Northern Sea Route forms new Arctic economy

Northern Sea Route forms new Arctic economy

June 09, 2023

Until 2035, the Northern Sea Route will bring more than 20 trillion rubles to the country’s budget.

#ARCTIC. #SIBERIA. THIS IS TAIMYR. The government called the route development the most cost-effective investment megaproject in Russia. Until 2035, the plan for the Northern Sea Route (NSR) development will bring almost 21 trillion rubles to the budgets of all levels, with only 600 billion rubles invested in it from the federal budget. Such figures were voiced during a meeting chaired by Russian Prime Minister Mikhail Mishustin.

The main Northern Sea Route’s advantage is that the transportation of various goods along it takes less time than other routes. For example, the route from Murmansk to Shanghai is almost half as long as the route through the Suez canal, and it takes a third less time to travel along this route. It is not surprising that the countries of Southeast Asia are interested in it, Indian companies are looking at the Northern Sea Route too, the Prime Minister of the Russian Federation said.

However, the route has disadvantages. The main one is the need to escort ships with icebreakers most of the time of the year, which causes an increase in the cost of cargo transportation along this route. But in the current situation, the Northern Sea Route has no alternative in terms of implementing the largest Russian projects in the Arctic.

Therefore, the Russian government approved a plan for the Northern Sea Route development until 2035. It includes 152 different events, it has five sections: cargo base, transport infrastructure, cargo and icebreaking fleet, navigation safety, as well as the management and development of navigation along the NSR.

A number of projects have already been implemented: a modern control system has been created that has increased the efficiency of navigation and its safety, an ice radar satellite, which is part of this system, has been launched from the Vostochny cosmodrome. Three nuclear-powered icebreakers have been built, including the most powerful in the world, the Arctica. The construction of the Utrenny marine terminal in the Gulf of Ob has been completed. Regular voyages of the nuclear-powered lighter-container carrier Sevmorput were launched from the north-west of Russia to the Far East and back. This year, ahead of schedule, five meteorological satellites are planned to be launched into orbit, they will provide continuous observation on Arctic routes.

The meeting participants noted that the plan for the Northern Sea Route development actually creates a new economy in the Arctic. As part of its implementation, it is planned to create a single infrastructure complex, including the construction of more than 50 icebreakers and ice-class ships, ports and terminals, emergency rescue centers, and the creation of an orbital satellites’ constellation.

Investments to implement the plan in the next 13 years will amount to about two trillion rubles, of which only about 600 billion rubles will come from the federal budget.

Mishustin also noted that the Northern Sea Route is a key element in increasing the transport connectivity of the most inaccessible territories. The delivery of goods critical to people and organizations to remote areas accounts for about a third of the total sea shipping volume. To improve these processes, a draft law on northern delivery has been prepared, which has already passed the first reading in the State Duma.

In addition, the NSR provides a dynamic and reliable flow of construction materials and equipment, which is necessary to implement such large-scale projects as, for example, Arctic LNG. Further expansion of the infrastructure in the Far North will make it possible to organize deliveries for which the of the Eastern railway range capacity is not enough.

To ensure a profitable cargo base on the NSR, six agreements were signed with key investors, including Norilsk Nickel. The result of the implementation of such projects will be additional revenues to the budget – more than 20 trillion rubles.

Earlier we reported that Russia will build the largest ice ship in the world.

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Text: Elena Popova, Photo: Nikolay Shchipko

June 09, 2023

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