The role and meaning of the North Seaway as the main transport line, have been defined, first of all, by the needs of the industrial opening up and successful functioning of economic complexes adjoining the line of the Arctic coast’ s regions as the most important factor of the economy stabilization and provision of Russia’s national geopolitical and economic security.

Being Russia’s internal way, the North Seaway plays an important role in the economic life of our country’s many regions which are connected with the Arctic Ocean with such large rivers as the Ob, Enisei, Lena, Indigirka, Kolyma, Khatanga and others. These rivers bring their waters into the Arctic Ocean and form with the Arctic seas a single transport system.

Traditionally, sea transport plays an important economic role in the provision of the population’s life activity and functioning of economic complexes. Its role and meaning in the north latitudes are, first of all, defined by some very important factors connected with a vast extent of the Russian north zone’s coast line: the absence or insufficient branching of the land communications of a year-round functioning in the regions adjoining the sea coast; the connecting role of sea lines for the internal sea ways of the European and, first of all, Asian North and meridional main railway lines of these largest regions of the country. An especially important role is played by strategic factors connected with the geopolitical and transnational meanings of the sea navigation in the Arctic zone. This is, first of all, control over sea aquatoriums, potentially rich in natural resources, a transit meaning of the North seaway as an internal route between the North-West and Far-East Russian regions, as well as over the possibilities of increase of transnational transit transportations along the line of the North seaway between European ports and ports of the Pacific Ocean’s regions.

In the foreseeable perspective, the North seaway remains the key element of the transport provision of the Russian Arctic regions. More then that, in the nearest future its role can considerably go up. New possibilities for the development of transportations along this line appear, first of all, in connection with the opening up of hydrocarbon deposits in the coastal regions and on the Arctic shelf. There are also favourable perspectives for the development of transit transportations of foreign freighters’ cargoes by the North seaway within the frameworks of formation of a single transport system between Europe and the countries of the Asian and Pacific region and the North Pacific coast of the USA and Canada.

The development of foreign relationships, federalism processes, globalization and regionalisation on the economic space of the North of Russia, gives an impulse to the development and extending of the processes of international co-operation and integration. “Passages” of economic co-operation of a new type-the Euro-Arctic (Barents) passage, the Murmansk, Arkhangelsk, Chukotsk, Asian and Pacific passages, the North Seaway develop.

The role and meaning of the North Seaway are also very important in the development of the economy and transport ties of the north-west of Russia and, first of all, of the Republic of Sakha (Yakutia), the Magadansk region and Chukotka, which at present possess the main part of the reserves and extraction of diamonds, gold, tin, iron ore, stone coal, salt, mica, tungsten, rare metals and mineral resources.

As a rule, each period of the North regions’ industrial opening up has its own level of development of the production forces of economic and transport ties. In connection with this, the north-east regions, unlike, for example, the European North regions and North-West Siberia, are at their initial stage of development, which is characterized by season, waterways of communication (river and sea), from where landways to the deposits of mineral resources are built, usually, as automobile and winter roads.

Such isolated industrial centers in the North-East are or were until the 90-s the regions of the upper Kolyma and Indigirka, the provision of which is totally based on the ports of the Far East and the port of Nechaevo, from where cargoes going by sea transport are transported by the Kolymskaya main road to mining enterprises, the region of the Cross Bay and Anadyr, including the Pultinskiy mining and ore plant, where cargoes are brought to by sea transport from the ports of the Far East: the Pevexkiy (Chaunskiy) industrial region, the provision of which is implemented by the North Seaway both from the ports of the Far East and the European North, as well as in the coastal navigation; the Yano-Indigirskiy industrial region, the provision of which is also, to a great degree, based on the North Seaway. The North regions of Yakutia are connected with the center by the North Seaway through the ports of the Far East and the European North. Thus, for the coastal regions of the North-East, the role and meaning of the North Seaway first of all implies provision of the local population behind the Polar Circle and the main bases of the North Seaway and provision with necessary materials for building and exploitation of industrial enterprises, first of all, mining ones. If it required to bring from 15 to 20 thousand tons of cargoes for the provision of the local population annually, then for industrial enterprises, there were hundred thousand tons.

The creation of industrial enterprises demanded a concentrated delivery of cargoes to several points and the organization of ports, specialized warehouses and mechanised mooring lines in them, what could be effectively carried out by ships of a large carrying capacity (over 4-5 thousand tons). This, in its turn, defines the necessity of updating and improvement of the organization of management and functioning of the North Seaway. It requires changing of the character and methods of the pilotage and navigation of ships in the Arctic conditions; the use of more powerful ice-breakers, more perfect methods of ice prospecting, as well as a deep research of the regularities of climate changes, sea ice property, ice movement are necessary, that is in the organisation of the developed scientific research of the Arctic.

Thus, together with the increase of the Extreme North’s industrial opening up, the North Seaway has more and more noticeably begun to turn into the constantly acting main road of the year-round mass transportations of national economic cargoes. This necessity has been dictated by the whole process of the opening up of a huge natural wealth of the north territories and by the necessity to provide a strong link between the European and Asian parts of the country through the north seas for supporting of the constantly going up tempos of development of the production forces of the Extreme North regions and raising their role in the provision of the country industry with a broad complex of production – non-ferrous and rare metals, gold, diamonds, tin, timber, furs, fish and so on.

The meaning of the North Seaway, as an independent Eurasian transport passage, is very important. It is connected with the intensification of the opening up of the Russian oil and gas Arctic shelf, with the increase of the transportations of the Norilskiy Metal Plant, one of the world’s largest producers and exporters of non-ferrous metals.

The problems of the North Seaway’s functioning are closely connected with the common problems of the Russian Arctic. An effective use of the North Seaway as an international transport passage, solving the problems of cargo transportations for providing Russia’s economic needs and international requirements, is possible only in case of solving some urgent problems connected with the necessity to create a normative legal base of its functioning; of providing a year-round navigation circle of all the lines of the North Seaway; irrespective of the seasons and the degree of ice property; of raising and renovation of the ice-breaker park; of providing a navigation security along the whole line; of creating conditions for the servicing of the international transport passage at the whole line (cargo terminals, communication and logical centers and so on).

It is necessary to work out a conception, and then a federal program, on the development of the North Seaway as an international transport main road. A special attention should be put to the creation of favourable conditions for cargo transportation, customs service, tankers, port dues, to the provision of cargo safety, ship movement security and so on.

According to the analysis of the development and use of the transport system of the Russian Arctic zone, sea transport in the north latitudes of the Arctic and Subarctic zones has at present no alternatives and is the most effective way to bring technique and technological equipment, energy bearers, industrial and food products necessary for the functioning of the territorial and production complexes situated in the coastal zone of the Arctic seas and for the life-support of the people living in the zone.

The Russian North territories are a zone of a maximum direct federal presence in connection with the most important national interests (defense, economic, geopolitical, scientific, ecological) concentrated here, and the provision of the economic, social and defense activities directly depends upon the functioning of the North Seaway.

One of the main tasks of the infrastructure of the Arctic transport system is the improvement of the North Seaway management, for which it is necessary to create an enterprise giving world services on the use of this line in the conditions of the market economy’s formation and functioning.

For all 70 years of the North Seaway’s existence, its opening up has been totally depended upon the budget financing. They have annually given about 200 million roubles for it, since 1987 its financing has begun to reduce, and so has the volume of cargo transportations. By that time, they had carried almost 7 million ton cargoes by the NS annually. The goods traffic consisted of the production of home enterprises, including the north delivery. Transit carriers of the North Seaway were out of the question; the Arctic seas were closed for foreign ships.

In 2000, in the Arctic, a bit over 1.6 m million ln ton cargoes were delivered, what had accounted 25 % to the average annual level of the second half of the 80-s. For the period considered, delivery from the East has decreased by 40 times. Since the middle of the 90-s, there has been stopped the export of round timber by sea from Tiksi to Japan (in 1987 174.6 thousand tons), and the deliveries of power-saw timber through the port of Igarka to West Europe have reached 50 thousand tons, what amounts to 7 % from the volumes of 1987. On other directions, there has been noticed a more temperate, but also rather considerable reduction.

To the greatest degree, the influence on the reduction of the volumes of transportations by the NS has been made by the decrease of production at the Norilskiy mining and metal plant, by the decrease of timber export from the Arctic ports, by the discontinuation of the transit transportations of foreign freighters’ cargoes, by the reduction of the volumes of the north delivery to the regions of the Extreme North .

By 2005, the volume of the cargoes delivered by the NS, had amounted to approximately 1.9 million tons. The mining and metal plant “Norilskiy Nickel” has saved its stable export deliveries: its cargoes have amounted to 65 % (1.25 million tons) of transportation by the NS. The reduction of the volume of transportations by the NS has made a negative influence on the whole infrastructure of the Arctic.

The meaning of the North Seaway as a transport main road for the north regions and Russia, as a whole, is defined, first of all, by the needs of the economic opening up and the facilities arrangement of the territories adjoining the line. Sea transport in the north latitudes of the Arctic and Subarctic zones has practically no alternatives at present and is the most effective way to bring technological equipment, energy bearers, industrial and food products necessary for the functioning of the territorial and production complexes situated in the coastal zones of the North of Russia. In prospect, its role will considerably rise with the opening up of the coastal and shelf hydrocarbon deposits in Timano-Pechorskaya province, in the basins of the Ob and Enisei rivers, of the gas Yamal deposit, gas and condensate deposits of the shelf of the Barents and Karskoe seas, both at the expense of the delivery of technological equipment and cargoes necessary for the functioning of the industrial and social objects of production and infrastructure, for the life-support of the population of these objects, and at the expense of the export of energy bearers.

The role of the NS as a national transport communication implies that this way is the most important part of the infrastructure of the economic complex of the Extreme North and a link between the western regions of the country and the Russian Far East. It unites into a single transport net Siberia’s largest river artery. For some regions of the Arctic zone – Chukotka, the islands of the Arctic seas and some localities of the coast of the Taimyrskiy (Dolgano-Nenetskiy) district – sea transport is the only means for the transportation of cargoes and life-support of the population.

¹ The development of the North Seaway, edition 3. Report edited by the Academician of the RAS A.G.Granberg, GNIU ‘Council on the Research of the production Forces of the Ministry of Economic Development and the Russian Academy of Sciences”, M., 2000.-p.104.

Nowadays, the NS is the only and economically quite a realistic way to the natural wealth of the Russian North, Siberia and Far East, the reserves of which, according to the forecast estimations, will even in the XXI century become almost the main raw base of Russia. The duration of shipping by the

North Seaway from Murmansk to the Bering Strait, depending on the route chosen and weather conditions is the following:
· Traditional (coastal) route – 3500 miles;
· Central route – 3029 miles (from the Karskie gates to the Bering Strait – 2512 miles);
· High-latitudinal route (to the north from the New Land, the North Land, the Novosibirsk islands and the Island of Wrangel) – 2890 miles;
· Round-the Pole-Route – 2700 miles;

Under the transportation of general and container cargoes from the exporting ports of Hamburg, Tromse and Pechenga to the ports of destination Iokogama and Shanghai, the distance under the use of the North Seaway in comparison with the southern seaway through the Suez Canal is reduced by 31-67 %. The time economy on the way is 10 days and nights in favour of the North Seaway on the line Hamburg-Iokogama and 12 days and nights - on the line Pechenga-Iokogama for a container-carrier at the speed of 19 knots on the clean water, 15 knots – by the line in the period of summer navigation.

The North Seaway reduces the distance from Murmansk to Vladivistok by two times. Due to the reduction of the distance, the profit for the transportation of one container by the North Seaway is from 50 dollars in the prolonged time of navigation (6 months) up to 200 dollars in the period of summer navigation (3 months).

The provision of the advantageous or, at least, non-loss-making work of the ice-breaker fleet in the Arctic depends upon the volume of transportations; it is necessary that the volume of deliveries by transport ships amounts to not less than 1 million ton cargoes per each ice-breaker annually.

In prospect, to 2010, they expect an increase of the volumes of sea transportations at the expense of the opening up and exploitation of hydrocarbon deposits, what conditions the need and employment of the sea fleet – a dry-cargo, oil and ice-breaker fleet. In this period, under some reduction of the export volumes of copper and nickel ore and timber cargoes, a considerable rise of goods traffic will happen due to the increase of the delivery of feinstein. In the nearest future, there can appear export oil goods flows from Varandey at the expense of the opening up of the deposits of Timano-Pechorskaya province (up to 3 million tons), as well as from the Prirazlomnoye deposit at the Pechorskoye sea at the volume of up to 2 million tons. An increase of the delivery of gas and condensate from the Ob lip from the deposits of Yamburg and north regions of the Tyumen area is forecasted. Large volumes of export deliveries in the Arctic in connection with the opening up of the Bovanenskiy and Kharasaveiskiy condensates in Yamal are also expected.

The polarization of the world market in the north hemisphere of the planet, and in particular, in the north Atlantic and in the north part of the Pacific Ocean, defines the necessity of the implementation of an effective transport goods traffic by the North Seaway and the development of the complex of trade and economic and legal norms, defining the industrial and transit infrastructure on the territory of the north regions – of the subjects of the Federation for Russian and foreign cargoes and passengers through the North-West of Russia into the zone of the Asian and Pacific Ocean region.

Economic and legal norms should provide the priority rights of the Russian producers and transport companies in the opening up of the natural resources and the facilities arrangement of the north territories or, at least, not limit their interests. It is necessary to develop some laws protecting the interests of the Russian industry and fleet and a protectionist policy concerning the Russian ship companies and industrial enterprises carrying out their economy activity in the north regions of the Russia. The administrations of all north subjects of the Russian Federation are interested in the new approach to the solving of the economic and social problems of the north territories, what defines the necessity of united efforts in the search of the ways of their solution. But a compulsory requirement to the effective opening up and development of the north territories of Russia is the outstripping tempos of the building and development of transport communications, the first place in which belongs to the North Seaway .

The main measures of the development of the national economy of the Russian Arctic zone are the strengthening in the Arctic of the Russian priorities and the restoration of partially lost transport and economic potentials consisting in the scientific and practical development of:

· the main trends of the state support of the restoration of the transarctic North Seaway as the basis of perspective home and international communication;

· the economic foundation of the “Murmansk passage” of the transnational sea transportation of the oil-refining production and liquefied Yamal gas of the Arctic deposits of Russia for solving the problems of the energy supply of the North-West of Russia, including the Murmansk region, and the export of this production;

· the program of actions of the federal agencies of the executive power, the authorities of the north subject-regions of the Russian Federation and subjects on the complex use of the North Seaway and its use on a commercial basis, managing in the Arctic zone.

The development of the transport service market at the North Seaway can be provided by the reduction of transport expenditures, the rise of safe and timely delivery, the improvement of transport means, the support of goods producers and carriers. All this complex of transport services can be achieved under the development and formation of a single transport system of the Russian Arctic zone, providing the choice of an optimal scheme of cargo delivery; by the development of the activity of forwarding agent firms; by the implementation of antimonopoly events by means of the organisation of contests in the delivery and import of cargoes and launching of the informational system on the transport services at the North Seaway.

² LITOVKA O.P. THE MODERN ARCTIC: PROBLEMS OF OPENING UP AND SOCIAL AND ECONOMIC DEVELOPMENT/ECONOMY OF THE NORTH-WEST: PROBLEMS AND PROSPECTS OF DEVELOPMENT. № 4 (10), 2001. S. -PETERSBURG. -P.3-7.
³ Evdokimov Y.A., Batskikh Y.M., Istomin A.V. The North Seaway: Problems, Possibilities, Prospects of Rebirth // The Economic Science of Modern Russia. M., 2000. № 2.-P. 101-112.

To define possible and optimal variants of the formation and effective functioning of the Arctic sea transport system, what the North Seaway is, it is necessary to develop scientifically the questions of investment, tariff policy, payment of the services given under the navigation by the North Seaway’s lines, tax, customs and credit policies at the North Seaway and the improvement of all the system of management as the main Russian north transport line, able to provide a guaranteed and economically effective delivery of the rising volumes of cargoes in the shortest time possible, taking into account social, defense and nature-protection requirements providing national security.

The main task of the state support is to become the working out of the technical and economic development project and the support of the North Seaway’ s activity. At the expense of the federal budget means, the state is to provide an effective functioning and development of the transport system elements being the federal property – the ice-breaker fleet, the navigation and hydrographic and hydrometeorological supply, emergency-rescue ships, distant and space communication, as well as to support transport, tanker and passenger fleets which are the property of resource companies (in particular, to guarantee loans to corporations building new ships and others).

For the more effective provision of the interests of managing subjects, north territories, consignors and consignees, the Arctic sea transport system management structure should be improved in compliance with the new economic conditions of the economic activity.

At the same time, the activity of the North Seaway in the Arctic cannot be based only on a commercial foundation on the market competition mechanism. In the period of its opening up and development, the North Seaway was exclusively a subject of the state regulation. Nowadays, it is still a monopolistic sea transport system in the Arctic, keeping this position in prospect. The state is to take the functions of state regulation and coordination of the interests of all organizations and enterprises – the participants of navigation by the North Seaway. It is the guarantor of the legal, organizational and material support of the North Seaway, which, being under the state management and control, shall bring in revenue not only to commercial structures, but also to the country budget and the north regions, as it happens under the exploitation of the Suez, Panama and Kilskiy canals, in particular.

The realization of the NS complex development project in connection with its large length, defines the necessity of taking optimal decisions on the co-ordination of numerous questions of exploitation, the development of transport and social infrastructure of the Extreme North and the North Seaway and can provide :

· the rise of the integrating role of the North Seaway in the transport system of the North;

· strengthening of the single economic space in the Arctic zone;

· a maximum satisfaction of the north territories’ needs in transport supply;

· strengthening of the positive influence of the NS on the social and cultural conditions of the life of the Arctic zone population;

· the improvement of the information supply of the functioning of the NS.

To reach the goals indicated, it is necessary, on the basis of really existing material resources and efficient suggestions, developed projects and programs, to develop a program of the NS complex development strategy and its use on a commercial base.

The development of the strategy of the Russian Arctic regions’ stable economic growth should be mutually connected with the development of the economic and defense activity in the Arctic zone. It is required to develop a mechanism of the coordination of norm and legal documents on its implementation, what will further the acceleration and effectiveness of the use of the richest oil and gas resources of the Arctic seas’ shelf and coastal deposits with the provision of strategic and geopolitical interests of defensive capability in the national economic and military security of the country.

The creation of economically effective conditions for the implementation of commercial navigation by the North Seaway, including an international shipping, as well as for the development of the North Seaway infrastructure and the rise of goods traffic, can be provided by the formation of investment, tariff, tax, customs and insurance policies. The investment policy should be oriented to the attraction of home and foreign investments which can be attracted for the building of the objects of production infrastructure, including the transportation of the Arctic shelf mineral resources. By the way, the Russian juridical persons will be conceded a preference for taking part in works on agreement as carriers. The second way – the attraction of foreign bank credits for the construction of transport ships under the guarantees of the Government of the Russian Federation or on the security of ships.

The organisation and economic problems of the North Seaway rebirth and development define the necessity of the radical conversion of the North Seaway economic and financial, transport and management activities for the rise of the effectiveness of its functioning in the conditions of the formation of market relations. It is more expedient to reorganise the “Murmansk Shipping Company” into a mixed holding company by two stages – with the creation, at the first stage, of a mixed holding company, turning then into a clear one with the attraction to the company, at this stage, of enterprises and organizations connected with the North Seaway activity.

The new structure of the North Seaway as a single indivisible national transport company of Russia should exist and develop within the frameworks of an industrial and financial group acting organisationally as a Russian stock company with a control packet of shares in the hands of the government.
To use effectively the North Seaway potential, to create conditions for the Russian business to work on it, a clear governmental policy, providing the legal norms of this organization’s activity at the world level, is needed. All this will create conditions for the North Seaway’ s successful functioning and development.

The measures considered are to define a strategic direction of the reorganization of the existing system of the North Seaway management and its rebirth for an effective functioning as the largest in the XXIst century Russian sea trade commercial organization, carrying out an industrial, transport, organization and economic activities at the line of the North Seaway – the main national transport line of Russia in the North and Arctic.

⁴ THE NORTH SEAWAY DEVELOPMENT CONCEPTION PROJECT. M. SOPS. CSRISF, 2000. –P..38.
⁵ Granberg A.G. Economic Internationalization of the North Seaway// International Life. № 8, 1997.-P. 37-44.

To attention of our visitors!

Since the present moment you can read Russian language materials in our web-site on any of the herein provided languages: English, Arabian, Bulgarian, Chinese, Croatian, Czech, Danish, Finnish, French, German, Greek, Hindi, Italian, Norwegian and other languages.
At the top of each article there is a panel of a choice of the languages, given by the company Google. Simply choose the language and read!

If you have desire to place information of noncommercial character on our site – we are ready to accept it. Our conditions:

1. The information should correspond to subjects of our Internet - portal

2. The information should be given either in English or in Russian languages.

3. The author and a source of data and their sanction to the publication should be specified.

The commercial information is published for a payment.

THE INDUSTRIAL NORTH #3