Port of Mariupol: making progress or lagging?

SE “Mariupol Commercial Sea Port” is implementing measures to increase capacity and cargo traffic. Is MCSP able to keep pace with its own financial plan?

Work is in full swing in the Mariupol Commercial Sea Port: regular tenders, modernization, reconstruction and construction works have become constant companions of the enterprise. The port is implementing the 2018 Development Plan in the medium term (for 5 years).

In particular, according to the results of the last two auctions carried out in the Prozorro procurement system, SE “Mariupol Commercial Sea Port” decided on contractors for the modernization of portal cranes with a total cost of UAH 4.64 million (USD 171.8 thousand).

The winner of the auction for the modernization of portal cranes is the Private Enterprise “UTS-AZOV” with an offer of UAH 1.96 million (USD 72.5 thousand). The winner of the bidding for the modernization of the departure mechanisms on portal cranes – Konecranes Ukraine PJSC with an offer of UAH 2.68 million (USD 99.2 thousand). According to the tender documents, these enterprises were the only participants in two tenders. The timelines for the services delivery, under the terms of the first auction, are until September 23rd, 2022; under the terms of the second – until September 22nd, 2022.

Reference: “UTS-AZOV” is engaged in the repair of machinery and equipment. Konecranes Ukraine PJSC is a subsidiary of Konecranes, an international manufacturer of equipment for lifting and moving goods.

Portal cranes “Mark-12”, “Mark-7” and “Kondor-6”, which SE “MCSP” plans to modernize, are used in the port for handling steel plates, steel coils, slabs, etc. As part of the modernization, the system of video recording of cargo operations will be installed on the cranes in order to increase the level of safety and to quickly monitor the transshipment processes. The company also proposes to introduce a system of diagnostics of crane operation with the possibility of remote access in order to improve conditions when working with the specified cargoes.

In early August, SE “MCSP” selected a contractor for the reconstruction of railway lines to the territory of the first port area. In July, the company announced a tender for overhaul of container loader №2. Also, the construction of a new grain terminal is nearing completion in the port – it should start working in October this year.

All these works are carried out by SE “MCSP” in accordance with the Plan of SE “USPA” for the development of the port of Mariupol. According to the document, within five years (the document was approved in 2018), the port plans to increase the number of jobs and cargo handling capacity by 2.5 million tons per year, as well as containers – by 100 thousand TEU per year. In 2021, the port handled 2 thousand TEU against zero last year. Although this is not sea transportation, it still means the resumption of container handling at the MCSP.

Recall that the financial plan of the MCSP for 2021 approved by the Cabinet of Ministers provides for the receipt of UAH 1.3 billion (USD 48.1 million) in net income from product sales, as well as UAH 93.2 million (USD 3.4 million) in net profit. Capital investments are planned in the amount of UAH 389.8 million (USD 14.4 million), including the modernization and modification of fixed assets in the amount of UAH 43.9 million (USD 1.6 million).

According to the financial plan, MCSP plans to achieve a cargo handling of 7.1 million tons. From January to July, the enterprise handled 3.56 million tons of cargo (against 3.18 million tons in the same period last year).

The increase in cargo traffic came in the following categories (January-July):

rolled steel + 60% (from 526.7 thousand tons in 2020 to 839 thousand tons);

pig iron + 45% (from 223 thousand tons to 322.6 thousand tons);

construction materials + 30% (from 253 thousand tons to 330.5 thousand tons).

Due to the fact that most of the enterprises supplying coal for export from the Donetsk and Lugansk regions through the port do not work, MSCP does not predict a recovery in the flow of export coal this year. The port hopes for the return of clay cargo traffic to Mariupol, since the open cuts for the winning of construction materials are located in the territories controlled by Ukraine.

The main export cargoes of MSCP are steel products and grain. To increase the cargo flow of steel products, the port, together with the Metinvest Group, launched shipping lines to Italy, Spain, Turkey and Bulgaria. The expected volume of supplies within the registered lines is about 270 thousand tons per month. This year, the port handled 2.96 million tons of steel products (against 2.37 million tons last year).

Grain transshipment decreased by 30% compared to last year. So, in January-July 2021, the port handled 360.4 thousand tons of grain cargo, against 514 thousand tons in the same period last year.

But now a grain terminal is being completed at the port. And by 2023, MCSP plans to increase grain handling by 2 million tons per year.

As for the container turnover, further forecasts completely depend on the speed of the container terminal commissioning.

In any case, now the Mariupol Sea Commercial Port actually maintains its indicators at the level of last year. And it looks very doubtful whether the state stevedore will make a profit of UAH 93 million (USD 3.4 million) per year.

Olga Gorbenko.