Vasily Filippovich: “Safety issues are under special attention”

Donrechflot OJSC, one of the largest shipping companies in the southern region of Russia, is nearing the completion of its river fleet repairs and plans to commence navigation in the third decade of March. Director General of Donrechflot Vasily Filippovich tells Water Transport (Media Group PortNews) about prospects and challenges of the company’s current operations.

- Mr. Filippovich, tell about the internavigational period of the river fleet? What is the level of its readiness for the coming navigation?

- First of all, I’d like to note that we now pay special attention to safety and spend large resources on repairs. Donrechflot has launched the programme of enhanced repairs, we thoroughly control the quality of spare parts hence we hope for long and smooth operation of major mechanisms and machines. The level of the readiness for the coming navigation is 99%.

It is early to speak about total expenses but I think that the amount spent for the repair of one vessel is the highest over the 5-year period.

- What are the projects of vessel modernization in the company?

- We have carried out modernization of M/V Volgo-Don 238. Its cargo capacity has been increased by 2,000 t and now it is one of the most efficient vessels of the company’s river fleet. As for the construction of the new fleet, the development of the company’s development programme is nearing completion. The programme covering a decade-long period will be considered in late April – early May 2014. Having presented this programme to the shareholders we will be able to speak about our plans for the nearest future.

Besides, we have started the renovation of the radionavigation system of our vessels which is a comprehensive programme valued at RUB 5.4 mln. Besides, Donrechflot is replacing the propulsion units. Here we focus on the economic effect. Diesel-generators developed in 1960-ies are being replaced with state-of-the-art diesel-generators developed in 1990-2000-ies. First of all we decrease fuel consumption. Secondly, we save on repairs: spare parts for new propulsion units are available while some of the plants which used to produce spare parts for soviet-time generators are closed already. Besides, ecological efficiency of the new units is taken into consideration. With lower emissions we decrease the impact on the environment.

- Where were the company’s foreign shipping vessels deployed during the winter period?

- One vessel operated in the Caspian Sea with the rest ships deployed for operation in the conventional regions – Azov Sea, Black Sea and the Mediterranean Sea.

- When does Donrechflot plan to open river navigation? How many vessels are to be involved?

- Part of the fleet commences operation on March 14-15. We hope that first loading of those vessels will take place in the third decade of March.

- What routes are in the company’s plans for the current year? Are there new routes? What types of cargo are you going to carry?

- Conventional cargo flows will remain —transportation of sulphur from port Buzan and potassium chloride from Solikamsk. By today, we have secured a contract for transportation of 100,000 t of potassium chloride from Solikamsk. We are going to sign a contract for transportation of some 300,000-400,000 t of sulphur from port Buzan. Besides, coal and grain are still our basic cargoes.

As for other flows, we are participating in a tender for transportation of large-diameter pipes for the South Stream pipeline which is to run through the Black Sea. Our chances are quite high but we are not eager to secure this contract at any cost. Transportation should be economically viable.

- How much cargo does the company plan to carry in 2014? Do you expect any increase of cargo turnover?

- I think the cargo turnover is to decline a little as well as we return the chartered barges of project R-79. Cargo transportation is to total 2.5-3 mln t.

- What are the challenges of Russia’s shipping companies today?

- Major challenge is the fleet renovation. Unfortunately, current construction at domestic shipyards costs too much: cost analysis shows the construction in this situation is not economically reasonable as the playback period of such projects exceeds 20 years. There are some ways to solve this problem. One of them is to prolong the Government Decree No 383 on compensation of rates on credits obtained by domestic shipping companies for shipbuilding projects in 2013-2014. This would give an impulse to the construction. Besides, the Government is currently discussing the introduction of a ship utilization grant which can be used exclusively for the construction of a new vessel. Moreover, under Federal Law No 305 both sea and river going vessels and inland navigation vessels built by Russian shipyards after 2010 can be registered in the second register of vessels. All these measures together are able to make the life of shipping companies easier and let the majority of the shipping companies in Russia start their fleet renovation.

- How strong is the effect of the global crisis?

- I would say that the lowest point of the global crisis has been passed. The matter is where Russia today is. We hope that our agriculture, coal mining and chemical industry will succeed and let our transport companies survive in this difficult time and then commence the construction of the new fleet.

Interviewed by Elena Tkacheva