Arkhangelsk as a gateway for Asia-Europe container trade

Recently, the project of a deepwater port in Arkhangelsk, named Belkomur project, has been included in the program of Russia’s North-West Federal District development until 2020. The new port’s projected throughput is estimated at 28 million tons a year. However, presented calculations of cargo base of the future port raised doubts among some experts.

Murmansk rival

The Belkomur project includes, among others, the construction of a new Belkomur 1155km mainline, which will connect directly the Republic of Komi with ice-free ports of Arkhangelsk, Murmansk and the ports of Northern Europe, and will enable the flow of transit cargoes from Asia to the West. The project is implemented by JSC Interregional Company "Belkomur", 86% shares of which is owned by the administrations of Komi Republic, Arkhangelsk Oblast, Perm and other government agencies.

The project major objective is the construction of a deepwater port in Arkhangelsk in the north-eastern part of the Dry Sea gulf in Dvina Bay, which would be able to handle annually about 28 million tons, largely containerized cargo in the amount of 17.5 million tons (TEUs not specified). Besides, the new port is expected to export 5.5 million tons of coal a year, 2.5 million tons of petroleum products, 500,000 tons of fertilizer, 1.5m tons of general cargo and 500,000 tons of timber.

The project worth about RUB 30 billion will be completed in 5 years. The federal government will reportedly invest 9 billion rubles and private investors will spend 21 billion.

Yet experts are not certain about the project. According to the analytical report titled "The Arkhangelsk region: the socio-economic status and effectiveness of executive authorities", which was prepared by analysts of the Institute of Regional Information, the implementation of such transport projects in the Arkhangelsk region is in conflict with the transport strategy of the neighboring Murmansk region that has approved the Murmansk Transport Hub project with Murmansk port as a main element.

"Most experts believe that the creation of another deep-water port in Arkhangelsk is unreasonable. At the same there are doubts about Belkomur project as well, the Ministry of Transport is considering the possibility of shifting mainline from Arkhangelsk port to the Murmansk port," the report said. The main reason - the lack of guarantees that the Arkhangelsk deepwater port project can be implemented, analysts said.

"Thus, in the case of redirection of the Belkomur mainline there is a high probability that the plans for of new port would be dropped. An alternative option could be the development differentiation of freight flows in ports of Murmansk and Arkhangelsk. For example, Murmansk could focus on handling gas condensate, oil and bulk cargoes, while Arkhangelsk would be specializing in container handling," the report says.

Neither Europe nor China

At the same time, experts of a major Russian container operator told PortNews that the project of making Arkhangelsk as a premier container hub is economically unreasonable.

"There is no sense to break the existing, well-established scheme of containers transportation. No one will carry containers to Arkhangelsk, when there has been an established and tested logistic scheme of container handling in the ports of the Gulf of Finland," the experts say. The company does not see any prospects for transit of containers from China to Arkhangelsk because of poor rail service.

"The main thing in container logistics is on-time delivery of goods, and Russian railways are not able to ensure it. So far, all attempts to shift Chinese container flow onto Russian railroad have failed," the company’s marketing office said.

Besides, the main consumers of imported containerized goods are Central Russia, St. Petersburg and the Volga region. It’s an absurd to ship the containers back from Arkhangelsk to the regions – it makes the transport arm to big.

The lack of sufficient water depths in the area of the projected port will require costly dredging to create an operating area and approach channels to the port. According to plans, the port should be able to accommodate vessels with 13.5-meter draft. So, the scope of dredging work will require a substantial investment, but its economic viability is questionable.

The only advantage of the northern port is that it will be unfreezing, which is important in view of the heavy ice conditions during winter navigation in the Gulf of Finland. But this fact along would hardly be able make the new port with projected cargo volume interesting to investors.

On the other hand, Russian government needs the Belkomur project implementation largely for political reasons. This is due to the policy the government runs to strengthen Russia's position in the Arctic region, of exploration and development of the Northern Sea Route and the country’s northern areas.

Vitaliy Chernov