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  • 2008 November 21

    Container terminal in Ust-Luga to ripen by August

    Egor Govorukhin, Vice-President of National Container Company (NCC) has announced that a container terminal in the port of Ust-Luga capable of handling 350,000-500,000 TEU per year is to be put into operation in August of the coming year. The terminal’s commissioning date was postponedtwice already. Analysts think the port is not ready to accept new volumes of cargo.

     

    3 million containers

    Recent five years have seen a fast growth of container traffic via Russian ports. It exceeds average global growth in this sector of transport industry.  In the first half of the current year transportation volumes grew by 22% to 1.85 mln TEU. Experts say by 2010 Russian containerturnover is likely to exceed 7—8 mln TEU. A half of it falls on the Big Port of St. Petersburg with three of Russia’s five largest container terminals: First Container Terminal (NCC), Petrolesport and Moby Dick (N-Trans).

    According to Alena Ashurkova, President of National Container Company LLC, implementation of the project on construction of a container terminal in Ust-Luga will make it possible to satisfy the demand for transshipment of Russian container cargo in the Baltic Sea and to decrease dependence of national consignees from the ports of Finland and the Baltic states.
    Construction of the terminal promising to become the largest terminal of Russia, CIS and the Baltic countries commenced in April 2007. The construction was planned to be implemented in several phases. The first phase (2009) envisages construction of two 440-meter berths, one 5-track railway front with 40 hectares of total area. Thecapacity is be 500,000 TEU. Parallel to construction of the 1st phase NCC is to solve issues related to links with main railways and federal highway А-121.
    The construction of the railway approaches is being carried out within the framework of an investment program of Russian Railways OJSC.
    Then, by 2019, the terminal’s capacity is to be raised to 3 million TEU.

    There also were discussions of a possibility to raise the capacity to 6 mln TEU per year.
    The terminal’s area will be 140 hectares, queue length – 1,700 meters, the storage will be 78,700 TEU. The terminal in the deep sea port of Ust-Luga will be able to handle vessels of the fifth generation with the capacity of 6,000 TEU. One more undeniable advantage of the port is the following: its territory is not limited by residential quarters and there is a possibility to expand the territory and to develop the port infrastructure.

    NCC is building the terminal within the framework of a Public-Private Partnership. Total investments including NCC resources and raised money will make some $800 million by 2020.

     

    Is the city ready?

    Both the construction and the commissioning were postponed several times. Earlier NCC planned to put the terminal into operation in December 2008, then it was postponed till May 2009. On November 20, 2008 Mr. Govorukhin announced in St. Petersburg that the terminal commissioning was postponed till August 2009. He explained it by problems in the project implementation due to long-running coordination with different authorities. According to him, "6 to 12-month delay is a norm for such large-scale projects." "Financial crisis influenced none of our projects," NCC Vice-President added.

    Experts think insufficient development of the port infrastructure and the consequences of the economic crisis are likely to hinder loading of the new terminal in the coming year.

    «Introduction of new container facilities is good but a comprehensive approach is required.  To ensure high quality of cargo handling there should be high-quality roads and well arranged document management and customs procedures. Neither city which is under construction in Ust-Luga, nor the port or transport is ready to provide customers with proper services, which is a significant limiting factor for cargo traffic development. Logistics is quite weak in Ust-Luga today and this is the issue to be solved before the terminal is put into operation,» Igor Martenichev, Director of the Commercial Department of Eurosib-Terminal CJSC told PortNews IAA when commenting on the situation.

    «Competition is quite high in container market today. The existing companies manage to cope with growing turnover through development of the available infrastructure. So the quality of services is especially important. Needless to say that unstable economy will hinder further growth of container traffic,» Aleksandr Ignatyuk told PortNews IAA.

     

    National Container Company (NCC) is the leading Russian operator of container terminals. It holds leading position at the market of stevedoring services. NCC is owned in equal shares by First Quantum and FESCO transport group. In 2007, total throughput of NCC container terminals exceeded 1.5 million TEU.

    Mariya Favorskaya upon media materials

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