vlad.tribnet.com / Issue #148 / Business / Reading article...

The Vladivostok Industrial Port (Vladinport) is still seeking investors to cover costs for its construction project on the Shkot Peninsula, estimated at $200 million.

The project, initiated in 1995, plans for eight new piers, four terminals, and a railroad loading and unloading station near the Vladivostok Commercial Port's existing facilities. The port will be able to handle over 5 million tons annually of timber, vegetable oil and metal cargoes, as well as general goods. If all goes according to plan, construction should begin in mid-1998, taking about five and a half years to complete.

With the Vladivostok Commercial Port becoming outdated, the new project will hopefully make trading in Vladivostok an easier process, said Vladinport General Director Ivan Abroskin. The project would also be an enormous help to the economy, as port construction will require 2,000 employees, while operation will demand 15,000 workers, Abroskin said. The company is expected to bring in an estimated $30 million each year.

Still, Abroskin is frustrated because the project has not received any breaks from the government. He believes that a development of the port's size deserves tax breaks, which haven't been coming. "We think that this kind of project requires some more advantageous terms," Abroskin said. "Unfortunately as of today we are given the same conditions that a shop gets."

As it looks for investors both in Russia and abroad to increase its $24 million assets, Vladinport is focusing on the United States. It has applied for a grant from the Trade Development Agency, a federal funding organization. If awarded, the grant will be used to complete a feasibility study of the site. Vladinport has also signed a letter of intent with Caterpillar Construction to use its equipment for the project.

The company has also worked closely with the Columbia Group, a project consulting company that helped develop a business plan and organize the grant application.

Vladinport is also looking to Greece, Germany, South Korea, and Australia for money, but has found it difficult to convince investors that the project is worth the risk. Abroskin blames stifling customs and tax laws for these fears.

Vladinport was founded in 1993 by the Vladivostok Commercial Port, after it realized that it would be unable to carry out land development by itself on a space given to it for that purpose by the state in the 1970's. Shares were quickly snapped up by local shipping companies.