Sergei Chelyadin: thе only thing hindering implementation of our project is unclear lease issue
Sea Port of Saint Petersburg (Morport), the largest stevedoring company in the port of Saint Petersburg, has been suspending implementation of a large-scale investment program for over a year owing to lack of proper regulation in the sphere of property relations with government in terms of lease of sea berths. Late in 2005, new owner of Novolipetsk Steel OJSC (NLMK Group of Companies) held a presentation of a program for development of its stevedoring business in the port of Saint Petersburg. The program implied construction of a number of specialized terminals within three years. The program was valued to be costing RUR 8 billion. However, absence of new agreements for long-term lease of sea berths does not allow the investor to implement its plans. Sergei Chelyadin, the Morport’s Director General told PortNews IAA within the framework of the 20th conference of the Association of Commercial Seaports about the company’s plans to start active phase of investment program.
- Sergei Valentinovich, could you, please, tell how the program announced by Morport one and a half year ago is going on?
- We are ready to start construction of the planned complexes. The only thing preventing us from doing that is unclear lease issue. It is not a secret that lease is a major part of any project. Of course, we are entitled to invest only into objects the relations on which are clear.
Nevertheless, within the framework of minor projects we started implementation of our program. We have undertaken a number of steps. Absolutely new grounds for cargo storage have been built already. In particular, we have built a new complex for transshipment of metal scrap at the territory of former warehouses No 30 and No 34. This complex is to be put into operation in April 2007. We have recently purchased a tobacco warehouse, started dismantling of it in order to build new transshipment ground.
Larger investment projects are to be developed as soon as we get answers related to lease relations.
-What are the projects you are going to start with within the framework of your investment program when Rosmorport FSUE solves the issue of berth lease?
- Of course, the first project we are to implement is a container terminal. We plan to build it at the territory of the Forth Stevedoring Company. We have almost started implementation of this project. Tender documents are under development today. We suppose the terminal's annual capacity is to make from 1 million TEU to 1.4 million TEU depending on technical capacity of adjacent territories and motor transport structures. For this purpose we make separate investments into development of the terminal’s infrastructure, which is to include construction of new gatehouses and a ground for cars. Infrastructure project is under coordination today. I am sure, we’ll manage to build a container terminal within 2-3 years.
Among other priorities is construction of a motorcar terminal with a capacity of up to 80-100 thou cars per year.
I would like to underline that ecologically dirty cargo is to be taken away from the territory of our companies. I think you will see the results within 2-3 coming years.
- What is the estimated volume of investments into these projects?
- It depends on how successful we are in negotiations with government as regards construction of a quay wall and territory development. I suppose the terminal will need about $150 million. It is minimum volume we consider today, though the figures are to be revised.
- When does Morport OJSC expects to sign new agreements on lease of the berths in the port of Saint Petersburg?
- Unfortunately, we do not know when. We have furnished all the documents demanded by both Rosmorport FSUE and Rosimushchestvo (Federal Property Management Agency). Those documents are needed for market valuation of the berth lease. Officially, we have not received any conclusions yet. Nobody have discussed it with us.
- What term of lease agreement you could consider as fair and economically efficient?
- The issue of the lease term should be provisioned by the Law on ports. The law was not only initiated by the Transport Ministry and Association of Seaports but it also considered by the deputies of State Duma. According to the draft law the term for lease of hydraulic structures is to make from 15 to 49 years. In my opinion, the term should depend on the period of complete depreciation of a berth. It is about 20-25 years.