Second Chinese investor interested in building and operating new intermodal terminal in Varna

Varna, Bulgaria (PortSEurope) April 22, 2022 – China Railway International Group (CREC) became the second Chinese investor in as many months showing interest in building and operating a new €500 million intermodal terminal in Bulgaria’s largest Black Sea port of Varna, according to the Chairman of Bulgaria’s parliament transport committee Borislav Gutsanov. A new intermodal facility in Varna will attract cargo that for years will not go to Russia’s Black Sea ports, that will avoid the overloaded Romanian port of Constanta. The cargo will come from Georgia’s port of Poti, which is to take over containers coming from China, via the Caspian Sea, now bypassing Russia. In March, Gutsanov discussed the project, then estimated by him at €1 billion, with representatives of Belgian company Jan De Nul. According to local media, the project has already been presented to one of the largest Chinese construction companies – China Construction Third Engineering. No details about negotiations, cost and timeframe for the project are available. Gutsanov’s idea for a new transport port in dates back to 2007. It envisages the relocation of cargo operations from the existing port of Varna East in the centre of the city to the Varna Lake in the Maksuda district. The plan for Varna East terminal is to become a recreational area and to be integrated in the city. The project envisages five quays in the new port - two for containers, two for grain and one for general cargo. The planned terminal area is on 650 acres. Gutsanov claims that building the new port capacities in Varna will attract the freight from the Far East to Western Europe. China Machinery Engineering Corporation with plans for a new terminal in Port Varna In April 2019, China Machinery Engineering Corporation (CMEC) signed a €120 million contract with Logistic Center Varna (LCV) to jointly develop new infrastructure in the port. The realisation of this first port project by a Chinese company in Bulgaria hasn’t yet started. CMEC, owned by the state-controlled China National Machinery Industry Corporation (Sinomach), will be responsible for project design optimisation, supply of materials, construction and installation as the prime contractor. The overall project construction period will take three years. Logistic Center – Varna is Bulgarian joint stock company, incorporated in 2007 in Sofia, Bulgaria. The company is solely owned by T.B. Consult (TBC). TBC is a limited liability company, 100% owned by businessman Todor Batkov. The new port project is to have a total area of 266 645 m²; length of the quay: 895 m berth line (460 m – first stage and 435 m – second stage); capacity depth of the quay: 12 m; air draft: 41.75 m; silo system’s total capacity 105,000 m³ grain; store for containers – 4,200 TEU full and 750 TEU empty container slots; open store for general goods – 23 000 m²; covered container freight station – 4,500 m²; potential for the construction of additional 7000 m² covered flat stores. Vessels’ capacity: container – 4,000 TEU, length 256 m, beam 32.2 m, rows on deck 13, maximum draft 11 m, deadweight 52,500 t; bulk – 50,000 t, length 225 m, beam 32 m, maximum draft 11 m, deadweight 50,000 t. Dredging of the two main access canals of Varna Port The dredging of the two main access canals of Varna to a depth of up to 13.5 m (from 11 m), 80% complete, could be stopped. The whole project might be abandoned, Bulgaria’s then Minister of Transport Nikolay Sabev said in January. “We need to think about whether it’s worth deepening (the port) or redirecting money to something which will contribute faster and more effectively to stronger economic growth in the region,” he said, claiming that the project aimed to deepen the port to 14.5 m. The Varna Lake section of the port and the turnaround channel will also be dredged as part of the BGN 435 million (€222 million) government-funded project. It aims to attract cargo from the China’s new Silk Road project and the new trans-Caspian transport corridors. Some eight million tonnes of material will be dredged from the channels and lake bottoms, with which the canals’ banks will be fortified. Bulgaria’s independent media insists that the whole project is to benefit a private terminal (Port TPP Ezerovo). This is majority owned by Ahmed Dogan, honorary chairman of the predominantly ethnic Turkish Movement for Rights and Freedoms (MRF). Dogan is a controversial local politician, linked in media publications to the communist-era political police. He is also described as a conduit for Russian interests in Bulgaria. After the completion of dredging, Port TPP Ezerovo is expected to take over the grain and containers currently handled by the state-owned Varna port terminal that is close to the city centre. The project for deepening of the Varna canal is 80% completed and access to the port of TPP Ezerovo ready, while this did not happen for the other 15 terminal operators in Varna port, according to the Mediapool independent news agency. Port of Varna (Bulgarian: Пристанище Варна, Pristanishte Varna) is the largest seaport complex in Bulgaria. Located on the Black Sea’s west coast on Varna Bay, along Lake Varna and Lake Beloslav, it also comprises the outlying port of Balchik. It has a significant further development potential with 44 km of sheltered inland waterfront on the lakes alone, easily accessible by road and railroad and adjacent to Varna International Airport. This move was already being planned in 2017, when the mayor of Varna, Ivan Portnih, announced that the ships loading grain and scrap near the city centre in the state port must move to the quays of TPP Varna near the village of Ezerovo. TPP is a large coal-fired thermal power plant. The project envisages Canal 1, which connects the Black Sea with Varna Lake and has a length of 3.8 km, to be dredged to a depth of 12.78 metres with a width of the bottom in the straight sections 103 metres, and in the curves – 178 metres. Canal 2 is located between Varna and Beloslav lakes and reaches Port Varna-West. The channel was completed in 1976-1978. Its total length is 10.2 km, its width is 106-130 metres with a depth of 12 metres. The goal of the project is a complete and long-term solution to the current problems of approach and ship manoeuvring and future needs for new manoeuvring zones in accordance with the investment projects of the operators of terminals and ports located in the port of Varna, the government said. It added that the project will provide the necessary conditions for the development of all terminals in Varna, in accordance with good maritime practice for safe shipping, which will enable them to compete with Romania’s Black Sea port of Constanta. State-owned Port Infrastructure company already built new cable channels, sewage, new street lighting system, new access points and a system for access control in Port Varna East. In Port Varna West, the infrastructure upgrade, water supply network and road surfaces have been completed. It is also planning the creation of yacht marinas with 100 docking places each in both Varna ports. Theoretically, the deepening of the waterway through the Varna and Beloslav lakes should be good news for the state port of Varna West in Devnya. It serves several of the large industrial plants located there – Agropolychim, Solvay Sodi and Devnya Cement, as well as the ferries, whose terminal is located in Beloslav. The distance from Varna Bay to Varna West is about 25 km, and the waterway passes under the Asparuhov Bridge and via two canals, which are periodically blocked by silt. But the Transport Minister insists that the foundation of the bridge will be compromised if the dredging works continue there. The need for additional depth for the Port of Varna West has been under discussion for decades, but without any results. The topic has been repeatedly put on the agenda by the owners of Agropolychim, who want to provide access to the port of Varna West to up to 60,000 tonne-ships, and not just the 30,000 tonnes vessels currently docking there. This is what, according to opposition politicians and the independent Bulgarian media, raises suspicions about the government’s sudden decision in 2020 to allocate money for the deepening of the waterway under the Asparuhov Bridge to Varna Lake exactly when Dogan started the implementation of his project for the new TPP Varna Port. The intentions announced by the Sigda company, in which Dogan is the majority owner, are to extend the quay of the existing Port of TPP Varna, to increase the number of its berths, as well as its depth to 12.50 metres. The renovated port will be able to handle up to 8 million tonnes of cargo per year. For comparison, the state-owned Port of Varna currently processes about 10 million tonnes annually. After the construction of new container infrastructure, the Port of TPP Varna will have a capacity of about 200,000 TEU per year and will become the biggest container terminal in Bulgaria. This is why it is expected that the Port of TPP Varna will soon make the existence of the state-owned Varna East terminal meaningless. How this will happen became clear in the autumn of 2019, when the traditional queue of grain trucks in front of the state port, waiting to be unloaded on export ships, moved to the port of Varna TPP. Largest industrial zone in Bulgaria The largest industrial zone in Northern Bulgaria will be built near the Port of Varna, according to Ivan Portnih, mayor of the Black Sea city of Varna, said in February 2021. The new zone is very close to the soon to be finished Hemus highway, connecting Varna to the capital Sofia as well as to the railway station and the Varna international airport. Feasibility studies are currently being developed for light urban railways, which will lead to the new industrial zone as well as an expansion of an existing boulevard in the direction of the airport with an exit of the highway to the industrial zone. More PortSEurope news about Port of Varna Copyright (C) PortSEurope. All Rights Reserved. 2022.

Second Chinese investor interested in building and operating new intermodal terminal in Varna

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Second Chinese investor interested in building and operating new intermodal terminal in Varna

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