A newly-independent nation whose physical and social infrastructure has been ravaged by war faces enormous development challenges. Before the conflict began, the Port of Rijeka, as the only deep water port in the northern Adriatic, was competitively positioned to serve as the natural gateway for all of Central Europe. However, by 1997, its activity had fallen by 70 percent from 1980 levels. Restoration of the port’s productivity was a critical element in establishing Croatia’s prospects for realizing profits through transit traffic, achieving long-term economic viability, and participating fully in international trade. Thus, even the new country’s potential for leadership within the region depended in part on proper development of the port and the revitalization of the waterfront. 

The Croatian government conceived this project as one whose scope encompassed rebuilding the waterfront and the roads within the port-city interface. It further envisioned implementing the institutional enhancements that would foster improvements in financial, social and environmental conditions at the port. This is of particular importance to the Bank, which advocates port modernization strategies aimed at improvements in the way people work.

Aware that effective development and good government must evolve in tandem, Croatia took steps not only to modernize the physical setup of the port to respond better to market demand, but to establish the body of law required to govern the country’s transport sector. In the course of this process, many transport enterprises were privatized, which in turn created new challenges in ensuring the social welfare of former state employees.

Port renovation is underway; road and bridge rehabilitation efforts already have resulted in improved access to various cities and islands. There has been a notable increase in traffic, another indication of private sector support and confidence. Part of the old port will be turned into a tourist facility with a pedestrian area, promenade, and marina, following in the footsteps of cities such as Baltimore, New Orleans, and Bilbao, which have redeveloped old port areas as attractive and profitable retail, office, and public space. It will allow the citizens of Rijeka easier access to the waterfront.

"We have had strong support from the municipality," said Ivan Vukas of the Port of Rijeka Authority, the implementing agency for the project. "Some people spent years here without ever going to the waterfront."

The project will rehabilitate existing infrastructure, fix and restore berths to allow large ships to dock, and develop a radar-based system and database to identify and monitor ship movements. The project will also redevelop 17 hectares of land presently occupied by warehouses and parking lots, including a ferry terminal building. A road will connect the port to the Rijeka Bypass, diverting traffic from the city center. These changes should result in a large reduction in exhaust gases, lower noise levels and fewer accidents and injuries.