Head of the port “Yuzhny” authority: Ukraine needs its own dredging fleet

(from the issue №5, 149, December) “Yuzhny” sea port authority has recently announced that the deadline for tender proposals regarding the dredging in the port, on the basis of numerous complaints of the bidders in “Prozorro” system will be extended for at least 28 days. We are talking about the operational deepening projects of the internal waters and the inner approach channel, water approaches, maneuvering areas and operating water areas reconstruction, as well as the sea approach canal reconstruction (on which the results of the tender were recently canceled) and inland water approaches to the deep-water berths reconstruction. The “Shipping” magazine has interviewed the chief of the administration of the sea port “Yuzhny” Maxim Shirokov; the interview deals with the current phases of the harbor development projects, the peculiarities of the dredging cost, the need to build domestic dredging fleet – and many others. Please find below the excerpts of the main conversation points.

Maxim Shirokov. Graduated from the Kyiv National Economic University, a degree in “Accounting and Audit.” An economist. In 1999-2006 worked in various positions in the economy and banking  in Krivoy Rog. 2006 – Deputy Director General for investment activities of public utility of the “Odessa International Airport.” 2006-2007 – the leading specialist on energy management of the “Industrial Investment Company Denker ltd.” 2007-2008 – Deputy Head of Finance and Economy SE “Kherson sea trade port.” 2008-2009 and 2010-2013 – Deputy Head of the Economy and Finance, acting Deputy Chief of port Economy of the SE “Yuzhny sea trading port.” From 16 July 2013 – The Head of the Yuzhy sea port authority.

 

On the water area and the approach channel dredging projects in the “Yuzhny” seaport began in 2013

– Now we increased the depths to 19 meters. I must say that we have reached the initial goal. Ukraine needed a deep harbor capable for large fleet processing. And now the “Capesizes” come here! We have shown the practical effect of this, and it is an indisputable fact. By the way, in the technical project it is said that the it will pay for itself in 7-9 years at the expense of the cargo base increasing. And as we have attracted the large vessels due to the depth, we have attracted new cargo: 500 thousand tons per month came to us from Odessa, where they were loaded on the raid. And most importantly, in 2014 we canceled a discount of 50% for handling vessels on the deepwater berths. The business found that it is still profitable to be processed at a depth alongside than on the raid. I’ll tell you that it is saving of 80 cents for a ton!.. And for two years, as of November 1 this year, only due to the abolition of the discounts, we received an additional $ 29 million. This is more than 80% of the project payback…But I want to point to another thing: the “Mobius” dredging company in 2014 was forced to leave without finishing the project. And now its completion is necessary for safety of navigation! The sea ​​approach channel  with width of 180 meters at the front edges is 140 meters at the bottom. There is a “Capesize” with the width of 50-55 meters, plus – escort tugs, plus – there should be a security zone. As a result it is very small; it almost does not give the possibility to maneuver if necessary. We need to expand the channel to 210-230 meters and provide the necessary security zone. It is the goal of the second start-up complex of the project; its cost is 470 million hrn, the implementation period, up to two years.

I already have said that we divided this project on the so-called launch complexes. First, to bring the depth up to 19 meters, it is implemented … However, some other difficulties appeared, as in Ukraine, there is no approved order for putting into operation of such a project, although it is “a separate case”. But at the same time, the channel is silting up and the initially declared maximum draft of 18.5 m is in fact 18.2 m. And the captains require the navigation margin of one meter for passing. By the way, “Chernomorniiproekt” actually prescribed the navigational margin of two meters for the vessel with the draft of 19 meters! Therefore, to implement of the second start-up complex – the actual subject of this tender, which is now on everyone’s lips! – is in need in terms of safety: to deepen up to 20 meters and to expand up to 210-230 m.

The third start-up complex, to bring the depth up to 21 meters, will be dictated by economic necessity. We in fact, have written it in the prescribed conditions of the tender: the decision to continue deepening to 21 meters will be accepted by the customer if needed. We’ll see if the situation on the market is not likable, we’ll stop the work. And if, for example, our cargo owners will say “we will have the valemaxes”, we will dig to 21 meters. The vessels with a draft of 19 meters will be able to pass; the captains will be pleased with the navigation margin.

That is, the second start-up complex – it is not a goal, it is a necessity. And the goal has already been achieved: we handle large vessels, and the state earns money from it. This is one of the few public investments, giving a strong effect.

 

On the deep-water berths’ №№5-8 reconstruction

The technical project working is completed; a tender for the design is announced. As a result, the berths №5-6 will be deepened to 21 meters (that is, we will increase their margin of safety from 19 to 21 meters). And the berths №7-8 will receive the margin of safety alongside up to 17 meters, today it is 14.5 m The estimated cost of this project is 2.5-3 billion hryvnia.

 

On the dredging cost formation

Here is an example: in a recent court definition (we will not delve into the recent vicissitudes related to the history of the dredging tender in Yuznhy, a lot of resources wrote about it – Edit.) it is stated that “according to the market analysis, its price is 6-7 euros per a cubic meter, but now the work is done for 10-11 euros.”  But we must distinguish the project and the actual price! In order to achieve a price of 6-7 euros, we need to have European companies here – the competitors for the local ones, which are “used to” work here. That is why we invite “Jan de Nul,” “Van Oord,” “Boskalis,” for them to dig – using a completely different technology. And if the same thing will continue happening here, they will not come to us. And we will not see 6-7 euros! Yes, in the project we lay the price, giving the “stock”. The price, in fact, is dynamic and depends on many factors. For example, in the project we are laying the maximum ship demurrage. The dredger is in the water area but the ship comes and dredger leaves. We don’t have the opportunity, the port of Odessa has, when the “dredger” can dig all the time and the space for ships’ maneuver still remains. But any such “leave” is extra money, and the contractor includes it in the price of a cubic meter. “Moebius” company once dug 10 million cubic meters in the port – and the average cost of one “cube” that time (2013-2014) was in fact 7.65 dollar, although a completely different price has been specified in the project.

There are other factors, for example, weather. The vessel can dig, but because of the storm, the barges cannot take the soil to a landfill… And so on. Besides, the equipment of the operational dredging matters as well. Dredger is a costly affair. The price of the dredging pump is low, dredge piping – even lower, down to $ 2-4 per cubic meter, depending on the conditions… It is also important not to be mistaken with the ground categories, it can lead to the significant changes in the works’ cost. The same “Chernomorniiproekt” redefined the soil type for us several times. In the end, it turned out to be the ground of 4-5 rank, loam, which is very difficult to dig. In addition, it is a viscous, sticky soil that remains on the ladle and it complicates the work.

All of this has to be understood and we have to have at least some experience. My colleagues and I have passed the dredging campaign with “Moebius” (again, 10 million “cubes”!). Then the operational dredging with “LIGOS,” and then we prepared three large-scale dredging projects! Believe me, we already have the experience and understanding of the problems!

 

On the necessity of the dredging equipment construction

Available equipment in the national industry cannot cope with the required volume of dredging.  And the sea port “Yuzhny” needs a new dredger, because it has the greatest depth, and there is no such equipment in Ukraine, which will cope with it. On the internal canal we have the passport depth – 15 meters, in the approach one – 19 m. And we are gradually raising the question of what the need of the dredging equipment designing and building. And another question – the kind of one. Does it have to be a dredger – or, perhaps, a different type of technology? I want you to understand that in collaboration with the world’s “giants” of dredging such as “Moebius,” “Van Oord,” “Boskalis,” “Jan de Nul” – we gain new experiences. We look at the way they work and what equipment meets modern requirements.

Our industry needs its own dredging fleet, at least for operational dredging. I’m not even telling that these are jobs, salaries for people, taxes for the treasury; the domestic businesses get unique orders! And while we do not have our own technology, we will suffer with these tenders, explain and demonstrate why the project is worth a billion not 900 million…

 

On the international interest in the “Yuzhny” port

In 2013, in our sea port of there were three working visits of the foreign delegations. And in 2016 – there were more than twenty delegations, among them – the Ambassador Extraordinary and the Ambassador Plenipotentiary of the People’s Republic of China, the representatives from the USA, the Netherlands, Hungary and other countries. They come to us and consider the options for investment cooperation, offering their services as the specialists – for the construction of hydraulic engineering, dredging, development of port fleet, on environmental issues, and so on. They see that we have implemented large-scale project: the port “Yuzhny” today is the deepest one in the Black Sea. Thus the interest. Besides, the port has a great potential: the “Chernomorniiproekt” counted, with the available options port is capable of handling of 120 million tons of cargo. So this interest is quite understandable!

Serhiy Lyalikov, “Shipping”

 

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