FOLLOWING THE DROP IN iron ore and coal traffIc Port of Constanţa posts EUR 1.6 million loss

• If the trend persists, the losses could double by the end of the year

In the first half of 2009, the total merchandise traffic which passed through the ports of Constanţa, Mangalia and Midia amounted to 20,344,643 tons, exports increased 8.1%, imports have decreased 44.2%, river traffic passing through the port of Constanţa shrank 28.9%, and container traffic shrank 46.61%, YOY.

Ioan Bălan, General Manager of the Public Company "Administration of Maritime Ports" (APM) SA Constanţa, said that the decision by "ArcelorMittal Galaţi" to discontinue running its raw material transports through Constanţa for its metallurgy operations, which were deemed "extremely important for the port", led to considerable traffic decreases across several groups of merchandises. Thus, iron ore traffic decreased 71.09%, iron and steel scrap traffic decreased 39.52%, metallic products traffic decreased 38.35%, and traffic of mineral and solid fuel decreased 66.32%. Losses of APM SA Constanţa caused by the drop in fees levied off coal and iron traffic amount to EUR 1.6 million for the first semester, and could reach an estimated EUR 3.21 million if the current trend persists.

On a different note, Ioan Bălan said that grain traffic increased spectacularly YOY (by almost 300% or 4,132,841 tons) in the first six months of the year, reaching 5,516,535 tons (compared to last year"s volume of 1,383,694 for the first half of 2008). Out of this volume, over 2,114,753 tons were exported, compared to 395,959 tons in the same period of 2008, 230,507 tons of grain were exported and the volume of grain that passed through the harbor increased 324,7% (2,371,625 tons).

• Infrastructure investments for increasing competitiveness of the port of Constanţa

The General Manager of APM SA said that sizeable investments were made in the construction of the two Northern and Southern seawalls, which have increased the secure area of the port. The Northern seawall is 5,900 meter long, and the Southern wall is 5,560 meter long. About 1,050 meters of the Northern seawall are still under construction, and in order to reach the projected length, this segment includes the seawall head. The works will cost an estimated 121 million euros, and will to be financed using the European Regional Development Fund, through the Operational Program for the Transports Sector 2007-2013.

Apart from the two seawalls, which essentially represent the expanded Constanţa harbor, several dividing seawalls have been built over time, intended to fight waves within the harbor. These include the "East-West" seawall, which cost 6,541,933 lei, "the seawall built across the harbor", which cost 19,036,913 lei and the "post docking shelter seawall for the ore terminal", which cost 2,095,212 lei.

All the docks of the Constanţa harbor are worth approximately 2,250,000,000 lei, and most of them have been built using public funding.

• The barge terminal - an EUR 21 million investment

"The need to create a distinct terminal for barges, arose following the predictions on the increase of commercial traffic on the Danube-Black Sea channel, particularly for ore and coal", Ioan Bălan said. This investment created new docks for barges, tugboats and towboats, in order to meet the demand forecasted for 2010. Right now, the barge terminal can handle approximately 10 millions tons of merchandise.

The total investment was estimated at approximately EUR 21 million, and consisted of making a 1,200 m wide and 7 meter deep dock for barges and a 300 m wide and 5 m deep dock for towboats and tugboats. 16 million euros came from an EBRD loan (which APM SA is currently paying back from its own sources), with the remaining EUR 5 million paid by the Romanian state.