Dienas Biz­ness: Tallinn port sells coal ter­mi­nal’s as­sets; Latvia should con­sider han­dling other car­goes

Baltic News Network - - News -

Tallinn port [state-owned com­pany Tallinna Sadam] has an­nounced a sale of as­sets owned by Mū­gas coal ter­mi­nal. The com­pany re­spon­si­ble for manag­ing the ter­ri­tory – Coal Ter­mi­nal – went bank­rupt. Now the port searches for a new part­ner, port’s rep­re­sen­ta­tive Sirle Arro told Dienas Biz­ness (DB) jour­nal­ist Egons Mudulis. Busi­ness­men work­ing at Riga Freeport say it is a warn­ing for Lat­vian ter­mi­nals – that they should con­sider at­tract­ing new car­goes to avoid bank­ruptcy. The port hopes to get EUR 3.3 mil­lion from sell­ing as­sets, as re­ported by BNS. The port or­ga­nized pro­cure­ment for con­struc­tion rights and coal ter­mi­nal man­age­ment at the end of 2017. The ini­tial price was EUR 4.5 mil­lion. There was no in­ter­est.

DB pre­vi­ously wrote that prob­lems with tran­sit of Rus­sian coal in Es­to­nia started with the po­lit­i­cal scan­dal in­volv­ing the re­lo­ca­tion of the so-called Alyosha mon­u­ment in spring 2007. Af­ter this scan­dal, coal turnover de­clined from 7.47 mil­lion tonnes in 2006 to 3.72 mil­lion tonnes in 2007. Although there was an in­crease of coal turnover in 2009 and 2010, vol­umes of this type of cargo in Tallinn dropped again in 2011 – to 0.3 mil­lion tonnes. Vol­umes con­tin­ued to de­cline in the fol­low­ing years. In the two last years there were no coal car­goes to han­dle, says Mudulis. In­stead those car­goes went to Lat­vian and Rus­sian ports. Arro told DB that tran­sit of coal car­goes in Es­to­nia will not be re­stored any time soon. Be­cause of that, the port wants the ter­ri­tory to be used for a new ter­mi­nal. Con­tenders can submit their of­fers for all as­sets of the coal ter­mi­nal or some of them un­til 5 Fe­bru­ary 2018. Coal Ter­mi­nal had a long-term lease with the port un­til 2050. The com­pany spent its last years pay­ing penal­ties for lost cargo vol­umes pre­vi­ously promised to the port.

DB re­ports that a rep­re­sen­ta­tive of a ter­mi­nal ac­tive at Riga Freeport voiced his sur­prise over the de­ci­sion made by Tallinn port. Pre­vi­ously in­for­ma­tion was re­ported that Krem­lin had per­mit­ted the use of Mū­gas ter­mi­nal. The rea­son for that is the up­com­ing plan to per­form re­pairs at Ustyug ter­mi­nal. This will re­quire four months and will cut this Rus­sian port ter­mi­nal’s out­put by half. But even in the event of a pos­i­tive sce­nario for Es­to­nian tran­sit cor­ri­dor, Lat­vian busi­ness­men hoped Rus­sia would not be able to re­ori­ent its car­goes from Ustyug to Tallinn quickly enough, leav­ing the door open for Latvia.

Mudulis says Coal Ter­mi­nal’s equip­ment was of­fered to Riga’s coal ter­mi­nals some years ago.

The de­ci­sion made by Es­to­nia’s port to drop tran­sit of Rus­sian coal is a sig­nal for Latvia as well, said a rep­re­sen­ta­tive of Riga Freeport’s ter­mi­nal. Ever since the scan­dal with Alyosha mon­u­ment, Es­to­nian ter­mi­nal worked off hope that coal turnover would re­cover soon. It is also im­por­tant to re­mem­ber that trans­porta­tion of car­goes through Tallinn is also more eco­nom­i­cal (3.5-4 USD/t) if it is not pos­si­ble to use Be­larus as a tran­sit cor­ri­dor. But the re­sult of mu­tual sanc­tions was that coal cargo turnover never re­cov­ered. In the end, the port made the de­ci­sion to cease sup­port­ing the ter­mi­nal, Dienas Biz­ness wrote.

When asked if some of the sold equip­ment could end up in Latvia, Mudulis said it is en­tirely pos­si­ble. At the same time Coal Ter­mi­nal equip­ment can be used by any coal or ore en­rich­ment fac­tory. The in­dus­try’s rep­re­sen­ta­tive doubts any­one would in­vest in equip­ment worth dozens of mil­lions that also re­quires dis­man­tling. Look­ing at what is hap­pen­ing in Tallinn, Riga City Coun­cil and freeport rep­re­sen­ta­tives should con­sider the risks that ap­pear for pri­vate ter­mi­nals in the form of mas­sive in­vest­ments in coal-han­dling equip­ment, says Mudulis.


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