Rain is Serbia's only salvation - Months-long drought to cause hundreds of millions of euros worth of losses to Serbian economy

Ships stranded on sand bars, rivers turned into brooks, empty wells, dry land, and huge losses. Months without rain and low water level have discontinued the transport of goods on the Danube, reduced the amount of electricity generated at hydroelectric power plants, endangered the autumn sowing, and resulted in an increase in the gasoline price. The four-month drought in Serbia have caused hundreds of millions of euros worth of losses to the economy.

Drought engulfs kilowatts

According to the plan of the Electric Power Company of Serbia for the year 2011, hydroelectric power plants should generate a third of the total amount of electric energy. Djerdap hydroelectric power plant used to produce 25m kWh a day, whereas now it generates only 5m kWh a day. Bajina Basta hydroelectric power plant produced 1.66 billion kWh this year, which is significantly less than planned. Hydroelectric power plants Uvac, Potpec and Kokin Brod fulfilled 74, 64 and 55.82% of their production plan, respectively.

- Serbian hydroelectric power plants will produce a total of 9 billion kilowatt-hours of electric energy in 2011. When there is enough water, as it was the case in earlier years, the annual production is close to 12 billion kWh. However, the amount of electricity generated at hydroelectric power plants this year will be 25% smaller than in 2010. By turning that percentage into money, we can come to a conclusion that this year's losses in that sector amount to about EUR 165 million, which is about 11 percent of the revenue of the Electric Power Company of Serbia (EPS) - says Momcilo Sebalovic from the PR Department of EPS.

Although the daily production of electricity at this time of the year is expected to amount to about 27m kWh, run-of-river power stations generate only 15m kWh per day, so that the biggest drought in the last thirty years has forced EPS to import much more electricity than planned.

Between 14 and 18 million kWh are imported every day. In November and December EPS imported 600m kWh more than planned.

Due to lack of electricity from hydroelectric power plants, coal-powered steam power plants had to step in (they generate about 84m kWh per day). However, financial losses are still huge.

- When the production at gas-powered steam power plants was at its maximum, EPS was spending EUR 2 million on imports a day.

The biggest difference is created because the average price of a kilowatt-hour in Serbia is EUR 0.055, whereas the price of imported kilowatt-hours and of those generated at domestic gas power plants is nearly twice as big.

Due to a shortage of rainfall, situation in the electrical sector is very bad in the whole region. At this moment, the region lacks 3,000 megawatts per hour. People at EPS claim that the situation is much better than a month ago, adding that there is no reason to fear that there will not be enough electric energy. However, Serbia will continue to import electricity in the following period.

Navigation in shallow water

According to the words of a transportation worker, situation on waterways in Serbia is "close to desperate." The water level of the Danube has hit its record low since 2003. Between early November and December 14th, over 80 vessels from Serbia, Romania, Hungary and Austria got stranded on the Danube near Apatin. People at the maritime and river agency Jugoagent say that they used to have 150 vessels on the Danube a week, while now they have less than 20.

- We now transport goods by truck and rail, which costs a lot. Financial situation will be much worse than the physical one. Everybody is at loss - sellers, buyers, transporters - says Bojan Basic from Jugoagent's container transport division.

The shipping company Jugoslovensko Recno Brodarstvo (Yugoslav River Shipping) reported a loss of about EUR 1 million in the period September 1st-October 15th alone.

At the proposal of Plovput Waterways Directorate, the Ministry of Finance has granted RSD 2 million to deepen the waterway on the Danube near Apatin and Bezdan and set freight vessels free. However, However, it is only a temporary measure that does not solve the problem in a long run.

Pavle Galic, assistant to the Minister for Water Transport and Navigation Safety, says to eKapija that a system solution and big investments are necessary to prevent ships from stranding in that part of the Danube.

- If this drought continues, we will be left with only a few options to react because everything depends on the river water level. What we can do is use our information system to keep shipping companies up to date with the current water level of the Danube, so they could organize their operations accordingly. We are aware that the costs incurred by all those using the river transport at the moment are huge, but they should be aware of a risk accompanying this type of transport.

Dry land weakens agriculture

Low water level will also affect the export of cereals. According to some data, the drought has reduced yields by 30%. The autumn sowing is also endangered. Drago Cvijanovic, director of the Institute for Agricultural Economics, says to our portal that nobody could have imagined how much the drought would affect the crops.

Because of the lack of rainfall, many villages are experiencing problems with water supply. Stock breeders in some villages even started to purchase water in cisterns.

Nobody can foresee the amount of losses in agriculture. Cvijanovic says that it would be much easier if our irrigation network was more developed. Only 1% of cultivable fields in Serbia is irrigated, resulting in annual losses of EUR 500 million.

It is still unknown how the drought will affect the prices of food products, but Cvijanovic points out that every drop in supply leads to a price increase.

Farmers, transportation companies, government officials - everybody is impatiently waiting for a rain. Weather forecasts say that a period of rainfall is ahead of us, but the consequences of the unpredecented drought in Serbia can only be fixed by a big rain. Not even a snow can improve the situation significantly. It seems that many citizens of Serbia will have the same wish in the New Year's Eve - more rain and a fruitful year.

Ivana Bezarević