International Business Magazine Jura (Sea). Issue 2001/5. Exclusive Interview.

Issue 2001/5

Transit cross-road

Zigmantas Balcytis – LR Minister of Communications – is a member of the 12th Government Cabinet. He was born on 16 November 1953 in Silute district, Juodziai village. From 1996 to the election to the LR Seimas, Zigmantas Balcytis was first deputy director of the Lithuanian-Hungarian joint venture (later – joint stock company). Since 2000 Zigmantas Balcytis is a member of the Lithuanian Democratic Labour Party. He likes basketball, hunting, water skiing, and fishing. He is married and has two children.

- Honorable Minister, what are the guidelines the Ministry of Communications under your leadership will follow in order to make transit via Lithuania more intensive so that our country could justify the name of a transit state?

- The main directives that the Ministry of Communications is following in order to make transit via Lithuania more intensive are defined in the Program of the Republic of Lithuania as well as in the implementation plan of this program. It is foreseen to create favourable conditions for the formation of new cargo flows and to reorganize transport system in such a way that the legal base regulating transportation activities and the state of terminals and infrastructure could maximally satisfy the needs of the users of transport services and especially the needs of subjects of economy, executing transit. For this reason the infrastructure of the I and IX transport corridors is getting improved and favourable conditions are being created for the foundation of integrated transport service system and the creation of multi-modal logistics centers basing modern information systems. Lithuania is trying to take an active part in international infrastructure and transport market integration processes. It is foreseen to found representative offices in different regions of CIS countries, especially in Russian regions in order to encourage transit freight flows via Lithuania.
It is important to implement a unified computer control system for the movements of cargo via the territory of Lithuania by liberalizing the functions of controlling institutions and allowing the cargo to move freely in international east-west and west-east directions.
We foresee to make export, import and transit procedures quicker and clearly regulate the transportation of military and other dangerous cargo.
The Transit Committee to the Government of Lithuania will become an effective and permanently working operative structure with quick and precise reaction to the changes of transit market conditions eliminating bureaucratic obstacles for the development of transit business.
In the Program of the Government of Lithuania the following measures are foreseen: restructurization and privatization of transport objects, modernization and development of all kinds of transport infrastructure. The execution of balanced tariff and fiscal policy in transport sector will help to improve the transit environment and to meet the needs of the users of transportation services.

- Do you intend to continue working on the initiative of your predecessors to turn the branch of Nordic corridor (China-Kazakhstan-Russia-Poland-Germany), which receives great attention both from eastern and western countries, to Lithuania?

- Sure, we are going to continue this initiative, as the inducement of transit via Lithuania and development of transport services is one of our strategic objectives. During the meeting of high officials of Kazakhstan and Lithuania the intentions satisfying the both parties were expressed - to increase Kazakhstan cargo transit via Lithuania. However, to get a branch of Nordic corridor turned from Belorus to Lithuania, first of all we have to agree on favourable rail tariffs in Russia for transit in Klaipeda direction. Then not only Kazakhstan transit freight flows could increase via Lithuania but of other countries too. It is also important to induce the foundation of Lithuania-Kazakhstan joint ventures involved in cargo handling, cargo storage, ship agents and cargo forwarding and to use effectively Klaipeda port and land infrastructure connected with it, in order to increase the competitiveness of the port and develop its international activities. In October this year a conference is to be held on the development of freight transportation activities where shippers, forwarders and other people involved are invited.

- How do you valuate the cooperation perspectives with the republics of Kazakhstan and Uzbekistan? What do you think about the intentions of Kazakhstan businessmen to invest their capital in Klaipeda port? (Interview with the Prime Minister of Kazakhstan D.Akhmetov for the magazine Sea 2000 No 5 Lithuania – a strategic partner of Kazakhstan)

- There are many inter-governmental agreements signed with these republics, among which an agreement on rendering transportation services for Uzbekistan and Kazakhstan transit cargo via Klaipeda State Seaport. Following these agreements we will strengthen and develop the cooperation, creating more favourable conditions for increasing transit cargo flows.
The share of Kazakhstan cargo has increased from 0.3% to 5.5% 1996-2000. In 2000 1068.8 thousand tons of cargo were handled and it is by 3.1 times more than in 1999. During the first half of this year 382 thousand tons of cargo were handled. Metal and alloys are exported and molasses is imported.
Uzbekistan cargo flows via Klaipeda State Seaport increased in 2000. During the first half of 2001 the situation remained the same – 6.2 thousand tons. Therefore, one of the most important aims is to seek that Uzbekistan cargo flows could reach Klaipeda port by railways and then the states of West and North Europe. So in the nearest future it would be expedient to propose to create a joint working group of railway people, who might discuss and prepare the plan for renewal and attraction of additional cargo flows. It is necessary to use more effectively the advantages of rail and sea transport infrastructure, Klaipeda container terminals, Klaipeda International Ferry terminal nemune roundabout way and the pedestrians’ road over the Nemunas river. During the meeting further possibilities of the development of the project 2K were discussed which might assure further cooperation conditions between the ports and the railways.
We exchanged our opinions with the Minister of Transport of Russia on other projects of transport infrastructure modernization important for the both countries, paying more attention to the border crossing issues between Lithuania and the Kaliningrad region.

- Is the project 2K only a key to solve Lithuanian and Russian railway tariffs problem or is it an international project opening much wider cooperation perspectives?

- The project 2K covers quite a wide range of questions. But first of all it is a cooperation inducing the development of the ports of Kaliningrad and Lithuania in order to attract additional cargo to Klaipeda and Kaliningrad, increasing their competitiveness, improving the quality of services. The question of harmonization of tariffs is very much important too.
The ports of Klaipeda and Kaliningrad are planning to cooperate in safety shipping, search and rescue and ecological problems.

- Stevedoring companies have openly expressed their dissatisfaction about the transit policy of the Conservative Party due to which the coordination of railway tariffs failed and the cargo flow via Klaipeda port decreased. Do the present Ministry officials see a perspective how to return the lost volumes of cargo?

- We are working hard to return the lost cargo flows. Intensive negotiations with the ministries of railways and transport for equal conditions in transportation of cargo in Klaipeda – Kaliningrad direction should serve this reason, and the possibilities to take part in the activities of coordination board of Trans-Siberia route and in the meeting of East-West ministers of transport are discussed. As I have already mentioned, during the meeting with the Minister of Transport of the Russian Federation Sergey Frank in Moscow we discussed certain steps for the development of our cooperation and during the visit of the Minister of Transport of the Russian Federation in Vilnius in September we continued the dialogue about the perspectives of our cooperation.
We intend to open a representative office of Klaipeda State Seaport Authority in Belorus and Kazakhstan. It would help to advertise our transit possibilities in the countries where transit is of strategic significance.

- What advantages, in your opinion, might attract investments to Lithuania and cargo flows to Lithuania?

- From the geographical point of view Lithuania is a convenient country for transit transportations. Two international transport corridors connect Scandinavian countries with Central Europe in north-south direction and eastern countries with Europe in east-west direction. About 70% of cargo in Lithuania is transit cargo. The majority of it is transported via Klaipeda port, which is the main hub of multi-modal transport of the I and IX B transport corridors. Klaipeda Seaport as the most northern ice free port on the Baltic Sea (it does not freeze at - 25°) is attractive for cargo transportation all year round.
Modernization of the existing infrastructure is of great importance for the attraction of new transit cargo flows. During the recent years modern ro-ro and container terminals have been built, terminals for handling liquid, bulk and packed fertilizers are working now, 300 km of railways have been reconstructed. In the future we plan to allot a big amount of money for the modernization of infrastructure. We hope to receive help from ISPA of the EU and loans from other financing institutions and up to 2006 to modernize telecommunications, signalization and electricity systems, to repair the bridges and viaducts in the IX rail transport corridor.
It is worth mentioning that the reconstruction works of the harbour entrance and dredging of water area up to 14.5 m are going on and after their completion Pannamax type vessels will be able to enter the port, which will increase cargo handling possibilities.
A well-developed network of export-import terminals, well-developed road network, the same gauge of railways in eastern and northern countries, the shortest way from Russia to the Kaliningrad region, good quality road construction and maintenance works, safe transportation of cargo and on-going privatization of transport enterprises with equal rights for the local and foreign investors will have a great impact on the attraction of additional cargo flows and foreign investors.