THE FORUM OF TRANSPORT WORKERS OF EUROPE AND ASIA


Address to the readers of Sergey Frank and Nikolay Aksenenko, the ministers


        The InternationalSergey Frank Eurasian Transport Conference is convened on the Neva banks for the second time. The Ministry of Communications, the Ministry of Transport and the Ministry for Foreign Affairs prepared it in cooperation with other Ministries and Departments of Russia. The 4th International Transport Exhibition 'TRANSTEC-2000' will be held in St. Petersburg at the same time.
        The participants will sum up the implementation of the Declaration as adopted by the First Conference in May 1998 and discuss the most important issues related to Eurasian transit. In doing so, special attention will be paid to the problems of developing a transit cargo and passenger traffic through the territory of the Russian Federation, an extensive and well-reasoned coverage of Russian transit benefits along the Europe-Asia line using Russian transport systems.Nikolai Axenenko Russian transit is presented at the forum as an alternative to the projects passing around the country. The Conference will discuss a part and position of the Trans-Siberian route and Russian seaports, BAM, Northern Sea Route, as well as the establishment of a transport passageway China - Kazakhstan - Russia -Belarus - Western Europe that will permit to intensify the cooperation among Russia, Belarus, and Kazakhstan, as well as North - South passageway being established now with the involvement of Russia, Iran, India, and other countries.
        Ministers of transport, representatives of political and business communities of European and Asian countries are invited to participate in the Conference, who have shown their great interest in the St. Petersburg Transport Forum held by Russia. In this view, it seems possible to provide it with a status of a traditional Eurasian Transport Conference to be regularly convened here. In our opinion, such an initiative will be understood and supported by the transport community. It will permit to produce a certain influence upon the framing of transport strategies in Europe and Asia, define principal transit lines between the two continents through Russia.

Sergey Frank, Minister of Transport, Russian Federation

Nikolai Axenenko, Minister of Communications, Russian Federation

THE FORUM OF TRANSPORT WORKERS OF EUROPE AND ASIA

The declaration proclaimed


         Government and parliament delegates from Europe and Asia together with representatives from international transportation and financial institutions gathered in St. Petersburg at the International Eurasian Transportation Conference in 1998.The International Eurasian Transportation Conference in 1998 They recognized the following issues as necessary for the development of effective and coordinated transportation links between Europe and Asia: further efforts towards progressive liberalization and harmonization of the transport markets of all parties;
        Compliance or, where appropriate, harmonization of national transport legislation, in particular on environmental protection, safety, technical and social aspects, with the relevant international regulations, including EC legislation and the UN ECE legal instruments in the field of transport;
        - development of intermodal transport with a specific emphasis on the improvement of the interfaces between the various modes of transport;
        - improved use of the existing transport networks and facilities through their technical upgrading and modernization and application of the most up-to-date transport means and technologies;
        - development of information-logistics systems for transport monitoring and management and appropriate information to the users of those systems; avoiding discriminatory taxes or charges in the transport sector;
        - elaboration of efficient mechanisms for financing transport infrastructure including the involvement of the private sector and/or international finance institutions;
        - the development of consultation mechanisms for a social dialogue across frontiers.

THE FORUM OF TRANSPORT WORKERS OF EUROPE AND ASIA

The main things - efficiency and common sense
Results and perspectives


Eugeney Kazantsev
Deputy Minister of Transportation
of the Russian Federation

        Approval of final document can be considered a result of work of any forum. At the first International Euro-Asian conference on transportation it was Declaration. Work on Declaration started at the same time with preparation of the conference. International organizations also were involved.Eugeney Kazantsev Five versions of Declaration were worked out. Work on the last one was finished on the day of opening the conference. However the delegates spoke about many amendments. The questions of principle also were touched. The delegations made some proposals to make the results of the conference more appreciable and efficient. All of them were considered, and many were stated in the final version of the document.
        This is how Declaration that was approved in May 1998 was born.
        The main resulting document of the conference showed the ways of development of effective Euro-Asian transportation connections. According to unanimous opinion of the participants the ways should have been developed taking into consideration further efforts in progressive liberalization of transportation markets, increase in intermodal transportation, improved use of transportation network, development of information-logistics systems for monitoring transportation process, preparing of effective mechanism of financing of the transportation infrastructure objects. According to Declaration a number of steps for development of integrated Euro - Asian transportation system should have been taken.
         How these instructions of the conference were realized during last 2 years? How cooperation between European and Asian countries developed in the different areas of transportation? How did we follow the directions of Declaration, that became an official document of UNO, was approved by Council of European Conference of Ministers of Transportation, Coordination Transportation meeting of CIS transportation ministers? Before the Second International Euro-Asian conference on transportation we can answer those and other questions, that life raised.
        -As long ago as over a year the ministers of transportation of Russia, Byelorussia and Kazakhstan decided to create the work group on the issue of development of transportation passage China -Kazakhstan -Russia -Byelorussia connected with international transportation passage N 2 and Europe…
        - Possibilities of extension of passage N 2 from Nizny Novgorod through Ekaterinburg connecting with Transsiberain railway are being studied…
- The issue of creation of the international passage North-South that connects India, Iran, Russia and Europe is being actively worked at…
        - Progressive and simultaneous opening of internal water ways of each country for the citizens and shipping companies of countries - members of EEC and Russia is being discussed. Free navigation and providing of necessary services for international transportation river-sea is the purpose…
        - Working on bringing together transportation laws is still in progress…


        Development of what is being done and has already been done according to Declaration is the main goal of forthcoming International Euro-Asian Conference on transportation.
        Signing the joint program of actions for years 2000-2003 by the ministers of transportation of the countries - members of General European Barentsev - European transportation zone is planned at the conference. By the way, since March of this year the chairman of the leading committee on development of this zone is Russian.
        The second International Euro - Asian conference was prepared according to Declaration, that recommends to carry the conference out once 2-3 years. The problems of further development of Euro - Asian transportation systems will be discussed at the conference. First of all, of course, at the conference we will stand for and promote economical interests of Russia, that will further transformation of our country into developed transit power on transportation of goods from the countries of South-East Asia to West Europe.
        Of course, resulting document will be passed at the conference also. The participants will determine its form and contents like at the first Euro - Asian conference on transportation. No doubt, progress in development of Euro-Asian transportation connections reached between two conference will be reflected in it.

THE FORUM OF TRANSPORT WORKERS OF EUROPE AND ASIA

What should the cargo transportation policy be?


Oleg Beliy,
Director of the Institute
for Transportation Issues

         A policy on cargo transportation is certainly a factor of great importance in the development of a transportation industry. It is even more important because it determines the general transportation strategy.
        The first step in forming this strategy is searching for the very resources that make transportation a source of budget revenue. The state should manage its share in the transportation network so that its operation contributes to the state budget.
        The second step in building a strategy is to clearly define the state's leading and organizing role in the development of the industry. Its organizational structure should mold the processes of self-organization within the market of transportation services.
        The third step is the use of modern science in implementing methods of complex system information in order to forge and adopt the soundest and most effective decisions.
        No transportation networks can be developed until coherent political, financial, economic and other important relations have been forged between states, regions, large and small economic groups, enterprises, non-governmental organizations, individual politicians, businessmen and entrepreneurs. On the other hand, the structure of relations between the objects and subjects participating in the transportation network is strongly influenced by geographic location and the longevity of the relations. From this one may conclude that those who have control over the space in which cargo transportation operates (country, region, local administrative bodies) dominate the network.
        The Russian Federation is geographically located in the middle of the international cargo flows between the North-South and East-West. These flows have greater advantages compared to the present circular transportation routes. They can bring large financial revenues to the state, which owns all transportation networks (air, land and water) in the Russian Federation. The partial exploitation of these networks for cargo and passenger transportation should be in the economic interest of the government, especially in times of financial deficit.
        In this way, instead of being a budget depletor, the transportation industry would become a budget replenisher. The claims commercial transporters may have to subsidies from the national budget are unjustified. Most of them lack competitiveness in the world market of transportation services because their infrastructure is worn and technologically obsolete. Because there are neither budget nor investment means, it is impossible to renew over 5-10 years the outmoded fleet or build missing roads and railways, or achieve new energy efficient technologies, etc.
        American, European and Asian Pacific states have mutual political, financial, trade, economic and cultural interests. In order to consolidate stable relations between them, the existing communication network must change. The APEC conference held in Malaysia in November 1998 recognized the need for creating shorter routes. Priority was given to direct air routes crossing the Russian territory, which are of primary importance both for passengers and cargo, using large capacity planes.
        At present, intercontinental cargo transportation through the Russian Federation has come to be considered an integral part of world traffic flows. It is also a crucial component in the organization of international transportation corridors. So far however, cargo has flowed in only two directions: North-South and East-West.
        Intercontinental cargo transportation can also use internal waterways, using "river-sea" type ships along a large transportation ring: the Baltic Sea - the Neva - the Baltic canal system - the Volga - the Volgodon canal - the Don - the Azov Sea - the Black Sea - the Dunai - the Rein - the Baltic Sea. This water route already exists and could be used depending on the political will and interest of all those countries through which the ring runs.
        We deliberately emphasize cargo transportation. It requires minimum expenditure and offers high budget revenues based on the existing freight tariffs whose value depends on the geographic location of the hosting country.
        The transportation industry, unlike other more homogeneous industries, includes various types of transportation means. They are presently developing in an environment of contradictory relations within the transportation service market. They all have specific technical features, levels of competitiveness and a number of other characteristics. Yet they must operate in a common transportation process and therefore, need a common strategic head center to develop a policy that uses all transportation resources to the maximum.
        These observations on the need for a conceptual foundation geared towards developing the transportation industry within a reforming market economy allow us to draw some conclusions:
        First, the strengthening of the state should be directed towards a more rational use of the existing resources to better organize the cargo transportation network.
        Second, a common coordination center for the state's executive power will improve the organizational structure of the transportation industry.
        Third, it is necessary to use up-to-date science and new information technologies in the search for more effective solutions for transportation.

THE FORUM OF TRANSPORT WORKERS OF EUROPE AND ASIA

The gates that should be opened


Yan Strugach
economic analyst

        There are plenty of different ways to characterise the development of our civilisation, however the oldest and most apparent seems to be the ones that demonstrate development of new routes between cities, nations and continents, including the Great SilkYan Strugach Road, and Passage from the Vikings to the Greeks, and the search of a route to India that resulted in discovery of Americas, construction of Panama and Suez Canals, Channel Tunnel and all others well known and less known roads and thoroughfares can be regarded, inter alia, as the most important landmarks of geopolitical changes.
        The epoch of great discoveries obviously is over. The XX-th century is the time of another science and technology revolution that contributed to the development of principally new means of human communication, the before unheard of speeds of navigating the space, but the search of new transportation routes on land, over the water and in the air is a never ending process. And the present issue of the SEGODNYA comprehensively shows the significance and complexity of the process of laying out new routes.
        The political events of the last decades in Europe and Asia have opened new opportunities to have a different perspective of transportation links between these continents. Vast territory of Russia, dividing western countries from their occidental partners, appears to be the most promising from the point of view of organising transit traffic, or in other words for establishing transport corridors for goods and passengers. This is a well remembered fact both by the State Governments and the business community, who repeatedly told us, using this magazine as a venue for disclosing their ideas, what the best way is to utilise geographical location, economy and scientific - technological potential of various countries who are ready to join their efforts and make the continents closer. It is not surprising that St. Petersburg turns out to be one of the centres on the cross-roads of major routes, those that are functional already and those that are being planned.
        In fact the most topical problems that have been on the Agenda of various transport forums attempted to get answers to the questions in what way it is possible to use traditional routes and cargo traffic of different countries to set up a common transportation system, what the contribution of the states with different economies might be and what the benefits such a common transportation system may bring them, what political, financial, scientific and technological as well as legal issues should be considered as the first priority ones, since the process of such system development has already started.
        The Northern Sea Route has already been navigated by ship convoys for many decades. Today this route is opened not only to Russian companies delivering supplies to the Arctic settlements and industrial settlements. The high-latitude route from Europe to Asia and from Asia to Europe might turn out to be much more profitable and safer than via Suez Canal. This proposal to navigate the Northern Sea Route has already been discussed by international carriers of different countries. Less "exotic" but also economically viable are the routes between West and East via Siberia, Russian Far East, the Lower Volga and Don, as well as Kazakhstan... No doubt there will be competition between the routes in their development, though up-to-date means of communications and logistics will be able to cope with multitude of various problems and will allow to manage the traffic efficiently.
        The named and other projects need a lot of funds to be implemented which is not surprising that they make the states think of co-operation. This is another proof that the transport processes will continue to be part and parcel of geopolitical development. The city of St. Petersburg has a very special place in this process. Not only as a large industrial and research centre, where international meetings of the transport experts have become a regular event. But the city and its environs are the transportation hub of the North -West Russia, where goods are coming from the West and the East. It is a true "window on Europe" opened by Peter the Great. Though today the "window" has grown to become a "wide opened gate" in both directions.

RUSSIAN PORTS TODAY AND TOMORROW

From brigantines to nuclear-powered vessels


  • Peter's creation pending the City's Jubilee
  • A full order book
  • An Arctic tanker is a unique phenomenon
  • Bathyscaphs of highest standard

Marina Alexeyeva

         One can hardly find any enterprise in our country, which had played such a great part in the history of domestic shipbuilding as well as in that of Russian fleet, other than the Admiralty Shipyards, a governmental unitary enterprise. It had been established pursuant to the Decree of Peter Mr. AlexandrovI as soon as one year after St. Petersburg had been founded, and has been a major shipbuilding yard of the industry for almost three centuries.
        For that time, more than two thousand ships and vessels of different class and purpose had been built there, starting from Peter's galleys to Peter the Great, the strongest ironclad, from a "concealed" vessel to Aurora, from a Russian brigantine to mighty nuclear-powered vessels and unique orders for submarine vehicles. Even economic scrapes of 1990s, which were disastrous upon other factories, just shook but failed to destroy Peter's creation.
        Indeed, they suffered from every disease of that time such as top manager appointment by election, barter payments, and spontaneous cooperative societies. However, they survived like the ships built there, having preserved their staff as well as their best traditions, failing which it is impossible to create ships of the class and quality which have been built there from the very beginning.
        "Today we can note that all the vessels built at the Admiralty Shipyards are to a highest standard and contract price. They proved themselves as very safe and conforming to the required operating criteria... And we shall not hesitate to offer the Admiralty Shipyards as an excellent site to build tankers" - it was a recent opinion about the activities of Admiralty Shipyards managers and employees as expressed by Mr. Edward Backnell, Fleet Manager for Columbia Ship Management Company. It seems that all other customers of St. Petersburg shipbuilders might share his opinion.
        At present, the enterprise is operating as steady as never before. Based on the latest year data, a share of the Admiralty Shipyards' products accounted for 22.6 percent of the shipbuilding output throughout Russia. The shipyard appeared to be the fourth from the top on a list of highest sales in St. Petersburg. It features an actual full capacity employment and a full order book for next years.
        What the Admiralty Shipyards employees relate their future to?
        According to Vladimir Leonidovich Alexandrov, the Shipyard's Managing Director, a special emphasis is placed on the construction of tanker fleet, non-nuclear submarines and deep-water facilities, small-size vessels and ship repairs. The enterprise is oriented mostly for export.
        Having examined purposefully the promising oil production areas, experts draw a conclusion that tanker fleet will be required on equal terms both on the oil fields of the Caspian Sea as well as on the Arctic coast of Russia. As a consequence, a Pulkovo tanker and then a new generation vessel, i.e. an oil product and chemical tanker Victor Dubrovsky have emerged. At the same time in 1997, the shipbuilders of Admiralty Shipyards were the first in Russia to start implementing a large-scale program for the construction of 5 most advanced tankers of ice class designed for Lucoil Company. Two of those, e.g. Magas and Astrakhan, have been already delivered to the customer. The third tanker of Arctic series has been launched recently, which delivery is scheduled late in this year.
        Generally speaking, an Arctic tanker is a unique phenomenon. It is a modern diesel vessel featuring a cruising range within 8 thousand miles, an independence of 40 days and a full speed in excess of 15 knots. In an ice environment, such a vessel is capable of overcoming a fast ice thickness up to 0.5 m at a speed of 2 knots. Nowadays the negotiations are in progress about the construction of the sixth tanker for Lucoil Company and a new prospective series of Arctic vessels with a 60 thousand tons deadweight capacity. Those vessels will retain all the advantages of the predecessors, but will be improved in terms of automation extent, tonnage, cruising range and speed.
        It is known that the use of the Northern Sea Route for the purpose of sea carriage by submarines is hampered greatly due to Arctic severe hydrological and weather conditions and, most important, a short shipping season. Therefore, the shipbuilders think about quite another line of activity, i.e. the construction of submarine transport ships designed for Arctic. To solve the above problem, it is supposed to set up a governmental structure such as a consortium to admit the representatives of governmental departments, major domestic oil and gas production companies, research institutions and manufacturing industries, Russian banks and foreign investors. Moreover, Mr. Alexandrov holds that some existing submarines could be re-equipped to carry raw materials.
        He thinks that "the main thing is to calculate the cost of such a project and arouse the interest of potential customers in the same manner as it happened, for instance, to new generation diesel submarines manufactured at Admiralty Shipyards, which are now produced for Russia and exported to India, Iran, China, and other foreign countries".
        Particular attention is paid to the production of unique deep-water Consul devices. Previously, such bathyscaphs were built only in Japan and France.American experts who visited the shipyard recognized that the United States are missing the devices of the class.
        Another line of activity is small-size vessels similar to aluminium northern boats of Master type. They have a safety certificate according to European modern standards, and leave foreign equivalents far behind owing to their sea-going properties, which apparent evidence is a permanently growing demand for them.
        Vladimir Leonidovich says, "Of course, it would be much more difficult for us to compete at the world markets if we had failed to establish our own design and technology basis within the Shipyard."
        And he gives an example of a production project for the tanker of ice class 20070. Developed through the efforts of the Admiralty Shipyards' Engineering Center, this tanker permitted to reduce the total project costs by about 20 percent.
        One can see here permanent re-equipment of production facilities, design and process engineering automation, introduction of advanced quality control systems. The Training Center provides refresher courses for the employees being especially valued here, proceeding from a reasonable assumption that human resources have been and will be the central point. That is why they speak with an equal optimism about the implementation of a social program and the development of a ten-year administrative shipyard development project to be presented by the end of this year. Admiralty Shipyards show excellent prospects.

RUSSIAN PORTS TODAY AND TOMORROW

Things are looking up...


Oleg Shulyakovsky
Director General
of the "Baltiysky Zavod"

        The first Russian submarine "DOLPHIN", battle ship "SEVASTOPOL", battle cruiser "SVERDLOV" and 325 surface and submarine men-of-war, considered to be the pride of the Russian Navy, were built at the "Baltiysky Zavod".Oleg Shulyakovsky Even in St. Petersburg famous for its shipyards the "Baltiysky Zavod" is the industry leader, it has already managed to take a very special place as a shipyard building men-of-war and also merchant and specialist ships.
        These traditions keep to continue today. During the last 25 years of the century this Shipyard built unique craft for space research, a series of nuclear icebreakers and nuclear cruisers. The Peter the Great, a heavy nuclear cruiser, is the most powerful modern surface man-of-war judging by its armament.
        During a century and a half of its existence the Shipyard experienced different circumstances, with its production going up and down. Particularly difficult it was for the workers and employers of the "Baltiysky Zavod", during the years of economic reforms in the country, because their subsidence completely depended on the "state orders" (orders to be paid for from the State Budget), and a peculiar token of this practice is the nuclear icebreaker " The 50-th Anniversary of the Victory", built for the Murmansk Shipping Administration. Since the amount of funds available is insufficient and there is no privileged crediting mechanism for this ship construction which is being built for almost ten years now instead of four. And though the Shipyard resumed the construction drawing on its own resources, the finale has not become closer. There is some hope, though, the Government of the Russian Federation promised to include financing of this icebreaker construction into the Federal Budget of 2003.
        Experts believe that major factor that saved the Shipyard was its diverse specialisation. Even in the Soviet time the metallurgic branch of the Shipyard, machine building and energy generating branches manufactured products delivered not only to half the country, but also supplied to other countries. During the most critical years, when there were no orders at all, these Specialist Shops of the Shipyard were the only operating units, helping the entire complex to survive and to maintain its core personnel.
        The achievement of the Propeller Shop is a good example of survival. Together with the scientists of the Central Research Institute named after A. N. Krylov, a new type of propeller was designed with improved hydrodynamic and cavity parameters. The use of such propellers at transport vessels would increase a propulsion coefficient by 9 per cent, ensuring less fuel consumed by the main engine.
        Today ships built at the "Baltiysky Zavod" are well known in world market. Its first marketable products were tankers for transportation of chemicals for German Customers, then orders of the Indian Navy were received for the construction of Naval frigates. Today the flag-ship has already been launched and her construction is being completed, two more frigates were started, the works are four months ahead of the General schedule. The second ship will be launched in November. Also in November the Shipyard will commission a flag-ship of bulk carriers setries. Contract has been signed for construction of two more chemical tankers.
        Another important aspect of the Shipyard production is building of nuclear icebreakers which are indispensable for The Peter the Great further development of the Northern Sea Route (SEVMORPUT), delivery of supplies to the population of the Russian Arctic (Far North), development of large Arctic off-shore hydrocarbon reserves. That is why together with the completion of the "The 50-th Anniversary of the Victory" icebreaker it was decided to design and build nuclear icebreakers of a new generation, which should replace old ships that had already outlived their operation resource.
        Another important aspect is icebreakers-suppliers, this concept has been developed in partnership with the ICEBERG Central Design Bureau. These ships are developed for the support and needs of northern navigation.
        Another project of the Shipyard is directly associated with the Arctic, it is the project of designing and manufacturing of floating diesel and nuclear power plants, which are believed to be the most promising for the "Baltiysky Zavod". The project is intended to supply power and heat generation for the population of the Northern and Far Eastern territories which is more than twenty million strong. Expert estimates indicate that these power plants meet all the present day requirements of economic viability, reliability and environmental safety. That is why the Project called "Energoblok - light and heat" implemented together with the Shipyard's partners, the most important being ROSATOMENERGO is believed to be critical for the Yard. This Project is a major precondition for a full-fledged operating transportation system in the Arctic.
        Floating diesel power plants have certain merits location-wise and cost-wise for their construction and operation as compared to the nuclear ones.
        The Shipyard together with its partner designed floating diesel power plants, 10 - 50 MWt in capacity, intended for power supply of the users in coastal and island areas. These power plants can be operated in autonomous mode and also they can be used together with other power sources.
        Comprehensive programme of support and development of Russian Northern and far Eastern regions encouraged the Shipyard to start new projects of designing and building floating hydrocarbon processing facilities of low capacity (20 -100 thousand tons of oil annually) for processing oil and gas. This project was initiated with the consideration of the present situation with fuel which was short in supply resulting in uncontrolled price hikes and as a consequence limits and quotas for the fuel. Though the geographical distribution of hydrocarbon reserves in many cases is favourable to make the product processing closer to the sites of its production, and waterways should be used for its transportation.
        When thinking about the needs of the people living in remote areas the Shipyard experts and Management by no means forget about the environment protection given the accidental oil spills. To cope with this topical problem the Shipyard has announced that a design of ship of oil-collector type had been made. The proposed vessel would not only collect the spilled petroleum products but also it is designed to process the collected hydrocarbons, with their subsequent supply to local users.
        Multi-modal operation of the Shipyard, its business-minded Management Team, readiness to tackle new and difficult projects allowed the Shipyard to start a new project of designing a desalting complex, with the production rate of 40 -60 thousand cubic metres of fresh water daily. Today as shown by the IAAE (International Agency of Atomic Energy) 20 African and Asian nations claimed that they desperately needed fresh potable water and the "Baltiysky Zavod" is ready to deal with this challenge.
        Apparently all these plans require significant investments and the Yard is ready to use them. To make their products compatible the Yard has developed a Revamping Plan, which to be implemented, only in 2000 needs half a million roubles for upgrading of production facilities, development of information technologies and purchase of new equipment, these costs are planned to be covered by the Shipyard's own funds.
        Summing up it can be said that the "Baltiysky Zavod" enters a new millennium with full colours looking ahead with great hope as a dynamic successfully operating production complex.

RUSSIAN PORTS TODAY AND TOMORROW

Baltic bridge: growth of reliability and attractiveness


Gennady Batalin
head of maritime administration
St. Petersburg seaport

        The 9th Baltic Bridge Gennady Batalintransport corridor caused a greater number of problems than the other 10 transport corridors determined within the framework of pan-European intermodal transport system. This took place in Crete (1994) and then in Brussels (1997) and Helsinki (June 1997). The main problem does not consist in the fact that this transit road refers to Russia and connects Baltic transport systems with the transport systems of the country's central territories and the Black Sea Region. As soon as the system was founded, our neighbouring countries, i.e. Latvia, Estonia, Lithuania, Finland and Sweden got the opportunity of maintaining the million-strong Russian export-import shipments in their ports. That's the main problem. This situation began to form when the USSR mostly developed the ports in Tallinn, Ventspils, Klaipeda and other Baltic cities. The switchover of the greater part of intermodal exchange to the Baltic seemed to help deliver Leningrad from the excessive development of its own seaport. This switchover also seemed to be able to perfect the allocation of labour throughout the Baltic.
        Unfortunately, those expectations turned out to be wrong. As soon as Baltic republics became independent, they reserved all port facilities and the most modern crafts of the Soviet marine fleet - refrigerated ships, oil ships, and other types of ships. As far as Russia was going through the crucial period of its history, the ebbing of influence on the Baltic Sea was not determined as a threat in due time. When Russia saw this threat, it turned out that it has to pay up to two billion of dollars annually for the maintenance of its transit cargo in foreign ports. At the same time, the country has no resources to develop its own ports and maintain them in good condition. The port of St. Petersburg, that is, the largest Baltic seaport, was put in a difficult situation, the more so that the West began a broad information campaign to discredit everything done in the port for the ships coming to the Neva banks.
        I am speaking about this to explain that the market is competitive but not ownerless. Our neighbouring countries to a great extent depend on the maintenance of Russian cargo. They do not want to lose one third or fourth of their budgets consisting of the money received from transit cargo maintenance. And Russia does not want to spend its money for this any more, the more so that despite the sequence of crises the country step by step straightens things out in the field of transportation. We get more and more used to count our funds and we want each rouble or dollar we have got to do good to the country's economy and working people.
        The last years showed that the seaport of St. Petersburg recovers its importance among the Baltic ports. No libel can convince ship and cargo owners that they can gain greater profits somewhere else. They see that transportation through St. Petersburg is much more comfortable and cheap than through other ports engaged in competition. It has been already estimated that timber is delivered through St. Petersburg to its place of destination by 1.5 days faster than through the ports of Finland, ferrous metals reach their destination by 2.6 days faster than through Baltic ports, and aluminium - by 2.2 days faster. This list can be continued. Any unbiased economist will easily calculate that his benefit from carriage and handling of cargo in St. Petersburg will make 15 - 50 dollars for one ton and 120 - 300 dollars - for one container. These results explain why St. Petersburg's cargo traffic gradually recovers. This is, of course, a result of great work done by the maritime administration, JSC "St. Petersburg seaport", stevedoring companies of the port, and many maritime customer services. The citizens of St. Petersburg and all Russian citizens understand the importance of events that take place in Russia's sea and coastal territories. As before, one job site in the port creates almost sixty well-paid job sites in the cities. So this struggle, I mean the development of domestic ports, makes sense.
        We can not get a victory over our proficient business rivals by means of persuasion only. Cargo traffic recovers when ship and cargo owners are convinced that better and more advantageous conditions are created for them in the port. What has been done in St. Petersburg to obtain this? I shall begin with the figures, for they are very meaning. Annual cargo turnover of the port in 1999 made 28.2 mln tons, that is, it exceeded the results of 1998 more than by one third. This was a record figure. International experts thought that our port would not exceed the mark of 20 mln tons during this century. Fortunately, they made a mistake. The port reached good results by all kinds of cargo, number of ships that visited it, ship turnover, time of ship maintenance, and volume of operations in winter shipping season. In 2000 the port will certainly exceed the volume of cargo turnover of 30 mln tons. It will also exceed the figure of 19.000 in ship turnover.
        What makes our port so attractive for customers? They can see that all year round we do a lot to continue the development of the port. This costs a lot, and during the last five years these means have been increased five times. Thanks to this, the length of moorages increased by 1963 metres and reached 10.5 km. Reconstruction of the main sea canal (56km length) is undertaken at present. The canal will be widened up to 160 metres (its original width is 100 metres) and deepened up to 13.5 metres (original depth 12 metres). By 2001 the declared depth will make 11.5 metres. This will open the water area for the ships of greater tonnage. Our customers expressed their great satisfaction by the appearance of an up-to-date container terminal, a terminal for the reshipment of fertilizers, new facilities for the oil-loading terminal, and special moorages for the reshipment of general cargo. The further plans on port development include the construction of facilities for the processing of 3.5mln tons of fertilizers on pier 107 by 2001, as well as processing of 2mln tons of fertilizers on pier 106 by 2002. We also plan to add 350.000 tons of general cargo transfer on pier 28, significantly increase the processing of oil cargo, and raise general output to 10mln tons. We successfully move towards the creation of a Great Port of St. Petersburg with annual total output of 60mln tons of cargo. This port area will include the existing port with all its zones, the north coast of the Gulf of Finland including the settlement of Gorskaya and the Kotlin Island, constructions protecting the city from floods, and the south coast of the Gulf including Lomonosov - Bronka section. The main thing is that our specialists turned from their recent words to real deeds. The specialists are supported by the Government and the local authorities. Many terminals are already in operation, and some other ones have found investors and begin working as well. At the same time, we work on the improvement of highway and railroad accesses to the future terminals. This is very important when your work is connected with high-class transport facilities.
        I can not but say some words about our port's role for passengers, because this is important for the whole city. At present, more and more passenger liners come to visit St. Petersburg - one of the finest cities of the world. We want as many ships as possible to come to our piers. This year we shall receive 213 tourist liners. The number of our guests will be more than 135 thousand people. And this is not a ceiling, though the figure mentioned will increase by 18 percent during the year. For some years already we can not receive the largest tourist liner "QUEEN ELISABETH": this 300-meter-long ship can not pass through the maritime canal. But we hope that next year we shall not have any reason for rejection. We shall be able to receive this largest liner and provide high-class service for it! This year we have already received "MILLENIUM" liner which is just a bit smaller.
        Before finishing my article I would like to mention just one more figure: during the first half of the year 2000 the port has increased its goods turnover by 23 percent. Does not this prove that we have taken the right tack?

RUSSIAN PORTS TODAY AND TOMORROW

        Almost two years and a half ago we wrote about a beginning of constructional works in Ust-Luga Sea Port. The project that has an important economic and strategic significance for Russia, foresees an erection of a multifunction transhipping complex equipped with a modern specialised technology, with a total freight turnover up to 35 million tons per year.
        Considerable successes are recently reached. The construction of the port infrastructure objects is actively being conducted. Construction of the coal terminal is the fastest (the annual freight turnover of the terminal - 8 million tons per year), the starting complex of which will be put into an operation in the Ist quarter of the year 2000.

Ust-Luga Seaport - The Need of the Time


  • Multifunctional transhipping complex - by the beginning of next year
  • A total freight turnover up to 35 mln tons per year

        To tellValery Izrailit 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.

RUSSIAN PORTS TODAY AND TOMORROW

Here are such places on earth as Novaya Zemlya,
south island and the Beluga bay


  • Choosing the best site for a new port
  • The optimal choice
  • In the most severe winters
  • New freight traffic

Alexander Parfyonov
General Director
LENMORNIIPROJECT
open joint stock Company

        Seaports have been of great importance in providing transportation on all stages of the Arctic region's development. During the last fifty years, fifteen seaports have been built in northwest Russia and Alexander Parfyonovalong the Northern Sea Route. Our institute has developed projects for the construction of ports in Murmansk, Kandalaksha, Mezen, Onega, Naryan-Mar, Anderm and the Dickson Island and well as piers for seaborn ships in Dudinka. Throughout these years Lenmorniiproject has taken part in the reconstruction and considerable development of the port in Archangelsk. New facilities were set up which then became part of the country's transportation system and that in turn, catered the needs of Northwest Russia and of the western Arctic.
        At the moment, in order to satisfy foreign trade needs, new terminals are being built in Murmansk and Kandalaksha while the project for the reconstruction of the piers in Arkhangelsk is actively being worked on. The large-scale exploitation of new deposits creates favorable conditions for the use of the northern and Arctic ports in the western sector. However, in order to provide oil, gas and ore transportation, it is necessary to create a comprehensive transportation strategy that coordinates all parameters and schedules with the mining operations. Recently, the press has published various different projects for the construction of a new port in the western sector. The "Northern Gates" Terminal project for oil transportation is considering as many as four potential sites for the construction of terminals in the districts of Varandei, Indiga and the Kalguev Island. There are preliminary projects for the construction of an oil port in Linahamori. However, these projects solve the oil transportation problem from the west Arctic in the interests of specific companies and do not take into account other freight traffic. For a number of reasons not one of the proposed plans received any further development.
        As for the TNRUS9584 project also called Transportation Development in the Northwest Region based on the TACIS program, it completely ignores the need for freight transportation, which is so essential for the economic development of the western Arctic sector. Foreign companies have recently begun to show great interest in obtaining concessions for the exploitation of ore deposits in the South Island of Novaya Zemlya. The absence of a comprehensive transportation system clearly hinders the economic development of the Northwest. All of this calls for the immediate creation of a transportation strategy with the construction of a new port as first priority.
        We believe that the ideal site for this new port is the South Island of the Novaya Zemlya Archipelago. Rich deposits of nonferrous and noble metals (manganese, lead, zinc, and silver) have been discovered there, 130-150 km from the Beluga Bay port. Their total supplies are estimated at 3 billion tons. On the shelf of the Barents and Kara seas, within 250-300 km from the Beluga Bay, numerous oil, gas and condensed gas deposits have been explored. Their total supplies amount to 30 billion tons of potential fuel, including 1,5 billion tons of oil, 250 million tons of condensed gas and over 15 trillion cubic meters of gas. This will provide a reliable power supply for the mining and petrochemical industries. However, the lack of transportation development strategies is obstructing the exploitation of these mineral resources, which are of world importance. This includes transportation links with the northwest including the western sector of the Arctic, all of which are of great interest to Russia, as well as to the European Union, Norway, Japan and other countries.
        The transportation process must be extremely reliable, regular and cost effective to counterweigh the difficulties of severe climate, the vastly extended location of deposits and the region's high environmental sensitivity to ecological disturbances. All of this should be taken into consideration when choosing routes for pipelines and constructing land and sea transportation units.
        The transportation system's final objective is to provide timely material and technical supplies to the production areas and to deliver on time the goods from the deposits to customers. Therefore, in the opinion of Lenmorniiproject, the optimal site for the construction of a new port is the Beluga Bay on the South Island of the Novaya Zemlya Archipelago. The advantages of this bay are its good geographic location in relation to the Northern Sea Route, its favorable climatic conditions and its proximity to ore and hydrocarbon deposits. The Beluga Bay's main attraction is that it is situated in a zone of warm current influence, and its natural conditions will allow year round navigation for vessels of all types and class with minimum expenses on icebreaker convoys. Even in the most severe winters the land-ice is 1 km long and less than 1 m thick. The bay is well protected from rough waters and from the incursion of drifting ice. The water depth at the mouth is 30-50 m and in the central area it is 10-30 m deep. The bay is virtually in the center of the shelf deposits and 130-150 km from the biggest ore deposit in the world. At present, a port already exists there with two loading and four auxiliary piers. There is also a settlement with all the necessary infrastructure. There is stone and sand on the island, and the eastern and northern parts are vast undeveloped areas. All of the above allows for construction in stages.
        The Beluga Bay is the ideal site for the construction of bulk and mechanic loading facilities, a cargo and supply terminal, a warehouse and a center for icebreaker convoys. The first stage is the delivery of 7 to 10 mln tons of oil from the deposits to the port using class feeder ships of 15-25 thousand tons deadweight. The next stage is the laying of a pipeline in the areas of Varandei and Prirazlomnoye to transport oil from the shelf and coastal deposits to the port. It could be possible to export oil directly from the port using 150-200 th. ton tankers. Experts estimate that by the year 2015 the total freight turnover of the port in Beluga Bay could reach 63-82 mln tons per year, including 40-50 million tons of oil, 15-20 million tons of ore, 5-7 million tons of various supplies and 3-5 million tons of containerized cargo freight. In order to deliver oil to the internal market, the Beluga Bay-Varandei pipeline would be connected with the Baltic pipeline system while the ore would be delivered to the metal factories of the Northwest and other regions by train. Railway carriages would be delivered from the Beluga Bay to Murmansk on ferryboats. The delivery of supplies could be carried out in the same manner.
        The construction of a multipurpose, well mechanized port in the Beluga Bay which is in the epicenter of freight traffic, and the gradual construction and activation of port facilities will enable, in comparison with other suggested projects, to considerably cut down transportation expenses and to speed up the return of capital investment. This will also create favorable conditions for further investment in the development of large deposits, guaranteeing a considerable income for Russia's economy, good conditions for the industrial development of the northwest and new freight traffic in the northern and Arctic ports.

PROS & CONTRAS

         In a package sent to us from Riga, we found an issue of the local newspaper "Business and Baltia". A discussion between journalist Eleonora Gailish and member of the Academy of Science of Estonia, consultant of Estonian Oil Service concern Michael Bronstein was underlined in black.
        The eminent economist believes that Russia saves a great deal of money when it uses Baltic ports for cargo transportation. He stated this opinion during the Baltic Transit Route - 2000 conference in Riga.

        Together with the interview given by Michael Bronstein, the Business and Baltia newspaper published the words of Boris Usanov, adviser to the St. Petersburg vice-governor, who also participated in the conference in Riga. Boris Usanov's point of view is completely opposed to the previous one. Our issue presents Boris Usanov's article in response to the Estonian academician.

A Baltic cooperation resourse


Michael Bronstein,
Academician of Estonian Academy of Science

         A freight turnover of the former Soviet ports on the Baltic Sea has increased 1.5 times as much for the last five years. The above process has been caused by the three most important factors as follows:

  1. Those years have seen the accelerated integration of Russia into global and European market environments. At the same time, the exports of power resources and raw materials have appeared to be the main source of currency receipts.

  2. Once the Soviet Union disintegrated, the Baltic countries have generally continued to be in a common transport environment with Russia and the CIS countries. The point is not only the same gauge line. The existing trading transport infrastructure in the Baltic region is a result of careful research and engineering developments. In particular, when engineering the construction of most advanced Ventspils and New Tallinn (Mooga) seaports and their transport systems, they relied upon a criterion of economic efficiency and minimized aggregate freightage costs.

  3. The Baltic countries, having renovated their seaports by means of foreign investments (to set up new terminals and process lines, deepen mooring points, expand a tank farm, etc.), have been successful to offer transport services to Russia on economically beneficial terms. The transit of Russian cargoes is implemented on a duty-free basis. Using the seaports of the Baltic countries, which transferred 87.6 million tons of cargoes in 1999, Russia has saved about 10 billion USD in capital expenditure.

        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 Boris UsanovOrganization 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…"

THE NORTHERN SEA ROUTE

ASIA - EUROPE - ASIA

Four questions for Sergey Frank, Minister of Transportation of the Russian Federation


  • Keeping the integrity of national communications
  • 25 - 30 crafts over one navigational period …
  • Considering an independent transportation corridor…

         Last November, at the St. Petersburg Forum on the Northern Territories, Sergey Frank, Minister of Transportation of the Russian Federation, declared the Northern Sea Route, together with the Trans-Siberian Route, as very important for Russia. They connect the Russian Far East with the country's western regions. At the same time, the Minister noted that the North Sea Route is the shortest waterway between Northwest Europe, the Asian Pacific region and the western coast of the US and Canada.
        Sergey Frank said it is no coincidence that everything related to the Northern Sea Route plays an important role in Russia's national transportation policy. Despite the country's budget difficulties, this policy strives to improve and develop the material, technical and organizational foundations of the Arctic marine transportation system, making it more attractive to its body of customers.
        At the Forum, the Minister said our main task is to create the necessary conditions in the infrastructure to revive the economy and social life of the Far North, stimulating its stable development. This is obviously a national priority. Yet we must not forget the international component of this problem. Russia began to integrate the Northern Sea Route with the world transportation system in 1991, officially announcing that conditions for international navigation along the Northern Sea Route had been prepared. At the International Eurasian Transportation Conference in May 1998, the Northern Sea Route was declared an independent Eurasian transportation corridor.
        During the preparation stage of the II International Eurasian Conference, we asked the Minister several questions about the present and future of the Northern Sea Route. Here are Sergey Frank's answers:
        -What measures should be taken to provide the stable and safe operation of the Northern Sea Route?
        It is important to keep the integrity of national transportation under state control. Having this in mind, we need to provide for the construction of a new generation of icebreakers. Until they are ready, we must work on extending the service of existing atomic icebreakers. This will allow us to use them for an additional 4 - 6 years. The improvement of the Northern Sea Route's material and technical foundation means incorporating special ice-class ships into the Arctic marine transportation system. These ships will provide the movement of oil and gas from new deposits on the Arctic coast and sea shelf. They will also deliver cargo to the population, the industrial enterprises and the transportation base operating in the area. In some territories of the Russian Federation, sea transportation is the only means of carrying the bulk of cargo.
        The Ministry of Transportation has developed measures that will facilitate the construction of the 50 YEARS TO VICTORY atomic icebreaker in St. Petersburg by the year 2004. We have also taken another important decision together with Russia's Minatom: the Marine Fleet's Central Research Institute together with the Krylov Institute have been asked to prepare the project for the construction of new generation icebreakers and a new 25 megawatt diesel/electric icebreaker.
        OAO Lucoil has already finished in Germany the construction of five ice-class tankers with a capacity of 16.000 tons. We have signed a contract with the Admiralty Shipyards (St. Petersburg) for the construction of five more UL ice-class tankers with a capacity of 20.000 tons. In March this year, we raised the Russian national flag on the Astrakhan - the leading ship in this tanker series. MANAS is the name of the next tanker to come into service. The construction of the other tankers in the series will be completed by 2002. The great advantage for Russia is that it will no longer have to lease foreign tankers for the transportation of Arctic oil products.
        Russia's economic needs are the most important reason for preserving and developing the Northern Sea Route, at a time when resource extraction and primary processing in the Far North has become dislocated. The Northern regions hold a vast supply of energy, mineral and forest resources. Their extraction and processing will fulfill both domestic and international needs.
        - Can the Arctic transportation system become self-supporting?
        Up until the end of the 80s, the Arctic transportation system was self-supporting. The volume of sea traffic reached 7 million tons in 1987. In order to achieve self-sufficiency we must raise the volume of cargo along the Northern Sea Route up to 10 million tons. This volume is likely to be reached by 2008 - 2010.
        -Is cargo traffic possible on the Northern Sea Route between the ports of Western Europe, North America, the Far East and South East Asia? Is it possible to transport Russian metals and fertilizers abroad through the Northern Sea Route, without using the Suez Canal? This way we could secure an income of hundreds of millions of dollars.
        In 1993 - 1997 the volume of sea cargo along the Northern Sea Route was already 150 - 200 thousand tons a year. Cargo traffic peaked in 1993, during the Arctic's summer shipping season. During that period, 15 Russian ships with 210 thousand tons of transit goods passed along the Route. Also, 8 ships carrying metals, fertilizers and timber traveled from ports in Russia, Latvia, Sweden and Finland to China, Japan, and Thailand. 7 ships from China carried oilcake, bauxite, magnetite and other operating supplies to Holland, England, Ireland, Germany, and Spain.         In regards to your second question, experience from past shipping seasons shows that, provided there is proper icebreaker escort, 25 - 30 ships can cross the Route during the Arctic's summer navigation period (from the end of June to the end of November). This means 350 - 400 thousand tons of cargo including Russian metals and fertilizers for export.
        -Do you consider the Northern Sea Route an independent transportation corridor?
        In May 1998, during the International Eurasian Transportation Conference in St. Petersburg, the Northern Sea Route was declared an independent Eurasian transportation corridor.
        In 1995, a ship with scientists from Japan, Russia, Norway, and Canada traveled along the Northern Sea Route from the port of Yokohama (Japan) to the port of Kirkines (Norway). The scientists observed the resistance of the ship's body in the ice under conditions of both independent sailing and icebreaker escorting. They concluded that ships like the KANDALAKSHA were suitable for voyages along the Northern Sea Route.
        In the future, the Northern Sea Route will be used in two ways. First, it should cater to the economic development of Russia's Arctic and sub-Arctic regions. Second, it should provide international trans-oceanic cargo transportation.
        We think that profits from the Northern Sea Route may amount to more than 200 million dollars. However, the reorientation of cargo traffic will require significant efforts. Certain political decisions will be needed because the interests of Ukraine and the Baltic countries will be affected.
        Last November in Oslo, with the initiative of Norway and Japan, the conference took place under the motto "The Northern Sea Route: the XXI century's route". The conference summarized the results of the international Northern Sea Route (INSROP) project for the years 1993 - 1995. More than 450 scientists and other specialists from 14 countries participated in the research work. They concluded that the Route is appropriate for international commercial shipping from a technical, economic and ecological point of view.

THE NORTHERN SEA ROUTE

What is the future of cargo traffic?


Lev Radchenko,
department head of the North West Association

         Throughout the course of the November 1999 Oslo conference on the North Sea Route and despite the interest in its development, it became evident that international shipping companies are still quite skeptical about transporting cargo through this passageway.Lev Radchenko According to Russian and foreign sources the real cargo potential between Europe, the Northern Far East and the North American Pacific Ocean is 6.8 million tons eastbound and 2.8 million tons westbound annually. Yet this prognosis does not take the North Sea seasonal traffic into account.
        Another way to determine the potential cargo load is by analyzing the present freight transportation through the Suez Canal and by combining the statistical information according to the origin and final destination of different types of cargo. This research was undertaken under the INSROP program. It determined that metals and mineral fertilizers are the prevailing potential goods heading east. The main exporter of this type of cargo via the North Sea Route is Russia while the main importer is China. Investigators concluded that 14 million tons of metal and 6 million tons of mineral fertilizers could be carried on the North Sea Route annually. However, it is possible these numbers may be too high. Other less sizeable potential goods heading east are grain, ore and fish. Chinese coal could also be transported to the west. Its cargo size would depend on the price of coal on the World market. 4.03 million tons went through the Suez Canal in 1997. The amount of potential goods from the North American west coast is also impressive; mainly coal, wood and grain. The Canadian west coast exported 4,1 million tons of coal and 1 million tons of paper mass to northwest Europe in 1997. This cargo was transported through the Panama Canal.
        Exports from the US west coast are less relevant to the North Sea Route. Its most sizeable cargo is grain, which is exported from Portland and Seattle to Russia and Europe. Because containerized cargo is unsuitable for the North Sea Route, there are few types of freight (except for bulk cargo) that are fit for this route. However, according to the research above, car imports to the northwest of Russia especially from Japan is also potential cargo for North Sea Route (considering the size of ships used for car transportation.) Despite this, the strict demands on regular deliveries could become a serious obstacle.
        In regards to existing cargo movements, there is still considerable potential in the export of fertilizers from Norway to China. The Norwegian exporter Hydro Agri, that transports fertilizers to China from the Glomfjord and Porsgrunn plants has actively shown interest in the North Sea Route.
        In comparison with other possible types of cargo, the transportation of fertilizers through the northern route is, perhaps, the most suitable due to the geographical position, cargo size, the required ship dimensions and the general stability of the freight.
        Nuclear fuel is small in volume, expensive and probably, the most questionable type of cargo. For instance, nuclear fuel (of Japanese origin) and the highly radioactive glassy nuclear waste from processing plants in Great Britain and France are transported back to Japan's nuclear stations.
        Apart from shortening the distance, using the North Sea Route for nuclear engineering has other obvious advantages. This type of cargo is still transported on very remote routes in order to reduce the number of countries whose territorial water it crosses. By using the North Sea Route, it would only cross Norway, Russia and USA (Alaska). The existing high tariffs on nuclear fuel transportation on the North Sea are hardly a serious obstacle. A preliminary estimate shows that 15-30 eastbound trips with nuclear waste will be necessary during the next 15 years, with additional trips carrying processed nuclear fuel.
        The INSROP program determined the types of goods that are not suitable for transportation on the North Sea. Ice conditions are unpredictable and delays are often unavoidable even with icebreaker convoys. This makes the transportation of containerized goods practically impossible, especially if the cargo is transported according to an exact schedule. Another problem with the transportation of sensitive goods in containers is the risk of them freezing added to the fact that there are no ports with essential container circulation anywhere between Murmansk and Japan. In addition to this, the North Sea Route places strict limits on ship dimensions.
        How then do we prognose the future volume of cargo traffic on the North Sea Route? The assumption is that the annual freight volume will be of 300 000-500 000 ton by the year 2005. In the long term, by the year 2015, the route will be in almost full use of its transit potential with 5-6 million tons of goods eastbound and 2-3 million tons westbound. If regular service is provided for icebreaker convoys, cargo transportation on the North Sea is quite possible.

THE NORTHERN SEA ROUTE

Not via the Suez canal but via the Northern sea route


  • The largest transport artery
  • The main line connecting the continents

Felix Katzman
Vice-president,
Russian Academy of Transport

        Felix Katzman There are several aspects that single out the Russian Arctic zone from the many other districts, places, and territories of the globe. First of all: the untold wealth in its bowels. Its role and significance increase because of the seas and bays surrounding the shores of the Arctic, that form a united transportation line: the Northern Sea Route.
        In March this year, the Russian Government adopted the Conception of Development in the North. Its basis is transportation, and above all, sea transportation. Thanks to this type of transportation Northern Russia and the 12 percent of Russia's population that live there supply one fifth of the national budget's total income.
        There is no doubt that the Northern Sea Route is the Russian Arctic's natural resource. This main transportation artery connects continents and countries located on three oceans: the Arctic, the Atlantic and the Pacific Oceans. It is not only the basis of economic stability in the North but also a very important part of Russian and international transportation systems. The mouths of Russia's main rivers like the Northern Dvina, Lena, Ob, Yenisei, Angara etc. are located on the seas which make the Northern Sea Route. These rivers cross the richest regions of Russia's Northwest, Ural, Siberia and the Far East connecting the largest train lines with mouth ports on the Northern Sea Route, making a united Arctic transportation system. The Northern Sea Route is the basis of this system.
        It is the shortest line between the ports of Western Europe, Russia, the Far East, and South East Asia. By guaranteeing a stable system, a significant part of the cargo presently transported through the Suez Canal can be carried through the Northern Sea Route.
        The Route can serve as a reliable alternative and it may compete with the Suez Canal. This is of no small importance, taking into consideration that no less than 80 mln tons of cargo per annum go through the Suez Canal towards the South (i.e. export from Western Europe) and to the West (Far East import). This cargo includes rolled metals, ore, oil products and other materials, which are also transportable through the Northern Sea Route.
        There is strong evidence which indicates that the Northern Sea Route is more effective in comparison with the Suez and Panama Canals. For example, ships cover 12840 miles from Murmansk to Yokohama (Japan) through the Suez Canal, while only 5770 miles on the Northern Sea Route. The route from Rotterdam through the Suez Canal covers 11250 miles, and through the Northern Sea Route only 7350 miles. A vessel must sail 9700 miles from Murmansk to Vancouver (Canada) through the Panama Canal and 5400 miles through the Northern Sea Route. The trip from Rotterdam to Vancouver is of 8920 miles through the Panama Canal and 6980 miles through the Northern Sea Route.
        These and other advantages of the Northern Sea Route were presented at the First International Eurasian Transport Conference. The measures and decisions that had previously been taken for the development of effective Eurasian transportation links were confirmed in its final declaration. The importance of the Northern Sea Route was the first point to be ratified for it was considered of special significance in the development of effective Eurasian links. The Conference defined the Northern Sea Route as an independent Eurasian transport corridor.
         The role of the Northern Sea Route as an independent transportation passage has considerably increased during these last years. This is connected with the development of Russia's oil and gas extraction from the Arctic shelf and the increase in cargo transportation from Norilsk metallurgical enterprise, one of the biggest world producers and exporters of non-ferrous metals.
        The issues related to the Northern Sea Route can not be studied separately from the general problems of the Russian Arctic. It is no coincidence they attract international attention. The Russian-Norwegian-Japanese team known as INSROP is devoted to researching the possibilities of the Northern Sea Route. However, the effective functioning of the Northern Sea Route as an international transportation passage, which would solve cargo transportation problems by fulfilling the economic needs of Russia and by complying with international requirements, is possible only if addressing the following issues:
        - The creation of a normative and legal base for the Northern Sea Route to function as an international transportation passage, that indicates the order of access of foreign ships to the route and the ports on the route, along with requirements of navigation safety, etc.
        - The renovation and enlargement of the fleet of icebreakers to provide navigation on all lines of the Northern Sea Route irrespective of season and ice conditions. At present there are six nuclear icebreakers working on the route. Soon, after the "Arctic" icebreaker is written off, there will be only 5 ships. According to a most simple calculation, the icebreaker fleet has to be increased at least twofold.
        - The creation of necessary measures regarding navigation safety, including hydrographic safety procedures on all routes with soundings, hydrographic signs, etc.
        - The implementation of measures to provide solutions for social and economic problems, in particular a final resolution to the issue of food delivery to the regions of the North. The principle of survival must to be replaced with the satisfaction of people's fundamental needs.
        - The provision of qualified personnel for the functioning of the route, in particular the training of navigators for work on the Arctic ice-breakers, as well as hydrographers, meteorologists, oceanographers and other specialists.
        - The industrial development of the Arctic with an emphasis on the increase in oil and gas extraction and the transportation of hydrocarbon cargo. This requires special attention to the ecological protection of the North. Thousands of tons of sulfur dioxide and other harmful substances are thrown into the atmosphere in the area of Norilsk, Northern Nickel and other enterprises. This creates intolerable pressure upon the environment and destroys useful areas (pastures, etc.)
        - The creation of a service infrastructure along the whole international transportation passage, i.e. cargo terminals, logistic and communication centers, etc.
        - The development of a concept followed by a Federal program for the development of the Northern Sea Route as an international transportation line. Special attention must be placed on factors that provide favorable cargo transportation conditions. Customs service, tariffs, port fees, guaranteed safety for cargo, traffic safety, etc. must be priorities.

The Northern Sea Route and the entire Russian Arctic region are the country's national wealth and they require the government's special attention.

MYTH OR REALITY?

From Japan to Europe via the Sakhalins


A corridor to be constructed

Stanislav Goncharenko
Deputy Head of the Department of Economics
The Russian Ministry of Transport

         On the brink of the third millennium, the role of the Commonwealth's transportation system is significantly changing. Thanks to objective preconditions, the system will transform into a "locomotive" capable of invigorating industrial development, intensifying economic activity and of raising theStanislav Goncharenko living standards in many Russian regions. The development of international Euro-Asian transport corridors will provide solutions to global social-economic problems.
        All this is directly related to the fact that the world's economy has grown rapidly during these last decades. This includes a global division of world labor and correspondingly, a radical increase in the exchange of goods between different parts of the world. Industrial supplies have intensified and large markets are more competitive due to accelerated capital flow.
        "Door to door" cargo delivery with maximum reliability and cost effectiveness in minimum time is now especially relevant.
        World cargo flow is regrouping in a focused search for more effective routes, including Eurasian ones. At present, cargo travels between Asia and Europe through the Pacific, Atlantic and Indian Oceans. It takes 35 days to get to Europe from Japan through the Suez Canal. Reliable cargo delivery schedules depend on sea conditions. It is therefore not surprising that cargo owners are currently searching for alternative routes.
        World foreign trade exceeds 4-5 trillion dollars. In 1997, Japan alone had a turn over of 0.88 trillion dollars. The volume of foreign trade for the ASEAN countries was assessed at 0.72 trillion dollars for the same year. The European Community and the USA especially, are the leading world exporters and had a far greater trade movement. The exchange of goods between Europe and Asia makes up half the world's cargo. In 1998 alone, 6 million 20-foot containers were shipped between Europe and South East Asia. As a result, many countries are looking to create transportation corridors.
        Almost all Eurasian routes pass within the transportation networks of the CIS countries and primarily of Russia. A common policy in respect to international cargo is important not only for the CIS but also for the majority of countries in the world.
        Practically all CIS states have strong prospects for development based on a close interaction with each other. However, the most attractive routes for cargo owners cross Russian territory. By the year 2010, Russia could have the main portion of the Eurasian international freight flow thanks to its geographical location and powerful infrastructure which includes railway, motor and water transportation.
        The importance of this issue has moved the government to create a federal program for the "Development of International Transportation Corridors". This program envisions among others, two Eurasian transport corridors, "East-West" and "North-South," a "great European water ring," and the development of the "Northern Sea Route."
        The main route between Europe and Asia is the "East-West" wide corridor. Although there are several branches within the corridor, its general direction is latitudinal. The territory from the Russian Far East Coast to its western borders makes up the central section of this corridor. The eastern section covers China, Korea, Japan and other states of the Asian Pacific region. The western section includes European transportation corridors, Baltic waterways, the North, Black and Mediterranean Seas and the Danube and the Rhine.
        In order to increase freight handling capabilities for cargo shipped from or via Russia and in order to give the country autonomy, various ports are being modernized while new ports are being constructed on the Baltic, Azov and Black Seas.
        The backbone of the "East-West" international corridor is the Trans-Siberian Railroad thanks to which the Chinese northeastern provinces link to the town of Chita. Ulan-Ude is the starting point of another railway, which merges into the Trans-Siberian route that crosses Mongolia into inner China.
        The Trans-Siberian railroad covers three routes from east to west:
        Ekaterinburg-Perm-Nizhny Novgorod-Moscow, Ekaterinburg-Kazan-Moscow and Chelyabinsk-Ufa-Syzran-Moscow. In the European part of Russia, the railway network is supplemented with river ports, roads, and airports. Also promising for the "East-West" corridor is the Volga transportation system through which cargo can be carried to the Baltic, Black Sea, Mediterranean and Caspian regions. What's more, the Danube-Rhine water corridor further links the network with central Europe.
        Even now the "Transib" is capable of handling up to 100 million tons of cargo a year. This includes international freight with a total sum of 140 thousand 20-foot containers. With a complete modernization, up to one million cargo containers could be shipped through the "Transib" annually. This is still insufficient though, given the present cargo volume between Europe and Asia and the very rapid increase of export-import cargo from Asian Pacific countries. The construction of a railway-road "Europe-Russia-Japan" corridor is an especially important project for regrouping global cargo flows between Europe and Asia within the "East-West" corridor.

MYTH OR REALITY?

Moving from words to needs


Interest in the project demonstrated by railway men, gas and oil producers, car drivers and power engineers.
And not only in Russia...

Yakov Mkrtychyan
Ph.D. in Technical Science
Honored scholar in Science and Technology

        As early as the 1930s,Yakov Mkrtychyan the Soviet Union and Japan considered connecting the Sakhalin Island with Russia's mainland and Japan. Because the Sakhalin was (and still is) the only oil-gas region in the Far East, the goal was to connect the island with the mainland through a tunnel and thus boost the development of production forces both on the island and in the entire Far East. The tunnel would supply food and goods to the population and provide the mainland with oil and gas. This objective is still relevant.
        The first and so far last attempt to connect the Sakhalin Island with the mainland was undertaken in the pre-war years. Experts developed and began to implement a project for an 8-km long tunnel in the Nevelsky Strait. The war interrupted this construction however. The project was forgotten for many years.
        In 1979, we revived this project and added further plans for the construction of a 30-km long tunnel between the Sakhalin Island and Japan across the La Peruse Strait. This idea emerged independent of previous research into oil and gas transportation between the island, the mainland and Japan. In those years Russia signed an agreement with Japan to jointly develop the oil and gas fields on the Sakhalin's shelf based on a sharing principle. Hence the need for oil and gas transportation to Japan. However, this initiative was also abandoned. It "withered away" at the proposal stage. Both the Chairman of the USSR Council of Ministers A. Kosygin and the Minister of the Gas Industry S. Orudzhev who supported this initiative passed away one by one. The project was again forgotten.
        Years passed, the country's railway network developed and began to operate full-time. We approached the First Vice-Prime Ministers of the Russian Government (first Y. Maslyukov and later N. Aksenenko) in vain. The former only had time to order to consideration of our proposal. After his resignation, officials simply "closed" the proposal with no second thoughts. In fact, N. Aksenenko spoke about my petition in the "Kommersant" newspaper. The article "Undermining Japan" (July 8, 1999, No. 118) convincingly outlined the many advantages of connecting the Sakhalin Island, the mainland and the Island of Hokkaido, yet only in terms of the national railway's cargo volume.
        Hardly anyone can doubt the enormous dividends for Russia in directly linking Japan, Europe and Asia through Russian territory. At present a project is underway for constructing a 1000-km underwater gas pipeline "Sakhalin-Japan" (1300 km long). Gas producers might be interested in the "tunnel project" while oil and gas companies might consider laying a pipeline through the tunnel under the Nevelsky Strait. This obviously does not exclude oil transportation using tank-wagons through the tunnel. The development of the tunnel project must consider the interests of the Ministries of Communications (MPS) and Defense, as well as those of gas and oil producers, car drivers, power engineers and tourism companies.
While the tunnel project is a-priori profitable for our country what is the attitude in Japan towards this idea? The answer is unambiguous yet the project appears to interest Japanese businessmen. First, they have always wanted access to the natural resources in the Far East and Siberia. Second, direct shipment and delivery between Japan, Europe, Asia and Russia becomes cheaper, faster, more reliable and cost effective while also better protecting the cargo from damage.
        It is time to change words for deeds. The Sakhalin Island link is unavoidable and will be permanently profitable. It is time to create a multi-branch federal commission to develop within 6 months a feasible project to subsequently implement. This depends on the Government's will.
        In terms of the Sakhalin-Hokkaido tunnel we must proceed in two ways:

  1. From below: the above mentioned federal commission should develop a joint proposal in cooperation with the already existing Japanese commission and submit it to their respective governments.
  2. From above: Diplomatic negotiations are necessary. Connecting two nations by land is a state matter, which should be handled by state leaders. The English Channel Tunnel that connects Great Britain and France can be used as an example.

MYTH OR REALITY?

A coridor that needs to be extended


  • This is beneficial to all
  • From China to the world via Primorye
  • Predicting the development of the transport system

Yevgeny Novoseltsev,
Deputy Director General
The JSC "Far Eastern Marine Fleet Research Institute"

         Russia's Far East is best suited for cooperation with the Asian Pacific countries. External economic relations are crucial for its development. First, it is closer to the rapidly developing countries in Asia and the Pacific than to the major Russian industrial centers. The shipping costs from Japan to Far Eastern Russia are 3-5 times lower than from the European part of Russia. Second, the Far Eastern economy is connected to the national economy through an inter-sector exchange rather than through industrial and technical cooperation. Third, production and consumption in the Russian Far East and in some Asian Pacific countries is in most cases mutually complemented.
        The interests of Russia as a Eurasian power are geared not only towards the West but to the East as well. In this respect, the Primorsky district is an important meeting point with the dynamically developing Asian Pacific region.
        During the reform years, the decline of cargo transportation through ports in the Far East weakened its economic relations with the center of the Russia. The result was the reexamination of the role of transportation in the international labor division. The development of the Far East has again become possible thanks to the transportation networks of the Asian Pacific countries and to newly formed trade and cargo relations.
        The multi-modal transportation system is the most effective in the Far East. It allows operators to use the advantages of each type of transportation and offer consumers high quality products at reasonable prices. This is also relevant for corridor No. 2, which needs to be extended as far as the ports in Primorye and the Asian Pacific region along the following routes:
- Northeastern provinces of China - southern Primorye - USA (and Canadian) West Coast.
- Northeastern provinces of China - southern Primorye -Japan, South Korea and other Asian Pacific countries.
- Europe - southern Primorye - Asian Pacific countries
- Europe - Russian railroad - Japan
        The northeastern provinces of China that link to the Russian transportation network have an enormous potential. Two of them - Heilunjiang and Girin have no exit to the sea and this predetermines its external trade. Northeastern China's exports are carried out through the Daliang port.
        China must create new exits to the sea because its port and railroad are overloaded (especially the Harbin - Shenyang section) and its industrially developed centers are far from the port. Under these conditions, the ports in Primorye could receive the cargo flows from the adjoining Chinese provinces and partly relieve the ports in Japan and Korea that hold the cargo in transit from North America to China.
        In view of the European experience, work is underway now in Primorye to create a transportation corridor between the Chinese northeastern provinces, Primorye and the USA. This idea has been supported in the USA (in the Seattle and Tacoma ports) and it is also being carefully examined by Chinese specialists. The proposed route already transports more than 50 thousand containers a year. It is 2630 km shorter than the conventional route from the USA through the ports of Japan and Daliang. Correspondingly, the cost of delivering one container is almost 600 USD lower. There are also other routes through Primorye from China to Japan and Korea that have significant advantages. A recently established container line is in operation on all directions through the Vladivostok, Posiet and Zarubino ports while coal is being transported from China through the Vostochny port.
        A direct railway connection between the Trans-Siberian Railroad and Japan through the Sakhalin Island is essential for the transportation network and trade relations. All the necessary conditions exist for implementing this project: a direct passenger and cargo communication between Japan, Russia and Europe; Japan's need for raw materials and fuel. This railway would be loaded with cargo containers (between Japan, Central Asia and Europe) and raw materials (coal, oil and ores).
        The development of this project depends to a great extent on Russia. It needs to connect the mainland with the Sakhalin Island and open the possibility for Japan to construct a bridge to Sakhalin from its side. The creation of international transportation corridors across the Far East will give Russia a tremendous income. This will allow it to fully utilize the Primorsky district's infrastructure, join the Asian-Pacific region in international economic cooperation, participate more actively in the creation and development of the industrial exporting zone and intensify foreign investments. Transportation will carry raw materials to the industrial regions of Russia and the Asian Pacific countries and therefore, open new opportunities for the economic development of our country.

MYTH OR REALITY?

Calculations confirmed the enormous economic effect


  • How large should cargo flow be?
  • From shipper to customer without reshipping
  • The Railway will connect Tokyo and London

Sergey Sharapov
Deputy Director
The State Technical & Economical Institute
for Railway Research and Design

         Last year, the Minister of Communications gave us the task of preparing a project for a railway link between mainland Russia and the Sakhalin Island. In search for new solutions, Sakhalinwe applied the experience of previous undertakers such as "Mosgiprotrans," the JSC "Dal'giprotrans," the Sakhalin and Far East railways and the Sakhalin local administration. We laid out the mainland's transportation infrastructure in the Sakhalin area. The Vanino-Kholmsk ferry crossing is the most dependant link in bad weather. Yet cargo remains detained for two-week periods at the Vanino and Kholmsk stations, which inevitably affects the cargo's integrity.
        It was therefore necessary to find a financially sound and technically feasible long-term solution to provide a stable transportation link with the Sakhalin. The first stage was a marketing study to determine the region's traffic flow. Given the present state of the local economy and its development tendencies, we concluded that the cargo turn over within the Sakhalin would amount to one million tons of cargo by 2010 and no less than two million tons by 2015, as opposed to the present 0.8 million. If Russia's foreign trade grows, we anticipate 1.4 to 6 million tons of cargo will flow between the Sakhalin and Japan by 2015. This figure includes cargo in transit to West Europe. We foresee a cargo movement of 2.5 million tons in 2010 and 3.0 million tons in 2015 between the mainland and its island.
        The transportation system must be developed in order to reach these anticipated figures. This means reconstructing and expanding the Vanino-Kholmsk ferry crossing; providing these ports with reshipment sea vessels; building a direct rail link between Sakhalin and Cape Lazarev (553 km) and between Pogibi and Nogliki (131 km) with a 11.7 km tunnel crossing the Nevelsky Strait; creating a traincar transfer point at the Nogliki station (to 1067 mm track). The economic viability of direct railway communication depends on international cargo flow. The intensified development of the Sakhalin rail link requires an investment of 35.1 billion rubles to be returned over a period of 24 years. This is acceptable considering the magnitude of the investment and the long-term advantages of such an infrastructure.
        The building of railway lines and a bridge/ tunnel crossing on the Nevelsky Strait is politically and economically sound. It would strengthen Russia's territorial integrity by providing more reliable communications with the center. This also means a stronger position in the world's economy. This project would offer Japan a direct link to Western Europe and simplify trade movements between the European Union and Asian Pacific countries. A 15000 km-long transcontinental railway line will connect Tokyo and London directly.
        Railway transportation across Russia is appealing because cargo travels faster than by sea. For example, a shipment between Tokyo and Rotterdam would take 15-18 days less by rail. Transportation costs would also lower by 523 USD for one 20-foot container on the same route. Cargo would not need to be reshipped along the way and would reach the clients directly. This would protect the cargo's integrity and reduce its cost for customers. At present, cargo travelling between Japan and Europe undergoes four loading-unloading operations!
        Connecting the mainland with the Sakhalin Island would significantly impact Russia's economy. The national budget would absorb 10-16 billion rubles annually as a result. The project's legacy would be a reliable all-weather communication network with prospects for even further growth with small investments. The Sakhalin would practically cease being an island.
        This is not all. New areas in the Khabarovsk district and the Sakhalin region would become economically active. Presently, the Baikal-Amur rail link (BAM) has only one exit to the sea (Vanino). With the construction of a new line, BAM will have an exit to the non-freezing Sakhalin ports of Kholmsky, Nevelsky and Korsakov, as well as to the mainland forest ports of De Kastri and Cape Lazarev. The cargo flows will be better distributed between Transsib and BAM. The industrial facilities of mainland seaports will be freed from the reshipment of cargo in transit to Sakhalin, Kamchatka and Magadan. These ports could be therefore put to better use in handling import-export cargo, decreasing the costs for port development. The costs for cargo transportation on this direct rail link between the Sakhalin, Magadan and Kamchatka will decrease by 18-20% via the Kholmsk and Korsakov ports and by 25% via the new port Nogliki.

MYTH OR REALITY?

Important for the whole of Russia!


Vladimir Shapoval,
First Deputy Governor
of the Sakhalin Region

        The problem of creating stable all-seasonVladimir Shapoval transportation between the Sakhalin Island and Russia's mainland has a long history and the issue was almost resolved in the early 1950s. The main goal was to carry domestic cargo and passengers as well as to open new transportation links with the Asian Pacific region (with Japan primarily). On May 5 1950, The USSR Government officially opened the construction of a railway line between Komsomolsk-on-Amur, Cape Lazarev and the Sakhalin Island with a tunnel crossing the Nevelsky Strait. The work stopped in 1953 yet the project is as relevant now as it was back then:

  • The Sakhalin region's economy and trade relations are dependent on a sea train-ferry crossing between Vanino and Kholmsk. Before 1994, 10 ferries were in operation with a capacity to transport 26 cars on each trip. At present only 5 are in operation. Both the ferries and the entire ferry system have become physically and morally obsolete. They also depend on weather and ice conditions in the Tatar Strait. The present ferry will exhausts its resources in approximately 2005-2008 after which the Sakhalin Island will have no stable transportation.

  • The creation of a direct and stable all-season railway network between the Sakhalin Island and the mainland is of enormous geopolitical significance for Russia and could have a decisive influence on the future development of the entire Sakhalin region and Far Eastern Russia. A direct rail link would also activate the Sakhalin's relations with Central Russia and the Asian Pacific countries (primarily Japan and China).

  • Two factors must be considered for a comprehensive and objective assessment of the economic, social and political consequences of the construction of this railway line between Komsomolsk-on-Amur, De Kastri, Cape Lazarev, the Sakhalin Island and the Island of Hokkaido: a long-term program for the social and economic development of the Sakhalin region and the Khabarovsk district, and the development of oil and gas extraction in the entire Far East. The Ministry of Communications under orders from the Russian Federation Government commissioned a study called "Technical and economic prognoses on Far Eastern transportation relations and the construction of a direct railway link between the mainland and the Sakhalin Island". The estimated cost of developing this study is 418 million rubles to be accomplished in a 1.5-2 year period. It would take less than 6-7 years to construct a tunnel (bridge crossing) and fortify the Sakhalin road section. Based on its scale and economic impact, the creation of a land corridor between Japan, Russia and Europe could become the most important major project of the 21st century.

  • MYTH OR REALITY?

    Is the idea of establishing the most appealing transport corridor of the new century feasible?


             We put these questions to Mr. Stanislav Goncharenko, author of the articles we published on the project for an overland passageway between the Sakhalin Island, the mainland and Japan.

            There is no doubt the idea is feasible, he said, for an Europe-Russia-Japan land corridor will ensure an expanded cargo turnover between Europe and Japan via the shortest route. It is capable of impelling force to the already powerful and progressive development of Siberia, the Far East and the Polar Regions as well as of many other parts of Russia, the Commonwealth States and Asian and European countries. This implies a general activation of science, innovative activities and manufacture.
            The construction of a Europe-Russia-Japan land corridor would be of strategic importance not only because it would redistribute global cargo flows but it would also provide access to an area rich in minerals. At the same time, the scope of cargo traffic would expand, and there would be a boost in imports-exports and in the volume of domestic freight.
            This will secure a maximum use of the Trans-Siberian Railway and the Russian eastern seaports, resulting in a second major boost of activities throughout the Baikal-Amur Trunk (BAM). The ultimate completion of its construction will be guaranteed. It would also secure the improvement of the adjoining area, i.e. a poorly developed and scarcely populated 400-km belt, which extends 4095 km from the Town of Ust-Kut in Eastern Siberia to the Tatar Strait.
            The traffic alone of natural resources will completely saturate the BAM whose capacity is 15 million tons. During the first stage of developing the adjacent deposits, the route will be capable of accommodating European-Japanese cargo deliveries in view of their single-track status. In the long run however, with the region's industrial and social evolution, as well as the growth of import-export cargo between Europe, Japan, China and Korea, the establishment of a second BAM track will be needed. The predicted shift from to the present 6 million containers to only 1 million between Europe and Asia seriously underestimates Russia's prospects.
            From the perspective of all countries, especially those lacking natural resources, access to the natural reserves of Eastern Siberia and the Far East is the main appeal for a Europe-Russia-Japan land corridor. Foreign consumer interests in Russia's natural resources will ensure their involvement in the renovation of low-intensity railroads, the construction of extended railroad branches and motor roads to remote ore deposits and distant large forests. In this way, natural deposits, timber, industrial business and social facilities become garlands stringed on the intercontinental trunk. It will be possible to deliver raw materials from a mine to a cargo terminal in any factory, in any country on the trunk without reloading or re-embarking. The same applies to commercially viable wood, spare parts, etc.
            The second appealing consideration, especially from the standpoint of industrial countries, is the enormous emerging market within those vast areas for construction and extensive economic development.
            The economic appeal of the production facilities that consume local raw materials and are "tied" to the trunk, is the heightened inflow of foreign capital into the area. The interest will be higher if joint ventures are undertaken in Siberia and the Far East. If so, Russia would gain an opportunity to dictate the admission requirements for foreigners. These would include advanced technological integration, experience in modern operations, substantial investment contributions and the promotion of Russian products in external markets.
            The construction of the trunk, communication networks and new industrial and social facilities will create a higher demand for metallurgical products such as rails, accessories, pipes and various types of rolled sheets and bars. This will guarantee a steady demand to metallurgists in Russia, Ukraine and Kazakhstan.
            Construction, mining, and cargo transportation will require a wide range of services: mining equipment, quarrying and building plants, diesel locomotives, freight and passenger railway cars, tractors and trailers, lorries, buses and railway station facilities. Orders for container production will increase drastically. At present, the traffic of containers in Russia is a low as 0.7% from the total traffic, while this figure reaches 20% in Eastern Europe and 40% in Western Europe.
            The growth in rolling stock production will increase the demand for spare parts to be manufactured by electric engineering plants, and by rubber, paint, varnish, and other industries. Diesel engineering will need to be developed further together with the use of imported parts in the entire range of diesel engines.
            The construction in extensive areas with different topography will require high-precision equipment designed for lugging and for ensuring the secure operation of the transportation system. The satellite navigation system GLONASS/GPS will be especially needed. Optic fiber lines will be installed to provide reliable communications.
            The success of construction and transportation in this emerging industrial area depends on automated data control systems based on a distributed computer network. Integrate flexible production will require fully automated systems for essential conversion processes. Because of the high demand for electronic equipment, it will be possible to liquidate the remains of the national electronics base.
            The expansion of business activities throughout a vast area and the establishment of a modern social infrastructure will have a positive effect on the demography of the sparsely populated eastern regions of Russia.
            Russia is having difficulty solving its problems because of a lack of foreign investment. Japan could be the main foreign investor in the construction of a passageway, two tunnels and a road network, among other things. The project as a whole is very appealing to them.
            Many parts of the Russian and Japanese transportation network have been in existence and operation for a long time. However, the construction of the Europe-Russia-Japan passageway and more specifically, of the two tunnels, will be a major breakthrough in the 21st century for Russia, the Commonwealth States and many Asian and European countries.

    THE NEW TRANSPORT CORRIDORS

    From India through Iran and Astrakhan


    • Russian Sea gates
    • The Olia port's problems
    • The container line on the Caspian Sea
    • How to solve today's problems

    Gennady Davydov
    Head of the Investments Department
    Maritime Administration
    Astrakhan port

            The main strategic task in developing the Astrakhan transportation junction is to become the center of the shortest and most profitable European-Asian line. Our purpose is to give the North-South transportation corridor its southern gates. This is why we are striving to restore our transportation and economic relations with Iran. We started with the processing of 186 thousand tons of cargo in 1994 and reached 1100 thousand tons within five years. Only in the first quarter of this year, 560 thousand tons of general cargo have already been processed.
            Research into potential cargo traffic shows that 20 to 40 million tons of cargo will move in the direction of the Caspian Sea countries, the Persian Gulf, and South-East Asia. It is no coincidence that the third All-European Transportation Conference in June 1997 suggested the development of the 9th intermodal passage with an extension to Astrakhan. Logically, this included a link to India through the Caspian branch and the Iranian ports. Traditionally, Indian cargo has been delivered to Russia either through the Suez Canal to Hamburg and Kotka, or to Novorossisk through Turkey. The main point is the change of this scheme.
            Two years ago the Astrakhan and Moscow forwarding companies "Volga-vaster", "Lakor" and "Vagna" were directly involved in solving this problem with the support of the Astrakhan regional administration and the Ministry of Transportation of the Russian Federation. They reached real results: containers with Indian cargo have been reloaded in the ports of Astrakhan.
             The creation of this new transportation line from India through Iran and Astrakhan is important for Russia. First, besides saving 30-40 % in expenses and delivery time, Russia could successfully compete with other shipping companies that presently monopolize the import-export cargo between Russia and India. Second, it is more profitable for the Southern regions of Russia, the Povolzhie and the Ural to import Indian products directly through the country's Southern gates and not through Finland and Moscow. Third, this new passage could absorb part of TRASEKA's cargo. Cargo owners could save 10-12 days by crossing TRASEKA.
             The representatives from India and Iran who visited Astrakhan confirmed their serious interest in the project. The main tasks are the processing of financial plans, the creation of a ship container line on the Caspian Sea oriented towards Indian cargo, a return traffic movement with Russian cargo, and the easing of customs paperwork for Indian cargo registration. It is also extremely important to set cargo delivery payments with domestic and not international tariffs.
             A trial consignment of 300-400 containers a month is a manageable volume for the 9 Astrakhan port complexes. However, if cargo traffic increases the existing port facilities will not be able to cope technically with the overload. The Olia seaport, which is presently under construction, must be incorporated to the project. The most up-to-date technology in port cargo loading as well as effective mechanization could be used in the docking and warehouse areas.
             399 million dollars are being invested in the construction of the Olia seaport, 100 km south of Astrakhan. This port will enable Russia to process 8 million tons of cargo annually. It will allow the country to protect not only its foreign trade interests, but also its political ones. This is especially relevant now that oil has been found in the Khvalynskoye deposit on the Caspian shelf. The new concept in port development, approved by the regional administration and Ministry of Transportation includes the construction of local structures: specialized trade complexes that will combine into a future common sea trading port. The successful ferryboat operation on the Olia-Enzeli (Iran) line encouraged Astrakhan's maritime administration to begin the construction of a second section for the Pionerny dock in the Olia port (130 linear meters in length). This dock will enable the processing of two ferryboats and relieve the first dock section for processing general cargo. The construction of a third dock segment dealing with containers is expected to begin soon.
             Of course, the Olia port has many problems. The main one is the absence of a railway. There are two conflicting tenets in this regard:
            - Prove there will be at least 3 million tons of cargo and we will find money for the construction of a 46 km railway.
            - Prove you have a railway and we will send 3-5-10 million tons of cheaper cargo to the Olia port with a shorter layover.
             It is now time to solve this problem, like many others that are related to the infrastructure and technical equipment. The port has good prospects, no doubt. It is close to the sea and the required investments are lower than for other projects. The personnel at the Astrakhan port is experienced and workers are qualified. Astrakhan has shipbuilding and industrial potential. Also the Pionerny dock at the Olia port is successful in processing cargo and the number of customers will grow. It is unreasonable to scatter our means when we have Astrakhan, such a powerful transportation junction on the Caspian Sea!

    THE NEW TRANSPORT CORRIDORS

            Everybody knows that Russia is a great naval power. It is among the top ten countries of the world in terms of total railway and motor road length as well as overland freight traffic. However, one can hear not so often that Russia occupies first place in terms of internal waterway length and that the greatest rivers of Eurasia and the world, such as Yenisei, Lena, Ob, Amur, flow over its territory. The last but not least is the Volga.
            This summer, three professionals, namely Mr. V. Alenkov, Managing Director of Volzhsky Terminal development corporation, his colleague, Mr. V. Mironov, Deputy Director of the same corporation, and Prof. V. Kostrov, Executive Director of Volga-Viatka Regional Logistics Center, informed the participants of the St. Petersburg Economic Forum about a global project "TransVolga: Cargo Communications Volga Region - Caspian - Mediterranean - Middle East Belt". We shall make our readers aware of principal ideas of the project.

    If we revive the volga then we shall revive the economy


    • Special purpose river
    • Let it be part of transport network!
    • Entry into world markets
    • Any delay is inadmissible

            It happened that the greatest rivers of Eurasia are operating with an intensity that is lower by an order than that throughout the world. Even the Volga that was formerly a transportation pivot of the Central and Southern Russia is losing its freightage importance to an increasing extent. The transit traffic from the Trans-Siberian route enters directly the marine "flanks", i.e. St. Petersburg and Novorossisk. The Volga and its tributaries are almost not operating but they are forming allegedly annoying "water obstacles" which need the bridges to be built over them.
            Stating the existing situation as above, some experts draw a conclusion about lack of prospects that is supposedly inherent and irreversible to the Russian internal water transport all round the world and thus prove the inexpedience of investments in its development. In doing so, they keep silent about the practical state of affairs. You know that both vessels and trains are going almost uninterruptedly up and down the Rhine and Danube, Mississippi and Thames, owing to both an intensive use of those by business communities as well as a powerful support of the governments, private sectors and international investment institutions. Also, they keep silent about the fact that the European Union Program stipulates for the establishment of a common intermodal transport network by 2010 that will naturally include the renovated transportation systems of Russia, the Baltic and CIS countries.
            It is necessary to emphasize new geopolitical and economic considerations, which pose a global importance on a solution to the problem of Volga revival as a business complex.
            The Volga as the greatest river of Europe is of vital importance in socioeconomic and geopolitical aspects as well as the Don and tributaries thereof are related to the mutual development of about 40 Russian regions, including the Northwest of Russia and Moscow Region. The above regions accommodate as much as 40 percent population and account for 45 percent industrial output of the country. The Volga forms, via its tributaries, channel systems and freight lines, a freightage network interacting with the countries of the North and South Europe, North America, Middle East, and the Caspian and Black Sea countries.
            Nevertheless, the Volga region can appear as a large-scale business system provided only that an equivalent interaction with economic macroregions is established. When considering water traffic capabilities under a modern logistics intermodal cargo traffic system and mutual economic interests of the adjacent regional clusters of Russia (first and foremost, those of the Volga, Ural, Center and South) and foreign countries, the Eastern hemisphere exposes an intercontinental macroregion featuring an area of about 30 million sq. km (that means it exceeds an area of the North America), which constitutes a sphere of Russia's direct vital concerns and is most favorable for the competitive engagement of river and sea transport in 3- or 4-modal traffic (in addition to single- and bimodal direct overland traffic by rail and road).
            Nowadays an earnest interest of wholesale exporters and importers from the Volga, Ural regions and those from the Caspian, Balkan, and Near East countries in intermodal wholesale traffic using the Volga and Don as well as their tributaries is already obvious. Large-scale projects are known which are to develop a trading carriage infrastructure involving the Volga and the Don in Kalmykia, Turkmenia, Kazakhstan, Azerbaijan, and Iran. The Russian-Turkish Business Council has included the development of trading carriage projects covering the Volga region in its priority programs. Egypt offers to establish a joint trade shipping line using Russian vessels of a river-sea type, Romania suggests that a similar line via the Volga and Danube be established with the modernized cargo storage infrastructure across the entire range. By the way, they are ready to set up a pool of European business communities. Croatia offers consignment port points on the Adriatic Sea. Similar negotiations are held with Serbia. Specific offers have been received from various trading and forwarding companies of Germany, Finland, Tunisia, etc.
            The Southern Belt countries are greatly interested in the imports of Russian products in a range from nails and planks to machine tools and engines, from peat and timber waste to fertilizers and plastics. Everything mentioned above is a vast market for Russian products. At the same time, most of the countries mentioned above, while lacking a developed shipbuilding industry, agree to carry imported and exported cargoes by Russian vessels. Russia's top priority is to expand greatly both trading and cargo traffic with the Danube countries, which existing extent is not conforming totally to the modern geopolitical and foreign economic configuration.
            In view of the above geopolitical and foreign economic trends, the conceptual projects under the TransVolga and TransVolga-Danube Programs have been developed. The adopted general federal and intergovernmental programs have been accepted as the starting points. Any delay in the implementation of the above programs contributes to a situation when essential international trading routes are laid around Russia.

    ON EARTH AND IN THE SKY

    Transsiberian route needs a new organization system


    • We must use the reserves
    • What are the obstacles?

    Boris Lapidus
    head of the economy department,
    Ministry of Communications

            TransSiberian corridor'sBoris Lapidus technical possibilities allow to transport about 200.000 containers of transit cargo a year from the countries of the Asian-and-Pacific region to Western Europe. However, some factors counteract the exploitation of the route's capabilities to full extent. One of these factors is the absence of the chief freight forwarder who would realize the coordinated rates and guarantee control and maintenance for the containers moving along the route. Other factors are the following:
    high cost of sea freight between the Asian-and Pacific ports and the East Port;
    high rates on the railroads of Poland and Germany for the transportation of transit containers to Western Europe through TransSiberian route;
    high rates and absence of the home freight carrier on the line between St. Petersburg and West European ports.
            High profitableness of external trade container transportation in the Russian transportation market led to the displacement of the Russian marine and automobile freight carriers by the numerous foreign companies working in Russia with the aid of their agents, joint ventures (often with 100 percent foreign capital) and by themselves. These facts, together with the lack of domestic marine container operators, led Russia to the loss of control upon the container transportation of transit cargo. At present, this situation grows worse because the Russian freight carriers and forwarding agents do not have sufficient experience and resources for the work in conditions of strict competition.
            Their work is uncoordinated, and so they weaken each other. At the same time, foreign operators usually enter into alliances to attain strong position in the market. For this reason they are the first to choose the routes of transportation. This results in redistribution of freight traffic not for the benefit of the Russian freight carriers.
            The existing rate of coordination between freight carriers and forwarding agents on the TransSiberian route is not sufficient. This coordination is carried out within the framework of the International Coordination Council for TransSiberian Transportation. The financial interests of the participants of cargo transportation are not coordinated. Therefore, transit potential of the TransSiberian route is not used. For the last years, the volume of transit cargo transportation along the TransSiberian route made just about 20 thousand of large-capacity containers a year as against 1981, when 140 thousand of such containers were transported.
             Analysis of the external trade transportation market proves that both foreign and domestic cargo owners, while organizing external trade transportation, prefer to collaborate with the single freight operator who provides the necessary container park, full set of services, and control upon the location of cargo containers during their movement along the route. In order to fulfil these tasks and to raise the volume of container transit transportation, it is advisable to organize the national company - operator of external trade transportation.
             This company must work under the patronage of the Russian Ministry of Transport and the Ministry of Communications. This company can exist as holding or consortium. It can include as its members such legal corporate bodies, as railroad operator for container transportation, automobile and transportation forwarding companies, freight terminals, Russian ports, Russian shipping companies, and investment companies (bank, insurance company). At present, a holding company or a consortium may have St. Petersburg Seaport joint stock company, East port joint stock company, Far Eastern Shipping Company, Siberian Aluminium group of companies, or Sovcomfleet joint stock company as its founders.
             The creation of such a company will contribute to the reduction of activities of the foreign container operators in the Russian market and their forcing out as well. This will also promote the development of inland container transportation. Preliminary calculations show that the creation of the intermodal container operator will make possible to reach the annual volume of transit transportation of 100.000 containers (and not less) by the year 2005.

    ON EARTH AND IN THE SKY

    Roads are our future


    Nikolai Seregin, main assistant to the General Director of "Rosavtodor" explains how motorways for cargo traffic are being constructed.

             -How are Russia's roads being integrated in a unified international Nikolai Seregintransportation infrastructure?
            -Russia's road integration is using historically formed routes. They are the shortest and provide maximum effectiveness to the international roads in the Eurasian highway system, including trans-European corridors.
    Due to Russia's favorable geographic position, the volume of international motorway links grew 12-15 % during recent years and the number of transportation means crossing our border into the EU countries increased by 10-15%. There have also been changes in the structure of traffic flow with an increase in heavy trucks and trailers.
    However, the technical condition of a number of motorways that are part of the international network do not meet international requirements. The number of road sections with frequent traffic jams entering large congested cities has increased. A large number of road sections that run through developed areas over considerable lengths, do not have the required lane or shoulder width, as well as no dividing lines or flyovers at railway crossings with high traffic.
            Within the next few years, the upswing in Russia's economy will stimulate the growth of automobile transportation and increase the load on network roads, especially on those providing international and interregional links. Therefore the Russian Federation's national program for improvement and development of motorway networks will construct a modern road system that meets western standards. Rosavtodor has developed the project, which will be implemented until the year 2010.
            - How is Russia's geographic location used for cargo in the Europe-Russia-Caucasus and Europe-Russia-Central Asia routes?
            - Three pan-European transportation corridors run through the Russian Federation. Two of them already function as routes linking Europe with Central Asia and the Trans-Caucasian region with a minimum number of transfer points on the Baltic, Caspian and Black Seas. This drastically reduces transportation time and costs by eliminating intermediary reloading operations.
            Several proposals have already been prepared for the development of transportation corridors towards the east (Ekaterinburg - Chinese border) and in the direction of the Black (Novorossiisk) and Caspian (Astrakhan) Seas. This will continue the development of international transportation links between Europe, the Trans-Caucasian region and Central and South East Asia which is in the long-term interest of the countries in these regions.
            The shortest routes from Central and especially, Northern Europe run through the territory of the Russian Federation. The use of transport networks within the TRASECA project's framework will increase the costs of transportation. Nevertheless with the assistance of the EU, EEC, UN and UN ESCAPO, a corridor is being created along the western Russian border in the North-South direction. The Via-Baltica, TRASECA and Silk Way projects are also being implemented. This is in spite of the fact that Russian transportation links with Europe and Asia have been included in the Eurasian international railway and motorway systems, as well as in the pan-European transportation corridors. They provide shorter distances for cargo and passenger deliveries and are therefore, more economically competitive.
            The Russian Road Agency in collaboration with other transportation organizations is taking measures to entice international transportation operators to use the Russian infrastructure. Amendments have been made to the Agreement on International European Motorways to develop type "E" motorways in Russia, which provide a road network towards the east. West European countries will be linked to Central Asia through our territory. These issues were discussed with the participating CIS countries within the frame of the Intergovernmental Council of CIS Road Workers. The UN General Secretary approved the new routes and the Protocol on CIS international motorways was signed at an intergovernmental level.
            -Nearly three years ago, the All-European Conference in Helsinki declared that an extension of the international corridors to Moscow would create unique conditions for the operation of the Eurasian intermodal transportation system, which would rebalance technological and operational parameters. What has been done in this direction?
            - The Conference confirmed the economic advantages for Europe and Asia in using the networks of Russia and its bordering countries for intercommunication. Other countries that would also become accessible are Iran, Mongolia, China, India, North and South Korea and Japan. The conference defined concrete ways to further develop unified integrated transportation systems.
            The integration of Russia's motorways into the European network proceeded at a fast pace. At present three out of ten pan-European transportation corridors are operating in Russia. Practically the whole network of "E" type international motorways has been put to use in the Russian segment, which has a length of more than 16 thousand km.
            Following the 48th session of the Economic and Social Commission for Asia and the Pacific Ocean (ESCAPO) a complex project for the development of a land transportation infrastructure in Asia was adopted (ALTID). It was supported by a number of CIS countries including Azerbaidzhan, Armenia, Kazakhstan, Kirgizstan, Tadzhikistan, Turkmenistan and Uzbekistan. The groundwork for a Eurasian link through Russian territory is being prepared within the frame of the Intergovernmental Council of CIS Road Workers and the ALTID program.
            The Russian proposals are supported by a number of participating Asian CIS countries. At present, joint research is being undertaken for an alternative route to TRASECA and the Silk way, as well as financial viability studies.
            The Russian Federation began developing a national plan geared towards the realization of the UN ESCAPO's goals under the ALTID project. This plan pays great attention to the development and improvement of routes within the Eurasia transportation corridor using motorways to connect Russia with Kazakhstan, Mongolia, China and the Korean peninsula. The present research work will define the best routes for these international motorways and the mutual benefits for cargo transportation.
            In November 1998, the Russian Federation sent the UN ESCAPO Secretary a proposal for including Russian motorway sections in the international network of Asian highways. In January 1999, the proposition was accepted. The routes were developed in accordance with the parameters for an international "A" type network suggested by ESCAPO, including its road specifications and the preservation and development of historical links between the region's countries. These routes answer to the interests of all countries participating in the project. It is important to distinguish the four main routes connecting the Russian Federation with Middle Asia, China, Mongolia, and the Korean peninsula:

    1. The Byelorussian border - Moscow - Samara - Chelyabinsk -Omsk - Novosibirsk - Krasnoyarsk - Irkutsk - Chita - Khabarovsk - Vladivostok. This transcontinental motorway has 13 offshoots along the Southern settlement band in Siberia and the Far East.
    2. Kursk - Voronezh - Saratov - Ozinki. This route provides the shortest link between Kazakhstan, Ukraine and Central Europe. It is also connected to Asian highways.
    3. Kamensk - Shakhtinskiy - Volgograd - Astrakhan - the Kazakhstan border. This route links Kazakhstan and its bordering countries with Central and Southern Europe. It is connected to the Asian network system.
    4. Vyiborg - St. Petersburg - Moscow - Volgograd - Astrakhan - Makhachkala - the Azerbaidzhan border. This route links the Trans-Caucasus and Middle Asia with Northern Europe. It is connected to one of the Asian network's main highways.

    Interview by Anatoly Stepanov.

    ON EARTH AND IN THE SKY

    Let polar aviation be!


    • "Too many cooks spoil the broth"
    • Return to life
    • Center in the northern capital

    Boris Boozinnik
    Prorector of Civil
    Aviation Academy

             Deserted settlements. Closed mines and procession plants. People can not find jobs in the North, and don't have a chance to move to another place.
            Transportation in the North is in a difficult situation also. Only Barents-and-Baltic Boris Boozinnikregion (Leningrad, Murmansk, Arkhangelsk regions, and Karelia) of all spacious Northern regions have all types of transportation: trains, automobiles, sea and river transport, and aviation. In some regions aviation is the only type of transportation and stopping its activity means, in fact, breaking territorial integrity of Russia.
            Ground base of aviation in Northern regions was created and reconstructed for several decades. Airports in Murmansk, Arkhangelsk, Amderm, Salekhard, Tiksi, Pevek, Chersky, Chokurdakh, Anadyr, Norilsk, Magadan, Yakutsk have been built, equipped and are currently in operation. They can work with TU-154, and some of them are in reserve for IL-62. These airports are suitable for usage, and they can not be allowed to lose their suitability.
            The main reason of the crisis of aviation in the Arctic and the North is difficult economic situation in the country. But the problem is also caused by the disunity of the aviation. That is true that "Too many cooks spoil the broth". Aviation of the Arctic and the North reports to several regional directions: Northwest, Arkhangelsk, Komi, West Siberian, Krasnoyarsk, Yakutsk, and Magadan. Is not that the reason why polar aviation is the most economically unprofitable one and most difficult to operate including the flight safety?
             The specialists of our Academy see the solution of the problem, first of all, as reconstruction of the united leading body for polar aviation. Based on comparative analysis of existing air transportation system of the Barents region of Russia (Karelia, Arkhangelsk and Murmansk regions) and foreign aviation companies, especially Scandinavian ones, strategic planning of organization of this region's air transportation system has been suggested. It provides effective functioning of air transportation system of the Arctic and the North under conditions of market economy, taking into consideration the specific character of the privatization of aviation companies in Russia.
            We beleive that the most reasonable way is to create Polar Aviation state company with joint capital and state owned block of shares. Transfer of all aircrafts, aviation companies, airports, aviation-technical bases of Northern territorial departments to Polar Aviation will allow to concentrate our efforts, experience and responsibility for the Northern air transportation in one company. The capital of large companies, such as Gasprom, Lucoil, Norilsk Nickel, metallurgic plants and other large companies and organizations of the North should be attracted.
             Airplanes/helicopters stock should be concentrated in aviation companies of Polar Aviation joint stock company. It includes AN-24, IL-18, AN-26, AN-30, AN-70, AN-72, AN-10, AN-12, for they are most suitable for the North. In our opinion, it is reasonable to begin again the small-scale production of the most acceptable for the North aircraft IL-14 with the wheel and ski undercarriage (similar to production of SI-130 "Hercules" aircrafts in USA for Arctic and Antarctic), hydroairplanes and dirigibles. They can be irreplaceable and economically profitable for the unloading of sea transportat, transportation of large-size cargo for miners, oil industry workers, geologists, gas workers (if helicopters can carry up to 25 tons, dirigibles can carry up to 50 or even 100 tons).
            Of course, marketing of all possible customers of air transportation should be carried out, the needs not only of the Northern Sea Route, but Russian companies and enterprises should be considered. Many problems should be solved, for example, the changing of large airports of the North to transit ones (reserved for fuelling) for aircrafts on flight through North Pole from Canada and USA, and from Europe - to the Asian-and-Pacific region.
            Forming of the market of air transportation and market infrastructure, demonopolization of the system of air transportation, elimination of organisation structures of administrative-command system that create obstacles to market economy - all this is impossible without the participation of administration of Northern subjects of the Russian Federation. Civil Aviation Academy is ready to carry out all the amount of research works connected with the foundation of Polar Aviation Russian joint stock company. It is clear that to solve transportation problems of Russia and, first of all, North, we will train and retrain aviation personnel.
            The important fact is the place of location of leading body of Polar Aviation. I am sure that Polar Aviation should be located in St. Petersburg - northern capital of Russia.

    ON EARTH AND IN THE SKY

    The air bridge connects three continents

    Transporting passengers over the North Pole


    • Does the America-Europe-Asia air transit bridge take advantage of Russia's geographic location?
    • Not long ago, passenger flights over the North Pole were but a dream. What is the situation now?

            Vladimir Goriachev Mr. Vladimir Goriachev, Deputy Director of the Russian Federal Air Transportation Office, answered these and other questions at a round table during the St. Petersburg Economic Forum...

            The Russian aviation system only serviced domestic flights within its national air space, including the Arctic region. There were no regular foreign airline flights into the Arctic. The needs of national consumers and of those living in polar stations brought about the creation of aviation support along the North Sea Route. Dispatcher points were set up and put into operation in order to serve those flights.
            As aviation technology progresses, international air carriers are beginning to make use of the unique geopolitical location of Russia's air space. A simple drawing shows that most possible routes between Europe, America and South East Asia (whose economy is developing rapidly) all cross Russian air space.
            And what if we add routes from America to India? Or maybe those to Africa?
            One can hardly question the uniqueness of our geographic location. If properly utilized, our national air space is unquestionably capable of solving the country's economic problems as well as those related to national security.
            There are several important dates in the history of regular flights over the Arctic. First and foremost, June 17, 1992, when the Presidents of Russia and the US signed a memorandum for the creation of short flight routes between North America and East Asia. The Russian-American group, RAGGAT, was given the responsibility of establishing air bridges between the two continents. Almost three years later, at a meeting in Bangkok, the Russian delegation presented their proposal for polar flight routes. On April 4, 1998, a high-level group, ITASPS, was set up for the international coordination of intercontinental flight routes.
            The goal of Russia's proposal in Bangkok was to create a direct communication through Russia's air space between cities that had previously not had such links. In essence, they proposed new aviation lines, i.e. four polar air routes. International air carriers were the first to support the idea.
            The new international air routes were to pass over the Arctic Ocean. The delegation proposed the shortest flight routes between North America and South East Asia. A decree from the Russian Federation prepared various demonstration flights between North America and India/Pakistan; between North America and Burma / Kampuchea / Malaysia / Singapore / Thailand / Indonesia; between North America and China / Hong Kong / Taiwan / South Korea. The demonstration flights were to be undertaken by U.S. air carriers to identify the operating characteristics and flight conditions along the new routes. According to calculations made by several air carriers, these new routes would save them roughly 100 million USD a year.
            The results from the demonstration flights were positive. They proved it was possible to maintain international air traffic at low temperatures. In late April this year, a decision was made to continue demonstration flights until October 1st. Regular polar flights will soon open.

    ON EARTH AND IN THE SKY

    On the thoroughfares of the city


    Vitaly Zentsov
    Deputy Chairman of the Committee
    for City Planning and Architecture
    of the St. Petersburg Administration

    • The city traffic is growing..
    • Ring Road and High-Speed Diameter...
    • Historical centre and the Neva Banks...

            The road and transport infrastructure of the metropolis called St. Petersburg satisfies not only the needs of the city proper and supports the reliable connections of the Northern Capital with other Vitaly Zentsovregions of the country. By its geopolitical location this city also serves as a bridge between Russia and Eastern and Western Europe, Baltic and Nordic countries contributing to the development of trade and economy, scientific and cultural contacts and tourism. The city is crossed by the 9-th Multi-modal Corridor, to which our city adds strong port complexes and a well developed network of roads and rails as well as good air transport facilities.
            This location of our city facilitates the development of its economy and at the same time puts forward certain requirements that its transport infrastructure should meet.
            Today the road-transport system of the city is overloaded by the local and inter-city traffic. The greater St. Petersburg according to the official statistics has one million vehicles registered, 60% of which is operating on a continuous basis. The number of cars increased from 1992 to 1997 up to 160 vehicles per one thousand of people. By the year 2005 it is predicted that their number will grow to 250-300 units. Average daily traffic at the city entry roads has reached 180 thousand of vehicles, one third of them being trucks, 10-12% of the total traffic come to the city in transit.
            The total length of the roads within the city limits is 2 186 km, two third of it are the major city streets. The development of the city-road network is still lagging behind the growth of the traffic, resulting in certain problems. At the approaches to the city, on week-ends in particular, as well as in downtown and across city bridges with their approaches transport jams have become a regular feature.
            The Government of the city pays great attention to the development of city transport infrastructure, its up-grading and landscaping of adjacent areas as well as to a better management of the transport flows. The road construction and up-grading projects are based on a system approach aiming at step-by-step development of the transport network with adequate results. The following are but a few examples.
            The first section of the Ring Road is under construction, from Gorskaya to Priozersk Highway. Design documentation for the next section (Bronka Railway Station- Tallinn Highway) has been almost completed. As soon as the Ring Road becomes a full circle, vehicles in transit will not enter the city any more. The transport carriers and goods owners will be in a more advantageous position, while the city will have a better, clean environment since the amount of car discharges will go down. The transport safety within the city will improve. Architectural monuments, the pride of the city, will be better preserved experiencing less vibration; street noise will be also mitigated.
            There is also project of a High Speed Western Diameter, that when constructed, will connect business and industrial city areas with its full fledged transport hubs (sea and river harbours, Pulkovo Airport, Railway Stations and Multi-Modal Cargo Terminals located at the thoroughfares leading to Moscow, Baltic and Nordic countries.
            It is planned to complete the design of a network of multi-level road junctions (that will allow the cars to move without waiting at cross-roads) as well as high-speed roads, the absence of which has become an obstacle to the city's life and further development.
            Completion of Ushakov Bridge Junction (Primorskoye Highway at the city exit) was an important event. Also a bridge was built over the railway track in Sestroretsk. Roads are being up-graded in the vicinity of the Staraya Derevnya Underground Station, projects are implemented that up-grade the roads at the city entrance along Primorsk, Vyborg, Murmansk, Moscow, Tallinn and Pulkovo highways.
            To speed up the construction and revamping of transit roads and with due consideration of the problems of project financing from the federal or city budgets it was decided to develop a proposal to set up toll roads.
            Historical centre of the city also gets its share of attention. Using advance technologies road and sidewalk pavements are renovated, these are Admiralty Avenue and Konnogvardeysky Avenue, Nevsky and Liteyny Avenues, Birzhevaya and Vladimirskaya Squares. The number of "no cars" zones is mushrooming, they are Malaya Konnyushennaya and Malaya Sadovaya, just to name a few. Truda Square reconstruction is coming to an end, it is the first site in the city where the underground space is used in a semi-functional mode, Sennaya, Suvorovskayas and Konnyushennaya squares are waiting for their turn.
            All the banks of the Neva River are including in the City Planning Scheme of building non-stop distribution junctions. The first sections (on the right Neva bank -Okhtinskaya and left bank Smolnaya) have been finished. The rehabilitation of Sinopskaya and Aptekarskaya embankments will follow.
            Much efforts are focused in making our northern capital worthy of its name. Granite embankments, steps down to the water, lamps on the embankments and houses facing the river have been repaired and renovated. It is a welcoming feature that funds for these jobs have been allocated not only by the city government but by city private sector as well. In this connection we can mention Mr. Konstantin Filkov, Director of the Educo-Centre (Sinopskaya Embankment) and others. Architect Vladimir Popov created a beautiful metal fence behind Smolny Building facing the river. We soon shall see beautiful embankments of the upper Neva that will favourably compare with those in the lower Neva reaches.
            It can be pointed out that all the designs are quite bold and of high quality. This is the opinion of not only our people, but the same was stressed by many foreign experts.

    ON EARTH AND IN THE SKY

    Sea charts and sailing directions

    We feel helpless without them


    Evgeniy Kluev
    Head of the State Hydrographic Enterprise
    Ministry of Transport (Mintrans) of Russia

            Among the dozens of St. Petersburg organisations taking part in Arctic commercial development, our hydrographic organisation Evgeniy Kluevis among those without which it is impossible to carry out river and sea shipping in the Northern Sea Route region. Together with our branches in the ports of Arkhangelsk, Dickson Island, Igarka, Khatanga, Tiksi, Cape Verde, Pevek, Providence Bay we have been ensuring safe navigation in the Arctic for more than 65 years. We have executed topographical surveys along the coastal zone of the mainland, the islands and the big Siberian rivers such as Yenisei, Khatanga, Lena, Indigirka and Kolyma covering a distance of more than 45 thousand kilometres and have also carried out soundings of more than 4 mln.km. on the shelf of the polar seas. We have thus eliminated more than 1200 navigationally dangerous instances.
            We have collected for many years the voluminous material, which has now become the national property of Russia. The length of the traditional route is equal to 3500 miles (6475 km.) while the length of the recommended routes for safe navigation is four times or so greater. Soundings continue on the Northern Sea Route. The purpose of these sea studies is to create new navigational charts, sailing directions, manuals, and handbooks. All ships are equipped with them. The routes themselves are provided with navigational equipment to maintain them at up-to-date level and to execute pilot steering on the rivers of Yenisei, Khatanga, Anabar and Kolyma. Navigators are informed about conditions and constant monitoring of vessels is carried out to prevent the contamination of the Arctic seas from oil products.
            However, we have only 21 hydrographic vessels and 10 auxiliary ones. The situation in Tiksinskaya and Kolymskaya hydrological bases is critical. We have no vessels to operate in the Bykovskiy fairway and the hydrographic vessel "Dunai" working on the Lena has no classification documents and is soon to be written-off. The fleet regeneration program provided us with three new vessels, which should have been delivered to us three years ago. What happened? The project has been ready for a long time. There are shipbuilding plants. Yet there is no money as usual. Nevertheless we continue the broad complex of works, studying different aspects of the Arctic water areas. For example, our hydrographic expedition is undertaking floor terrain surveys of Shtokmanovskoye and Prirazlomnoye deposits, which are of great practical importance. The problem lies in that we are not employing our full capabilities.
            Of course we would have more possibilities if the problems related not only to the present but also to the future of the northern hydrographic service were solved more rapidly. For example, for more than 25 years we have used radionuclide energetic installations as a power source for navigation. This system automates almost all navigational devices avoiding the use of navigational polar stations. But the life of almost all the radionuclide energetic installations (381 installations total) will come to an end in 2003. Mintrans and Minatom are aware of this and of the fact that the available navigational system does not even meet today's requirements.
            There are a good deal of other problems too. For example, it is necessary not only to develop monitoring and adjustment stations but also to create electronic navigational charts corresponding to the requirements of International Maritime and Hydrographic organisations. The problem of automate ship handling has yet to be solved. The ship electronic cartographic TRIS-100 system successfully tested on seven vessels and icebreakers was developed and certified three years ago. This new navigational system will allow us to give up the obligatory pilot steering of vessels on Yenisei, Khatanga, Anabar and Kolyma. The creation of a network consisting of 14 monitoring and adjustment stations of global satellite navigational systems on the Russian Arctic sea sector has yet to be finished in order to provide safe navigation conditions on the Northern Sea Route.
            This list of course, does not speak of all that has still to be done in both the present and the future.

    ON EARTH AND IN THE SKY

    Transit bridge at the connection of the continents.


    Formula of development: accessibility, efficiency, quality, safety.

    Oleg Dunaev
    Deputy Chairman of
    Economics Committee
    for Ural region development programs, professor

             Ural region is unique in its way, because it is located at the connection of two continents: Europe and Asia. That geographic peculiarity let Sverdlovsk area and Ural region play a leading role in development of not only national, but also Euro - Asian transportation connections. A lot of most economically sound land and air routes, that connect European and Asian parts of Russia, the countries of Europe and Asian - Pasific Ocean area cross Sverdlovsk area. For instance, suffice it to say that density of the railways of general use in Sverdlovsk area is 182 km at 10 thousand of square km of territory (it is 3,6 times more than average in Russia). Density of automobile roads with hard surface in Ural region is 89 km at 1000 square km of territory. That is also considerably higher than average in Russia.
            Air transportation is carried out in Sverdlovsk area through "Koltsovo" airport - one of the biggest in Russia, that has the status of international one. It is suitable for all types of airplane because of its technical conditions. And that guarantee cooperation with foreign air transporters. The infrastructure of the airport was intended for internal transportation only for a long time. Now it is being reconstructed in three stages. The reconstruction will allow "Koltsovo" to reach the highest international class.
            International automobile transportation is carried out at Ural by the transportation companies - members of Association of international automobile transporters. The volume of automobile international transportation increased 3,5 times during last 5 years. Sverdlovsk area is now at the second place (after Moscow) in the volume of whole-sale trade at internal market and at the fourth (after Moscow, Tumen, St. Petersburg and Krasnoyarsk) in the amount of trade turnover with near and far foreign countries.
            Realization of competitiveness is the integral part of social-economical development strategy for Middle Ural. And in this connection - active using of economical potential of Middle Ural in development of transportation infrastructure of Russia, in creation of international transportation passages, as Europe - Asia, America - Asia.
             World practice shows that for promising development it is necessary to change from competitiveness between separate types of transportation to intermodal, combined types of transportation, large transportation systems that serve them and have integral center of organization and management of cargo delivery process. Role of operator as organizer of transportation and functioning of powerful goods transfer systems is increased distinctively in the systems like that. Unfortunately, in our country that technology of interaction of transportation companies on one side and their customers on the other side is not used yet and have to be not only worked through but also supported legislatively.
            In this connection the first thing to be done at Ural is creation of intermodal logistics terminal on the basis of Sverdlovsk railway in Ekaterinburg. In our opinion it is reasonable to found transportation - industrial logistics company as a joint-stock company with participation of metallurgical and machinery construction companies of the area, Sverdlovsk railway, "Koltsovo" airport, Association of international transporters, area government and Ekaterinburg administration.
            The need in express railway is also critical. That requires modernization of railways at the sections Ekaterinburg -Perm -Moscow (for goods container transportation) and Ekaterinburg - Kazan - Moscow (for passenger transportation). Further modernization of "Koltsovo" international airports for increase of transit passenger transportation and development of cargo air transportation in containers is required. Containerization of transportation, by the way, is our main link in the strategy of innovation renewal of production of Sverdlovsk area economics.
            Development of the second European transportation passage requires working on the project of international highway Ekaterinburg-Moscow (connected with Berlin-Paris). It is reasonable in this connection to consider possibility of creation of consortium with participation of international and Russian finance institutes, private Russian and foreign investors with support and guarantees of the subjects of Ural Region Federation and Russian government.
            We also have to think about raising the competitiveness of Russian automobile transporters at the market of international automobile transportation services. And that have to be done on the account of reduction of expenses on purchasing and maintenance of automobiles, that meet the requirements of European Union. Only during last two years competitiveness of automobile transporters of the area at the market of international transportation service reduced for 3,9 per cent. The part of the automobile transporters of the area is only 7,7% of export-import goods transported in Sverdlovsk area by international automobile transportation. As a result, area budget received millions roubles less.
            Our legislative and executive authorities have to develop the system, that stimulates international transportation by local transportation organisations. Modernization of transportation and its close interaction with all branches of region economics are also required. Without it we can not lower transportation tariffs and raise competitiveness of Ural goods at internal an international markets.

    ON EARTH AND IN THE SKY

    Safety is our main goal


    Nikolay Reshetov
    General Director
    Russian Maritime Register of Shipping

             Freight and passenger transportation on the Arctic Íèêîëàé Ðåøåòîâseas requires special navigation safety and ship reliability.
            The oil and gas extraction from new shelf deposits in the Russian North Sea call for the construction of offshore drilling platforms and complex engineering structures. Special Arctic ships and icebreakers are needed to carry oil, gas, nickel, copper and other raw materials throughout northern Russia. These vessels are also needed for the transportation of transit cargo from Europe to the Far East along the Northern Sea Route and for the delivery of goods to Russia's northern ports. In accordance with government rulings, the Russian Maritime Shipping Register works as a complex engineering center. The Register unifies the technologies and equipment of ships and offshore platforms. Its goal is to improve navigation safety and to preserve the Arctic marine environment.
            The government's decision was not accidental. According to the merchant shipping code, the Register is Russia's only government institution responsible for the technical supervision and classification of vessels. The Register has ample experience in marine operations in the North and on this basis, constantly improves the requirements for vessel classification and construction while also developing new ones. The purpose of this work is to provide safety in navigation and to protect the environment. The Register goal is to guarantee the safety of a vessel under permissible sailing conditions. Under contract with the Lucoil Arctic Tanker Company and in accordance with the Register's requirements, a series of Arctic tankers for ice navigation is being constructed in German dockyards and in the St. Petersburg Admiralty shipyard.
            The Register collaborates with international organizations connected with the problems of Arctic navigation. For instance, it cooperates with a team from the International Marine Organization, which is developing the International Safety Code for Vessels in Arctic Waters. The Register is also a member of the International Association of Classification Societies, which participates in the development of standard requirements for all Arctic vessels.
             The Register's scientific research on this topic has resulted in the creation of specialized computing techniques and computer programs. By the end of the XX century, these classification societies began to use statistical probability methods for risk evaluation in the exploitation of vessels and drilling platforms. This is especially important for the construction of ice-resistant drilling platforms that extract oil and gas from the Arctic shelf. In this regard, the Register has begun to study statistical probability methods that foresee extreme situations and evaluate possible risks in the exploitation of ships and marine constructions. The goal of this study is to minimize risk factors on the Arctic drilling rigs.
            Sailing along the Northern Sea Route has always been dangerous, as it is partially covered with ice. For this reason, the Register is presently developing a new project together with the Krylov Central Research Institute, the Central Research Institute of the Marine Fleet, and the Institute of the Arctic and Antarctica. The purpose of this project is to evaluate, anticipate and lower the risks for ships sailing along the Northern Sea Route.

    IN THE COUNTRIES OF THE COMMONWEALTH

    Development along different though interrelated lines


    Georgiy Kryzhanovsky,
    President of the International Transportation Academy

             The trend towards gradual economic stability observed throughout the CIS during these last few years has paved the way for cooperation, which is central to continuing successful economic reforms. Nobody doubts that an important line of cooperation is the establishment of a common commodity distribution chain in a common transportation market.Georgiy Kryzhanovsky A number of recent intergovernmental agreements prove this point.
             The concrete activities of intergovernmental commissions, established to solve various cooperation issues in the transportation industry, are practically a prerequisite for the successful development of the national economies. These specific programs and projects are now being implemented within the CIS transportation network. However, practice shows that some shortcomings in the production of transportation services and consumption are factors that obstruct business activity and prevent the inflow of foreign capital so needed for industrial development.
            Our insufficient experience in the administration of intergovernmental cooperation is a major impediment. Divergent priorities within the transportation network, different approaches to organizing a common commodity distribution chain, and inadequate attention to the creation of practical mechanisms for the implementation and follow-up of agreements, often show that the intensive activities of intergovernmental authorities towards development and negotiation are inefficient from the viewpoint of active transport service market operators.
            As far back as 1994, a transportation conference (made up of ministers of transport) developed a Coordinated Transportation Policy valid up to the year 2000. This created a single-minded process for transportation support of developing national economies during a transitional period. This could be considered an initial stage in the establishment of an intergovernmental regulative and legal system to govern the transportation service market. The document adopted at that time enabled transportation authorities as well as intergovernmental committees to achieve some positive results in solving a number of important problems in the coordination of separate transportation modes. However, the network embracing the Member States of the Economic Union is now failing to meet the needs of our developing economies. These committees underestimate the importance of a systematic approach to solving the economic problems of transition and implementation of further reforms.
            Together with the implementation of adopted programs and projects to develop a transportation network and a common transportation service market, it is also necessary to prepare and submit a number of new drafts to the competent authorities. Based on data analysis, it is important to include steps in these drafts for creating transportation cooperation among the Member States of the Economic Union, to clearly formulate the specific problems, to define common policies towards a common commodity distribution network and to establish a common transportation service market.
            The CIS Commission on Free Trade and the Department of Transport have developed a Concept for CIS cooperation in order to establish a common transportation space up to the year 2010. It is based on the diverse experience of Independent Member States of the Economic Union, which again proves that a more systematic approach is necessary for solving the existing problems.
            The Concept's main purpose is to build objective prerequisites for a transportation network segment to achieve the basic political targets of the Economic Union. A primary target is to formulate and negotiate common approaches by intergovernmental and national authorities for the administration of transportation networks.
            The first type of problems the Concept deals with, are the non-conformities in the existing transportation structure and operation, replacing them with the modern economic and political conditions and realities of the post-soviet area.
             The second problem is creating new intergovernmental and governmental regulations designed for transportation system development and operation in the post-soviet area. A reason for this is the specific role of transportation in the development of the independent state economies under market conditions. It is impossible to create equal and favorable conditions for the industrial, agricultural and transportation service sectors when there are no effective regulations on transportation.
            Finally, the third set of problems is the unequal allocation of sites for equipment manufacturing and repairs throughout the area of the former USSR. For this reason, transportation agencies have been forced to initiate the development and implementation of equipment production and renovation in almost every country. This means it is economically viable to expand transportation cooperation to effectively use each country's transportation infrastructure within the present market.
            It is important to identify the basic lines of transportation cooperation and the order of priorities for the development and implementation of individual programs, eliminating the reasons and consequences of central problems. Transportation cooperation can and must develop along different though interrelated lines.
            The International Transportation Academy is studying specific steps for ordering and harmonizing national transportation laws, customs, tariff policies, national transportation leasing support programs and developed personnel systems for the network. These problems are being worked on in close contact with intergovernmental agencies and national transportation authorities.

    IN THE COUNTRIES OF THE COMMONWEALTH

    Ukraine - Russia


    Victor Yuschenko
    the Prime Minister of Ukraine

            - What relations does Ukraine have with St. Petersburg and the regions of Northern Russia in the spheres of industry, science and high technology?
            - First of all I would Victor Yuschenko like to say that the development of comprehensive and mutually beneficial relations with Russia is a priority for us. Naturally, close regional economic links were established historically and under the present conditions of forming market structures they require qualitative renovation.
            Its considerable scientific, technical, industrial and raw material potential determine the special features of Northwest Russia. That is why Ukrainian enterprises and research organizations are interested in further developing cooperation in this region. First of all, this applies to shipbuilding, to chemical and oil chemical production and to the delivery of Ukrainian agricultural products to places where certain traditions and connections already exist. We would like to intensify the participation of our companies in the development of raw material resources in the region. The cooperation between the Arkhangelsk pulp and paper mill and the Kiev paper-and-cardboard factory is a good example of this.
            Our cooperation with the Northwest regions of the Russian Federation seems to be quite promising. For instance, the Murmansk region's government is interested in further increasing the supply of consumer goods from Ukraine, especially food and products of industrial and technical application. The development of our contacts in tourism and recreation is also promising.
            We consider our participation in the renovation of the fishing fleet very important in cooperation with Murmansk. In particular, we are talking about using Ukrainian shipyards on the account of our debts from the use of Russian gas. At the end of January this year, this point was examined at a Russian-Ukrainian meeting where we discussed the placing of a package of orders to Ukrainian shipbuilders and possible ways of undertaking the project.
            As we continue good old traditions with new additions, we stand for the development of interregional relations based on frame agreements between Ukrainian regional administrations and separate subjects of the Russian Federation. Agreements between the Zaporozhye region, the Dnepropetrovsk region and Karelia are already in effect, and further agreements on cooperation between St. Petersburg and Kiev, as well as between other Russian Northwest and Ukrainian regions are being prepared. It is very important to avoid formal declarations of intention and to cooperate through real projects in accordance with the economic strategy of our countries. We think St. Petersburg is a good example. It created a special committee on cooperation with Ukraine that includes the scientific and cultural spheres.
             A number of machine-building and metallurgical enterprises of the Donetsk region maintain a close and constant contact with the Northwest regions of Russia: the open joint-stock company "Kramatorsky heavy engineering plant", "Slavtyazhmash", the "Zuev energo-mechanical plant and the open joint-stock company "Donetsk metallurgical plant" among others. A specific example of cooperation is the work by the Nikolaev scientific-research enterprise "Mashproekt" on the construction of the 1st turbine for the Central Heating Station in the town of Velsk in the Arkhangelsk region. This project was based on new ecologically safe, energy saving technology. This technology had only been previously used on modern submarines.
            - What are the character and the volume of trade relations between Ukraine and St. Petersburg and between Ukraine and the regions of Russia's North and Northwest?
            - Undoubtedly, we can not be satisfied with the present condition of trade and economic relations with such a large region of Russia as is the Northwest.
            Though commercial exchange between Ukraine and this region is worth over 400 mln. Dollars, it is still 15 - 20 percent less than it was before the August financial crisis.
            Considering the significance and size of St. Petersburg, part of our mutual deliveries still take place in the form of barter which contradicts our mutual tendencies and goals. The number of joint ventures is decreasing. Only in St. Petersburg they have diminished from 250 to 67 since 1995. In my opinion it is extremely important to maximize efforts. The legislative and executive bodies of our countries should work to remove obstacles in the development of mutually profitable and comprehensive relations.
            - Is Ukraine interested in the development of the northern oil and gas shelf?
            - The issue of fuel supply diversification is very urgent for Ukraine. We are looking for optimal solutions to solve this problem. A number of Russian companies are actively participating in the privatization of Ukrainian oil processing enterprises. This is why it seems logical that these companies show special interest in the development of oil and gas deposits in the North. We can offer the example of LUKOIL, a widely known company that actively participated in the privatization of the Odessa oil processing plant. The situation with the privatization of the Lisichansk oil processing plant is similar. Tyumen Oil Company is planning its revival and intends to increase processing. Ukrainian oil and gas companies, including machine-building ones, all which have considerable potential are also showing a certain interest in the development of Russia's northern deposits. The government of Ukraine is striving towards the creation of normal, clear and common "rules of the game" for all participants of the energy resource market. This is our main task and our primary support for those who want to work in our country successfully.
            - Does your business sector show interest in the exploitation of the Northern Sea Route through trade relations with countries in the Asian and Pacific region? What can this route offer Ukraine?
            - First of all I must point out that the Northern Sea Route was developed mainly for the native population of Russia's North and for the development of the adjoining territories. Part of Ukrainian goods, which include food products, reach this region through St. Petersburg, Murmansk and Arkhangelsk. We continue to be interested in increasing the commodity turnover in the North and Northwest. A good opportunity to achieve this goal is the transport corridor "from Varangians to Greeks" which is being actively revived and a considerable part of which goes through the territory of Ukraine. When we reconstruct this corridor we will have more possibilities to intensify economical and trade relations.
            - What is the development tendency of economic, industrial and trade relations between Ukraine, St. Petersburg and Russia's North and Northwest?
            - I have mentioned some of these tendencies in answering previous questions. However, I am convinced that the agreement on free trade in the CIS would give a more considerable impetus in the near future for the development of all kinds of trade and economic relations with the subjects of Russia's Northwest. It is known that Ukraine consistently holds this idea and that it is persistently looking for ways to overcome existing problems, especially with the unification of tax and customs rules and the liberalization of the movement of goods. At the same time we hope for positive changes in the economies of both Russia and our country, so that the quality and competitiveness of goods and services improves, and for the positive tendencies in relations between Ukrainian and Russian banking and financial systems to strengthen and develop.
            All this together will undoubtedly favor the quality of life and the welfare of the citizens of our countries who deserve a better fortune, as we say in Ukraine.

    THE PAST

    Finnish rail with the russian track


    Olga Alexeyeva, Curator,
    The Central Museum of the October Railway.

            "Finnish Railway is to be opened for regular operation along the entire distance between St. Petersburg and Helsingfors on 30 August 1870. All the trains will continue to run between St. Petersburg and Vyborg by the existing Time Table till 15 September, though in addition there will be a special non-stop passenger train from St. Petersburg directly to Helsingfors."
            This announcement was published in the St. Petersburg Vedomosty newspaper announcing this remarkable event.
            Attempts to connect the capitals of the Russian Empire and the Great Principality of Finland by rail were repeatedly discussed before the first railway connecting St. Petersburg and Moscow were built. The construction of the Finnish rail was impaired by the repercussions of the Crimean War that destroyed most of the Finnish Merchant Fleet, Finland incurred great costs to re-build it. Another reason was a continuous shortage of financial resources. In addition there was a firm belief then that Finland rich in waterways with its numerous rivers and lakes needed no rail and that it rather had to develop its water thoroughfares.
            Nevertheless the issue of the railway kept to be continuously on the Agenda and was repeatedly postponed. The construction of the first Finnish rail started in the spring of 1858 from Helsingfors northward to Tavastgust. The engineering survey for the rail connecting St. Petersburg - Vyborg started a little bit earlier, the works were later extended to cover the distance to Helsingfors - Tavastgust line, where it had to tie in at the Riikhimyaki Railway Station.
            It was Count Adgerberg, governor-general of Finland, whose persistence and commitment to the cause made the project viable. Count Adgerberg encouraged the Seim of the Great Principality to allocate funds for the construction of the railway which opened land routes to various Russian regions and to West Europe via St. Petersburg. The funds were sourced in different ways, it were tax money of wine producers and sellers, there was also an internal Finnish loan amounting to 6 million Finnish marks (the rate of exchange at those years was such that one Finnish mark equalled to 1/4 of a Russian rouble).
            Alexander II signed His Majesty Prescript expressing His Majesty approval, empathising the importance of the railway for the development of country's economy as a whole and Finland in particular, he also added that "the people who suffered much because of poor yields of agricultural products" needed this new development project for it would give them, presently unemployed, an opportunity to earn their living. His Majesty authorised the construction of the rail and ordered "it to be started as soon the funds for it had been raised". The works started next year.
            The route for the future railway chosen by designers was 413 versts in length, starting from Vyborg District of St. Petersburg, it then had to cross Vyborg town and continue north up to the Railway Station called Riikhimyaki, which is 66 versts from Helsihgfors, where the rail was already built. This allowed them to cut the construction costs.
            The Russian Invalid, a popular St. Petersburg newspaper of that time (No 27, 1870), commented on the commissioning of the first section of the rail from Petersburg to Vyborg "as it has become known a versta of the rail will cost, on an average, 22 000 metal roubles". The Total Budget of the construction was roughly estimated to be 7 518 750 roubles, plus a contribution from the Finnish Government, provided that the funds allocated by the Russian Treasury, would be returned via its participation in the Railway Net Profit, one third of the profit was due to the Russian Treasury (for the new rail section up to Riikhimyaki) or 26% from the profit of the entire line up to Helsingfors.
            Legally the new railway, unlike state railways in Russia, was considered to be a private railway and as such it had its relationship with the Ministry of Railways until Finland became an independent state on 31 December 1917.
            The Headquarters of the Main Construction Office and later the Administration of the Finnish Railway was in Helsingfors. And later this was justified since almost entire railway was within Finnish territory, only its small section (about 32 verstas) crossed Petersburg Province. Though Great Finnish Principality before the Revolution was part of the Russian Empire, its autonomy was quite strong and both stations Beloostrov and Terioki were considered to be and actually were border stations with their own Customs Offices. In 1870 new Customs Departments were opened in Helingsfors and St. Petersburg.
            The track and its right-of-way extending up to the Finnish border crossed lands partially belonging to the State Treasury and partially to private land lords. Alexander II made a gift to the Railway amounting to 6 desyatin 360 square sazhen (one desyatina equals to 2400 square sazhen) of the state lands. A number of State Departments like the Department of Land Plots, Major Artillery Administration also allocated some land plots to the Railway, many land plots were presented by land lords who had their summer estates in the area in question like Count Levachov, Prince Golitsin, Countess Brunner and others. The Main Construction Office bought lands from their owners by a special price with the prospective payment of a certain per cent from the forthcoming profits as soon as the railway had started to operate.
            Designing and construction of various railway facilities, connecting lines, stations, technical and auxiliary facilities required recruiting a number of highly professional personnel. It is difficult to name the most important and it is impossible to list them all. The Railway Committee undertook a general management of the works, the Committee was chaired by an elected ober-engineer, retired Major General Kurt Sternval being one of them.
            Both engineers and manual workmen were recruited among the Finns. At first the number of workers did not exceed a thousand and a half, later their number increased up to 12 000 strong. Most of them were not highly qualified, others had no skills at all. Nevertheless the construction was finished with very good technical results and very fast, it took merely two years and a half to fulfil the job.
            It is interesting to mention here that even before the work on engineering design started there was no general agreement on the track width. One group suggested that the track should be the same as in Western Europe, i.e. 1435 mm, while others advocated a wide Russian track of 1524 mm. The second group won, since this track width ensured goods transportation without freight reloading for the goods transported from Finland and Finnish ports by cargo trains and also direct route for passengers travelling across Russia.
            At the same time with the rail construction railway stations were built. Wolmar Westling, Finnish architect, was the author of the architectural design of most of the railway station buildings. At the Russian Section of the Railway the station buildings were made of wood, in the so called "Russian Style", very similar to country estates (dachas) at the Karelsky Peninsula Shuvalovo( Lanskaya, Udelnaya, Shuvalovo, Pargolovo, Levasovo, Terioki, Kuokkala, later Ozerki and others). At the Finnish side railway station buildings reminded of the buildings in the style of Renaissance and Gothic. The fragment of an old Finland Railway Station building in St. Petersburg was successfully incorporated in the newly build station.
            The railway had a sufficient number of locomotives at the time. Passenger cars were comfortable and allowed passengers to walk through the entire length of the train (from its head to its tail). The then railway tariffs were not cheap, but quite affordable, a passenger had to pay three kopecks for travelling in the first class car for one versta, the cost of the same one versta in the second class car was two kopecks and only one kopeck in the third class car. It is not difficult to estimate that the trip from St. Petersburg to, say, Vyborg (a distance of 120 verstas) ranged from 1 rouble 20 kopeck to 3 roubles 60 kopecks.
            The railway was commissioned in stages, as soon as the section was finished it started operation. The first "pilot" train ran from Petersburg to Pargolovo in June 1869. In November of the same year a counter-section Riikhimyaki-Lakhti was finished and 1 February 1870 the rail ran from Petersburg to Vyborg. His Majesty Alexander II, in person, launched a through train that could run between the two capitals on 30 August 1870, that was the day of His Majesty Patron Saint. This day (12 September by the New Calendar of the 20-th century) is celebrated as the Birthday of the Finnish Railway. This year the Railway celebrates its 130 anniversary. On that day as on any day two trains will depart the Finland Railway Station (to say nothing of numerous electrical local trains), they are express-trains "REPIN" and SIBELIUS, they will head for Helsinki, the capital of a friendly neighbouring state.

    Majesty Prescript

    THE PAST

    The Majesty Prescript


    \An abstract from ALEXANDER II Prescript of 11 November 1867.\


             "This Railway should demonstrate its direct importance for the trade between Russia and Finland, particularly being significant for St. Petersburg, this city even today is the major customer of the produce of Finnish industry and agriculture.v Russian export from St. Petersburg to Finland is larger than from any other place."
    \An abstract from the Resolution of the Seim of Finland on the beginning of the construction of a railway between Helsingfors and St. Petersburg, March 1867.\

            "Considering local conditions for Finnish industry, agriculture and trade Russian Empire is the best place for Finnish export and appropriate and correct railway should greatly promote this export, and also the people who suffered from poor yields desperately need help, and after the Finnish Seim adopted the Resolution to build the Railway from Rikhiimyaki Station (Helsingfors- Tavastgusskaya Railway) to our capital WE gave Our permission to the Government to borrow 18 million marks for this purpose and WE authorise and order to start the construction of the railway as soon as the money is received. At the same time WE command Our Finnish Seim to be concerned with sourcing a loan to make the above said construction possible and WE allocate 10 million Finnish marks for the project..."

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