A window to Russia

The challenges of cargo transit via the Kaliningrad Region, an exclave territory of Russia, are still on the table though the authorities have undertaken a package of measures to improve the situation. The region suggests expansion of subsidies to the seaborne transport, launch of more ferryboats at Ust-Luga-Baltijsk line and container trains between Poland and Moscow.

In search of subsidies

The Kaliningrad Region has been traditionally experiencing difficulties with cargo transportation from/to the mainland Russia because of the tariff policy of Lithuania and Belarus as transit territories lobbying their own interests. In particular, Lithuania is interested in loading of its port in Klaipeda as we wrote earlier >>>> 

There was an attempt to handle this problem via negotiations but finally a decision was made on subsidizing the costs for railway transportation of cargoes t/from the Kaliningrad Region. As Vladimir Zhovtun, head of the Transport Development Department at the regional Ministry of Infrastructure Development, said at the Baltic Transport Forum in Kaliningrad, RUB 1 bln has been allocated as subsidies covering the period up to 2020. According to the official, Kaliningrad Region is looking into a possibility to compensate the shipping costs when it comes to cargoes delivered by sea.

As for cargo shipping by sea transport, there is a problem of vessels deficit. Ust-Luga – Baltijsk line was earlier serviced by three ferryboats: Baltijsk and Peterburg operated by Trans–Exim Ltd. as well as Ambal operated by Oboronlogistika LLC. The Peterburg was taken off the line on January 28, 2016 by the owner’s decision amid economically impractical deployment at the line. Ferryboat Baltijsk is to be returned to Ust-Luga-Baltijsk line in September 2016 upon completion of its repair. The Ambal operating at the line is to undergo modernization.

Meanwhile, three LNG-fuelled ferries are to be built for Ust-Luga - Baltijsk line. They are to be operated by BFI LLC (operator of rail ferries). The company expects the construction to be completed by 2018. Total investments are estimated at RUB 12.6 bln. As of today, they are waiting for the decision of the Ministry of Finance of the Russian Federation on required allocations (RUB 5.1 bln of subsidies). RUB 7.5 bln is to be raised through leasing. The ferries are to be built at Russian shipyards. Preliminary negotiations have been carried out with United Shipbuilding Corporation. Negotiations with Gazpromneft Marine Bunker on development of the infrastructure required for bunkering of ferries with liquefied gas are underway. Special bunkering tankers should also be built under the project. Single-deck ferries will be able to accommodate 66 wagon units. They will have an ice class and provide a gauge of 1,520 mm. Their speed will be 18-21 knots.

Rerailed ambitions

The railway companies, in their turn, suggest shifting of some cargo flows from seaborne transport to railways. As Victor Golomolzin, head of Kaliningrad Railway, told the Baltic Transport Forum participants about the project considered for the delivery of containers with car components from port Pusan (S. Korea) to Avtotor by railway across the territory of Russia (with transshipment at the port of Vladivostok). Under the project it is supposed to deliver 16,000 TEUs per Russia year. One more project implies shifting of 4,000 TEUs, which currently flow from the port of Gdansk (Poland) to the port of Ust-Luga and then go by railways to central regions of Russia, to a railway route via the Kaliningrad Region. Moreover, the Kaliningrad Railway is going to take over raw sugar flows from the Baltic ports with its transshipment at Kaliningrad based terminal of Sodrugestvo Group for further transportation to Kazakhstan and Kirgizia (up to 500,000 t per year).

Playing with boxes

Aleksei Pavlov, Director General of Baltic Stevedoring Company, is also for attraction of containerized cargo to transit routes via the Kaliningrad Region. According to him, with the fall of container imports it is necessary to develop containerization of exports, improve customs and administrative procedures, launch container trains.

As to customs administration it should be noted that Kaliningrad Customs has got out of North-West Customs control.  It is now controlled directly by the Federal Customs Service. The market participants say it has a positive impact on the activities of the regional customs authorities.

As Svetlana Kumanjova, head of Kaliningrad Customs control enforcement, said at the Forum, average time of customs operations at the port of Kaliningrad makes 6 hours. Kaliningrad Customs is currently working on wider involvement of “Seaport” portal. So far it has been launched at customs point Kaliningrad. Form the moment it was launched in December 2015 the portal registered over 600 arrival/departure notices, over 160 packages of ship documents and 190 packages of goods documents. Customs points Svetly and Baltijsk are to be linked to “Seaport” portal by Quarter II’ 2017.

Promising project?

When speaking about the development of port infrastructure in the Kaliningrad Region we should mention a project on construction of a freight/passenger terminal at Pionersky which is to be completed by World Cup 2018. Maxim Sokolov, RF Transport Minister, and Victor Olersky, Deputy Minister of Transport, head of Federal Marine and River Transport Agency, have recently visited the Kaliningrad Region and marked the development of project documentation in full and without any delay. State Environmental Expert Approval of the project was obtained in August 2016. As of today, the project is under consideration of Glavgosekspertiza (Russia’s General Board of State Expert Review).

The terminal at Pionersky is to be ready for commissioning by June 2018. The berth of the new terminal will also be able to handle Rо-Rо cargoes bound for Russia, including those which are currently handled at the port of Klaipeda. The terminal will be long enough to accommodate sea going liners of up to 317 meters in length.  Maxim Sokolov says international cruise companies operating in the Baltic Sea have already included the Pionersky terminal in their travel package for 2018.

In our opinion, the main challenge of this project is to ensure the terminal loading after the World Cup. Actually, Kaliningrad has every chance to become an attractive port of call for cruise ships. The city can offer a good sightseeing programme.

As for the longstanding project on construction of a deepwater cargo hub, the experts continue to differ in their opinions. Some believe this port is needed in the region, others say it is not reasonable to compete with Gdansk. The latter think it is better to find and develop a different market niche like a container line between Kaliningrad and Bronka terminal in Saint-Petersburg.

Vitaly Chernov