November 5, 2020
Mr. Arkady Korostelev, President of the FESCO Group, addressed “Rosatom” with a proposal to “start systemic interaction”. In the Korostelev’s letter sent to the head of the state corporation Mr. Alexei Likhachev last week (RBC possesses this document, its authenticity was confirmed by a source close to FESCO), the prospects of such a partnership are explained as follows:
FESCO already provides transportation of more than 30% of cargo (or more than 10 thousand tons annually) for nuclear power plants under construction abroad;
in “conditions of high market competition and geopolitical turbulence” Korostelev sees prospects in combining efforts of both companies to develop the Northern Sea Transit Corridor (part of the program for the development of the Northern Sea Route (NSR), which is operated by the state corporation). As the top manager reminds, FESCO annually delivers more than 200 thousand tons of cargo to the Extreme North, Siberia and the Far East as part of the ‘Northern Delivery’ program. FESCO’s capacities allow “to form the Arctic logistics and facilitate the successful implementation” of the NSR development program, he is sure.
RBC sources claim that the project has been initially approved by ‘Rosatom” management. The partnership, which is planned to be announced in the near future, provides, in particular:
– “Rosatom” will become the management company for the Vladivostok Commercial Seaport (VMTP), the main asset of FESCO group, early next year;
– The state corporation will take part in the investment program for the development of the port.
RBC’s interlocutors do not disclose the amount of possible investments. But one of them recalls that last summer at a meeting of the NSR international public council, Mr. Alexander Neklyudov, “Rosatom Cargo” Director General, said that the state corporation is ready to invest $ 274.5 million in “one transport and logistics hub”.
As follows from his presentation devoted to the development of the Northern Sea Transit Corridor, the state corporation planned to choose the transport and logistics hub “Vostok” (“East”) just before the end of 2020. At the same time, Neklyudov announced that international partners would be involved in the development of this project – negotiations on the creation of a joint venture are underway with the Arab port operator “DP World” and the logistics company “Integrated Service Solutions GS” (ISS GS, a joint venture of the “Creon Energy Fund” and the “Dubai Investment Corporation”). According to him, the joint venture will handle commercial transportation from Murmansk to the North-East Asia.
The ongoing conflict over the ownership of the Vladivostok Commercial Seaport attracted much attention and possibly has led to a political decision to pass the control over this strategic asset to “Rosatom” state corporation, which is one of few successful actors in Russian business world.If this news is confirmed, the nomination of Vladivostok seaport as the NSR Eastern hub raises a number of questions. In particular, whether the Arab investors will prevail in creation of the eastern arm of the NSR transit corridor and what role in the project will be played by Korea, China and Japan who are seemingly interested in the Arctic transit.