The Belgian-Lithuanian business forum in presence of His Majesty Albert II, King of the Belgians and His Excellency Valdas Adamkus, President of the Republic of Lithuania

FEZ Kaunas launches : The Euro-baltic network cityFreddy OPSOMER MRE :

Vilnius, tuesday, march, 21st, 2006

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1. Modal Split2. Trends in the European Logistics Market3. Kaunas at the cross-roads of two TEN-corridors4. Kaunas FEZ

CONTENT

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1. Modal Split

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Modal Split in the EU

Modal split of freight transport in EU-25 (in Mtoe)

Source: European Commission, 2003

• Exponential growth of road transport

• Share of rail and inland navigation is decreasing

• Result: negative external effects of transports market are no longer sustainable and intermodal solutions need to be developped

0%

20%

40%

60%

80%

100%

1990 2000 2010 2020 2030

Road Transport Rail Transport Inland navigation

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Modal Split in Lithuania

Modal split of freight transport in Lithuania (in Gtkm)

Source: European Commission, 2003

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 2000 2010 2020 2030

Trucks Rail Inland Navigation

• As in the rest of the EU, the Lithuanian freight transport system also shows a growing modal imbalance.

• Like in the other new Member States use of rail transport is quickly dropping.

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2. Trends in the European Logistics Market

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• Logistics in the EU is gradually changing from a monolythic model (Blue Banana) into a polycentric model.

• In addition to the Blue Banana and the Meditterranean Arc investments are concentrated in Poland, Hungary, Chech Republic and Slovakia.

• Investments in the Baltic area in logistics are still limited. Hinterland intermodal infrastructure need further investments.

Actual European logistics main structure

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• Development of logistic pockets with intelligent intermodal infrastructures as connections

• Increased competition between European regions for logistics investments.

• Southern Germany as geographic centre of the EU will become an important logistics node.

• Baltic and Black Sea areas will also become important logistics hubs based on North-South flows.

• Mainports will remain important for intercontinental trade from-to Baltic Sea.

Expected logistics main structure in the medium term (2020)

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• Emergence of a Eurasian land bridge which will primarily be based on rail transport.

• Baltic countries will become important nodes in N-S and E-W freight flows.

Expected logistics main structure in the long term (2030)

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3. Kaunas at the cross-roads of two TEN corridors

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• Kaunas will become a logistics hotspot at the crossroad of TEN corridors I and IX.

• Kaunas wiil become junction of important N-S and E-W freight flows.

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4. Kaunas FEZ

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• fast growing economy expected next 10 years / Lithuania : the Baltic tiger

• large consumer market : 200 mi consumers within 1000 km range

• stable legal framework : EU and Lithuanian legislation for Free Zones

• custom free zone : transit of goods and services

• corporate tax advantages : - no tax (year 1-6) - 50 % tax reduction (year 7-16)

Kaunas FEZ : advantages (1)

500km=41.000.000 consumers

1000km=200.000.000 consumers

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Kaunas FEZ : advantages (2)

Kaunas : Euope gate on Euro-Asian landbridge

- north south : Rail Baltica and Via Baltica

- east west : corridor IX

Rail and road corridors

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Kaunas FEZ : target sectors

• woodprocessing / furniture / textile

• value added logistics (rail and air cargo) : Finnish group YIT as first client

• mechatronics : Elinta gives start of technology cluster

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Kaunas FEZ : issues to be solved urgently

• land : bordering and expropriation issues very urgent : otherwise loss of important FDI for Lithuania

• urgent need for multimodal integrated vision : Kaunas airport - Palemonas rail - rail baltica - FEZ

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Thank you