#10 - JRL 7069 - RAS 16
RUSSIA AND ITS NEIGHBORS: RUSSIA--EU: THE NORTHERN TRAFFIC INTERFACE

SOURCE. René Nyberg (Ambassador of Finland), "The Gulf of Finland as the New Sound: the Northern Dimension and Traffic Infrastructure in Northwest Russia." Talk given at meeting of the "Russia in an Integrated Europe" Committee, Moscow, 26 April 2002. Full text at http://www.finemb-moscow.fi/

The speaker points out that the Baltic will soon be "an inland sea of the [enlarged European] Union and Russia." The economy in northern Europe is growing faster than anywhere else on the continent. "The explosive growth in transport and travel highlights the importance of traffic infrastructure as the Russian and EU economies grow together."

St. Petersburg is a major transport node where sea lanes to the west meet railroad lines and inland shipping routes from the east and south. However, natural conditions there are awkward for sea transport. There is pack ice for much of the year, and even in the summer the shallow waters must be constantly dredged to keep shipping lanes open. Reliance on Estonian and Finnish ports, where the ice breaks up much earlier, avoids these constraints. Costs are lower and the standard of service is higher.

"Cooperation between Finland, Russia, and Estonia in the Gulf of Finland began between the frontier guards ten years ago. The goal now is to follow the examples of the English Channel and the Sound [the straits separating the Danish coast in the Copenhagen area from southern Sweden] and create a Vessel Traffic Management and Information System for the Gulf of Finland by 2004." This project, which is essential for environmental protection and traffic safety, awaits approval by the International Maritime Organization.

The ports of Tallinn and St. Petersburg have been growing fastest. The role of Finnish ports is increasing when goods flows are measured in terms of value rather than tonnage. Murmansk and Archangelsk are developing too, but mainly as exporters of raw materials. The same applies to the Latvian and Lithuanian ports, which besides the traditional transit traffic handle a growing share of these countries' own foreign trade.

Today only Finland offers a return-freight demand for containers. Finland's high level of exports ($bn47.7 in 2001) requires empty containers, which its imports from Russia provides. By contrast, containers and trucks arriving in the St. Petersburg region and ports in the Baltic states have to be taken away empty. Shared use of these containers and trucks reduces the cost of trade for both Finland and Russia.

Russia has an extensive network of inland waterways, but its infrastructure is dilapidated and it is poorly integrated with other transport modes. Russia is committed under the terms of the Partnership and Cooperation Agreement to open up her inland waterways to vessels from EU countries. Finland has used the Volga-Balt system -- for example, to deliver large drilling rigs to the Caspian Sea.

Russia's underdeveloped road infrastructure impedes growth in truck traffic. Construction of a motorway from Moscow to St. Petersburg to international standards has not even commenced. The main emphasis in northwest Russia is on building road bypasses around St. Petersburg and Vyborg. 40 percent of Russian import and export by road goes through Finland.

Rail still accounts for about 80 percent of surface transport in Russia. The most important recent investment from the perspective of international transport was an upgrade of the Moscow-St. Petersburg track, with separation of goods and passenger services: goods trains now run via Vologda. Recently a direct rail connection was completed between Arkhangelsk and Murmansk and Finnish harbors on the Gulf of Bothnia. The BELKOMUR project would permit exploitation of the vast forestry resources of Arkhangelsk and Komi.

It has been decided to create a high-speed train connection between Helsinki and St. Petersburg, later to be extended to Moscow. This will be the first world-standard passenger train service between the EU and Russia running several times each day. The aim is to cut the present traveling time of 5 hours 30 minutes to 4 hours 30 minutes by 2004 and to 3 hours by 2007-08.

The most underdeveloped part of northwest Russia's infrastructure is air transport. If a positive spiral like that in sea traffic is to be achieved in air services, the ambassador declares, Russia will have to be more welcoming to foreign airlines. He refers to differences of opinion between the EU and Russia in this area:

* the persisting dispute over fees for overflying Siberia. The EU wants the money used to develop Russia's air traffic infrastructure instead of to subsidize Russian airlines, as at present.

* the current dispute over aircraft noise. As a countermeasure, Russia has limited the number of flights that certain foreign airlines are allowed to operate into St. Petersburg and other cities.

But the biggest obstacle to traffic between the EU and Russia, especially truck traffic, is the customs. The first priority of EU customs officials is to ensure that legal traffic flows smoothly, while their Russian colleagues strive for total control in the interest of crime prevention.