Moscow, Russia (Ports Europe) June 25, 2024 – In a schizophrenic third change of position in as many months, Russia, isolated from the Western transport network by sanctions, decided to support ports and logistics infrastructure abroad.
The Russian government, with the participation of the Russian Union of Industrialists and Entrepreneurs (RUIE), must submit by August 1 proposals to provide Russian organisations with additional measures to create sustainable supply chains and infrastructure for foreign economic activities in new markets in Africa, South America and South-East Asia.
The instructions, prepared at the plenary session of the congress and the meeting with members of the RUIE board bureau were approved by Russia’s President Vladimir Putin.
To build or not to build: Russian ports abroad
In end-May, it was “no” to foreign ports and logistics infrastructure
The Russian government does not plan to support the country’s private or state-owned companies’ investments in foreign ports and logistics infrastructure, Russia’s Deputy Prime Minister Dmitry Patrushev said at the All-Russian Grain Forum in Sochi on May 30. He contradicted Putin and many senior government officials who, since the start of the year, repeatedly claimed such investment plans.
Russia plans logistic infrastructure in Asia, Africa, South America
“For now, we do not provide support for investments by Russian companies in foreign infrastructure,” Patrushev said. “We will still support investments in our own infrastructure. Construction of infrastructure in third countries is, first of all, the task of these third countries. They have to build infrastructure that will allow us to improve our supply chains”.
He also noted that long-term trade relations with friendly countries (Russia’s term for countries that do not support the sanctions against Moscow for its full-scale invasion of Ukraine) imply mutual integration of infrastructure.
“We need to discuss relevant initiatives with our foreign partners,” Patrushev said. “We cannot invest public money in the development of infrastructure related to grain exports in third countries. It is important for us that there is this support to our exporting ports”.
In early May, it was “all in favour” of port infrastructure, industrial parks and logistics centres in Asia, Africa and South America
To bypass Western sanctions, the Russian government will finance the creation of port infrastructure, industrial parks and logistics centres in Asia, Africa and South America, the director of the department of international cooperation of Russia’s Ministry of Industry and Trade Roman Chekushov said in May.
“We have 12 projects for infrastructure abroad for the period 2025-2030 in progress, but this is not the final number,” Chekushov said. “It can change either down or up depending on the investment activity of our companies, both logistics and management firms”. Borrowing from China’s playbook, Russia is trying to build its own logistics infrastructure. It will do so in so-called “friendly countries”.
Chekushov underlined that priority would be given to financing projects in countries through which the main international transport and logistics corridors pass. The key is routes along the International North-South Corridor (INSTC) project, which is promoted by Moscow.
The focus would also be on routes to China and countries that are already the largest importers of Russian products or are capable of becoming a distribution point for Russian products due to their location.
In April, Putin “requested” assistance to local companies to acquire or create transport and logistics infrastructure abroad
In April, Russian President Vladimir Putin said that he wants the government to provide financial assistance to local companies to acquire or create transport and logistics infrastructure abroad.
The Chairman of the Board of Directors of FESCO, Andrey Severilov, asked Putin for this during the Russian Union of Industrialists and Entrepreneurs congress on April 25.
Private Russian companies to buy ports abroad with state money
“As for the acquisition or creation of infrastructure abroad by our companies, of course, we need to support this process, this is one hundred per cent,” Putin said.
Hard pressed by Western sanctions and exclusion from the global logistics chain, Russia started in January talking about a network of transport and logistics centres (TLCs) and marine terminals abroad. The first such proposal for Russia’s “sovereign logistics” was made by Severilov at the kick-off meeting in January on the formation of a new national project Transport.
Russia wants logistics centers and marine terminals abroad
Also in April, Chekushov clarified that Russian ports could be created in Tanzania, Senegal, Algeria or Egypt.
Moscow to finance private firms to buy ports in Africa
Russia’s Delo Group said in April that it is planning to create a transport hub in Sri Lanka. Sri Lanka is ideally positioned for cargo transshipment to the giant Indian market and South Asia.
Russia to build a port terminal in Sri Lanka
Additional instructions from the RUIE meeting
The instructions, prepared at the plenary session of the congress and the meeting with members of the RUIE board bureau and approved by Putin also demand that the government must ensure that changes are made to Russia’s legislation to provide for mechanisms to attract extra-budgetary funds into priority investment projects for the creation and development of transport infrastructure.
The document also orders the creation by August 1 of additional measures to support the construction of transport and logistics infrastructure and distribution centers, especially near the main transport corridors.
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