• 2022 June 30

    Financing unstitched for terminals

     
    Kaluga Region TLC. Image source: the Ministry of Transport

    RF Government can start subsidizing loans of those investing in backbone network of transport and logistics centers (TLC) in view of cargo flows turning eastwards and lack of facilities on those routes. The Government’s document foresees preferential interest rate - 50% of the key rate. The market players estimate total investments in new TLCs at RUB 140 billion. Their capacity is to surge almost 2.5 times to 8.6 million TEU. Among the key market players are VTB Nedvizhimost, RZD Business Active, TransContainer, Fininvest and NTT. 

    In the coming weeks, the Government of the Russian Federation will approve subsidizing of banks’ interest rates on loans provided for construction of new transport and logistics centers (TLC), say PortNews’ sources in the industry aware of the talks progress. With the introduction of sanctions and partial withdrawal of the international lines from the ports of the North-West region, considerable cargo flows were redirected to the transport corridors linking Russia with Turkey, Iran, India and China, according to the transcript of the meeting held by Prime Minister Andrey Belousov published on RF Government’s official website. 

    “The meeting discussed measures to support the network of transport and logistics centers that are aimed at enhancing their capacity as well as the indicative forecast of container traffic by 2024. The new backbone network number 29 transport and logistics centers,” reads the statement. 

    Image source: Global Ports

    According to the Eurasian Union of Rail Freight Traffic Participants (ESP), total investments into construction of new TLCs are estimated at RUB 140 billion. 

    Among the key market players are VTB Nedvizhimost, RZD Business Active, TransContainer, Fininvest and NTT 

    According to information obtained by IAA PortNews, the subsidized facilities are to be put into operation by the end of 2024. Subsidies are to make 50% of the key rate if it is not below 6%. New TLC should have annual capacity of at least 100,000 TEUs.

    The list of the largest TLCs includes the project of VTB Nedvizhimost on construction of multimodal center “Usady” (Moscow Region, introduction in 2023-2027, 4.1 million tonnes per year), container terminals Grodekovo and Zabaikalsk by RZD Business Active (Far East, 2023-2026, 270,000 TEUs), TransContainer terminals in Irkutsk, Zabaikalsk and Novosibirsk (phase-by-phase introduction by 2024, over 1 million TEUs), Fininvest TLC in the Primorsk and Khabarovsk territories (2024-2025, about 750,000 TEUS), Sibirsky TLC in Novosibirsk by NTT (to be introduced in 2024, 600,000 TEUs). 

    Under the federal project on TLC, total capacity of newly introduced multimodal transport and logistics centers is to make at least 51.6 million tonnes by 2024. As of today, there are nine TLCs in Russia: Bely Rast (Moscow Region, owned by RSD Logistics - 51% and Liaoning Port Group (earlier - Yingkou Port) -  49%) as well as Russian Railways’ TLCs Kuntsevo-2 (Moscow), Taltsy (Buryatia), Grodekovo and Pervaya Rechka in Primorsky Territory, Khabarovsk-2, Zabaikalsk, Yuryevets (Vladimir Region) and Syktyvkar (Komi).

    Image source: RZD Business Active

    Containers are used for transportation of over 3,000 various types of goods including food products, consumer goods, equipment, components, sawn timber and fertilizers. “The demand for their transportation is persistently high,” said Sergey Avseykov, Executive Director of ESP.   

    “ESP expectation of May results were the same as the conservative forecast of the Ministry of Economic Development. A decrease of 8-10% was expected. June showed that current activities of the market players and RF Government on the market support and adjustment, including cancellation of import dues on containers, reduction of customs procedures, and other factors such as lifting of coronavirus restrictions in China, outlined the trend towards the market recovery. As of June 20, container transportation fell by 3%, year-on-year. Complete recovery is possible by the end of 2022. Thus, container transportation can remain at the level of 2021 or even higher,” he told IAA PortNews. In 2021, cargo traffic on the network of Russian railways rose by 12.1%, year-on-year, to 6.5 million TEU (including empty containers).

    The trend of ‘eastward turn’ raises the significance of large Siberian and Far East agglomerations, ESP says adding that the capacity of terminal facilities can be increased to 8.6 million TEUs by the end of 2024.

    Siberia including Novosibirsk is considered to be one of the key regions in the TLC concept, ESP says. A terminal at Kleshchikha station in Novosibirsk will undergo reconstruction. Besides, the construction of  Sibirsky TLC  of 600,000 TEU in capacity has begun. The latter can be expanded to 1 million TEU, says ESP.

    Image source: Sibirsky TLC

    According to Knight Frank Russia, investments in creation of TLCs (excluding construction of storage infrastructure that is the construction of a container yard, development of railway approaches and related infrastructure) can total RUB 100,000-150,000 per square meter excluding VAT. TLC should offer maximum opportunities on handling of goods and their transshipment from/onto seaborne transport, railway and road transport. The most advantageous areas for TLCs are those linked to railways and close to seaports with the access to large highways, the company emphasized.

    “Profitability of such facilities is higher than that of storage facilities. Privileged financing makes TLCs even more attractive for construction,” says Konstantin Fomichenko, Regional Director, Director of the Department for Industry and Storage Facilities, Knight Frank Russia. 

    With the incoming logistic flows shifting from west to east, the volumes of cargo transported by railways will grow, hence the growing demand for terminal infrastructure, he says. Obviously, additional demand is expected for temporary storage facilities, customs procedures, handling of containers. If the number of containers transports in the eastern direction (by sea and by railway) multiplies, the existing infrastructure can be overloaded. Consequently, there is a risk of delivery delays and disruptions. Therefore, the development of terminal infrastructure in the east of Russia will let increase potential volumes of imports, the expert believes.

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Author

Yana Wojciechowska

editor@portnews.ru