To tell about successes of late, about complexities the every chief inevitably faces with, we have asked Valery S. Izrailit, director general of JSC "Ust-Luga Company", a company which directly controls the port construction.

        -How could you explain the necessity to construct a new sea port on beaches of Baltic sea?
        -Many years the Leningrad merchant sea port was one of largest ports in country. The USSR had 70 ports. Nowadays, after the disintegration of the Soviet Union, we have only 40 sea ports. But only 11 of them meet the requirements of the processing of export-import freights. Their total traffic capacity is valued no more than 133 million tons per year, whereas there is a necessity to tranship around 200 million tons of freights. The deficit of port powers inevitably causes appreciable growth of transportation costs and puts foreign trade of Russian Federation depending on the foreign states. For a central and Northwest European part of Russia the deficit is more than 50 million tons per year. The dependence on foreign transport corridors makes the Russian cargo owners bear additional transportation costs for freight transhipment through ports of Baltic states and Finland. And according to the various information of the experts these costs amount up to a 1 billion USD.
        - What is the conditionality for port construction in Ust-Luga?
        - The reason is in unique natural features of the Luga Bay. First, it's caused by the possibility of a year-round operation of a port with a short period of icebreaker assistance for vessels. Second, the large depth of the water area in combination with the short approach channels (3,7 km, while that of Saint-Petersburg port is 35 km). Fourteen meters' depth of the berthing water area and of the approach channel (for the first phase of the port) will allow to process vessels with the deadweight capacity of up to 75.000 tons.
        Further dredging of the approach channel and the berthing water area up to the depth of 18 m will allow receiving vessels with the deadweight capacity of up to 100.000 tons, that will considerably lower the freight cost for the cargo owners. There are practically no limitations on the further extension of territories to form custom-warehouse and manufacturing zones of port.
        - How far has the port construction been advanced?
        - Now it is possible to speak about a new phase. Considerable part of work is already made. In particular, the 425-m dock of the coal terminal is almost ready, the starting complex of which is planned to put into operation in Ist quarter of 2001.
        - It's known that construction financing can be implemented both by budget means and by the means of private investors. Who is going to be a real owner of the property: the state or the representatives of private sector? In this connection how are the rights and responsibilities of Parties determined?
        - On the basis of conditions of the contract with the Russian Federation Ministry of Transportation the objects of a port-complex, constructed in accordance with the same contract are subdivided into objects of a state property and objects of a private property. The objects constructed at the expense of the state means is regarded to be objects of state property, and those built at the expense of private means to be a private property.
        Ministry of Transportation founded General management of the state customer for general management on implementation and control of the project. The state support is ensured by the Decrees of the President of Russian Federation,Orders of Government about prime measures on revival of a mercantile fleet of Russia. The project has no regional, but federal significance.
        The JSC "Ust-Luga Company" is the General developer of the project and has authorities to make independent solutions on financing, designing, building and future exploitation of port with attracting both state, and private investments.
        The following organisations are among the shareholders of JSC "Ust-Luga Company":
- The Government of the Leningrad Region,
- State Unitary Enterprise "October railway"
- Public JSC "Association Financial-Industrial Company"
- Other private Russian and foreign investors
        JSC "Ust-Luga Company" set up 15 opened joint-stock companies that should organise the construction of separate objects of port infrastructure depending on the profile of its specialisation. I want to underline, that it is the first case in our country that such a big multifunctional port is being constructed by private means.
        - According to the project the freight turnover of Ust-Luga seaport is 35 million per year. Last year St.-Petersburg sea port has reworked 28,2 million tons of freight -It is a little bit less, than that of Ust-Luga seaport. Whether the competition between ports is possible?
        - Practically it is not. As we already mentioned, the deficit of port powers totals more than 50 million tons per year. The constructive competition will not damage neither our, nor St.-Petersburg port, and the competing as services and size of payment for them will only help the cargo owners, and, finally, all customers of the goods by a decrease of the prices.