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  • 2019 March 26

    Serik Zhusupov: “There are numerous challenges hindering the development of port industry”

    A regular meeting of the Board of Directors and General Meeting of the Association of Commercial Sea Ports (ASOP) was held in Saint-Petersburg on 22 March 2019. The conventional business programme carried a jubilee connotation – the country’s first port association celebrates its 30th anniversary. Serik Zhusupov, Executive Director of the Association, answers the questions of IAA PortNews.

    - Mr Zhusupov, could you please outline the key achievements of Russia’s stevedoring sector in the recent 30 years. What was the contribution of ASOP?

    - Port industry is among the key elements of Russia’s transport system. It creates conditions necessary for implementation of the country’s foreign trade and transit potential. Over the recent decades the seaports have been showing a positive dynamics. In 2018, throughput exceeded 800 million tonnes, twice as much as that of all Soviet Union ports in 1988 and four times as much as that of RSFSR in the same period.

    The Association of Commercial Sea Ports numbers more than 70 organizations including the largest stevedoring companies. They introduce advanced technologies, implement new projects and improve logistics thereby ensuring the growth of performance indicators.

    Our industry focused association provides for regular exchange of opinions, forging of a joint stance, draw attention of authorities to the most acute problems and suggest optimal solutions.

    In the very beginning of its activities the Association justified joint responsibility of ports and railways for sealing of railcars with import cargo. Otherwise, the troubled crime situation in the segment of foreign trade activities seaports could have found themselves on the brink of economic survival.

    During the challenging period of corporatization and transition to the competitive market business, it was through the efforts of ASOP that privatization implying maximum participation of port works was fought back.

    ASOP used to assist in development of proposals on key regulations needed for stable functioning of seaports under new conditions: on establishment and on authorities of Sea Ports Administrations and Rosmorport, on lease agreements involving non-privatized property, on methods for calculation of cargo handling tariffs.

    ASOP experts managed to justify zero VAT rate for services on cargo handing in seaports; exemption from property tax on property when it comes to hydraulic engineering structures in ports; termination of price regulation; exemption from payment for water use and considerable reduction of the list of hazardous and technologically sophisticated infrastructure facilities in seaports.

    Many of the port proposals were taken into consideration when developing framework for regulations from the part of state authorities and other types of transport in seaports. 

    A special line in the history of ASOP is the Law on Ports serving as a real foundation for the regulatory framework. Joint work of legislators and experts took more than a decade. In the result, the concept of “sea terminal operator” was for the first time described as a transport organization. 

    - Is the dialogue with federal authorities in the interests of stevedoring community successful today?

    - Successful development of stevedoring business in our country became possible particularly due to a RF Government's consistent position on a structural reform of domestic port industry, creation of a comprehensive regulatory base and development of a system for a productive dialogue between ad hoc executive authorities and the professional community.

    Multi-level interaction with RF Government bodies is based on a number of agreements signed by ASOP and the Ministry of Transport, the Ministry of Natural Resources and Ecology, the Agency of Strategic Initiatives and other bodies involved in development of the country’s port business on a principally new contemporary level.

    That lets ASOP experts take part in elaboration and discussion of the most important regulatory documents and plans, submit their proposals and, together with executive authorities, look for solutions to the most acute problems.

    Undoubtedly, this interaction yields results in the form of comprehensive solutions for the development of port industry and stimulation of a socially responsible stevedoring business.

    - Could you please name the key challenges being faced by Russian port community. What are the solutions, in your opinion? 

    - There are numerous challenges hindering the development of port industry. For example, state regulation of border check points at sea terminals numbers about three dozens of documents which sometimes overlap each other and decrease the efficiency of control and production activities. The Association of Commercial Sea Ports offers supplementing the industry legislation with a dedicated section or even a separate law so as to pin down the purpose of state control in check points as facilitation of the country’s transport potential development.

    Transport security is related issue. In our opinion, the problem is in occasional revision of recently set requirements, in unpredictability of new, sometimes urgent, regulations entailing considerable financial expenses of stevedoring companies.

    For more than 20 years ASOP and state bodies have been handling issues of tariff regulation and excluding stevedores and companies providing towage services from the list of natural monopolies. We consider this process being unreasonably dragged on while port industry performance has been long showing high level competition in this segment of economy. In this respect, there are many expert conclusions. We expect the recent statements of the Federal Antimonopoly Service on possible abolition of Law on Natural Monopolies to facilitate and finalize the process.

    The territory of our country is washed by 13 seas of three ocean basins, there is a well developed network of railways and roads, a system of river transport, the Northern Sea Route – all these lets Russia be one of the leading players in the global transport market not only providing its consumers with products of domestic origin but also ensuring transit between the Asia-Pacific Region and Europe. Optimal use of the national transport system’s transit potential is both a challenge and a prospect for the development of seaports. 

    Not without reason, RF President’s Decree on National Objectives and Strategic Tasks of the Russian Federation Development till 2024 has a section dedicated to the comprehensive plan for upgrading and expanding core infrastructure providing for the development of West-East, North-South and Europe-Western China transport corridors particularly through expanding capacity of river transport and railways including railway approaches to seaports, capacity of seaports in almost all basins, reduction of transit time for containers transported from the Far East to the western border of the Russian Federation as well as 4-fold increase of transit volumes.

    With those large-scale changes production capacity of domestic ports are forecasted to grow to 1.3 billion tonnes by 2030. 

    On this occasion, I would like to congratulate all port workers and port industry veterans on the 30th anniversary of our Association!

    We consider the anniversary as an opportunity to analyze and evaluate that huge work we have performed and to look beyond the horizon as well as an impetus to creativity and development rather than just a celebration.

    Interviewed by Nadezhda Malysheva