Phantoms of Russian infrastructure – 2022
The outgoing year was a turning point for the entire Russian transport and logistics industry with its eastward pivot setting new priorities for the port infrastructure development.
A tangle of transport problems
The outgoing year has seen further implementation of the project on comprehensive development of the Murmansk Transport Hub (MTH). As of autumn 2022, MTH construction was about 50% complete.
As Yevgeny Ditrikh, head of GTLK, told IAA PortNews in September 2022, the coal terminal of Port Lavna would be launched in the second half of 2023. “In the current reality, the key advantages of Port Lavna are of particular importance - first of all, it is the direct access to neutral waters. Besides, it is a deep-water and ice-free port, which lets it receive vessels with a maximum draft and a carrying capacity of 150,000 tonnes round the year. We are currently working on expanding the range of cargo to be handled at Port Lavna port as part of the project development,” he said.
In addition, a programme of preferential leasing of ships is being developed with the involvement of the National Wealth Fund. That will allow for the delivery of about 346 ships of various types within the coming decade. The programme provides for the construction of 151 cargo ships, including at least 46 large ones. They can be deployed for operation on the Northern Sea Route and call at Lavna.
In December 2022, Murmansk Region Governor Andrey Chibis announced that the Russian Government allocated RUB 37.7 billion for the project.
“The Ministry for the Development of the Russian Far East and Arctic provides us with RUB 4.2 billion for electricity supply to the western shore of the Kola Bay. The new power infrastructure will contribute to the development of our current and future investors which inject resources in the Murmansk Region economy and create new jobs,” said Andrey Chibis.
According to the project roadmap, construction of coal terminal Lavna is to be completed in 2023; construction of Lavna-Vykhodnoy railway – in 2024; construction of Volkhovstroy-Murmansk railway – in 2024.
The coming year is to show if the schedule for the coal terminal construction is met or if it keeps the status of a long-delayed project.
Pionersky is not 'always prepared'
Port Pionersky in the Kaliningrad Region is still under construction although it has lost its general relevance, in our opinion. In August 2022, FSUE Rosmorport announced the results of the tender on construction of a passenger terminal building, development of stormwater sewage system, installation of a radio-relay tower and ensuring of transport safety at the international terminal for cruise and passenger ships with OOO Geoizol acknowledged as the winning bidder. The contract price is RUB 2,228,834,963.
The General Contractor for completion of port infrastructure development under the project on construction of international terminal in Pionersky is FSBI Marine Rescue Service.
The project is expected to annually ensure up to 110 calls of cruise ships with at least 225,000 cruise passengers and 312 calls of ferries able to carry 80,000 passengers and 80,000 Ro-Ro units. That number of calls in the current situation is obscure and looks just as the belief in the radiant future.
Grain by grain
Attempts to create grain facilities in the Baltic basin have not been implemented yet although the ports of the neighboring Baltic countries still handle about 1 million tonnes of grain per year.
The first attempt of Sodruzhestvo was in 2020 when RF Government leased out a plot of land in Batareinaya Bay (Lomonosovsky District of the Leningrad Region) for 10 years for the construction of the Baltic Grain Terminal. However, the Government of the Leningrad Region withdrew its approval of the grain terminal in June 2020 due to the environmentalists’ protests.
The second attempt was in June 2022. Sodruzhestvo signed an agreement with the Leningrad Region Government on construction of a terminal in the port of Ust-Luga. The capacity is planned at up to 10 million tonnes per year with no dangerous cargo handling.
Investments into the project are expected to exceed RUB 37 billion.
Apart from the project of Sodruzhestvo, Port Vysotsky is going to convert its coal terminal for grain transshipment. In August 2022, a corresponding agreement was signed between the port and the Government of the Leningrad Region. The project provides for the construction of a new grain terminal in the port of Vysotsk with annual capacity of 4 million tonnes.
Another project in the same port, that of SPK Vysotsk, has finally sunk into oblivion: there has been no information about the project revival after it was suspended in 2020.
Northern tales
One more "long-suffering" project is Indiga port. The project passed through the hands of various investors. It was first intended for handling of LNG, then oil, coal, fertilizers or paper. Then it was planned to export titanium ores. A consortium of the AEON Group and Rustitan Group announced the plans to export titanium ores via Indiga. Ores are planned to be exported from the Pizhemskoye deposit of titanium ore. The port is to handle ships of up to 300,000 dwt with a total throughput of 80 million tonnes. Cargo traffic on the railway is estimated at 67 million tonnes.
When speaking at the 10th International Forum “Arctic Projects – Today and Tomorrow” in October 2022, Yury Bezudny, Governor of the Nenets Autonomous Region, said that Rustitan produces about 5 million tonnes of titanium ores per year.
Investments in the construction of Sosnogorsk – Indiga railway branch are estimated at RUB 350-400 billion. “The case for small – to find investors willing to finance that ambitious project,” the Governor summarized ironically.
The project on construction of Obsky Gas Chemical Facility has been suspended this year amid sanctions since its products were initially indented for exports to the European Union.
Arctic projects, Severnaya Zvezda and Chaika, have confirmed their status of ‘phantoms’: no information on any progress in their implementation has been available this year.
Sakhalin mist
In the beginning of the year, consortium of Transport Projects and Investments, LLC and Witteveen+Bos, an engineering holding based in the Netherlands, commenced designing of a new cargo port in Poronaysk on the Sakhalin island. Investments into the project were estimated at RUB 34.9 billion, capacity – at 14 million tonnes of cargo per year. The construction under a concession agreement was to begin in mid-2023 with the terminals to be put into operation one by one in 2025–2027. However, the project has not been included into the draft programme for targeted investments in 2023 or a planned period of 2024‒25.
Setting eyes on the East
If nothing extraordinary happens, the next year, is likely to continue and consolidate the trend of the eastward pivot in logistics. That means that the state support will be mainly provided to projects able to relieve the overloaded eastern direction and those focused on trade with Asia.
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