Dateline: Vienna, Austria: Danube trade is the latest casualty of war

FOR A shipping man, Herbert Petsnig is spending an inordinate amount of time dealing with trains and lorries.

The managing director of Austria's main shipping company, DDSG Cargo, has a big problem. Nato's bombing of bridges over the Danube in Serbia has sent tons of rubble into the water, blocking the river and much of his business. Of Mr Petsnig's 152 boats, more than 60 have been stranded around Novi Sad in Yugoslavia; 33 are in Romania, 13 are in Hungary and 18 are stuck without cargo or anywhere to go in Austria and southern Germany.

His priority is keeping business going until the end of fighting allows the river to be reopened. This involves expensive operations in Hungary and Romania, moving goods off the ships and on to trains and trucks. It costs three times more to transport goods by rail than by river, and seven times more to take them by road. At least 20,000 tons of grain, animal feed and other agricultural products have already been transferred to trains, but all the coal and iron ore is still stuck on barges in Romania.

"You can certainly say it has been a terrible month," said Mr Petsnig. "And it is likely to be a terrible year." Daily losses are running at over 1m schillings (pounds 50,000) from the blockage. "I expect May to be at least as bad as April," said Mr Petsnig. "It will not improve for as long as the bridges are impassable. Then it becomes a question of getting customers back from the railways. Transport on the river is more environmentally friendly and cheaper, but the fear among customers is that this sort of thing could happen again. It's very, very difficult. There was a UN blockade between 1991 and 1994 and we lost a lot of customers then. We have worked very hard to win them back but now it seems as if we could lose them again." He said he feared there was little reason to hope business could be turned around at all this year. The clearance of the river itself could take at least four months, he said.

The company has already reached the stage where jobs are at risk. "Of the 180 jobs on the ships, at least a third are seriously endangered," said Mr Petsnig. The next few weeks will see a reduction in the company's fixed costs, meaning wages. "Or we can wait until the company goes under and then there will be a lot more redundancies all at once," he said.

Mr Petsnig is not the only man in Vienna with serious concerns. The Austrian Chamber of Commerce reported last week that the country's five biggest companies were losing 5m schillings (pounds 250,000) a day. Industrial giant Voest-Alpine Stahl, the country's main steel producer, needs 150,000 tons of iron ore each month, most of which comes from Ukraine. Rather than being shipped up the Danube, the ore is now being transported by rail, said a spokesman.

Conversations between those in the shipping business are already turning to the question of who will finance the clearance of the river. Mr Petsnig fears he and fellow shippers will have to foot the bill. "The Yugoslavs will say, `We didn't destroy them', so it will be up to us to pay for it," he said.

Danube countries have already accepted that Yugoslavia will be in no financial position to rebuild the bridges itself - and certainly not within the necessary time-scale. The Danube Commission of 10 countries with strong interests in the river ended a week-long assembly in Budapest, Hungary, last weekend by agreeing that member states should help to clean and clear the Yugoslav section of the river. But the commission, now headed by the Austrian representative Hannes Porias, said it would expect to work closely with international organisations and financial institutions when restoring the Danube.

If nothing else, the member states have time; the bombing shows little sign of abating. Nato planes hit targets in Novi Sad this week, reportedly making the last Danube bridge impassable for lorries and trains.

The Danube has always been one of the most important waterways in Europe. Traffic peaked in 1987 at 100 million tons but declined after the break- up of the Soviet Union and was further hit by sanctions against Yugoslavia during the Bosnian war. By 1994 annual traffic had fallen to 19 million tons. The river stretches from southern Germany, through Austria and then south and east through Slovakia, Hungary, Croatia, Yugoslavia, Romania, Bulgaria, Moldova and the Ukraine. Ships and barges take grains and soya from west to east, passing loads of iron ore and coal going the opposite way. The latter makes up the lion's share of the traffic - an economic lifeline to emerging economies in the former Eastern Bloc.

River transport has received official encouragement from politicians keen to reduce expensive and environmentally damaging lorry traffic. Before the latest fighting, analysts had predicted growth in Danube traffic of 1.5 per cent per year for the next 15 years.

A big share of this would come from emerging economies east of Vienna but these are the areas most badly affected by the blockage, and the ones that can least afford the dip in trade. About 65 per cent of Bulgaria's exports are transported on the river. Moving the cargo - most of it bulky minerals and fuels - by road and rail has already cost the country an estimated $6.3m (pounds 3.8m).

In Romania, the Transport Ministry reported that broken contracts on stranded vessels could cost $2.8m a month, while the country's largest shipping company, state-run Navrom, said it stood to lose about $25m this year from the loss of Danube traffic. The fear is that if the river is not reopened soon, Romanian trade will become utterly uncompetitive. A statement from the Industry Ministry says exports could become almost impossible because of a four to seven-fold increase in transport costs.

The problems for Vienna are immediate rather than long-term. As one of the richest countries in Europe, Austria can afford to lose a few million US dollars a month while the Danube is blocked. And although this and probably next year are likely to be bad ones for DDSG Cargo, Mr Petsnig said the longer-term future for Danube traffic remained bright. "If the clearance is fast and effective we could win our customers back on to the water. The roads and railways are increasingly busy and the waterways still have great potential for transport. But the next two years will be very, very difficult," he said.

The biggest concern is not the temporary loss of Danube shipping but the fear that the vulnerable emerging economies from which Vienna and Austria profit could be seriously damaged by the blockage.

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