Paldiski port eyeing transit center for Kazakh railway company

Paldiski Northern Port. (Postimees/Scanpix)
11/12/2016 1:42 PM
Source: BNS
Category: Business

Privately held Estonian port operator Paldiski Sadamate AS intends to set up a transit center for Kazakh state-held railway company Kazakhstan Temir Zholy (KTZ) at Paldiski Northern Port that would ease transportation of goods from Kazakhstan to the Scandinavian market.

Paldiski Sadamate AS has a long-term partnership with KTZ and expanding and intensifying cooperation between the parties is currently in the cards, said Aleksandr Kovaljov, a board member at Paldiski Sadamate AS.

"The port has good possibilities for building new specialized customs terminals, with a free zone status if necessary, right next to the sea, complete with quays of their own," the company said in a letter to the Estonian Ministry of Finance.

Establishment of the new transit center would enable goods from the Silk Road and Kazakhstan to move to Scandinavian countries significantly more easily than at present, said Kovaljov.

The company described several options for the building of the new terminals. One of them would involve selling the construction permit to the partner and later establishing a joint venture with the partner in order to operate the transit center. A "turnkey" option has also not been ruled out either, wherein the terminal would be built by the Estonian side and the Kazakh partner would thereafter become the operator of the terminal.

Kovaljov declined to provide any details of the business plan or the estimated size of the investment, saying that the project is still in the early phase of development.

In the Estonian port operator's letter to the ministry, Kovaljov said that while a cooperation agreement was signed between Estonian ports and KTZ during a visit by Estonian officials to Kazakhstan in the spring, the pace of cooperation has since slowed down somewhat and the company expects the ministry to help them present the project to potential partners in Kazakhstan.

Paldiski Sadamate AS posted a revenue of 11.9 million euros for 2015, a 5.6 percent decrease from its 2014 figures.

The Paldiski Sadamate group of companies is made up of the parent Paldiski Sadamate AS as well as Estonian subsidiaries OÜ Palsteve and OÜ Pintomar and Russian subsidiary Paldiski Northern Port Ltd.

Editor: Aili Vahtla

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