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  • 2022 November 21 10:29

    VARPE sees state support insufficient for modernization of domestic fishing fleet

    State support with RUB 1.5 billion per year is needed with key priority to be given to the construction of small-size and mid-size ships 

    All-Russia Association of Fishery Enterprises, Entrepreneurs and Exporters (VARPE) has addressed  Andrey Yatskin, First Deputy Chairman of the Federation Council. In its letter (IAA PortNews has obtained a copy of it) VARPE marks three support measures in the form of subsidies from the federal budget: compensation of expenses for acquisition (construction) of new civil vessels to replace the scrapped ones (utilization grant), partial coverage of loan rates and lease payments as well as a subsidy to partially cover expenses for construction of fishing ships. However, efficiency of programmes aimed at support of fishing ships construction should be enhanced, according to VARPE.

    “Unlike passenger and cargo ships, fishing ships are more expensive to build due to installation of costly equipment. Therefore, additional risks appear and economic viability of the support measures is decreased,” reads the letter.

    Absence of the fishery companies’ interest is explained by a low compensation of expenses for construction (acquisition) of vessels with the requirements of companies not taken into consideration when setting terms for providing of support measures, VARPE emphasised.

    According to the Federal Customs Service, 151 fishing ships were imported in 2019-2022. Most of them came from Japan (about RUB 100 million per ship).

    Between 2017 and 2021, coverage of loan rates totaled RUB 75 million, in 2022 – about RUB 115 million, according to VARPE. Financing of the utilization grant programme at RUB 950 million in 2020-2021 and financing of fishing ships construction at RUB 1 billion could allow for construction of 19 ships which accounts for less than 2% of the fleet.

    VARPE says that the most promising measure is the subsidy to cover interest rates. Allocations of 2020 could cover the interest rates for 41 ships, those of 2021 — 37 ships. Maximum compensation of loans at 2/3 of expenses for payment of interest rates is not to exceed 2/3 of the basic indicator.

    “This measure is not popular in the fishery industry. Thus, the existing programmes aimed to support the construction of fishing ships do not contribute significantly to the development of the industry. They are not sufficient, concludes VARPE.

    As VARPE President Germn Zverev told IAA PortNews, it is necessary to increase the scope of state support of RUB 1.5 billion per year with the key priority to be given to the construction of small-size and mid-size ships. 

    16 shipyards across the country, from Kaliningrad to Kamchatka, are implementing the so called ‘keel quota’ programme. Construction of 52 fishing ships and 38 crab catchers was foreseen by the first phase of the programme (according to the data of the Ministry of Industry and Trade as of December 2021). By the end of 2021, the shipyards delivered 6 fishing and 2 crab catching ships. 

    Russian Federal Fisheries Agency (Rosrybolovstvo) says 97 ships are being currently built in Russia for the domestic fishery industry (58 fishing ships and 39 crab catchers).

    According to various estimates, fishery companies of the Russian Federation own 1,500 ships of over 80 tonnes in capacity. Of that number, about 1,104 ships are involved in fishing.

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