Russia Opens Its Inland Waterways

Contemporary Review, July, 2000 by Thomas Land

A GROUP of Russian and French shipping interests have established an environment-friendly navigation business connecting Moscow with Paris and several other key West European ports. The cargo service may well prove to be a forerunner of a long-awaited shipping accord that would open up Russia's vast but neglected river navigation system to Western shipping.

Serious discussions involving senior officials from the European Union (EU) and the Russian Ministry of Transport have at last taken place in Moscow, London and Brussels. The scheme would save trans-shipment costs at major ports like St. Petersburg or Novorossisk. It may also have a dramatic impact on the Russian economy by encouraging industrial development in resource-rich areas while cutting atmospheric pollution.

The project would necessitate a shipping infrastructure development programme costing something like $1.2bn for opening up the entire system including the Siberian rivers. In the absence of alternative available sources, the lion's part of the money would be raised by Western investors as well as commercial and multinational development banks and local authorities. Substantial additional technical assistance may well be forthcoming from the United Nations Economic Commission for Europe (ECE) which is very actively promoting the utilization and expansion of the continent's waterways.

Vladim Berjozin, chief executive of Moskva River Navigations, has announced the direct shipping service between the Russian and French capitals via a series of canals and the River Seine. From France, the Russian river/sea ships will make their way through the Channel, cross the North and Baltic Seas and return to Russia through the bay of Finland and the Neva and Moskva Rivers.

Inland water navigation offers considerable economic and ecological advantages over other forms of transport in many areas and industries. The system of waterways promoted by the ECE caters for the connection between important sea ports and coastal routes as well as the hinterland.

Russia's scandalously neglected inland waterway system has been attracting increasing attention from Western shipowners, despite the financial and industrial chaos which now rules throughout that post-communist national economy. In the short term, the West is keen to exploit trade generated by the Caspian hydrocarbon industry. And in the longer term, it wants to play a lucrative role in the development of Russia's enormous industrial potential during the decades to come.

The scope of the European waterway network comprises navigable rivers, canals and coastal routes extending from the Atlantic Ocean to the Ural Mountains, connecting 37 countries and reaching far beyond the continent.

Russia's 106,000 km network of potentially navigable rivers, lakes and canals is a vast resource waiting to be revitalized. It would be turned into one of the least polluting and most economical means of moving passengers and freight over medium and long distances. The scheme is to unclog the overburdened and highly polluting national transport system which is struggling to keep pace with the accelerating demands of the rapidly modernized national economy.

Formal negotiations between the EU and Russia may well begin shortly following exploratory talks which started between the two at the London International Marine Transport Forum a year ago. The EU has consistently sought to win access for its ships to the river ports deep inside Russian territory -- but so far to no avail. But Russia's resistance is weakening.

Russian opponents of the modernization programme have argued against the reforms on the grounds that they might give foreign shipowners undue influence over the direction of the domestic economy. They are also suspicious that the EU wants them to invest in modernizing the waterways in order to grab the most lucrative profit opportunities.

Indeed, EU ships may have to refrain for some time from moving cargo between Russian ports. The main routes sought by West European operators are the St. Petersburg-Moscow link, the White Sea Canal and the Volga/Dnieper system connecting the Caspian with the Black Sea.

In a dramatic policy reversal, Russia recently gave its first concrete sign of willingness to engage in international co-operation in the development of its inland waterways. Yevgeny Kazantsev, a high-ranking official from the Ministry of Transport in Moscow, was the only delegate at a conference in Azerbaijan to express serious doubts about the economic feasibility of creating independent trade routes to linking the Caspian oil producers of the former Soviet Central Asia with their export markets. Then, on his return to Moscow, he invited international collaboration in a collective transport infrastructure programme specifically to serve the Caspian region, which would include the development of the potentially lucrative Volga-Don waterway system costing at least $200m.

Western participation in the modernization project would be essential. Under-investment and lack of maintenance have driven the waterways into disrepair and turned them into an economic bottleneck. Dams erected without shiplocks have closed whole sections of the network to traffic. And many waterways are too narrow or shallow to accommodate big ships and barges.