Russians reject Chinese bid for
port By John Helmer
MOSCOW -
A year-long bid by the Chinese government to establish a
foothold for exports from its northwestern province of
Jilin through a nearby Russian port has been scotched by
a Russian coal and steel group intent on shipping its
own products. An increasingly vocal economic
nationalistic approach to commercial rivalry from
Russia's neighbors is likely to be the keynote of the
incoming cabinet of Prime Minister Mikhail Fradkov, who
in 2000 headed economic security at the Kremlin's
Security Council.
The Mechel group, which
includes the Mechel Steel plant in central Russia, the
Yuzhny Kusbass coal mines and the Korshunovsky iron-ore
mine in southeastern Siberia, is set to take control of
the Russian far eastern port of Posyet from MDM, a
Moscow-based banking and metals group.
A year
ago, Chinese representatives at a session of the
Sino-Russian government commission on economic
cooperation tabled a proposal for Chinese management, on
long-term lease, of the ports of Posyet and Zarubino.
The Chinese intention, they said, was to export various
products, notably coal, from the Tunangan economic
region. Intended markets for the shipments were Japan
and the United States. The two Russian Pacific ports are
close to the Sino-Russian border, and plans to upgrade
them as an outlet for Chinese exports across the Pacific
have been under discussion by Russian, Chinese and US
transportation officials for several years. The
discussions had failed to inject any money into the two
ports, which remain small backwaters.
Chingiz
Izmaylov, deputy minister in the federal Ministry of
Transport in Moscow, responded immediately to the
initial Chinese offer, saying that his ministry
"advocates the use of existing port facilities by
Russian companies and doesn't see the need to rent out
port terminals to foreign companies, when Russian
companies can provide the transportation services and
develop port facilities". Izmaylov wasn't totally
negative toward Beijing, adding that he would consider
negotiating alternative proposals from the Chinese
government for export operations through the ports, on
condition that there would be no change in legal
management.
The Chinese government move
initially took Russian commercial port interests by
surprise, because both Posyet and Zarubino were owned by
private Russian joint stock companies. MDM held a 65
percent stake in Posyet, while Zarubino was controlled
by a little-known Russian company called
Universe-Holding.
Industry sources told Asia
Times Online this week that MDM is under Russian
government pressure to divest assets, but for the record
MDM refuses to confirm that it has done a deal with
Mechel to sell its stake in the port. Alexei Sotskov,
spokesman for Mechel, added that for the time being he
would have "no comment".
Larisa Romanenko, an
executive with the Posyet port company, said that
Siberian Coal Energy Co (SUEK), a unit of the MDM group,
currently supplies 64 percent of the throughput of the
port. SUEK, she added, controlled 69 percent of the port
company's shares, with 13 percent in state hands and
another 11 percent held by expediter Ferrotrans. Coal
bound for Japan is the primary cargo, followed by
ferroalloys produced by the Kuznetsk Ferroalloy plant,
which has also been part of the MDM group. Turnover at
the port reached 845,000 tons in 2003, up 37 percent
from 2002. This year, Romanenko told Asia Times Online,
Posyet should move about a million tons of cargo in all.
When built in the Soviet period, Posyet had a maximum
cargo capacity of 1.5 million tons. It ranks fifth in
size of the Russian ports on the Sea of Japan and Sea of
Okhotsk after Vostochny, Vladivostok, Nakhodka and
Vanino.
Alexander Lashin, deputy head of the
Transportation Department of Primorye region, where
Posyet and Zarubino are located, said his region is
opposed to the Chinese takeover. "The overwhelming
majority of cargoes that go through Russian ports in
Primorye are Russian export cargoes. Chinese transit
cargoes amount to only a very small volume." He was
skeptical, he added, that the Chinese would use Posyet
and Zarubino for container shipping to and from Japan
and the west coast of the United States. "Most of the
US-bound cargoes from China still go through Chinese,
not Russian, ports." Lashin admitted that Zarubino port
was close to bankruptcy, but that despite that, the
negotiations between the controlling shareholders of the
port and Chinese interests weren't acceptable to
Primorye, which is one of the port's biggest creditors.
A spokesman of SUEK responded to the Chinese
offer last year by saying that Chinese coal would be
competing for the same export markets as Russian coal
produced by SUEK. "It doesn't make sense to assist
natural competitors," the source told Asia Times Online.
SUEK had also been a vocal opponent in the past of
proposals from China to build rail access for their coal
exports to the trans-Siberian rail network and thence to
the larger Russian far eastern ports of Vladivostok and
Vostochny.
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