Arctic is looking for “right people”
Deputy Prime Minister Dmitry Rogozin has backed the idea of establishing a body for comprehensive management of the Northern Sea Route. Yet, the functions of this body are not absolutely clear as there are dozens of proposals in this respect. Some believe there is no need to establish a new body.
As of today, the Northern Sea Route Administration subordinate to the Federal Marine and River Transport Agency issues permissions for NSR navigation and certificates for ice pilotage, monitors hydrometeorological, ice and navigation situation, coordinates installation of navigational aids, selects regions to carry out hydrographic surveys, assists in organization of search and rescue operations. In general, the NSR Administration is in charge of technical issues related to safe navigation within the Northern Sea Route waters.
Deputy Prime Minister Dmitry Rogozin believes it is not enough for the development of the Northern Sea Route potential. “The task should be expanded and we need an authority to highlight the advantages of the Northern Sea Route. NSR will not be viable without an infrastructure allowing for cargo supply to the ports. There are cargoes in the Urals and Siberia but it is very difficult to deliver them to the North. Some right people should be in charge of it … There should be a master everywhere. The period without a master has resulted in the appearance of numerous candidates to act as a NSR operator … There should be one operator, the one to deal with both defence and civil affairs on the Northern Sea Route”, said Dmitry Rogozin at the “Technoprom 2016” Forum in Novosibirsk.
The tasks and objectives of the operator were not put clearly in that speech but the idea is apparently focused on the establishment of an organisation or an authority for promotion of the Northern Sea Route, attraction of cargoes, coordination of stakeholders’ activities and, probably, setting of dues and their rates. The idea is similar to that used for establishment of the Ministry for the Development of the Russian Far East or the Ministry of Crimean Affairs (the latter has been abolished).
There are many candidates to occupy this niche, indeed. 67 applications have been found viable by the working group of the State Commission for Arctic Development (SCAD). Therefore, there is no consensus on the organizational form of the future ‘master’. It may be a ministry, a federal agency a state/public company or a corporation.
As for the tasks, the new ‘master’ will have to ensure smooth traffic of military cargoes and freight for Spetsstoy (Federal Agency for Special Construction) as well as freight under Northern Delivery programme (deliveries of basic commodities to remote regions of the country's North) – some 800,000 t to 1 mln t per year. This figure is expected to triple by 2030. Dmitry Rogozin says the Northern Sea Route operator will deal with both military and civil organisations. One of the tasks will be to coordinate the logistics and to optimize the loading of vessels.
Apart from the state cargoes the Northern Sea Route will be used for exports of natural gas, crude oil and metal under the Arctic projects (Yamal-LNG, Arctic terminal, Nornickel etc.). There is also a transit cargo flow which can grow in the future. As for commercial cargoes with their carriers and logistics they hardly need any additional structures to manage their business. They need a coordinator rather than an operator.
There is also a long discussed idea of the Northern Sea Route to take over cargoes from the industrial regions of the Ural and Siberia, from Transsib and BAM railways via port Sabetta. Reasonability of redirecting cargo flows from other regions of Russia (BAM and Transsib) to Sabetta was covered by RF President Vladimir Putin during his news conference in December 2015>>>>.
To deliver cargo by land to the Arctic it is necessary to implement the projects of railway approaches - Northern Latitudinal Railway and Belkomur. Dmitry Rogozin thinks the latter one is more costly and can be implemented only with foreign investments, perhaps. Principal interest has been expressed by Chinese investors. Nevertheless, those projects cannot be implemented without industrial corporations of the Siberia and Ural regions, he believes. The instructions on attracting the companies have already been given, says Dmitry Rogozin.
Weather the NSR ‘master’ will be in charge of attracting cargo flows from other regions of Russia or coordinate the development of the required infrastructure is a special issue.
The Kamchatka Territory Government says the new structure should be entitled to initiate legislative acts but not all experts agree with this idea.
Some think there is no special need for this structure at all as all the mentioned tasks can be handled by the existing structures like the Ministry of Transport, regional governments, State Commission for Arctic Development, etc. SCAD can also coordinate all the activities.
So, the idea of establishing a single authority to regulate the NSR development is at its initial phase. It is difficult to say what will become of it. The main thing is not to have an inverted effect of potential investors, shippers and operators pushed off with additional administrative barriers, monopolization and bureaucracy.