Publication: Eurasia Daily Monitor Volume: 4 Issue: 136

On July 11 Russia’s First Deputy Prime Minister Sergei Ivanov and Transport Minister Igor Levitin unveiled a comprehensive modernization program for Russian Black Sea ports during an inspection visit there. The program is ambitious in both scale and pace, with most of its goals scheduled to be attained by 2010. It is a counterpart to the program for accelerated expansion of Russia’s Baltic ports, which the Russian government also launched this year, with President Vladimir Putin taking a personal interest in both programs.

The government drew up its Black Sea program before the decision of the International Olympic Committee to hold the 2014 Winter Olympic Games in Sochi, on Russia’s Black Sea coast. That decision, announced on July 4, will necessitate massive investments to develop infrastructure in the Sochi area, above and beyond the scope of the overall program for Black Sea ports and mostly beyond this program’s time frame. Ivanov and Levitin discussed both the overall maritime transport program and ideas about Sochi development during their visit.

According to these officials, Russian Black Sea ports currently handle more than one third of Russia’s sea-borne exports in terms of tonnage. Total export cargos were reported at 160 million tons in 2006 and are “conservatively” expected to grow to 250 million tons annually by 2010. The port development program ambitiously envisages doubling the existing export capacities, which are currently strained to the limit and distributed very unevenly along the Russian coast.

At present, Novorossiysk alone handles more than one half of that overall export tonnage. The over-congested port’s various terminals loaded a reported 88 million tons of export cargos in 2006.

That figure includes an estimated 60 million tons of oil, one half of this originating in Kazakhstan. Oil loading will increase if the Caspian Pipeline Consortium’s line boosts the volume of oil pumped from Kazakhstan to Novorossiysk. Expecting this to be the case, the Russian government is ordering three tanker ships to carry that additional volume of oil from Novorossiysk to Bulgaria’s Black Sea port of Burgas, for feeding into the planned trans-Balkan pipeline to Alexandropolis on the Greek Aegean coast.

The Russian government’s program envisages relieving some of the congestion at Novorossiysk through specialization. It would transfer some shipping flows from there to other Russian Black Sea ports while dedicating Novorossiysk to oil, grain, and container cargos. In addition, a modern grain export terminal is due for completion this year.

Ivanov and Levitin explicitly called for competing with Romania’s port of Constanta in terms of attracting international container shipping to Novorossiysk. The Russian government envisages building the appropriate terminals as a priority until 2010, in place of existing old terminals.

The commercial port of Novorossiysk can no longer expand physically in the narrow bay, a section of which is taken up by the naval port. Russia’s Black Sea Fleet is expanding its installations there to a full-fledged base as an alternative to Ukraine’s Sevastopol, where the Russian fleet’s lease is due to expire in 2017.

Other port development plans include using Taman as the main coal export terminal (instead of Tuapse) while expanding the use of Tuapse as an export outlet for oil and, potentially, liquefied gas. The port of Kavkaz (also in Krasnodar Krai) is slated to specialize for handling commodity ferryboats. A catamaran line for passenger boats is scheduled to run between the ports of Anapa-Novorossiysk-Gelenjik-Tuapse-Sochi.

The program also envisages developing overland and air links to the ports. A second railroad line to Novorossiysk and convergent highways to that port are to be built until 2010. Also by that date, the old airports of Anapa and Gelenjik are to become modern international airports, alongside the existing Adler airport. The three are to be merged into a single, state-controlled company. Ivanov and Levitin underscored Krasnodar Krai’s potential as a destination for international and Russian tourism (“We don’t have anything comparable in Russia”).

In Sochi, the transport modernization program runs through 2015, but will almost certainly have to be adjusted to meet the 2014 Olympic deadline. The port will be reserved exclusively for passenger traffic. All other cargo flows are to be transferred from Sochi to other ports. This measure takes immediate effect, so as to enable the port of Sochi to receive construction materials for the planned Olympic installations and start construction of large-scale passenger terminals. These are planned to accommodate passenger and cruise ships with capacities of up to 3,000 passengers each, for a total of 600,000 passengers per year by 2010 and 715,000 by 2015. Access highways to Sochi and a ring highway around the city are included in the program, as well as expansion of the Adler airport, which is servicing Sochi.

The Russian government is creating an inter-departmental structure to supervise this Black Sea program. While the government’s existing Maritime Affairs Board only meets three or four times per year with a very broad agenda, the new structure will be a standing one to coordinate port development. Ivanov has nominated Levitin to head the new inter-departmental structure in his capacity as transport minister. With President Putin evidencing a personal interest in the port development program, Ivanov a front-running presidential contender, Levitin also mentioned as aspiring to a top post in 2008, and the scheduled Olympic games as an added stimulus, this Russian Black Sea program will command political attention and funding in Moscow.

(Interfax, Itar-Tass, July 11, 12)