Unsewn financing for terminals

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TLC of the Kaluga region. Image source: Ministry of Transport

RF The government may start subsidizing loans for those investing in the backbone network of Transport and Logistics Centers (TLCs) given the eastward flow of goods and the lack of facilities on these routes. The government document provides for a preferential interest rate – 50% of the key rate. Market participants estimate total investments in new TLCs at 140 billion rubles. Their capacity is multiplied by nearly 2.5 to reach 8.6 million TEUs. Some of the major market players include VTB Nedvizhimost, RZD Business Active, TransContainer, Fininvest, and NTT.

In the coming weeks, the government of the Russian Federation will approve the subsidization of bank interest rates on loans granted for the construction of new transport and logistics centers (TLCs), PortNews sources said in the report. industry aware of the progress of the talks. With the introduction of sanctions and the partial withdrawal of international lines from ports in the North West region, considerable flows of goods have been redirected to transport corridors linking Russia with Turkey, Iran, India and China, according to the transcript of the meeting held by Prime Minister Andrey Belousov published on the official website of the RF government.

“The meeting discussed support measures for the network of transport and logistics centers aimed at strengthening their capacity as well as indicative forecasts of container traffic by 2024. The new backbone network has 29 transport and logistics centers” , we read in the press release.

Image source: Global Ports

According to the Eurasian Union of Railway Freight Traffic Participants (ESP), total investments in the construction of new TLCs are estimated at 140 billion rubles.

According to information obtained by IAA PortNews, the subsidized facilities must be commissioned by the end of 2024. The subsidies must represent 50% of the prime rate if it is not less than 6%. The new TLC should have an annual capacity of at least 100,000 TEUs.

The list of the largest TLCs includes the project of VTB Nedvizhimost on the construction of the multimodal center “Usady” (Moscow region, introduction in 2023-2027, 4.1 million tons per year), container terminals Grodekovo and Zabaikalsk by RZD Business Active (Far East, 2023-2026, 270,000 TEUs), TransContainer terminals in Irkutsk, Zabaikalsk and Novosibirsk (phased introduction by 2024, over 1 million TEUs), Fininvest TLC in Primorsk territories and from Khabarovsk (2024-2025, approximately 750,000 TEUs), Sibirsky TLC to Novosibirsk by NTT (to be introduced in 2024, 600,000 TEUs).

Under the federal project on TLC, the total capacity of newly introduced multimodal transport and logistics centers is to produce at least 51.6 million tons by 2024. To date, there are nine TLCs in Russia: Bely Rast (Moscow region, owned by RSD Logistics – 51% and Liaoning Port Group (previously – Yingkou port) – 49%) as well as TLCs of Russian Railways Kuntsevo-2 (Moscow), Taltsy (Buryatia), Grodekovo and Pervaya Rechka in the Primorsky Territory, Khabarovsk-2, Zabaikalsk, Yuryevets (Vladimir region) and Syktyvkar (Komi).

Image sources: RZD Active company

Containers are used to transport more than 3,000 types of goods, including food products, consumer goods, equipment, components, sawn timber and fertilizers. “The demand for their transport is constantly high,” said Sergey Avseykov, executive director of ESP.

“ESP’s expectations for the May results were the same as the conservative forecasts of the Ministry of Economic Development. A decline of 8-10% was expected. The month of June showed that the current activities of market participants and the RF government on market support and adjustment, including cancellation of import duties on containers, reduction of customs procedures and other factors such as the lifting of coronavirus restrictions in China, pointed out the trend towards market recovery. As of June 20, container transport has fallen by 3% year on year. A full recovery is possible by the end of 2022. Thus, container transport can remain at the level of 2021 or even more,” he told IAA PortNews. In 2021, freight traffic on the Russian Railways network grew by 12.1%, year-on-year, to 6.5 million. TEUs (including empty containers).

The “eastward turn” trend increases the importance of major conurbations in Siberia and the Far East, according to ESP, adding that the capacity of the terminal facilities can be increased to 8.6 million TEUs from by the end of 2024.

Siberia, including Novosibirsk, is considered one of the key regions for the TLC concept, according to ESP. A terminal at Kleshchikha station in Novosibirsk will be reconstructed. In addition, the construction of Sibirsky TLC with a capacity of 600,000 TEUs has started. The latter can be extended to 1 million TEUs, specifies ESP.

Image source: Sibirsky TLC

According to Knight Frank Russia, investments in the creation of TLC (excluding the construction of storage infrastructure, i.e. the construction of a container yard, the development of railway approaches and related infrastructure) can total 100,000-150,000 RUB per square meter excluding VAT. The TLC should offer maximum opportunities for the handling of goods and their transhipment from/to maritime, rail and road transport. The most advantageous areas for TLCs are those linked to railways and near seaports with access to major highways, the company pointed out.

With inbound logistics flows moving from west to east, the volumes of goods transported by the railways will increase, hence the growing demand for terminal infrastructure, he says. Obviously, additional demand is expected for temporary storage facilities, customs procedures, container handling. If the number of container transports to the East (by sea and by rail) increases, the existing infrastructure may be overloaded. Therefore, there is a risk of delivery delays and disruptions. Therefore, the development of terminal infrastructure in the east of Russia will increase the potential volumes of imports, the expert believes.

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