Regional Outlook : Macedonia Sees Highway as Its Route to Recovery : Former Yugoslav republic seeks funds for east-west corridor. But Greece, Serbia could put brakes on project.

After a two-year struggle to escape the Yugoslav war and economic sabotage by Greece, the people of newly independent Macedonia have found the road to recovery. All they have to do is build it.

Macedonia and its Balkan neighbors are drumming up funds and organizing work teams for a major east-west highway, railroad and utility project that will create a corridor between the Adriatic and Black seas through Albania, Macedonia, Bulgaria and Turkey.

A natural crossroads of the southern Balkans, Macedonia would benefit from the thousands of toll-paying trucks shuttling goods across the peninsula, especially if nationalist conflicts and U.N. sanctions continue to hamper traffic along the more traditional north-south routes linking Western Europe with southern markets.

The project, which also envisions regional cooperation on air-traffic control and telecommunications development, seems like a natural for bolstering post-Communist economies as well as encouraging friendly relations and interdependence in what has often been an unstable corner of Europe.

Turkey also stands to enhance its influence in the region if and when the corridor becomes a reality, since the new rail and traffic links would open secure markets and strengthen ties with the countries it ruled for centuries as the Ottoman Empire.

But therein lies the one hitch in a project that otherwise looks like the fast track to the “new world order”: Turkish influence in the southern Balkans will likely irritate both Greece and Serbia, adding more pressure to the already explosive concoction of political, economic and religious rivalries in this part of the world.

The idea to rebuild the ancient Via Egnatia of the Roman Empire was actually born of the conflicts that have disrupted modern trade routes in the Balkans over the last two years.

Greece is outraged over this former Yugoslav republic’s insistence on using the name Macedonia, claiming it implies territorial ambitions on the northern Greek province of the same name. A government-inspired economic blockade aimed at pressuring Skopje authorities to change the country’s name deprived the 2 million people of Macedonia of crude oil for three months last year, poisoning already sour relations and compelling the government to look for an alternative to the usual fuel-importing route through the Greek port of Thessaloniki.

“This corridor should mean the border crossing with Greece will always be open, because there will be no political reason to block Macedonia if we have an alternative,” said Antoni Pesev, minister for planning, civil engineering, telecommunications, transport and environment.

He shrugs off concern that the project could worsen relations with Greece, noting that Macedonia’s southern neighbor is a natural trading partner for this new nation and will be welcome to take part in the regional undertaking whenever it allows the political fever over the name issue to subside.

Deputy Foreign Minister Risto Nikovski agrees but says he fears the government in Athens remains resistant to cooperation, even on projects of mutual advantage.

“There are direct and indirect benefits for Greece to help establish the east-west corridor. Its claims that this is some kind of Islamic connection between Turkey and Albania are just political manipulations. It should be clear to both sides that our natural, real, long-term interest is in good relations with Greece,” Nikovski said.

Western diplomats in this Macedonian capital tend to take the host country’s side in dismissing the potential complications in ties with Greece.

“Everything the Greeks have done here brought about their worst nightmares,” one envoy commented, expressing enthusiasm for the corridor.

The other major impetus for the regionwide push for east-west linkage has been the war in the former Yugoslav federation, which over the past two years has swept from Slovenia to Croatia and now engulfs Bosnia-Herzegovina, blocking the only major highway from Western Europe to the southern Balkans.

Alternative trucking routes exist through Hungary and Romania, but those roads are in deplorable condition and require too much fuel and time to be cost-effective.

Some semblance of a road route already exists along the new east-west corridor, but several stretches are too primitive for heavy truck traffic--like the five-mile cobblestone swath linking Macedonia and Bulgaria east of Kriva Palanka. Also, at least two-thirds of the 85-mile Albanian segment is deeply potholed, narrow, mountainous or unpaved.

There are currently no east-west rail links, although a path was surveyed and graded during the first years after World War II for a project that was abandoned in 1948 because of the Greek civil war and Yugoslavia’s break with Moscow and its Eastern European satellites. Much of that 45-year-old ground preparation remains useful and should speed construction of the railroad.

Acknowledging their common interests in smoothing out new trading paths, the transport ministers of Macedonia, Albania and Bulgaria signed a protocol in May to jointly develop the corridor. Construction on priority stretches is expected to begin in August using domestic funds, and the scope of building will be accelerated if and when loans and credits are granted by international lenders.

Italy and Turkey have also taken part in the initial planning and search for financing, since both see the corridor as a crucial factor in bettering their positions in east-west trade.

As currently outlined in pitches made to the new European Bank for Reconstruction and Development as well as more established financial institutes like the World Bank, the highway and railroad lines would run from Albania’s Adriatic Sea port of Durres through Macedonia and Bulgaria to Varna and Burgas on the Black Sea. An electricity grid and possible oil pipeline are planned between Bulgaria and Macedonia, and the first equipment for regional telephone and air-traffic control networks has already been installed to link Skopje with Tirana and Sofia.

Money is the only brake on the project, but Pesev and others involved in the financial lobbying are optimistic that their plans will impress the aid and credit people in Brussels with the promise of strengthening regional ties and stability.

Macedonia estimates that its 83 miles of highway and 167 miles of railroad will cost $1.1 billion. Neither Albania nor Bulgaria has worked out detailed cost projections. Turkey’s share of the regional corridor is already in place and needs only to be connected to its less developed neighbors.

Asim Cavusoglu, an official at the Turkish highways department, says the proposed route from Albania is actually the completion of a 5,625-mile Trans-European mega-project conceived 15 years ago as part of what has evolved into the Conference on Security and Cooperation in Europe.

Turkey has already completed 500 miles of roadway as part of the project and will add nearly that much again by the end of this year, Cavusoglu said.

“All three countries are completely behind this project and consider it the highest priority,” Pesev said of the ex-Communist latecomers. “We would like to build it all tomorrow, but everything depends on the money. There are hundreds of reasons to build this project and only a few arguing against it.”

One of those question marks is the war in the former Yugoslav federation and the punitive sanctions imposed on Serbia and Montenegro. If those impediments to trade were removed, there would be less logic in investing in the alternative east-west corridor. But few expect any speedy resolution of the war or easing of sanctions.

If the countries have to foot the bill for the project themselves, it will take at least 10 years, Pesev said. With sufficient foreign support, he added, the highway could be built in six to 12 months and the railroad in under two years.

Macedonia has already redirected $23 million originally earmarked for completion of the main highway between Skopje and Thessaloniki to begin work on the worst bottlenecks of the east-west route.

While that may convince the international financial institutions pondering the project that its drafters are serious and eager, the diversion of funds may also confirm some Greeks’ suspicions that the east-west corridor will be at their expense.

Special correspondent Hugh Pope in Istanbul contributed to this report.