Arkhangelsk River Port CEO Andrei Razgovorov: "We intend to develop inland shipping on the Northern Dvina"

For the past year, the new management of JSC Arkhangelsk River Port helped to stave off the company bankruptcy, to boost passenger and freight traffic, and started building suburban piers and plans to start construction of a passenger port in Arkhangelsk. About all this the port’s CEO Andrei Razgovorov told in an interview with PortNews.

- Andrei, tell us how have you managed in such a short time to change the situation with the river port, to transform it from a nearly bankrupt into a developing enterprise?

- We assumed control of JSC Arkhangelsk River Port in December 2011. The company had accumulated debts of more than RUB 60 million to creditors, suppliers, and tax debts of some RUB 25 million. We even did not have money to pay our staff. The situation was aggravated by the fact that all contractors after the top management replacement immediately had rushed to bailiffs to quickly collect debts, millions of rubles. To pay off part of the debts and salaries we had to raise funds from other institutions. At the same time, we started to negotiate with contractors and lenders to sign repayment schedules.

Simultaneously, we commenced revamping of our company. We had to streamline the management team, which at the time was comprised of more than 70 people. The managers accounted for about a fifth of the total workforce. We decided to eliminate some services and had to hire new legal department. For example, the department’s former lawyers had filed only three claims against debtors for the year, the amazing number for such a company.

I had to build relationships with the personnel: the crews, dock workers. We had implemented a system of electronic document workflow between the cargo area and the managers of the Arkhangelsk River Port. Now all information on received and transshipped cargoes is uploaded to the computers of employees of the controlling departments. We have excluded the possibility of underweight or overweight of loads. Moreover, thanks to a team of our programmers, we can at any time from a computer or mobile phone to find out the location of any vessel of our fleet, and what the crew members are doing.

- In what condition was the fleet?

- Actually, we understood: the navigation would not wait until we can resolve the economic and human resources issues. Therefore, from the first days we were handling the issues of the Arkhangelsk River Port’s fleet. Last winter turned out to be troublesome. The fleet was in poor condition: exhausted engines, ship hulls not repaired for decades, poor interior. It was quite clear, in this condition the fleet is not going to work in the upcoming navigation season, not to mention future years. We began to lift vessels in dock, to change engines, to repair hulls, change the interior and furnishings of passenger compartments. Previously, it was a real pain to purchase spare parts and it would take months to get them. So, our purchasing department’s four employees were replaced with only one guy and we gave his cell phone number to the captains so they could call him to order spare parts they need to get it right away, bypassing bureaucratic red tape. As a result, before the shipping season start our ships had passed all the necessary tests and trials.

- What are the 2012 navigation season’s preliminary results?

- We were nervous when the navigation began, the Government of the Arkhangelsk region and oversight agencies kept an eye on us. But we had handled it. In 2011, passenger traffic was 650,000 people, while according to the results of 2012 it is forecasted to reach 1 million people. We had recommissioned after lay-up an additional, the ninth passenger ship.

In 2011 freight traffic amounted to 424,000 tons. For this year, we expect it to be no less than 700,000 tons. In the nomenclature of the goods transported prevail coal, stone and crushed rock.

River port operation is largely determined by the state of the economy of the city and the region as a whole. If they are building a lot roads, facilities, the enterprises are working, accordingly there is high demand for the service of river shipping companies. Unfortunately, today we are affected by a decline in the logging industry, a traditional sector for Arkhangelsk. Therefore, we are looking for additional sectors to increase our revenues. During the 2012 shipping season, Arkhangelsk River Port made a debut in dredging business. We have already provided dredging services to several companies in Arkhangelsk and Severodvinsk. Now we are planning works in the port of Bakaritsa. For the first Arkhangelsk River Port has started shipping and handling of scrap metal.

Our employees tend to compare this navigation season with that of the Soviet era, when two dog watches on the ship were not enough, and the crews worked in three shifts. And for the last eight months our fleet, employees have not stayed idle even a day.

Our revenues in comparison with the previous year have increased by 70 million rubles. For the current year, we have managed to pay off almost all the debts inherited from our predecessors. We expect that over the next two years JSC Arkhangelsk River Port will turn into a profitable company.

- Do you plan renovations, refitting, or newbuildings orders?

- Certainly, in the first place we are planning to replace our "veterans" – the 60-year-old passenger boats Balkhash and Kommunar. As for the acquisition of Meteor class high-speed hydrofoils, we do not see it as appropriate. Our classic water buses of Moscow-class boats, a Project of the 80's, are just perfect for local conditions. Noteworthy, there are two women among the officers of these vessels, who may rise to the post of ship captains.

- What do you thing about the introduction of port controls on Russia's inland waterways? Does it hamper the river ports operations?

- We had all passenger boats, oil tankers checked and some of the cargo ships. There were no serious violations found, and the small deficiencies were eliminated along the way, without affecting the operational activities. Probably, appropriate measures needed to ensure safety of navigation.

- How are going to renovate suburban piers and construct new ones?

- For starters, in the spring of 2013 there will be safe floating passenger piers deployed on eight islands of the Primorsky district. Laysky Shipyard has completed the construction of two floating piers. Eight more ordered by Arkhangelsk River Port will be built this winter. We will spend RUB 45m for this purpose. Overall, we plan to install in the delta of the Northern Dvina, including Arkhangelsk and the suburbs, new floating piers for 27 stops of river transport. Additionally, there will be 76.5 million rubles raised for the project. We have entered into an agreement with the Arkhangelsk region government to refund the cost of the piers construction within several years.

- For the first time Arkhangelsk will have a new passenger port. When do you plan to commission the facility?

- The Government of the Arkhangelsk region has endorsed our initiative and has allocated land for the construction. The project is now passing all necessary approvals. For two or three months we will have the building design completed. The terminal area will encompass not less than 500 m2, and will have comfortable waiting area for passengers, a ticket office and public toilet. The project is financed by the company’s own funds and by an investor. The project cost will be determined after the preparation of project documentation. In 2013, we plan to begin the construction and to inaugurate the facility before the 2014 shipping season.

Interviewed by Albert Sventitsky.