St. Petersburg calls off extension of Finnish cargo port
Governor Matviyenko accuses Container Finance of trying to dictate terms
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An ongoing dispute between the Finnish Container Finance cargo port and Russian officials in St. Petersburg has apparently escalated into a complete breakdown. The city government of St. Petersburg announced last week that it would be cancelling the extension plans of the Container Finance terminal on the island of Kronstadt.
"The extension of the terminal will not be built", St. Petersburg Governor Valentina Matviyenko has said, media sources reveal.
"We have shown enough patience and willingness to negotiate. The investor should have had their actions approved by the State Construction Committee. The company, however, has not fulfilled its obligations, but is instead using extortion and dictation tactics when discussing with the city of St. Petersburg", the Governor stated.
The Russian State Construction Committee, Rosstroi, who are currently working on a Gulf of Finland barrage, have stated that they would need the Container Finance extension site as a storage area. The City of St. Petersburg suggested that Container Finance hand over the extension site for a prescribed time period. The company, however, declined the offer because of problems they had with the wording of the contract.
Governor Matviyenko is now threatening to evict the Finnish company from the site even if she has to involve bailiffs or the police.
Container Finance's Chairman Kimmo Nordström sees the city’s attitude as pressure tactics.
"If the lease is annulled, the city also has to cancel the investment agreement. This can only happen by means of legal proceedings. In such a case we would have to be refunded our USD 1.5 million investment, plus the losses caused by loss of commercial operations."
According to Nordström, the reason behind the Russian officials’ actions is the desire to take over the favourable harbour location in the vicinity of the St. Petersburg ring road. Earlier this year, Rosstroi shut off truck access to the company's Kronstadt terminal for four days. The stoppage is estimated to have caused around EUR 1 million in losses to the terminal and its customers.
Finland’s Ambassador to Moscow, Harri Helenius, hopes the dispute between Container Finance and the City of St. Petersburg can be solved without rancour.
"The company has done good work there. It is most regrettable that the expansion project has been stalled. It is not in the long-term interests of the City of St. Petersburg, if foreign firms are treated badly", Helenius adds.
"The extension of the terminal will not be built", St. Petersburg Governor Valentina Matviyenko has said, media sources reveal.
"We have shown enough patience and willingness to negotiate. The investor should have had their actions approved by the State Construction Committee. The company, however, has not fulfilled its obligations, but is instead using extortion and dictation tactics when discussing with the city of St. Petersburg", the Governor stated.
The Russian State Construction Committee, Rosstroi, who are currently working on a Gulf of Finland barrage, have stated that they would need the Container Finance extension site as a storage area. The City of St. Petersburg suggested that Container Finance hand over the extension site for a prescribed time period. The company, however, declined the offer because of problems they had with the wording of the contract.
Governor Matviyenko is now threatening to evict the Finnish company from the site even if she has to involve bailiffs or the police.
Container Finance's Chairman Kimmo Nordström sees the city’s attitude as pressure tactics.
"If the lease is annulled, the city also has to cancel the investment agreement. This can only happen by means of legal proceedings. In such a case we would have to be refunded our USD 1.5 million investment, plus the losses caused by loss of commercial operations."
According to Nordström, the reason behind the Russian officials’ actions is the desire to take over the favourable harbour location in the vicinity of the St. Petersburg ring road. Earlier this year, Rosstroi shut off truck access to the company's Kronstadt terminal for four days. The stoppage is estimated to have caused around EUR 1 million in losses to the terminal and its customers.
Finland’s Ambassador to Moscow, Harri Helenius, hopes the dispute between Container Finance and the City of St. Petersburg can be solved without rancour.
"The company has done good work there. It is most regrettable that the expansion project has been stalled. It is not in the long-term interests of the City of St. Petersburg, if foreign firms are treated badly", Helenius adds.
Helsingin Sanomat