9 Sep 2019 16:45

Revoking export surcharge for railway tariffs necessary for development of grain exports - FESCO

VLADIVOSTOK. Sept 6 (Interfax) - The export surcharge for railway tariffs (8%) must be revoked in order for grain exports to reach stable volumes, Aidemir Usakhov , Vice President of the railway division at the Far Eastern Shipping Company (FESCO) said at one of sessions of the Eastern Economic Forum.

"Everything is understood [here]. We're not talking just about the export surcharge, we need a zeroing out of the tariff so that it could be considered that [shipments are economically viable], Usakhov said.

Right now, for the discount, "predictable stable volumes of grain" are needed for which Russian Railways (RZD) could reduce freight prices within the "tariff corridor." "If we provide some guarantee volume, they will give us tariff discounts. If we aren't able to do this, then they won't even talk to us there [in the monopoly]."

"The tariffs are growing. As of this moment more or less serious volumes of grain [are delivered] up to 5,000 kilometers," Usakhov said. At the same time, the company does not see economic viability even at smaller distances. "Our company was the first to transfer Novosibirsk grain to Novorossiysk. The tariff distance is around 4,000 km. The [economics of delivery] were not calculated, this was a task that had to be completed because farmers had gone to the Agriculture Ministry, to the Transport Ministry," the executive said.

Furthermore, global development of grain exports requires port infrastructure, which "almost doesn't exist," Usakhov said. "We tried direct transshipping at our port [in Vladivostok], but this is ineffective [volumes are small]," Usakhov said.

"There is an alternative - container shipping of grain. At the moment, this is frustration, since there is no infrastructure for real, large-scale exports. But, on the other hand, even when we get it, container shipping is a very narrowly-focused business - higher-quality grain, more expensive grain, different types, small volumes that are used in production, not for mass bread making," Usakhov said.

FESCO has already made such pilot shipments. "Last year, 1,000 containers were sent to China. At the moment, 500 tonnes is being loaded into containers at our Novosibirsk terminal, also bound for China. But, then again, this is not strategy, not implementation of a state program," Usakhov said.

"Apart from simultaneous storage, as at the Novorossiysk Grain Plant, an important feature of the Novorossiysk Grain Terminal is the presence of deep-water berths that make it possible to load large-tonnage vessels. Otherwise, the freight maritime component also destroys competitiveness in the end," Usakhov said.