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  • 2006 October 12

    Alexei Chiсkanov: Half of the port’s berths to be put up for a tender

    Saint Petersburg MPMC (Municipal Property Management Committee) has come very close to conclusion of new agreements on lease of marine berths in the port of Saint Petersburg. The main issue is which leaseholders are to be able to sign new agreement without tender and which berths are to subject to the tender. Rosmorport FSUE – strategic owner of the seaport’s public assets –failed to provide Saint Petersburg MPMC with a list of berths having direct links with technological equipment of the leaseholders. Such links is a ground for conclusion of new long-term lease agreements without tender. Saint Petersburg MPMC jointly with Rosmorport have twice fixed a time limit for documents to be furnished by Rosmorport - September 15 and October 10, 2006. Besides, Rosmorport failed to provide MPMC with draft Specifications for market evaluation of the port’s berths.

    Meanwhile, Arbitrage Court of Saint Petersburg and Leningrad Region continues proceedings under claims of Saint Petersburg prosecutor’s office and Rosimushchestvo (FPMA, Federal Property Management Agency) against 13 largest stevedoring companies of the port. The complainant party claims to consider Rosmorport’s lease agreements as violation of Russian legislation.

    Alexei Chiсkanov, deputy chairman of Saint Petersburg MPMC, has told PortNews IAA about the development of work on conclusion of new agreements with leaseholders of the port’s public assets.

    - Alexei Borisovich, could you, please, tell if the claims against stevedoring companies are being considered at the court now? What is MPMC’s position here?

    - As it is known, these claims have been raised by Saint Petersburg prosecutor’s office representing Rosimushchestvo’s interests, so initial complainant is Rosimushchestvo. We have Rosimushchestvo's order to bring Rosmorport’s lease agreements into compliance with Russian legislation. We have applied to the Arbitrage Court for legal succession of these proceedings to Saint Petersburg MPMC. We are successors of Rosimushchestvo since we are charged with management of federal property in the port of Saint Petersburg.

    Some courts have rejected our succession application. We have appealed against those rejections and the appellate instance is reversing those judgments as they are considered one by one to approve legal succession. We are to take place of Rosimushchestvo as a complainant party. Thus, the issue of legal succession to MPMC has been already solved though some official documents have not been executed yet because the cases were delayed and time for their consideration has not come yet. However, hearings under similar cases, for example the case of the First Container Terminal, resulted in the court’s adoption of our attitude.

    We hope for amicable settlement as regards agreements under which the berths are to be handed over without tender.

    - Are there many such berths?

    - Not all of the berths are subject to this scheme. I cannot specify the number now, though I can assume it will be about 50%.

    Considering the Government’s decree No 156 (See Legislation page, section - Orders at www.portnews.ru, PortNews editorial comment), the ground for such targeted lease agreements is technical link between the leaseholder’s immovable assets and the berth itself. However not all the leaseholders have registered title for immovable property located at their territory. To execute targeted lease agreements we need to be provided with Rosmorport’s conclusion approved by Rosmorrechflot to confirm such a link between the leaseholder’s assets and the berth. So such assets should be registered at MPMC as the leaseholder’s property. We cannot acknowledge technical link without ownership registration.

    - Is it possible for leaseholders to register their title now?

    - If leaseholders understand that ownership of immovable property is very important for them they should have registered it from July when we started to discuss the issue of new agreements. We have held a number of meetings having invited all the leaseholders in advance.

    - What does Rosmorport management think about new lease agreements? There is a feeling that Rosmorport delays the procedure.

    - Yurij Parfeonov, Rosmorport’s head, came to us late in September and we had one more verbal discussion of all the issues. We reminded Rosmorport about their promise to provide Terms of Reference of berths evaluation.

    Rosmorport had only one question – who is to take money collected for berth lease – Rosmorport FSUE or federal budget? It is a very complicated issue since there are two different positions and contradicting judicial practice. One the one hand, the position of the public sector is supported by the Federal Law on Budget for 2006 and by the Budget Code requiring transfer of income from federal property to federal budget. On the other hand, there is a position of State Unitary Enterprises (SUE). According to Article 299 of the Civil Code of RF, income from property under SUE’s economic control should be disposed by the enterprise and the owner is entitled only for part of the enterprise’s income. I would not conceal that such a position sometimes wins the actions.

    We have discussed this issue with Parfeonov and informed him that Rosimushchestvo takes the budget’s side here and that we represent Rosimushchestvo’s interests. So, when making the order on Rosmorport’s approval of property lease we’ll stipulate that rent is to be transferred in full to the federal budget. However, Rosmorport and its branch ministry – Ministry of Transport – are to determine their own position, since they are leaseholders to sign the agreements. Our terms are the following – all the funds are to go to the budget. However, if Rosmorport thinks we are wrong it is entitled to bring this issue before a court.

    - How can this influence the interests of a leaseholder?

    - Our condition is transfer of the amount to the budget in full. If the agreement does not meet our requirement we’ll ask the court to transfer the lease payment from the SUE’s settlement account to the federal budget. If we are cast in lawsuit it is to become an established budget practice. This practice has not settled yet. It has nothing to do with the leaseholders since they pay either to the budget or to SUE’s account. The amount does not depend on it.

    - New agreements provide the possibility for accounting of Rosmorport’s input into berths servicing. What is today’s practice?

    - We consider it to be the issue of Rosmorport’s economic business management. If Rosmorport thinks it may pretend to any payments for berth servicing besides lease payment – that is its due. However lease payment is to be calculated on the grounds of its market value, which includes payments of the books-holder (SUE) for berth overhaul, maintenance etc. So, to our opinion, such a demand has no legal foundation. Broadly speaking, leaseholders are anyway to pay 1 million dollars per berth based on market value. If Rosmorport manages to agree with leaseholders as regards additional payments, we don’t mind that. We just specify the bottom level.

    - Why do you value a berth to 1 million dollars?

    - It is my assumption based on Fishing port trading results. If you remember, annual lease rate exceeded 2.5 million s.u. (standard units used by Saint Petersburg MPMC for calculation of tenant payment equal to about 35 rubles – PortNews editorial comment).

    - When does the berth evaluation starts?

    - As far as I know the process has already started – some of the leaseholders have asked for evaluation on their own initiative. For example, First Container Terminal (FCT), which is the first to come to the court, is going to order evaluation on its own initiative and we don’t mind that. MPMC’s position is the following: it is not important who is to order evaluation, but it should be executed by accredited evaluators, entitled for evaluation of state property and providing positive results of expertise at Municipal Board for real estate inventory and evaluation. We do not care who is to pay for evaluation – leaseholder, Rosmorport or our organization.

    - The requirement specification has not been issued yet, has it?

    - No, there is no requirement specification yet. The issue is still under development. Evaluators may start working without specification available, but it may not execute any reports without RS coordinated with the owner. Thus, we wait for RS from either Rosmorport or leaseholder. The compulsory condition is the following: RS is to be approved by Rosmorport. We want the requirement to consider books-holder’s payments for berth overhaul. The payments are to be approved by Rosmorport.

    - Is MPMC ready to withdraw an action if FCT starts evaluation on its own initiative in order sign new agreement on berth lease at market value?

    - The action may not be withdrawn. The position of the prosecutor’s office is the following: if it is furnished with all the necessary documents (market valuation, conclusion on the possibility of berth transfer without tender) and Rosmorport is provided with MPMC’s approval of berth’s targeted transfer, the prosecutor’s office does not mind amicable agreement of the defendant with leaseholders. We do not reject the claim for agreement invalidation and sign lease agreements with the same leaseholders on the basis of new rates and new terms.

    - What is MPMC's plan as regards those leaseholders, which are not able to re-sign the agreements without tender?

    - The termination of the agreement is to be settled by the court, though there is one factor – time allowed for claims. We think this period is not over yet, so in cases when there is no ground for targeted lease of a berth we are going to claim for agreement invalidation and arrange a tender for the right of berth lease.

    If leaseholders are the owners of the property, which is not proved by the documents yet, they may prepare the documents and furnish them execution. If they do not have any immovable property they have no time to build it. If there is a property but no title documents it is problem as well. It takes about two years to register ownership of a warehouse, for example. Leaseholders have no time in this case and such a berth is to subject to tender.

    - Is there a standard form for new lease agreement s?

    - No, there is not such a form. We don’t think it is necessary since our standard lease agreement may be applied for berth lease as well. We just have to exclude a number of clauses not related to marine technologies. It will essentially be similar to the agreement used in the case of fishing port put up for tender.
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