Where all roads cross

Learn about a unique transit potential of the region in an interview with Vyacheslav Shport, the Khabarovsky Krai governor.

The press service of the Governor

– Mr Shport,  many times you stressed the favorability of geostrategical position of Khabarovsky Krai. What competitive advantages does the region have for developing transportation routes and logistics and for increasing cargo flow to Asia-Pacific countries?

– Our region boasts location that is not just favorable, but it is really advantageous. Its territory is at the geographical center of the Russian Far East.  Here, car, river, air and sea routes are crossing, major pipelines and railroads pass.

At the same time, Khabarovsky Krai has long ago outgrown the notion of a buffer zone. Today it will not be a stretch to define it as a contact zone – Russian, as well as international. It is particularly important considering a new economic policy that is carried out by the government at the East of Russia. Indeed, accelerated social and economic development of the region implied its integration into the Asia Pacific region. And here it will be wrong not to use great transit opportunities of Khabarovsky Krai.

Another question is what is necessary to realize these opportunities? Of course, we have to improve transport infrastructure. We have to create a core network for engaging an industrial potential of the region into the economy of Russia and Asia Pacific region.

– What means of transport do you stake on?

– Of course, on all of them. We have to totally use navigable Amur (internal water transport is particularly important for life sustainment in Northern regions), as well as existing approaches to sea ports of the Asia Pacific countries. Besides, our urgent challenges are joining of ‘narrow’ sections at railways, reconstruction and creation of highways, development of pipeline transport, air travel.

I’d like to speak on the last issue. We are reconstructing Novy international airport in Khabarovsk. This is a very important project for Khabarovsky Krai, as well as for the whole Far Eastern Federal District. We will implement it at the basis of public and private partnership mechanism. Big money are involved. Total amount of investment into the airport development will comprise 18.8 billion rubles by 2030.

At the expense of the federal budget the airport complex is reconstructed. As for a new passenger terminal, its construction will be financed by non-state funds. Japanese investors - Sojitz Corporation and JATCO – confirmed their participation. Ernst & Young worked out a concept and feasibility study for commercial territory development project (AirCity). Now objects are being projected; there were negotiations with international hotel operators on future hotel and business complex management. Also, we are communicating with industrial investors and trade commercial infrastructure operators.

Our goal is to create a modern gateway airport of federal importance, a hub. The idea is to fully use competitive advantages of the region. See, Khabarovsk airport is a reserve one for airports of all the Far Eastern District.  It is located at the crossing point of trans-Siberian and trans-Eastern air routes, at the most favorable climate conditions, and it is able to accommodate planes in any weather.

Note, even now the airport is not just the biggest one in the Far Eastern Federal District, it has the highest traffic volume rate. It kept its leading positions in 2016, serving 1.9 million passengers (including transit). This figure is 2.6% higher than in 2015.

– Is cargo flow growing too?

– No doubt.  In the last year alone, it comprised 24.5 tons (5.8% more than in 2015). We had got new flights. I.e., Air Bridge Cargo Company that is one of the largest cargo carriers in the world that is performing transcontinental flights via Russia, began to make transit stops in Khabarovsk on the way to routes to the USA.

At the end of 2016 a new cargo direction was opened in our routes network by Russian Post airplanes. Also, this department has plans to construct a logistic post center at the territory of Khabarovsk airport – the only one of that kind at the Far East!

Generally, the cargo flow has grown in all directions, including car and water transport. The absolute growth rate champion is pipeline transport – it showed 14.1% growth in 2016. Over 50% of all cargos are transported by railroad (4.8% growth).

Moreover, Khabarovsky Kray provides about 40% of cargo turnover of railway transport of the Far Eastern Federal District, 23 % of total cargo turnover of regional ports and 31% of all transport system of the Far East.

– You have mentioned the airport reconstruction. What are finance perspectives for other major projects in 2017 that are implemented in transport logistics sphere in the region?

– First, modernization of railway infrastructure of Baikal-Amur Mainline and Transsib. It’s a really ambitious project; estimated total capital investment is over 560 billion rubles. 360 billion of it are put up by JSC Russian Railways. In 2013-2016 At Khabarovsky Krai Russian Railways financed works for up to almost 40 billion rubles. In 2017, over 12.4 billion rubles are planned.

Besides, railway department is reconstructing a pedestrian tunnel at Khabarovsk-1 station. This year costs will comprise 216.2 million rubles, by August the tunnel has to be ready.

Another large-scale project is a construction of a transport and transshipping complex for handling coal at Muchka Bay (Vanino seaport). It is carried out by VaninoTransCoal. Total project cost is over 27 billion rubles. These are investor’s funds; they will be spent on creation of a loading terminal and development of transport infrastructure and energy and water supply networks. And budget money will be spent on bottom dredging at federal property objects.

Plus, it was decided to allot 3.2. billion rubles of federal subsidies within this project for railways and energy supply networks construction. We plan to finish the first stage of the complex in 3rd quarter of 2019.

An important issue for us is increasing capacities of Vanino bulk terminal with development of railway infrastructure of Toki Park. This Daltransugl project costing over 6.1 billion rubles will provide transshipping of upto 24 million tons of power station coal per year by 2020.

Besides, within implementation of a long term plan on Komsomolsk-on Amur social and economic development in 2017, 3 sections of Khabarovsk-Lidoga-Vanino highway with a drive to Komsomolsk will be built. For that 583 million rubles were allotted, of them 450.5 million are from the federal budget, the rest is the regional money.

Thus, this year we plan to finish this highway that is of extreme importance for us. It will connect regional center and periphery with Komsomolsk-on-Amur and Vanino sea port and will become the final point of Transsib Euro-Asiatic international corridor highway service. Also, there will be a transport drive from federal Chita-Khabarovsk and Khabarovsk-Vladivostok highways to seaports at Pacific shores.

– Investments are supposed to be large. That is why it is reasonable to ask: how big is the share of Gross Regional Product and assignments to the consolidated budget of Khabarovsky Krai that is formed by the transport complex?

– Shortly, it is the lion’s share. In 2015, transport share in total volume of Gross Regional Product was 24.9 %, in 2016 it was 26.8%.

The same situation is with assignments to the regional budget. According to the results of the year 2015, transport industry share in tax revenues comprised 15.6% (11.8 billion rubles); that is the biggest figure in the region.

In most cases, promising growth of transport industry of the region is provided by investment projects of several major companies: Russian Railways, Transneft-Dalny Vostok, Daltransugol, VaninoTransUgol, Khabrovsk Airport.

Of course, not all directions of transport industry boast positive tax efficiency. For example passenger transportation in the region (as well as in many other Russian subjects) due to great distances and relatively small passenger flow need. But we mean socially important routes, like river and air ones! They cannot be closed, otherwise distant regions that anyway have little transport accessibility will be cut off from the ‘mainland’. |Not long ago, in February, we added Nelkan village to the existing route of Khabarovsk-Nikolaevsk-on-Amut-Ayan. That was done after numerous requests from Ayano-Maiski district. New route will be funded from the regional budget.

– Vanino and Sovetskaya Gavan always attracted private companies that want to develop products’ export to the Asia-Pacific region countries. As we estimate, are concessions, provided by free port regime, mostly tailored for big investors or for small projects, that are not always related with transport?

– Development of Vanino-Sovetskaya Gavan transport and industry hub is one of the main tasks of the regional transport complex in a long-term period. This approach corresponds to Russian Coal Industry Development Program  for the period upto 2030, as well. Let me remind, that it envisages deposits development in Zabaikaliye and at Khabarovsky Krai, Irkutsk and Amur Oblasts, Republic of Buryatiya, South Yakutia, Jewish Autonomous Region and Kuzbass, construction of mining and processing plants and, what is particularly important for us, special port terminals in Vanino and Sovetskaya Gavan seaports. All this will provide growth of coal export to the Asia pacific countries.

Projects are big and they are implemented by serious investors. No doubt, that they will be interested in free port opportunities; Vanino Municipal District has accepted this regime since the middle of 2016. For, residents are offered tax reliefs, streamlining of customs and visa procedures, as well as administrative preferences.

But we expect, with a reason, that smaller business will come here at some point. A preliminary list of potential residents includes 20 investors with investment amount of over 87 billion rubles. So, over 70% of them are small and medium businesses from different industries: construction, fish processing, agriculture and transport.

Moreover, today the Russian Federation Ministry of the Far East Development Department is considering an opportunity to decrease minimum investment volume from 5 million to 500 thousand rubles when implementing investment projects at the territory of Khabarovsky Krai that belong to the free port of Vladivostok. This is aimed to attract small and medium business here.

– What is the biggest obstacle for economic development of Vanino and Sovetskaya Gavan and what can we do about that (within Russian Federation subject competence or through addressing with initiatives at a federal level)?   

– The answer to the first question you know yourself, I guess: the main constraint of Vanino-Sovetskaya Gavan hub development is an underdeveloped railway infrastructure at the port approaches.

An estimated cargo flow to the sea ports of Vanino (one of ten biggest ports of Russia) and Sovetskaya Gavan is declared to be 130 million tons per year by 2030, including about 100 million by potential residents of Vladivostok free port.

By 2010 Russian Railways implemented a project of the Reconstruction of Oune-Vysokogornaya section with construction of a new Kuznetsovsky tunnel at Komsomolsk-on-Amur – Sovetskaya Gavan section. This enables to increase the road’s carriage capacity. In 2008 it was 8.1 million tons per year, in 2017 37.1 million are planned.

Sure, this is not enough – when 130 million are planned!

Now about what we can do. To provide the claimed cargo flow we have to perform the second stage of modernization of Baikal-Amur and Transsib mainlines’ railway infrastructure. General concept of Vanino-Sovetskaya Gavan railway hub development has been worked out. It envisages synchronization of development time of railroad and loading terminal construction. Now this scheme is on approval at Russian Railways.

– Will the airport in Vanino be reconstructed?

– I guess you mean in Sovetskaya Gavan? Yes, in 2017 we plan major repair works of airways terminal in Sovetskaya Gavan airport (Mai-Gatka). To reconstruct airfield, built a closed sheathing of runaway and a patrol road we work with the Ministry of Defense as the owner of the airport.

– Now in two coastal districts of the region cargo transshipment, timber harvesting and processing, water bio-resources harvesting and processing are the most developed industries. Will a free port regime encourage development of industries that are new for Vanino-Sovetskaya Gavan transport and industry hub? Do we need the there?

– According to the law, a Vladivostik free port resident is able to perform any kind of activity. Well, except, forbidden, of course, – as far as I remember it includes oil and gas production, production of some excise goods, administrative job.

So we are getting perspectives for developing new agricultural, food, industrial productions, mountain, construction, fuel and energy complexes, housing and utilities infrastructure and, of, course, tourism. The result is new jobs, transport infrastructure development, creation and modernization of industries designed for competitive goods production.

Do we need all this? I think this is out of question. We do need it! Of course, if we are serious when we speak about accelerated social and economic development of municipal objects in Khabarovsky Krai and encouraging population there.  

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