A multimillion container terminal development project is being launched in Muuga

Today, AS Tallinna Sadam, AS Eesti Raudtee and Rail Garant, one of the largest transport companies in Russia, concluded a contract on the co-operation in launching a container terminal at the cost of 130 million euros (more than two billion Estonian kroons) in Muuga Harbor.

The Port of Tallinn finished the construction of the container terminal infrastructure in the summer of last year. The construction was supported by the funds of the European Union. The tender for the construction of the terminal was finished a month ago, and the contract was awarded to Rail Garant, which intends to commence developing the terminal and engineering the equipment as soon as the contract is signed. The terminal is to start operating within the first quarter of 2013.

As the Chairman of the Board of Rail Garant, Nikolai Falin, believes, the convenient location, the well-developed infrastructure, the year-round navigation, the simplified procedures of transit processing and no custom tolls are, undoubtedly, the major advantages of the Port of Tallinn. “Meanwhile, the ports of the North-Western waters of Russia are overloaded and do not possess the necessary capacity for the transshipment of the present volume of goods,” Falin stated.

“We have always considered the opportunities of the railway in Estonia to be better than in Latvia or Lithuania. Moreover, it was the expertise of the Estonian Railways personnel who can always be relied on that finally convinced us we had made the right choice,” Falin added.

“So far, the main reason of the problems in cargo exchange was the absence of a competent, well thought-out and properly organized logistics chain and the absence of a well-defined work structure. However, if there are agreements among the consigners, the transportation operator, Russian Railways and Estonian Railways and the port itself, if all the links of this chain are acting in unison, the routes have been determined, the deadlines and other conditions are met, then there are all the prerequisites for the successful implementation of the project,” Falin explained.

According to the Chairman of the Management of AS Tallinna Sadam, Ain Kaljurand, the project at hand will contribute to the development of transit and promote healthy competition in the sphere of container transportation and enhance the competitive position of the Port of Tallinn. “The international business in the area of logistics is moving towards clean and mobile container transportation; so being the largest port of the Baltic Sea, it is high time that we secured our positions in the given sphere,” Kaljurand stated.

“The concept of Rail Garant is genuinely unique: while the goods of the Russian direction have been moving from the West to the East so far, the company’s business plan implies the reverse movement, from the East to the West. That will provide additional transportation facilities for Estonia and advantages for exporters. To put it simply, new opportunities for transporting goods will be open to Estonian manufacturers, and delivering them to other countries of the world will be cheaper,” Kaljurand elaborated.

“Moreover, the negative impact on the environment will be decreased compared to that of road transportation because railways will be used to transport containers,” Kaljurand summed up.

As the Chairman of the Board of AS Eesti Raudtee, Kaido Simmermann, says, the contract to be concluded between the Port of Tallinn and Rail Garant will imply additional traffic of goods for Estonian Railways and the decrease of the share of oil products in goods traffic, which is a positive change.

“The co-operation of the Port of Tallinn and Rail Garant will increase the share of rapidly developing container transportation in the scheme of transportation of Estonian Railways, which in its turn will increase efficiency as goods will start moving in both directions instead of the former goods traffic from the West to the East,” Simmermann noted.

In 2010, the container transportation volume of Estonian Railways increased by 40 per cent; and within the first three months of this year, by 62 per cent. That being said, Estonian railways have handled a record amount of container goods which constitutes 3101 TEU.

The container terminal development project will cover a part of Muuga Harbor with the area of 71 hectare, 27 hectares of which are intended for the terminal itself; and 44 hectares, for emergency space. Within the framework of the project, mooring 378 meters in length has been built; and the existing terminal in the territory has been extended by a hundred meters. Besides, the necessary infrastructure consisting of access roads and utility lines will be constructed in the Eastern part of the port.

The cost of the infrastructure of the container terminal built by the Port of Tallinn reaches one billion Estonian kroons. At the end of 2006, the European Commission allocated 295 million kroons (18.9 million euro) from the European Union structural funds for expanding the Eastern part of Muuga Harbor, most of the funds were directed at financing the extension of the container terminal and the construction of the emergency space.

Rail Garant is one of the largest Russian transport holdings, which includes 11 railway and container transportation carriers and forwarding agents. The main types of the goods transported by the companies of the holding are mining and smelting goods, liquid bulk, refined petroleum products, liquefied gas and other types of the cargo of industrial purposes, such as large diameter pipes, cars, mineral fertilizers, and grain.

The consolidated rolling stock of the holding exceeds the number of 20 thousand rail cars; the company development strategy implies increasing the rolling stock up to 50 thousand of rail cars by 2013, which would ensure the Rail Garant holding a place among the among the largest top five independent operators in Russia. Rail Garant is owned by major Russian business leaders Sergei Gushchin, Nikolai Falin, and Sergei Smyslov.

In the last year, the Port of Tallinn conducted negotiations with some ten prospective container terminal operators, two of which submitted specific project proposals as to operating the given area. Among the proposals submitted within the tender to find the operator of the new terminal, the proposal of Rail Garant was deemed the best on 8 March this year.