By Juhani Saarinen in St. Petersburg and Ust-Luga

Ust Luga, a multipurpose commercial port, is under construction in the Luga Bay on the Russian south coast of the Gulf of Finland.

The effects of the giant new harbour will extend to Finland as well.

The new port is bound to increase the risk of oil catastrophes in the Finnish coastal waters, as hundreds of new cargo vessels will pass through the facility every year.

In addition, the new port is likely to capture part of the eastbound transit business through Finland, thus easing the traffic congestion in Southern Finland and on the eastern border with Russia.

Ust-Luga is a major project - even on the Russian scale. The capacity of the port is to be up to 120 million tons per year - considerably higher than that of all Finnish ports put together.

The oil pipeline terminal to be placed at the port is to be completed in three years, reports Alexander Goloviznin, the Deputy General Director of Ust-Luga Company, the management company for the construction and development of the commercial seaport in the Luga Bay.

Thereafter, the annual throughput of oil via Ust-Luga is expected to be around 50 million tons.

The new route will significantly increase the number of oil shipments on the Gulf of Finland. Goloviznin is not worried about the risks involved, although the increasing vessel traffic is a cause for concern in Finland.

”I do not understand Finns. As long as oil is carried through Porvoo, everything seems to be alright”, he says.

Matti Aaltonen, the Director of the Traffic Department of the Finnish Maritime Administration, notes that as traffic volumes continue to rise the risk of accidents is also increasing. Ust-Luga will bring another three or four tankers on the Gulf of Finland on a daily basis, while other cargo vessel traffic is also bound to increase.

”Certainly the number of vessels will grow, which will pose a challenge to the management of maritime traffic”, Aaltonen reports.

For the time being, the cargo traffic going through the port of Ust-Luga is only a fraction of the planned volume of shipments. Currently, only three port terminals operate in the area, but another three are to open by the end of the year.

A container terminal is to be brought into service next summer.

Nevertheless, the area in front of the port is congested already today. A dozen or so elderly ships are dredging mud out of the main fairway, to increase the size of vessels that can be accommodated.

Dmitri Ivasenko, a foreman at the state-owned transport company Rosmorport, is pointing at a building 500 metres away on the mainland: the coastline used to be there.

To this point, a total of EUR 700 million of private and public funds have been invested in the port. The overall budget throught to 2015 will be much larger: nearly EUR 6 billion.

The Port of Ust-Luga is situated on the border of the Russian Federation and the European Union, some 160 kilometres west of St. Petersburg. The port is competing for cargo shipments with Finnish harbours.

It is possible that the Port of Ust-Luga will decrease the volume of Russia-bound cargo on Finnish roads already next year, as several car manufacturers have reported that they will transfer the transport of new cars away from Finnish ports, Goloviznin announces.

”The number of car transports in Finland will definitely decline, but they will not disappear entirely”, he estimates.

Moreover, some of the container traffic through Finnish harbours could be rerouted.

”Six months ago I would have said that the growth in container traffic is so large that the capacity of the Russian ports alone is not sufficient. Now I am no longer so sure as there is an economic crisis all over the world - even in Russia”, Goloviznin concludes.

The port of Ust-Luga has a thorny problem: Where to find skilled dockworkers?

The region surrounding the port is sparsely populated, and local companies have already drawn all available labour from the area. If Ust-Loga expands at the planned pace, the demand for labour could be some 6,000 people by the end of the decade.

The Soviet era can be seen reflected in the solution for the shortage of labour. The Ust-Luga Company has set out to build a new city of Ust-Luga for dockers, growing eventually to be the size of the Finnish town of Kirkkonummi (pop. c. 30,000).

In the former Soviet Union, population transfers and new communities like this were not uncommon, but reportedly Ust-Luga will be the first "new city" in Russia since the collapse of communism.

Today, a small densely built-up area is in exactly the same place as that planned for the new city, but soon the scenery may look quite different.

By the end of 2010, some 250,000 square metres of new apartments and other dwellings should be built in the area.

At the initial stage, well over 10,000 inhabitants could move to the new city, and according to plans, the total population in Ust-Luga would be almost 35,000 by 2025.

Helsingin Sanomat / First published in print 4.10.2008

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