Big Port St. Petersburg: shift or leave as it is

The idea of shifting Big Port St. Petersburg facilities beyond the city has been discussed for decades already. The recent initiative reached the level of RF President. The project is expected to be time, cost and effort, time and cost intensive. Apart from the terminals, the project will probably include the transfer of strategic shipyards. The experts are ambivalent about the idea due to the concerns over lost of jobs and flow of cargo to the Baltics.

TMH President Andrey Bokarev has addressed a letter to the President of Russia with a suggestion to shift Big Port St. Petersburg facilities beyond the central part of the city (IAA PortNews has a copy of the mentioned letter). According to Andrey Bokarev, the most reasonable solution is to move the facilities to the port of Ust-Luga. The vacated space (about 600 hectares) is suggested to be redeveloped into a residential and commercial areas. The letter says it is an economically viable project that can be implemented through public private partnership involving investors’ and VEB.RF resources.

Vladimir Putin has given instructions to work on the project involving ad hoc ministries and authorities.

Evidently, the redevelopment should also cover the Severnaya Verf shipyard engaged in implementation of defence orders and, perhaps, the Kirovsky Zavod plant. Otherwise, the quarters appearing instead of port will be surrounded by industrial areas which will make them less attractive. Since termination of the plants’ activities is impossible, new production facilities should be first built outside the city. Who is going to build and to pay – that is one of numerous questions rising in case of shifting port facilities.

The experts also emphasize the diversity of Big Port St. Petersburg which has been traditionally handling a vast range of general cargo. As it is economically reasonable to build dedicated terminals, just ‘copying’ the current terminals at a different location is hardly possible.

According to Aleksandr Goloviznin, Logistics Director, Morstroytechnology, who used to head a terminal at the port of Ust-Luga, thinks the project on shifting Big Port St. Petersburg facilities to Ust-Luga is a dubious project.

“Despite the booming port construction in the country and enormous expansion of port facilities, the entire post-soviet period, and also the late-soviet time, have seen no newly built port able to handle such a wide range of cargo. The have been built no multipurpose ports and they are not likely to appear. The economy is not strong enough. With the revised legislation on investments into port infrastructure construction of such terminals is almost impossible now. The port of Ust-Luga is a perfect modern port. I am proud of having had the luck to take part in its creation. However, throughout its existence, the only type of cargo that has come to Ust-Luga from Saint-Petersburg is coal. The rest has not found its place there. Neither will it find. If trade centers are built instead of the port, roughly 20 million tonnes of Russian export cargo will become ‘homeless’”, says the expert.

"Roughly 20 million tonnes of Russian export cargo will become ‘homeless’"

Andrey Karpov, Director of the analytical center Dorn, believes that the transfer of port facilities is reasonable in case of building Bronka-Lomonosov cargo district. According to him, part of port facilities should be preserved in the city while increasing the share of containers.

“In any case, there should be a port in the city. However, the cargo mix should be changed with the focus on cargo consumed and generated by the city economy and citizens as well as transit cargo which is systemically important for the city economy and raising its competitiveness (it mostly container, ro-ro and refrigerated cargo), - says the expert. – Handling of such cargoes should not be interrupted or reduced due to redevelopment activities”. Moreover, the city is interested in building up those cargo flows (including transit ones) which requires the reserve of throughput capacity … The only place on the Neva Bay shore where new port facilities can be really constructed within the administrative borders of Saint-Petersburg but beyond densely built-up areas is the coastal area between the southern part of the Flood Prevention Facility of Saint-Petersburg and the Voyennaya Harbour in Lomonosov. It would actually be a new cargo district of Big Port St. Petersburg, Bronka-Lomonosov. Apart from the existing MSCC Bronka, it can accomodate specialized terminals of other stevedores focused on priority cargoes of Saint-Petersburg.

The expert also thinks it is necessary to develop the railway and road approaches to the new cargo district and create a port related industrial zone at the adjacent territory so that the new cargo district of the port could be developed in cooperation with the Leningrad Region.

“Shifting of port terminals is reasonable in case of building Bronka-Lomonosov cargo district”

When speaking about phases of moving port facilities the expert expects cargo districts I and II can be shifted within 10-15 years after a decision is taken on the top level. Realistic period for cargo districts III and IV is 20-25 years. According to Andrey Karpov, Bronka-Lomonosov cargo district can be built within phase I.

Olga Gopkalo, Senior Specialist, Morstroytechnology, is concerned about loss of jobs en masse that is possible amid the project implementation. The port personnel will not be willing to leave for Ust-Luga which is far from the urban infrastructure.

“If port operations in the city are stopped, the first and the most obvious consequence will be the loss of jobs by transport industry employees living in the city including those working at stevedoring companies, railway stations Avtovo and Novy Port (which will have virtually zero cargo flow) as well as numerous port and shipping service companies: agent, insurance and crewing companies, surveyors, shipchandler, tallymen, administrative personnel, customs, border and phytosanitary services, dry ports …, numerous forwarding and logistic companies, etc.”, says the expert.

“If port operations in the city are stopped, the first and the most obvious consequence will be the loss of jobs by transport industry employees living in the city”

According to Olga Gopkalo, another essential issue is who is able to transfer port facilities.

“It is too early to discuss the mechanism of the project implementation. It has not been developed yet. Who can undertake it and who should gain benefit (commercial and other) from the project implementation? And that exactly how it happened in Hellsinki. As the land owner, the city decided to shift stevedoring operations from one plot of land to the other… The city paid for the construction and then gained profit from the use of the vacated plots. Such a process is much more transparent – the expenses and the profit can be compared and it is clear who is to be involved in negotiations on covering the stevedoring businesses’ costs. The berths at the port of Saint-Petersburg are federally owned with the plots of land having a variety of owners. There is no single owner”, says the analyst.

It can be summarized that the transfer of port facilities beyond Saint-Petersburg is a challenging project with many aspects and it requires involvement of all the stakeholders. Selection of a wrong location or transfer of wrong facilities would affect the city economy and the entire country with the risk of some cargoes to flow to the ports of neighboring countries.

By Vitaly Chernov

news@portnews.ru

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