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Novotrans expands in Ust-Luga

Novotrans, one of Russia’s leading rail operators, has acquired a 100% stake in Global Service, the operator of the ferry terminal in the port of Ust-Luga

In May this year Global Service won the tender of Russia’s federal seaport enterprise Rosmorport to operate the terminal, which occupies an area of 30-ha.

Along with taking over the terminal, Novotrans now also becomes the operator of the Ust-Luga-Baltiysk (Kaliningrad) ferry service.

The service is strategically important, as it provides for cargo transport between the Russian mainland and the exclave without crossing the borders of Belarus and Lithuania.

The line is currently operated by two rail and truck ferries, AMBAL and BALTIYSK, but these are obsolete. In June 2018, Nevsky ,Shipyard near Saint Petersburg was awarded a US$80M tender for the construction of a new and bigger rail and truck ferry with LNG dual-fuel capability. This is scheduled to be launched in August this year. An order for a second, identical ferry is thought to be imminent.

Novotrans’ Director General Konstantin Goncharov stated that shipping between the two ports will continue to grow and the company is developing the Ust-Luga terminal’s technical capabilities. Already new ro-ro tractors and heavy FLTs have been acquired.

The Global Service acquisition is part of Novotrans’ broader strategy to diversify its activities. Earlier this month it signed an agreement with Saint Petersburg’s regional administration, stating its readiness to invest around US$740M in the "Lugaport" project in Ust-Luga. This is part of Russia’s adopted programme for transport infrastructure development to 2030.

Last October Novotrans consolidated a 76.55% shareholding in Transport and Logistic Complex (TLK), the principal owner of the Ust-Luga-based multipurpose cargo-handling terminal Yug-2. However, its property rights for the terminal have since been challenged by other local players, specifically Saint Petersburg-based billionaire Ilya Traberg, a co-owner of Primorsk Multipurpose Reloading Complex Ltd (PUPK), which plans to build a deep water dry cargo port at Primorsk, presently Russia’s key Baltic oil harbour.

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