outlook 2021 recommendations |
Progress status |
Level of progress |
|---|---|---|
|
Update the state-level transport strategy every four years |
The FTS 2016-2030 was updated in 2022 to include actions related to sustainability. However, no regular mechanism exists to ensure periodic updates to the strategy. |
Limited |
|
Develop domestic CBA guidelines for all transport modes |
No economy-wide cost-benefit analysis guidelines exist for transport projects or any accompanying survey, analysis, or technical instructions. |
None |
|
Develop/update a tool for project identification, selection, prioritisation and implementation |
BiH has not taken further actions to develop tools and methodologies for project selection and implementation. |
None |
|
Continue rail reforms in RS and begin rail reforms in the FBiH |
Restructuring of RS's railway company is ongoing and adoption of key bylaws to advance rail transport in RS has been completed. No significant rail reforms have begun in the FBiH. |
Limited |
|
Develop a study on the institutional, legal and operational framework for maritime and IWW transport to define the roadmap for this transport mode |
While no steps have been taken to develop the institutional, legal, or operational framework for maritime and IWW transport, BiH has continued efforts to rehabilitate the Port of Brcko. |
Limited |
|
Ensure that transport facilitation remains a priority |
Efforts to improve transport facilitation through both road and rail have continued in BiH. |
Moderate |
|
Implement asset management principles in the transport sector in line with the domestic inventory system |
Although asset management systems do not exist for all modes of transport, the Road Asset Management System (RAMS) was established in three of four BiH public road enterprises responsible for the TEN-T Core and Comprehensive Networks. |
Moderate |
|
Develop an Integrated Environmental and Transport Action Plan |
The FTS was updated to include actions related to sustainability, but no Integrated Environmental and Transport Action Plan has been developed. |
Limited |
The way forward for transport policy
Monitor, evaluate, and readjust the existing policy framework. The existing transport strategy needs to be regularly monitored, and regular evaluation reports should be made publicly available. This will help BiH keep its transport policies up to date, relevant, and effective. Improved coordination between the state and entity levels will also be key in planning and implementing effective transport policies.
Develop a tool for project identification, selection, prioritisation and implementation. This tool should be applied to all transport projects in BiH. These systems should comprise all processes, from identification to ex post monitoring of implemented projects, to the financial management of an information technology system planned to be implemented in all spending departments of governmental institutions and implementing agencies. BiH’s single project pipeline, which serves as a basis for this system, should be regularly updated based on co‑operation and co-ordination of inputs between the state and entity-level governments.
Ensure consistency in measures aiming to develop environmentally sustainable transport. BiH should pay particular attention to the articulation between different policy documents that aim to achieve green transport, such as the recently updated FTS and the NECP, once adopted. Monitoring and evaluation of the implementation of measures needs to be ensured, and targets should be regularly adjusted. Moreover, data collection on transport sector emissions and the environmental sustainability of the transport sector needs to be improved to be robust and comprehensive. The European Environmental Agency developed a good example in the form of the Transport and Environment Reporting Mechanism, which prescribes indicators for tracking transport and environment in the EU.
Improve the road safety framework. Further efforts are required to align national legislation with the EU acquis on road safety. BiH must also establish a road crash database and collect the EU key performance indicators to identify measures that could reduce crashes and, consequently, severe injuries and deaths. Developing robust data collection on traffic accidents and key performance indicators on road safety will be essential in this regard (Box 12.1).
Improve the co-ordination of policies for fair and inclusive transport. BiH should prioritise the development of fair and inclusive transport policies at both state and entity levels to ensure equitable access to transportation services for all citizens. While encouraging initiatives exist at the local level, such as the SUMPs implemented in certain cantons and municipalities, such initiatives would benefit from greater coherence and co‑ordination at higher administrative levels, as well as good practice exchange from those administrative levels that are implementing them. Emphasising policies that address accessibility, affordability, and improved working conditions for transport workers is crucial. BiH should integrate these policies into its strategic frameworks, aligning them with relevant EU legislation to uphold passengers' rights and promote social inclusion and cohesion through the transport sector.
Enhance efforts to develop well-functioning combined transport, recognising the crucial role of a modernised rail infrastructure network. Combined transport is the most cost-efficient mode of transport, reducing environmental pollution and increasing cooperation between freight forwarding network companies. Achieving well-functioning logistical chains and establishing an international corridor approach and intermodal solutions could promote high competitiveness in BiH’s transport market. Therefore, BiH should prioritise the modernisation and enhancement of its railway network alongside developing the legal and regulatory framework to support combined transport.
Box 12.1. Adopting the Safe System approach and safety performance indicators for improved road safety
In the past decade, the International Transport Forum (ITF) has promoted adopting the Safe System approach to road safety. This approach can drastically reduce road fatalities and is endorsed by the United Nations General Assembly. It now forms the basis for the new Global Plan for the Decade of Action on Road Safety 2021–30. The Safe System approach is proactive; it is preventive and predicated on the notion that people make mistakes and that these errors can result in traffic crashes. It seeks to identify and proactively address vulnerabilities in the transportation system in a holistic manner. Adopting the Safe System approach is a concrete step that the WB6 economies can take to improve road safety outcomes.
The Safe System approach requires road safety authorities to collect, analyse and use accurate road safety data and develop safety performance indicators (SPIs). The European Commission developed a list of SPIs with the corresponding methodology in the Baseline project. These safety performance indicators are related to driving behaviours, such as following speed limits, drunk driving, and seat belt usage. Indicators related to vehicles, infrastructure, or trauma are also important. Road safety improvement can be further accelerated by identifying distinct at-risk or vulnerable user groups and implementing safety performance indicators to improve road safety outcomes. The ITF report recommends SPIs tailored to vulnerable road users such as pedestrians, cyclists, and motorcyclists. Implementing SPIs specific to these groups can help the WB6 economies advance the Road Safety Action Plan's goal of protecting vulnerable road users.
Sources: ITF (2022[13]; 2023[14]);
References
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Notes
← 1. Such as the Rulebook on the certification of drivers and centres for education (Directive 1007/59), and the Rulebook on interoperability (Directive 2016/797), the Rulebook on passenger rights and obligation (EC Regulation No. 1371/2007), and the Rulebook on the manner of crossing road and rail traffic.
← 2. Previously, BiH did not control its entire airspace, as Croatia and Serbia jointly controlled the upper airspace.