National Dredging Company May Be Established by the End of 2019

27 may 2019 | RIA Novosti

A national dredging company may launched in Russia before the end of 2019; the budgetary efficiency for the government from the establishment and operation of the company may amount up to RUB 25 billion, an expert of the Analytical Center Beglyar Novruzov told in his interview to RIA Novosti.

Beglyar Novruzov
Beglyar Novruzov
Department for Economics and Transport Development

In May, the Kommersant newspaper wrote that the Analytical Center developed a draft road map for the launching a national dredging company in Russia. The initiative is originated by the St.Petersburg-based company "Investments. Engineering. Construction" which plans to invest RUB 20 billion during Stage 1 and build 15 vessels for operation in the Baltic and Azov-Black Sea basins, the newspaper writes.

"According to our estimates, the national dredging company may eventually be founded by the end of 2019. By this time we expect that a public-private partnership mechanism is established and both the minimum scope of dredging works and the main production facilities for building and repair of the dredging fleet are determined. In total, the government's budgetary effect may amount to RUB 25 billion," Novruzov said. Mr. Novruzov also noted than the national dredging company will allow the country to reduce the economic dependency on foreign dredging companies by declining their services, and to develop a national dredging fleet.

"The dredging repair services are offered by several Russian companies, and appearance of a new player will increase the competition which may have a positive effect on the cost of services and cause the service providers to improve their performance; in this situation the service providers will have to reduce the cost of their services through a more efficient management of their assets. As to the capital dredging, only foreign companies provide such services in Russia, so the newly-established national dredging company will break up the foreign monopoly," Novruzov said.

According to him, dredging works are to be performed not only in the Northern Sea Route water basin but also in the Baltic and Azov-Black Sea basins; moreover, the dredging repair and capital dredging services are crucial along the Northern Sea Route, particularly in the Eastern Arctics.

The "road map" is pending approval from the authorities, so it is too early to analyze certain solutions and governmental supportive measures. The discussion is underway. If the government decides to create and support such company, then with the assistance from the Interdepartmental Work Group, the efforts will be made to remove the administrative and production barriers and to conduct the cost-effectiveness analysis of the national dredging company project," the expert concluded.

Source: RIA Novosti news feed