There have been many developments within the Russian shipping industry over recent years, including resolving challenges with river transport, the development of new Arctic shipping routes and improving the recently resumed maritime passenger route between the Russian Caucasus and Crimea. In June 2017, former Deputy Minister of Transport for the Russian Federation Victor Olerskiy spoke on these issues and other topics relating to maritime and river transport development within the country. The interview was released shortly before the Cristophe de Margerie LNG tanker made history by being the first ever vessel to traverse the Northern Sea Route without an icebreaker escort. This opens up myriad exciting new possibilities for the shipping industry, especially as the ship completed the journey in record time.
Moving Transport Off Land
One topic Victor Olerskiy expounded on was the role of the government and of businesses in moving business from land travel to water travel. Olerskiy commented on the requirements for delivering cheaper water transport to businesses, building a modern fleet and improving the infrastructure. In order for these things to happen, a payback period needs to be forecast. Olerskiy further discussed the construction of two hydroelectric complexes, one on the River Don and the other on the River Volga. Some facts about the River Volga can be viewed in the infographic attachment to this post. Design for these projects was underway at the time of the interview; once completed the Middle Volga will be deeper.
The two hydroelectric projects had been allocated funding totalling 62 billion rubles, according to Victor Olerskiy. This does not cover the entirety of the costs to full-term, with Olerskiy exploring various other funding options to be implemented from 2020. Money will also be saved through moving amounts of cargo transportation off the roads and onto the rivers, as road maintenance is currently a high government cost. Budget commitments will need to be considered in 2020 and beyond, stated Olerskiy.
Hydroelectricity is electricity produced using the power of water, through a sustainable and relatively low-cost system. As of 2015, almost 17% of the total electricity generated in the world came from hydroelectric sources. Hydroelectricity accounted for approximately 70% of all renewable energy produced that same year. Forecasts predict that the amount of energy produced by hydroelectric systems will increase year on year by around 3.1% globally. Hydroelectric complexes with reservoirs and dams are not only relatively cheap to run in relation to the amount of electricity produced, but the operations are also highly scalable. The PDF attachment looks at the early history of hydroelectric power.
Northern Sea Route Development
The development of the Northern Sea Route (NSR), which crosses through Arctic waters, could play a key role in the future of Russian shipping. At the time of Olerskiy’s interview, it was possible to navigate the route year-round in either direction. Economic expediency remained a question at that time, although new icebreaking vessels were being built and tested. Olerskiy discussed the challenges still present in the navigation of the NSR, which includes unpredictability as the ice situation is still liable to change unexpectedly, which has a knock-on effect on the duration of journeys. Severely low temperatures also mean that the route is only suitable for the transportation of certain goods that are not temperature-sensitive.
Olerskiy went on to discuss the privatisation of Sovcomflot, which he said was scheduled for the first half of the summer. Learn a little more about Sovcomflot in the embedded short video. Olerskiy stated that the sale would take the form of a public offering.