In 2000, the national port network reported traffic of 133m tonnes, although overall demand was in the region of 200m tonnes. The situation in the Russian north west was particularly dire: ports serving that region had a capacity shortfall of 50m tonnes.

Today, coal exports via Russian Baltic ports face the biggest problem. Estimates suggest that by 2010 export capacity for this commodity in that region will be just 21m tonnes, while demand will have soared to 40m tonnes and could creep up to as high as 48m tonnes by 2015.

Estonia, Latvia and Lithuania have all therefore ploughed vast fortunes into upgrading their own existing coal export installations with a view to attracting as much of this traffic as they can. This is despite the fact that, by 2010, Russian policy dictates that 85% of exports will have to be handled by its own ports. However, in reality, that figure is unlikely to be met.

This does not mean to say that efforts are not being made to address the capacity shortage in north western Russia; far from it. The Ust-Luga port project is a good example of this. It was built as a public-private partnership, allowing a state-owned company, Rosugol, to collaborate with private investors to build the Rosterminalugol coal export facility. In 2002, a new private partner, Kuzbassrazrezugol, also took a stake in the company, making it possible for much of the handling equipment to be purchased. Rosugol, for its part, has retained an equity stake as a means of influencing future policy.

Construction of the terminal began from scratch, which meant having to put in an electricity sub-station, mains water supply and other utilities. Operations commenced in May 2003 using stop-gap equipment. This consisted of a gantry crane to unload rail wagons, while a ship loader and a Liebherr mobile harbour crane took care of vessel loading. Productivity, of no more than 70,000 tonnes per month, was poor, with only 40 rail wagons daily being processed.

The only operational berth was 280 metres long and had draught of 12.2 metres. Despite these modest installations, traffic, nevertheless, slowly built up, from 262,295 tonnes, in 2003, to 575,624 tonnes a year later, falling just slightly in 2005 to 500,110 tonnes.

During this initial operational phase, work also began on upgrading the terminal. A second, 565-metre berth was built, also capable of accommodating ships drawing up to 12.2 metres of water. In effect, this means Rosterminalugol can accommodate vessels of up to 60,000 dwt. Better handling equipment was also put in place, using Germany's Man Takraf as general contractor; this included a wagon tippler, a conveyor belt system capable of transporting up to 3,500 tonnes/hour and two stacker-reclaimers serving a 385,000 tonne stockpile. In addition, the wagon reception area featured a defrosting tunnel fitted out with infra-red equipment to ensure that unloading could take place even in the coldest weather. Work was completed in December 2005, with the new installation officially opened by Vladimir Putin, president of the Russian Federation on 24 January 2006.

The availability of the new equipment considerably boosted traffic, which rose to 3.5m tonnes in 2006 and to 6.4m tonnes last year, as the stevedores came fully to grips with the new technology at hand. The bulk of the steam coal passing through the terminal comes from the Vorkuta coal mines in the Kuzbas Basin. This is exported to power stations in Finland, Great Britain, Germany and so on.

No other Russian port in the Baltic is able to load similar amounts of export coal. Nor is any other installation in the region so fully automated.

For 2008, volumes are expected to reach 6.5m tonnes.

The next construction phase is already under way and is due for completion in the second quarter of 2009. This will bring into operation a second wagon tippler and a second ship loader on Berth II, where draught is being deepened 14.5 metres. These measures should boost throughput to 12m-14m tonnes.

Studies are now under way to determine the feasibility of introducing a further stacker-reclaimer to further boost storage capacity.

However, Rosterminalugol has run into a brick wall. Russian bureaucracy is currently preventing the all-important second berth from operating in a commercial manner. According to operations director Artur Sedov, the problem is the absence of an open border check point.

When Ust-Luga was being built, the border police granted individual licenses for each vessel calling at Berth I. Then, in 2003, a proper check point installation was erected, with the cost entirely picked up by Rosterminalugol itself.

In February 2006, when Berth II at the coal terminal was put into operation, it began handling a lot of material inbound for the construction of other terminals at the port, in addition to some coal exports. Vessels engaged on port authority work moored at this second berth, although loading continued to take place on Berth I. Because Rosterminalugol is enclosed by security fencing and equipped with a video surveillance system, there is no effective segregation of the two berths within the terminal itself; this is simply unnecessary.

However, that is not how the border police saw things: after 18 months of successful dual berth operation, they insisted that a second open border check point be erected on the second berth and all foreign vessels were forbidden to dock there until this new infrastructure was in place.

Cargo, recalls Mr Sedov, built up on the berth, while any vessel conveying imports simply could not use it. Magnanimously, the border police said they would allow vessels to use Berth II, but only if they were operating under the Russian flag. So, for foreign vessels to call at Rosterminalugol, they have to enter via Berth I, be given clearance by the border police and then shift over to Berth II for loading, none of which makes economic sense.

The result, says Mr Sedov, is that turnaround time for vessels loading coal at the terminal is suffering. Furthermore, the other three terminals at Ust-Luga are in the same boat, because the only check point in the port remains within Rosterminalugol.

Despite the absurdity of the situation, a meeting with senior local and national officials, including the vice-governor of Leningrad region, failed to find a way to effectively re-open Berth II to allow normal loading to go ahead.

“We are asked to undertake work according to legislation. This is all well and good, but the authorities only remember the law when its suits them,” Mr Sedov claims.

As an example, he points out that the existing border check point should have been built and maintained by the state, although in practice it only exists because Rosterminalugol's private sector backers stumped up the cash to get it installed. Officials manning the check point have also received free accommodation courtesy of the coal terminal, which also picks up the tab for their food and electricity.

The reason given as to why no state officials seem prepared to resolve the situation? The Federal Agency for Frontier Development, which should in theory oversees check points, is not actually legally registered to do so. This situation has been made worse by bureaucratic reshuffling. Nobody nowadays knows who has the final responsibility for managing open border check points. Although previous state structures could be perceived as Byzantine in nature, says Mr Sedov, at least, in his view, they worked.