Step by step Ukraine bids farewell to its sea country status

Kerch ‐ one of four Ukrainian cargo ports lost after the annexation of Crimea. (CC-By-Alexxx-Malev)

As a result of the Russian occupation of Crimea, Ukraine lost four cargo sea ports: in Sevastopol, Yevpatoria, Theodosia and Kerch. And it will soon lose the possibility to use ports on the Sea of Azov.

 

In July, the “Rosavtodor” Federal Road Agency responsible for Russian roads announced the parameters of a new bridge route across the Kerch Strait, separating the occupied Ukrainian Crimea from the Russian Kuban. For several weeks preparatory construction works have been continued – in the Kerch region, in the occupied Crimea and in Taman on the Russian side.

In the first year of operation, the daily capacity of the road section consisting of four lanes in one direction and enabling movement at a speed of 120 km/hour would amount to 12.8 thousand cars per day, to reach 40 thousand within 20 years. In the future, the railway part of the bridge with two tracks should allow the transport of 26 million tonnes of cargo and 17 million passengers per year by trains travelling to and from Crimea. On the bridge, cargo trains would travel at a speed of 80 km/hour and passenger trains – 120 km/hour. The initial intensity of traffic would reach 47 pairs of trains per day, including 35 passenger trains and 12 cargo trains, to rise to 65 pairs of trains within 20 years.

At the same time, in June, the Russian invaders of Crimea started preparations for the construction of an energy bridge in the area of Kerch, which would make the peninsula independent in terms of electricity supply from continental Ukraine. Four lines of an undersea cable with the total length of 220 km and the total transmission capacity reaching 300 MW are expected to connect the Russian Kuban with the occupied Ukrainian Crimea by the end of the year.

The Russians are building, Poroshenko keeps mum

In order to implement the bridge construction plan, Russians must first find a site to store construction materials and technical equipment. It is evident that Russia, in the first place, intends to create its own depot of construction materials on the Ukrainian side of the border, on the Tuzla Island. The construction of a temporary bridge is ongoing between the island and the artificial sand spit created by the Russians during the Kerch Strait conflict that broke out in 2003. It is an obvious case of violation of international law. Russia infringes our territorial waters while Poroshenko and his subordinate Ministry of Foreign Affairs keep silent instead of responding – comments Andriy Klimenko, the head of Black Sea News information service specialising in the Black Sea region problems.

Instead of Poroshenko’s strong response to Kremlin plans, a gift for the Russian aggressor is being prepared, practically depriving Ukraine of its ports on the Sea of Azov and helping to make the occupied Crimea independent from Ukrainian influences.

A formal and legal obstacle for the construction of the bridge route and the energy bridge, as well as the guarantee of the free operation of ports in Mariupol, Berdiansk and a small marina in Henichesk, are all contained in the provisions of the still binding Ukrainian-Russian agreement regulating the use of waters in the Kerch Strait and the Sea of Azov by both countries, concluded in 2003 under the settlement of the Tuzla conflict. The agreement guarantees, inter alia, the free passage of ships and vessels flying the flags of Ukraine and Russia across the Kerch Strait and in the basin of the Sea of Azov, as well as provides that “all issues related to the Sea of Azov and the Kerch Strait should be resolved exclusively be means of peaceful methods or on the approval of Ukraine and Russia”.

As long as the agreement is effective, Russia must not treat the Kerch Strait as its own exclusive territorial waters.

In accordance with the provisions of the agreement: “Any issues related to the Kerch Strait basin shall be settled by means of agreement between the parties. Merchant vessels and ships and other state vessels flying the flags of Ukraine or Russia, used for non-commercial purposes, shall take advantage of free movement within the Sea of Azov and the Kerch Strait. Merchant vessels flying flags of other states may enter the Sea of Azov and cross the Kerch Strait if they travel from or to a Ukrainian or Russian port.”

However, in mid-July the draft Act waiving the ratification of the 2003 agreement by Ukraine was submitted to the Parliament. If the Act is adopted, Russia will be able to block the sea traffic towards Mariupol and Berdiansk on a whim, claiming that the strait constitutes its territorial waters, and Ukraine will have lost the instrument of a formal complaint about the failure to fulfil the provisions of the treaty, with no other means to remedy its grievances. The last formal obstacle for Kremlin to build the bridge route and the energy bridge across the Kerch Strait will also disappear.

Mariupol and Berdiansk – victims of the President

Anyway, the biggest Ukrainian port on the Sea of Azov, in Mariupol, is barely alive. As a result of the General Staff preventing the counterattack of volunteer troops at Mariupol in January this year and stopping the operation that could have led to regaining the control over the entire Ukrainian coast of the Sea of Azov, today ship operators sidestep the port in Mariupol, recognised by them as dangerous, whereas the sea traffic in this basin, anyway very limited, has been taken over by the port in Berdiansk situated several dozen kilometres to the west.

According to many Ukrainian commentators the entirely passive attitude of the President and his ruling party towards the Kerch Strait and, consequently, the ports in Mariupol and Berdiansk, may be explained by the businesses that the Ukrainian President is running in Russia and their dependence on the decisions made by Moscow authorities. Accordingly, Russian decisions affecting those businesses that have been taken so far may shed a light on the matter.

– Over the recent weeks the seizure of a confectionery plant in Lipetsk belonging to Poroshenko has been lifted, and the local court dismissed tax fraud charges. There is little doubt that the Kremlin stands behind those decisions, favourable for Poroshenko, as nobody in their right mind would believe in the independence of a Russian court – stated Vitaliy Kupriy, Vice President of the Committee on the Rule of Law of the Ukrainian Parliament (the Supreme Council) in mid-July.

From the economic point of view the bridging of the Kerch Strait by Russia and the annulment of the treaty regulating the use of sea routes planned by Kiev will divest the Ukrainian control over the Sea of Azov coast of any importance. Ports in Mariupol and Berdiansk, cut off from the Black Sea, will only provide service to small vessels fishing on the Sea of Azov. This may subsequently help the President-oligarch’s team to reach a consensus with the Kremlin concerning Russia taking over the control of this area in exchange for economic concessions for the President’s own businesses.

The loss of the Sea of Azov and ports in Mariupol and Berdiansk situated there will also mean a significant limitation of export capacity for industrial regions still controlled by Kiev: Kharkiv, Dnipropetrovsk, Zaporozhye and the unoccupied part of Donbas, so far mainly serviced by these ports.

Sea deregulation

In order to at least slightly improve the situation resulting from the loss of consecutive ports, the government was forced to start combating corruption, ubiquitous in the sea transport. The corruption schemes based on blocking cargo until the “victim” pays the required bribe, may effectively paralyse trade exchange. The Minister of Infrastructure, Andriy Pivovarsky has announced introduction of asolution according to which the controlling authority, instead of the economic operator, will have to pay for cargo stoppage in the port, if it turns out that the downtime was illegitimate.

– The inspecting authority will have to pay if they do not find anything – he announced. Cargo inspections are to be conducted on the basis of risk analysis, instead of officers’ discretion, as has been the practice so far. The ministry also wants to replace the currently operating system of paper document flow by a fully electronic system. According to new guidelines cargo clearance should take an hour.

According to the estimates of the ministry, those changes will increase the capacity of Ukrainian ports by 15-20 per cent, without incurring any investment expenses. One wonders, of course, if in the Ukrainian’s reality this turn of policy may not take a twist, making inspections exceptionally detailed and thus virtually bound to find something in a typical act of tail-covering  by bribe-demanding officers. After all, risk assessment as the basis for conducting customs clearance was already touted several years ago and presented back as part of amendments to the customs legislation. Nevertheless, the customs service has always been and continues to be one of the most corrupt branches of Ukrainian administration.

At the end of July, the Minister of Infrastructure announced the privatisation of one of the fully operational ports still controlled by Kiev – the facility in Nikolayev. Although the port operates very well as state-owned and does not require special investment, it offers the opportunity to control exports of grain from the southern steppe, black soil (chernozem) districts of Nikolayev, Kherson, Kirovograd and Dnipropetrovsk. And after the loss of ports’ potential the Sea of Azov basin turned in fact into a lake, the port in Nikolayev will also provide services to exports of the metallurgical and machinery sector from the districts of Zaporozhye, Kharkiv and the unoccupied part of Donbas.

It is a strategic, important exit to the world for Ukrainian exports, providing a level playing field to all market participants. Most probably one of the Ukrainian oligarchs will soon gain a monopoly on exports by sea from Nikolayev for next to nothing.

The author is a journalist, lives in Ukraine.

 

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