The Strategy of Development

ALONG THE ROADS OF LIFE

The Strategy of Development

(This problem will be solved in new conditions)

Vsevolod PERESYPKIN,
Director of the Central Naval Research Institute,
Fellow of the Academy of Transport of the Russian Federation

        The Northern Sea Route has historically developed as an indispensable national communication system for Russia in the Arctic. Vsevolod PERESYPKIN The sea transportation system that exists there is the most important part of the infrastructure and economic state of the North. It unites major Siberian rivers into one joint network. A great deal of financial assistance and the work of several generations of Russian citizens have been invested into the development of this main artery. In the 1980s, 16 linear icebreakers (including 7 nuclear ones) and more than 200 ships for ice navigation were used on this route. At that time, the average volume of traffic on this route reached 6.58 million tons as it was subject to state management, control and support.
        The reforms that are being carried out in the country have negatively affected the social and economic sphere of the North. A large part of production has been significantly reduced. The volume of traffic has decreased by more than 4 times, at its lowest point in 1999 was 1.5 million tons. Such an abrupt decrease in the amount of cargo on this trade route has caused a crisis, which has affected the entire transport system in the North. The route seems to have become redundant. Since the icebreakers and cargo ships are deteriorating, the coastal infrastructure of the Northern Sea Route is in critical condition. Along the route, some particular "areas" of economic growth have appeared which are of a local nature and are mainly due to the export of gas and oil from the oilfields of the Barents and Kara Seas.
        Now, the issue of reviving and developing the Arctic Region as well as securing the transport route, namely the Northern Sea Route, is facing all levels of government. But the problem is to be solved principally in new market conditions.

        The development strategy of the Northern Sea Route is based on the following:

The state supports priority industries of the North (oil and gas, mining, wood, chemical), which are able to increase traffic volume within a short period of time; it develops the federal transport infrastructure of the Route (icebreakers, port and navigation facilities, hydrographic, hydrometeorological facilities, communication, safety) as the basis for maintaining a national joint transport system.
Subjects of the Russian Federation and business enterprises use services of shareholding shipping companies and take part in the development of the Route.
Certain major business enterprises (Lukoil, Gazprom, Norilskiy Nikel, etc) create their own transport fleet and construct shipping terminals for carrying out their production.
Development of the Northern Sea Route plans on a provision of large-scale traffic: 4 million tons in the year 2005, 12 million tons in the year 2010, 50 million tons in the year 2020, including oil exports to Europe from the Timano-Pechersky Region; 25-30 million tons from the Ob and Yenisei river basins; 25-40 million tons of condensed gas from the Yamal peninsula.
In the process of reviving the Arctic Region economy and the development of the Northern Sea Route, a sea transport system under government control is being created, the management of the Northern Sea route is gradually being adjusted in compliance with new economic conditions.

The conception of development of the Northern Sea Route, which is being developed by our Institute includes:

Construction (before 2014) of 4 modern nuclear icebreakers with a capacity of 60 MWt, an icebreaker leader with a110 MWt capacity (before 2017), 5 diesel icebreakers with a 25 MWt capacity and 3 port icebreakers with a 4-7 MWt capacity.
Addition of cargo ships for ice conditions, 80-90 vessels (before 2015)
Modernization of existing and construction of new seaports (Petchenga, Indiga, Harasaway), shipping terminals (Prirazlomnoye, Varandey, Yarensediakha), container terminals (Tiksi, Provideniya, Petropavlovsk-Kamtchatsky).
Development of systems providing for navigation safety.

        Our conception also includes the development and support of international navigation along the Northern Sea Route. The results of research which, was done between 1993 and 1998 within the international program (INSROP) showed that the potential volume of transit shipping between European ports and the Asia-Pacific region could reach up to 5 million tons eastward in 2020 and up to 3 million tons westward.
        The mode of management of the Northern Sea Route, which is being adjusted to comply with new economic conditions as ordered by the government of the Russian Federation and the Interministerial Committee meeting (December 1999) should not damage the existing Arctic transport system. Realistically, it is required and should be implemented in due course. In the first stage, the most acceptable "gentle," voluntary, legal, organizational way of uniting business structures and governmental organs with local authorities and non-commercial organizations could be the Association of Users of the Northern Sea Route (its conventional name is "Arctictrans").
        The Charter and Constituent Agreement of the Association, which has been developed by our Institute, has been agreed upon by potential founders. At present, preparations are being made to organize a founding meeting.
        The acute problem of bringing socially important cargoes (fuel, food) to the North is in the process of being resolved. For these Northern deliveries, the government has allocated substantial financial support (3 billion rubles in 2000). The possibility of establishing a government-controlled company (conventional name Gosarcticsnab) whose task will be the organization and delivery of cargoes to the North is being considered. The work of Gosarcticsnab should be based on the principle of minimal costs - from the purchasing of goods to their ultimate delivery to consumers. This will prevent the misuse of the budgetary funds being allocated. The Charters of Gosarcticsnab, which have been developed by our Institute, as well as organizational and staff issues should be considered by the Interministerial committee of the Arctic and Antarctic.
        In order to strengthen state control and management of the Northern Sea Route, the Interministerial committee also recommends increasing the role of its Administration, to establish within it an Observation Council on the Northern Sea Route, to increase the importance of the Interministerial committee of the Arctic and Antarctic by giving it the status of a government committee.
        In this way, throughout the process of reviving the Arctic Region economy, the growth of local and transit traffic and the complex development of the Northern Sea Route, a stable, self-sufficient Arctic sea transport system controlled by the government will be created contribute to the federal budget.