This is an integration resource. Unfortunately, there is a threat of losing it. During the same years, some plans have matured under the slogans of "national security" and "transport independence" to establish some alternative ways of carrying Russian cargoes as opposed to the Baltic ones. This summer a final decision was made to construct the Baltic Pipeline System and the first stage of the seaport in Primorsk to transfer 12 million tons of oil by 2001-2002 and achieve 30 million tons subsequently. As a proportionate growth of exported resources is not expected, then an actual drastic reduction of oil transfer via Ventspils will occur.
        What are the reasons of our opponents?
        The economic reasons are a so-called "overpayment" for the transit through "alien" seaports, which is estimated as USD 2 to 2.5 billion per annum. The figures are, gently speaking, are spun out of thin air. For example, the transfer of oil and oil derivatives, and these account for more than 50 percent of the total freight traffic through the seaports of the Baltic countries, costs USD 350-400 million a year to Russian exporters. Therefore, some "saving" could be achieved only in case of free or extremely beneficial (at the cost of Russian taxpayers) transit through domestic seaports. The geopolitical reasons: they refer to a danger of blocking any transit through the Baltic countries in case of a threatening conflict between Russia and NATO. However, in this case the ways for Russian cargoes to the West will be also blocked both through St. Petersburg and Primorsk. By the way, the supporters of changing-over Russian oil streams from the West to China are also referring to such a hypothetical threat (see The Expert No. 27, July 17, 2000, a special issue "China").
        The consolatory reasons: Russian transit on the Baltic Sea will grow rapidly and there will be enough work for every seaport. Allegedly serious experts from the northern countries forecast a freight turnover in the Eastern Baltic countries as high as 400 million tons by 2010, and Russian ports pretend to as low as 150 million tons, i.e. a bit higher than the turnover of the nine largest seaports of the Eastern Baltic countries in 1999. This is a praiseworthy modesty. But where have they got a mystical figure of 400 million tons? The initiated revival of Russian processing industry will raise sharply a demand for power and natural resources, and the production thereof will increase by 20 or 30 percent by 2010 at best. Therefore, a relative reduction in exports is inevitable. Besides, the new development areas of crude oil production, if we exclude the Timan-Pechora oil field, are located in the Eastern Siberia and on the Caspian Sea. Consequently, new pipeline systems are also designed in the East and South. Moreover, although 54 percent of Russian crude oil and its derivatives flowed towards the Northwest late in 1990s, then according to a power development strategy of the Russian Federation Fuel and Energy Complex for a period up to 2020, a share of the Northwest Region will shrink to one third.
        A relative reduction in crude oil and oil derivative transit flows in the Baltic Region could be possibly compensated by means of other cargoes to a certain extent. In particular, great expectations are placed on a growth of container traffic. Theoretically, it is related to an expansion of Russia's part as a transcontinental bridge between Asia and Europe. However, the most recent years have seen, in practice, a substantial cutback in the utilization of a principal railway, i.e. Transsib, for those purposes. Although the above railway passed through 150 thousand 20-feet containers annually during 1980s, then 1999 saw 15 thousand ones only. At the same time, a freight turnover between the South East Asia and Europe had grown three times as much. Cargoes from Japanese and other Asian seaports go by sea to Rotterdam and Hamburg around Russia. A powerful competitor against Transsib may emerge in using overland routes. European Union has officially initiated and financially supported a TRASECA Project, i.e. a transportation passageway to pass around Russia through Uzbekistan, Kazakhstan, Azerbaijan, and Georgia. An idea of a "new silk way" is also proposed, that means a Trans-China Railway Project to start from Lianyingan Seaport through the Middle Asia to Turkey and European countries. This is the Southern route again.
        It is possible to retain and improve the economic and political importance of the Baltic shortest transportation passageway through some joint efforts of the regional countries. The unworkable competition on the edge of trading and transit wars must be replaced with the cooperation within an international legal framework. The basis is a mutual economic interest and growing investment efficiency in an environment of limited financial resources.
        If we add together all the national transportation programs of the Baltic Region, then we could face 2- or 3-fold excess of a seaport and transport service supply over an actual demand for the same by 2020, that will freeze huge capital investments and undercut stability in our region. Thus, we hold that it is necessary to coordinate and streamline national investment programs to some extent, establish large-scale transnational projects and programs intended to ensure an adequate status and high competitive ability of the Baltic transport route on the whole.

The further development of the baltic passageway depends on the consolidation of efforts from the states located on the Baltic sea cost

Boris Usanov,
Academician of Russian Academy of Transportation

        This rather extended title is the basic view of the St. Petersburg Administration (and Russia's, in general) with respect to the development of seaports, also known as "the marine aspect" of the St. Petersburg transportation and technical network. During the V General Assembly of the Baltic Sea Port Organization that was held in St. Petersburg in early May this year, we were glad to see the participants' positive assessments on its efficiency. Representatives from 60 ports from 9 Baltic countries unanimously stated that import-export cargo growth rates had been 3 times higher in 1998 for the OAO Seaport of St. Petersburg, for instance, than for Baltic Sea ports in general.
        It would seem everything is clear; the line of activities is in place, and its results are positive.
However, this is not so:
And this is why...
        This year has witnessed (and will still see more) international conferences on transportation in every Baltic State, with special emphasis on issues of cargo movement. This is quite natural. The handling of Russian freight accounts for more than ? of the Baltic national budget revenues. How then can one assess the Russian initiatives in the Baltic for the reconstruction and renovation of existing port facilities and the construction of new ones? In this case, will Russians take back "their own" cargo from the Baltic seaports?
        It is important to note that seaports in the Baltic States, Ukraine and Finland are presently handling over 80 million tons of Russian cargo, which is more than 2.5 times what the stevedore companies handled in the Great Seaport of St. Petersburg in 1999. Taking this into consideration, Russia pays more than 2 billion USD a year, which is approximately the cost of the missing components in the St. Petersburg transportation network. Therefore, the problem is far from trivial from the viewpoint of both parties concerned.
        I fully agree with Mr. Michael Bronstein, member of Estonian Academy of Science, who prefaced his interview with the subheading "People who have their own interests in mind are lobbying for new Russian Ports" (Business & Baltia, June 14, following the Baltic Transit Way - 2000 conference in Riga, June 8-9). Well, it is economic estimates rather than politeness that dictate the need for our own facilities to handle domestic cargo and avoid using third country seaports. As a participant in the above conference, I am pleased to mention that we (our Russian delegation was large) were properly understood. In this regard, the Russian Journal published the following article on June 16 entitled "Why Are Bars Required on the Window to Europe":
        "The Baltic countries seem to realize the time has come for Russian exports to find alternatives, and the (Baltic) monopoly on Russian cargo is ending. Russia may enter this new stage with a positive outlook". However, things are not so simple.
        Please open page 28 of the Great Seaport of St. Petersburg reference book that has was recently published. The diagrams presented in the book show that the Riga Seaport for instance, cut down the handling of containers by 6% in 1999 as compared to 1998, of metals by 3% and fertilizers by 1%, while St. Petersburg increased those figures by 6%, 14%, and 4%, respectively.
        As they say, one has one's interests at heart. A summary article following the Riga conference appeared in the Commersant BALTIK weekly analytical journal, under the heading, "The Transit Way: Our Forces are Retreating". This is just a simple statement of facts. Academician M. Bronstein was being polite when he used the words "The Self-Interests of the Nationally Offended" in the title of his interview. I believe this is an unacceptable statement. This should be avoided in our mutual relations in accordance to the foreign policy section in the government declaration (on the occasion of Mr. Andris Berzins' assumption of office as Prime Minister), where good neighborhood relations with Russia appeared as a priority for the first time.
         The Baltic region has enough work for everyone, which is confirmed in the prognosis presented by the Council of Ministers for the Northern Countries. This study shows that marine cargo traffic will grow by roughly 400 million tons in the forthcoming decade.
        At the same time, the consolidation of multilateral relations in the Baltic region is also necessary for it is the only way to integrate our efforts in gaining the cargo that flows between the West and the East. We are all in direct competition with such cargo corridors as the TRASEC (the former Great Silk Way). Although TRASEC is longer (in distance and time) and more expensive for cargo owners, it has a sufficient number of supporters. It does not take a prophet to anticipate that TRASEC problems will be an important part of the discussion during the 2nd International Eurasian Conference on Transportation. We have invited Academician M. Bronstein to participate in an open discussion rather than offering interviews, to face what he calls "the real threat to us all". This will also be an adequate response to his assertion that "the scary words about the billions of dollars that Russia loses in cargo flow are intended, first and foremost, for internal circulation within Russia. The real figures will never enter the Russian press. It is impossible to make one's way in…"