All roads lead to Crimea?

Port sector development in Crimea is hindered by international sanctions as well as high port charges, insufficient competition and low containerization of cargoes. That is the opinion of the Second Crimean Transport Forum participants who met in Alushta last week.

Divide and rule

Port industry development in Crimea is hindered by international sanctions as well as high port charges, insufficient competition and low containerization of cargo flows. 

As Transport Minister of Crimea Andrei Bezsalov said at the Second Crimean Transport Forum, some port charges in Crimea are 10 times as high as in other ports. “We reduce charges as a special concession to cargo owners without prejudice to our economic interests,” the regional Minister says.

According to Andrey Vasyuta, Director General of SUE Crimean Sea Ports, who also participated in the Forum, seaport infrastructure in Crimea features high level of depreciation - 99.3%. Depreciation of vessels is 86%, hydraulic engineering structures – 99.6%, mechanical equipment - 95%. Therefore, the ports of the Crimean Peninsula are highly in need of money.

Andrey Vasyuta says that state regulation and federal subsidies are required for port infrastructure modernization. Federal special-purpose programme on development of Crimea (2015-2020) provides for allocation of RUB 5 bln for reconstruction of hydraulic engineering structures.

According to Timofei Kurayev, head of Crimea and Sevastopol Department at Russia’s Federal Antimonopoly Service, SUE Crimean Sea Ports could be divided into separate entities to solve the problems Crimea’s port industry.

“This would revive those ports whose activity is insufficient today. I am sure, this will be done sooner or later,” said Timofei Kurayev.

The proposal has been supported by Natalia Yakovenko, deputy head of FAS Department for Transport Control. “Competition could facilitate the loading of those ports in Crimea that are insufficiently loaded today,” Yakovenko thinks.

The discussion also involved State Duma Deputy Mikhail Bryachak and Russian Border Services Agency head Konstantin Busygin who opposed the proposal of FCS and FAS representatives since a single structure is easier to manage.

As Sergei Akseonov, Head of the Republic of Crimea, said at the St. Petersburg International Economic Forum (SPIEF-2015), the Government of the Republic is set to sell the commercial seaport of Feodosia. “It has traditionally been handling oil products, there is a possibility and technical conditions for this, - Sergei Akseonov commented. – Investors, including foreign ones, are interested in putting money in the port”. Andrei Bezsalov said several investors have expressed their interest in the projects of Feodosia port development. Therefore, a winner is to be selected through a competition.

In September 2014, Aleksei Kolesnikov, First Deputy Director of Feodosia Company on Oil Product Supply, told that the company included into the sanction list had to stop exporting oil products and turned to domestic market providing services for Russian companies. In March 2015, Saint-Petersburg based company Ligof announced its plans on investing RUB 5.4 bln into the port of Feodosia.

SUE Crimean Sea Ports was set up in March 2014. It includes the ports of Kerch (commercial and fishing), Feodosia, Yalta and Yevpatoria. 

This structure does not correlate with that developed in Russia where terminal facilities are generally owned by private companies and federally owned facilities are managed by FSUE Rosmorport. 

As Sergei Akseonov said later, Crimean ports will revise cargo handling rates by July 15, 2015. According to him, Transport Ministry of Crimea is elaborating the proposals. Akseonov said that considerable difference in the rates of Crimean ports and Black Sea ports of mainland Russia was caused by the necessity to pay the debt of RUB 200 mln to the Maritime Directorate. To settle the debt Crimea authorities addressed Deputy Prime Minister Dmitri Kozak with a request for compensation of the above amount from the federal budget.

Meanwhile, Viktor Vovk, deputy head of the Federal Marine and River Transport Agency (Rosmorrechflot), says the Agency will in every possible way promote the projects aimed at consolidation of shipments bound for Crimea and containerization of cargo flows towards the peninsula.

Vitaly Chernov, Nadezhda Malysheva.