Railroad slowdown
Russian Railways has recently been attacked from all directions. The Transport Ministry condemns the slowdown in the development of infrastructure at close approaches to Ust-Luga while the court takes the side of Petrotrans-Primorsk in a dispute over the reconstruction of Vyborg-Primorsk-Yermilovo railway branch. Meanwhile, Russian Railways says the works in Ust-Luga are on schedule and insists that the company is right in the dispute with Petrotrans-Primorsk.
According to the analytical note to the report on the progress of implementation of the federal special-purpose programme “Russia’s transport system development (2010-2020)” in the first half of 2013 published by the Ministry, Russian Railways OJSC has considerably curtailed works on the development of infrastructure at the close approaches to port Ust-Luga and on construction of Ust-Luga terminal station. The company explains this with the absence of budget financing.
In particular, the plans for the nearest years do not include the activities on construction of Luzhskaya-Generalnaya station which is supposed to have tracks connecting it to the newly built terminals, for example metallurgical terminal.
As IAA PortNews learnt from Russian Railways OJSC, the first phase of construction works being implemented at Luzhskaya-Generalnaya station and implying the construction of three station tracks is on schedule. The facility is to be put into operation in 2015. Design works are currently in progress at the site. As of today, the carrying capacity of the railway towards Ust-Luga is 37 mln t per year. Upon completion of Luzhskaya-Generalnaya station, the expansion of the carrying capacity will depend on the development of the terminals and their connecting tracks. The project is financed by Russian Railways OJSC.
It should be noted that in the 7-month period of 2013, port Ust-Luga handled over 34 mln t of cargo including 21 mln t transported by railway. It turns out that the railway is nearing its limit and will not be able to develop without the extension of the infrastructure capacity.
In late July 2013, the Supreme Arbitration Court of the Russian Federation (SAC) upheld the decision and the regulations of the Leningrad Region Authority of the Federal Antimonopoly Service in respect of Russian Railways OJSC which “dictated unfavorable technical conditions” to Petrotrans-Primorsk LLC on the development of public railway tracks. Russian Railways insisted that Petrotrans-Primorsk should develop public infrastructure within the framework of connection to Vyborg-Primorsk-Yermilovo section at its own cost.
This was qualified as violation of Article 10 of the Federal Anti-Competition Law (abuse of a dominant position). Antimonopoly service ordered to terminate the violation of the anti-monopoly legislation and set a fine of over RUB 44.5 mln.
Russian Railways did not agree with the decision and the dispute finally reached the SAC of Russia which dismissed the claims of Russian Railways.
“We are satisfied with the SAC decision”, says Vadim Vladimirov, Head of Leningrad Region Authority of the Federal Antimonopoly Service.
Nevertheless, as IAA PortNews learnt from Russian Railways, the company is sure it is right.
“The 13th Arbitration Appeal Court on November 14, 2012, decided in favour of Russian Railways”, the company commented.
The necessity to attract private investments into the development of public infrastructure is dictated by the current carrying capacity of the specific sector of the railway network, Russian Railways says. Petrotrans-Primorsk has announced its plans to carry 3.3 mln t of cargo along the railway branch that make Russian Railways demand that the company invests its own resources.
Russian Railways says it did not have funds for the development of infrastructure so that it could handle the volumes announced by Petrotrans-Primorsk. The Investment Programme of Russian Railways approved by RF Government did not imply the development of infrastructure at Vyborg-Primorsk-Yermilovo section. In such a case all investment issues can be solved by agreements signed by Russian Railways and the organization willing to connect. Russian Railways thinks that if a state company has no resources for partial development of infrastructure, the development of this part through attraction of private investments is legally acceptable.
Anyway, the situation when the development of port facilities is ahead of the infrastructure development is evident. However, the state places a priority on the Far East direction, as President Putin said at the Saint-Petersburg International Economic Forum - 2013. It is explained by the shift of Russian raw materials towards the states of the Asia-Pacific region. European direction is in stagnation and does not seem to boost. Moreover, port infrastructure in the European part of Russia is developed quite well. For example, against the investor’s opinion, we see no urgent need to expand port Primorsk with the construction of terminals for different cargoes.
Vitaly Chernov