JSC MCS’ CEO Viktor Morozov: We are ready to fully ensure implementation of programs projected by shippers
Because of changes in conditions on the world markets, the structure of cargo turnover of the Murmansk Commercial Seaport (MCS) may change. Victor Morozov, MCS’ CEO told about this, as well as further development plans of the stevedore company in an interview with PortNews.
- Victor, what are the preliminary forecasts of the Murmansk port’s outcome in 2010?
- We expect this year-end total throughput to reach 14 - 14.2 million tons. Of these, approximately 10 million tons will be coal, 1.5 million tons - apatite and fertilizer, 300 tons - manganese ore, about 800 tons - iron ore concentrate and 0.5 million tons - cargoes of Norilsk Nickel, transported to Dudinka. From all types of cargo handled at the port there is a strong coal transshipment decline compared with last year - 2 million tons less than in 2009. The reason - the changes on the world coal market. In 2010, most of the coal traffic shifted to China, where coal prices are higher. The export coal handled at our port is shipped largely to Europe and North America.
Due to lower coal transshipment we had to adjust our budget before the end of this year. But in general, we managed to complete in full plans for major repair, purchase new equipment, modernization and ecology. The port now operates steadily, the wages are paid regularly, dividends paid out for 2009 were the highest since our company was established.
- Victor, what are the preliminary forecasts of the Murmansk port’s outcome in 2010?
- We expect this year-end total throughput to reach 14 - 14.2 million tons. Of these, approximately 10 million tons will be coal, 1.5 million tons - apatite and fertilizer, 300 tons - manganese ore, about 800 tons - iron ore concentrate and 0.5 million tons - cargoes of Norilsk Nickel, transported to Dudinka. From all types of cargo handled at the port there is a strong coal transshipment decline compared with last year - 2 million tons less than in 2009. The reason - the changes on the world coal market. In 2010, most of the coal traffic shifted to China, where coal prices are higher. The export coal handled at our port is shipped largely to Europe and North America.
Due to lower coal transshipment we had to adjust our budget before the end of this year. But in general, we managed to complete in full plans for major repair, purchase new equipment, modernization and ecology. The port now operates steadily, the wages are paid regularly, dividends paid out for 2009 were the highest since our company was established.
- What companies have changed the volume of coal deliveries to the port this year?
- We must pay tribute to Siberian Coal Energy Company (SUEK), which, despite the difficult situation, continue to fulfill its obligations. Regretfully, some of the other cargo owners reduced shipping, but due to serious, objective reasons.
Due to the very strict approach of the state supervisory bodies to the coal mines operations, some mines were closed. In particular, Kotinskaya Mine is operating irregularly. This greatly affects our work – the company’s planned figures for coal shipment is implemented by 15-20%, which leads to decrease in cargo turnover of the port.
We understand the situation, because we see that shippers are taking all measures to increase coal supplies to Murmansk.
- Has the reduced turnover somehow affected the development plans of MCS?
- This year the Board of Directors of JSC Murmansk Commercial Seaport adopted a program of development until 2020, determined its basic directions. I want to emphasize that our program fully meets the request of the Russian President Dmitry Medvedev on the innovative path of development. All documents of our program have been submitted to the ministries of Economic Development and Transport. We are ready for development.
Murmansk International Economic Forum, held on October 1-2, has already had positive outcome. We managed to reach agreement at the forum on a project of iron ore concentrate shipment from our port through the Northern Sea Route. The market development shows that the concentrate shipments to China turn out profitable. The volume may be considerable, since China consumes more than 100 million tons of iron ore a year. The shipping lane from Murmansk along the Northern Sea Route will be shorter by 7-8 thousand miles, than the alternative route through the Suez Canal. However, to implement such a project specialized ice-class bulkers of capacity of 50-60 tons are required. There are currently no such vessels. This issue is very interesting and promising, and we are working on it together with Atomflot.
- We must pay tribute to Siberian Coal Energy Company (SUEK), which, despite the difficult situation, continue to fulfill its obligations. Regretfully, some of the other cargo owners reduced shipping, but due to serious, objective reasons.
Due to the very strict approach of the state supervisory bodies to the coal mines operations, some mines were closed. In particular, Kotinskaya Mine is operating irregularly. This greatly affects our work – the company’s planned figures for coal shipment is implemented by 15-20%, which leads to decrease in cargo turnover of the port.
We understand the situation, because we see that shippers are taking all measures to increase coal supplies to Murmansk.
- Has the reduced turnover somehow affected the development plans of MCS?
- This year the Board of Directors of JSC Murmansk Commercial Seaport adopted a program of development until 2020, determined its basic directions. I want to emphasize that our program fully meets the request of the Russian President Dmitry Medvedev on the innovative path of development. All documents of our program have been submitted to the ministries of Economic Development and Transport. We are ready for development.
Murmansk International Economic Forum, held on October 1-2, has already had positive outcome. We managed to reach agreement at the forum on a project of iron ore concentrate shipment from our port through the Northern Sea Route. The market development shows that the concentrate shipments to China turn out profitable. The volume may be considerable, since China consumes more than 100 million tons of iron ore a year. The shipping lane from Murmansk along the Northern Sea Route will be shorter by 7-8 thousand miles, than the alternative route through the Suez Canal. However, to implement such a project specialized ice-class bulkers of capacity of 50-60 tons are required. There are currently no such vessels. This issue is very interesting and promising, and we are working on it together with Atomflot.
To date, the port of Murmansk is ready to handle 1.5 million tons of iron ore concentrate, increasing the volume to 5 million tons a year. For that we will need to make some adjustments to the port development plan launching a terminal for handling this cargo.
Also, we plan to boost freight turnover handling cargoes intended for the development of Shtokman field and Prirazlomnaya. We are ready to fully ensure the implementation of programs projected by shippers.
- Please name the main parameters of your investment program.
- First of all, the investments are directed for reconstruction of the port’s first area - 7 billion rubles until 2015. We believe that half of this amount will be invested by Rosmorport, and the other half will be provided at our own expense. We have planned construction of a new line of terminals, an increase of waterfront length. The work is under way to link the investment project with the development of the Murmansk transport hub. I think that we get the project approval from the Government of the Murmansk region and Rosmorport by next summer. So far, we are funding the project and future investments feasibility study.
At the Transport forum in Moscow it was said that the state will find it advantageous to privatize berths. Then we are ready to consider such a scenario under a concession agreement. In this case, JSC MCS will independently attract co-investors for the construction of new waterworks with further return of spent funds through reducing lease payments.
- How do you evaluate the idea of corporatization of Rosmorport?
- I think it is a correct and right way, which will allow us to resolve promptly bureaucratic issues. Rosmorport is a giant structure, which is managed rather slow and clumsy. If Rosmorport becomes a joint stock company, and make its branches independent in decision-making, such a measure will accelerate the development of port facilities. The Rosmorport corporatization is need as quickly as possible.
Interviewed by Nadezhda Malysheva.
Also, we plan to boost freight turnover handling cargoes intended for the development of Shtokman field and Prirazlomnaya. We are ready to fully ensure the implementation of programs projected by shippers.
- Please name the main parameters of your investment program.
- First of all, the investments are directed for reconstruction of the port’s first area - 7 billion rubles until 2015. We believe that half of this amount will be invested by Rosmorport, and the other half will be provided at our own expense. We have planned construction of a new line of terminals, an increase of waterfront length. The work is under way to link the investment project with the development of the Murmansk transport hub. I think that we get the project approval from the Government of the Murmansk region and Rosmorport by next summer. So far, we are funding the project and future investments feasibility study.
At the Transport forum in Moscow it was said that the state will find it advantageous to privatize berths. Then we are ready to consider such a scenario under a concession agreement. In this case, JSC MCS will independently attract co-investors for the construction of new waterworks with further return of spent funds through reducing lease payments.
- How do you evaluate the idea of corporatization of Rosmorport?
- I think it is a correct and right way, which will allow us to resolve promptly bureaucratic issues. Rosmorport is a giant structure, which is managed rather slow and clumsy. If Rosmorport becomes a joint stock company, and make its branches independent in decision-making, such a measure will accelerate the development of port facilities. The Rosmorport corporatization is need as quickly as possible.
Interviewed by Nadezhda Malysheva.