RUSSIA RADICALLY REVISES SYSTEM OF PORT CHARGES HARBORS FREE TO NEGOTIATE WITH CARRIERS

RUSSIA RADICALLY REVISES SYSTEM OF PORT CHARGES HARBORS FREE TO NEGOTIATE WITH CARRIERS

Russia has radically altered its system of port charges, giving ports freedom to negotiate directly with carriers and ending a discriminatory regime under which most foreign-flag vessels paid much higher rates than Russian ships.

Industry executives predicted the new rules could speed changes in the Russian shipping market.The equalization of charges is sure to please foreign shipping companies in particular, but Russian carriers are already campaigning for its reversal.

Igor Palik, a spokesman for the Russian Marine Transport Department, said that the system for setting compulsory port fees, including pilot, mooring, beacon, navigation and anchor charges, was revised effective Sept. 1, for the first time in almost a decade.

PORTS TO FEEL EFFECTS

The reforms will affect the ports of Vostochny and Nakhodka in the Russian Far East, Novorossisk and Tuapse on the Black Sea and Murmansk and Arkhangelsk on the Arctic Sea.

One major revision is that all ports will be able to negotiate individual deals on port charges, involving discounts of up to 50 percent. The decision comes six months after the Port of St. Petersburg was offered similar prerogatives on a trial basis. Mr. Palik said that on the basis of the experiment at St. Petersburg, it had been decided to extend the direct negotiations to all ports.

He said that the government in Moscow still sets an official basic tariff for one-time customers, but ports can now negotiate discounts, usually with carriers who sign long-term contracts or offer high frequency of calls.

DISCRIMINATION ENDS

Mr. Palik said that the other major reform was that Russia had ended a system of discrimination against most foreign carriers in favor of Russian ships.

"We have evened the situation out. We attracted a lot of criticism and now we have decided to end all practical discrimination," Mr. Palik said.

Until Sept. 1, vessels flying the flag of countries without special bilateral agreements with Russia had to pay much higher port fees. The exact difference is hard to establish, but in many cases foreign carriers paid double and sometimes five times more in port charges than Russian carriers.

In fact, the two groups of countries that suffered most under this discrimination were flag-of-convenience states and countries with strained diplomatic relations with Russia.

Abolishing the discriminatory regime is a major concession to Russia's trading partners who repeatedly complained about the system during trade talks. Just last year, the European Union raised the issue as a sticking point in its Trade and Cooperation Agreement with Russia, asking Russia to exempt EU cargo carried on third-country ships. Russia had said it would not abandon the system until at least 1999.

UNHAPPY RUSSIAN SHIPOWNERS

Mikhail Burlatenko, a spokesman for the Baltic Shipping Co., said that the end of the preferential system of port charges was a blow to Russian shipowners who would lose business to foreign competitors and be forced to look for cargo on world markets. He said that the Russian Shipowners Association representing all Russia's major shipowners was now meeting with officials to reverse the decision.

"It is a difficult situation," Mr. Burlatenko said. "We are going to have to start thinking hard about whether we want to call at our own ports."

He warned that the charges would exacerbate problems Russian carriers have had in attracting local clients. He said that the Baltic Shipping Co. had already been forced to give up ships and close down several services because of financial difficulties over the past year.

According to official figures, Russian vessels' share in import-export cargo to Russia has shrunk dramatically since the end of the Soviet Union. Foreign vessels' share in the trade rose to 85 percent of cargo in 1994, compared with only 77 percent in 1993.

Emma Alexandrova, financial expert for Inflot, a Russian shipping agent, said that the new port charges would end a major advantage the Russian ships had in operating from Russian ports. She added that Inflot was concerned

because it was still not clear whether, under the new system, shipping agents would receive the same benefits as operators in negotiating discounts with ports.