“Started with one ferry, now there are five”
The well-known news agency Bloomberg reported the other day that the EU may include amendments to Kaliningrad in the new sanctions package that define the rules transit of goods from Russia through Lithuania. In the Kaliningrad region itself, of course, they are waiting for such a decision, but they are not going to rely on Europe, and are ready for any development of events. Even if Lithuania does not open transit, local business will not give up. About how local enterprises cope in such difficult conditions and what kind of support they expect from the state, Moskovsky Komsomolets was told by a person who knows the strengths and weaknesses of the region,Andrey Vladimirovich Romanov, President of the Union of Industrialists and Entrepreneurs of the Kaliningrad Region.
Kaliningrad Photo: pixabay.com
“Those decisions taken by Lithuanian politicians complicate the activities and work of enterprises,” says Andrey Romanov, “But we don’t use the word blockade, we still have options for alternative cargo deliveries. First of all, this is a sea route, a ferry crossing, dry cargo ships, container ships on the sea route. There are options, and they will always be saved. I do not think that the European Union, and even more so small Lithuania, will have enough resources to carry out a blockade of a subject of the Russian Federation. But returning to the issue of enterprises, the economy, this, of course, complicates current activities, and we see this in the example of the supply of metal, building materials, primarily cement, and other groups of goods.
– The current situation is a test for each specific enterprise and for the economy of the Kaliningrad region as a whole. We've all stepped out of our comfort zone, and we're all in extreme conditions right now. There are risks that some enterprises will leave the market, but there are always such risks even under normal conditions. I have no doubt that the main companies will remain on the market and continue their activities. And here the speed of decision-making is very important. Nevertheless, we are waiting for a decision from Lithuania and the European Union that they will abandon their decision and restore transit in the form in which it was before June 17. This would be logical, since the adopted decision is completely contrary to the spirit and letter of the agreements that were signed by the Baltic countries when they joined the European Union. It was the beginning of the 2000s. The European Union, of course, has the right to prohibit the import of certain products to or from itself, but trying to regulate the movement of goods between the subjects of Russia is beyond all reasonable limits and this decision is inadequate. We expect the European Union to understand this and change its legal acts. If this does not happen, we will have to expand our sea route, and in recent days additional ships have already appeared that allow us to supply metals, cement, and building materials. And we will respond to all deterioration with adequate actions in order to maintain economic activity in the region.
– Literally today, the media reported that the First Deputy Prime Minister of the Government of the Russian Federation Andrei Removich Belousov said that the deterioration of logistics for enterprises in the Kaliningrad region should not affect competitiveness. We have already come out with initiatives to subsidize more expensive logistics in order for enterprises to remain competitive. I hope that our proposals will be heard and we will receive support from the federal center.
— This is a matter of discussion. Taking into account the peculiarities of the Kaliningrad region, we have always had the issue of expensive logistics, and at some stages these mechanisms have already been developed. It seems to me that such a mechanism can be implemented quite quickly without developing something new and without going through a large circle of discussions and approvals. It seems to me that there is no need to discuss industries, we need to look at the goods that go to and from Kaliningrad, and subsidize them. At what level? To the level that the cost of their delivery would correspond to the most popular tariff used by the enterprises of the Kaliningrad region when they were transported by rail at the tariff 10-01 from Kaliningrad to the central part of Russia. Then economic activity and competitiveness will remain at this level.
– If the EU does not change the conditions for transit, a certain number of ships will be required. Now active work is underway to make the right balance of what cargo can be delivered to Lithuania, and what by sea. And literally in a few days these balances will be brought together. So far, there is a queue, there is some traffic jam in Ust-Luga, but it is not critical.
— We started with one ferry, now there are five. This shows that the demand for these routes has increased.
– Air travel is much faster, but at the same time more expensive. They have the right to life, part of the cargo is delivered to us by air routes, but this is expensive cargo per kilogram. And not all cargo can be transported by aircraft.
“If the European Union reverses its decision, this will be the most optimal way out of the situation. There will be no need to raise the issue of subsidizing, attract additional vessels. However, you need to hope for the best, but be prepared for any development of events.
– This has happened and will continue to happen. I will give an example of spare parts for various types of equipment: Road equipment, agricultural equipment. When European companies began to make decisions that led to an increase in the cost of logistics, some enterprises began to produce spare parts in the region. Yes, this is a difficult job, it is not yet mass and assembly line production, and therefore some things turn out to be more expensive, but they are competitive and this is a good impetus for new products and production development. I am sure that these products could be sold well throughout Russia.
—First of all, the right decisions. Every day we need to make different decisions, they are not always simple, not always standard, but let them turn out to be right in the end. I also wish you health and success in the current situation.