Rosatom to Take Over Arctic Development

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Published Nov 18, 2017 10:05 PM by Charles Digges

Russia’s president Vladimir Putin wants to turn infrastructure development for the Northern Sea Route – Russia’s fabled east-west passage through the Arctic to Asia – over to state nuclear corporation Rosatom, according to reports in the Kommersant business daily.

The paper said that Putin assented to the idea, which was put to him by his prime minster, Dmitry Medvedev, and which would turn all state services for nautical activities, infrastructure development, as well as state property used along the corridor to Rosatom’s management.

The paper noted that the government has likewise been spurred to making the necessary amendments to legislation to enshrine Rosatom’s new role in overseeing the sea route.

It wasn’t immediately clear what lay behind the apparent decision, but by entrusting Rosatom with the responsibility to oversee development of the Northern Sea Route, Putin will have handed one corporation – and one that deals with nuclear power – the monolithic task of building what the Kremlin considers to be nothing less than its future economic health.

If the transfer of authority for the corridor is indeed transferred to Rosatom, observers in Russian say that the role of nuclear icebreakers in all aspects of route development will be greatly increased – though by how much, no one is certain.

These observers also suggested that Rosatom’s lobbying for overseeing the corridor could be tied to its desire to build the $1.6 billion Lider, a goliath nuclear icebreaker that has been more of a fanciful aspiration within the nuclear community than an actual plan.

Putin’s press secretary Dmitry Peskov had yet to confirm the massive shift in responsibility, and a spokesman for Russia’s legislature told the paper he didn’t know if the legislative changes had yet been penned.

For it’s part, Rosatom said it was aware of Medvedev’s idea, and added it would be “concentrating on preparing for the government suggested amendments to legislation.”

One government source that spoke with Kommersant acknowledged that a discussion about whether Rosatom was being granted too much authority was likely yet to come, but he also said now that Putin had decided the question, there were no plans to challenge it.

For years the Kremlin has stumped on the notion that developing the Northern Sea Route for navigation and oil and gas development is the most pressing issue for Russia’s economy. It has also enlisted Atomflot, Russia’s nuclear icebreaker fleet, to press ahead with building a new line multibillion-dollar icebreakers, despite sanctions that have given the ones it already has far less to do while many Arctic oil ventures fold up their tents.

According to Kommersant’s sources, various plans to put the Northern Sea Route in Rosatom’s hands have been making the rounds of the government since mid-October. One plan favored the development of a so-called federal Arctic agency, though what function that agency would serve was unclear.

What finally emerged earlier this week, however – in an effort that was spearheaded by Rosatom head Alexei Likhachev and Deputy Prime Minister Dmitry Rogozin – was the approval of such an agency along with a shift of responsibility to Rosatom from the Ministry of Transport, which had previously been overseeing Northern Sea Route infrastructure development.

Now, said the paper, according to sources, Rosatom will oversee all infrastructure and energy building concerns along all 6,000 kilometers of the route through its arctic division.

According to the source, that will mean Rosatom oversees just about everything, from building ports, to building communications and navigation infrastructure, as well as coordination scientific research.

By the current budget, the federal government will be spending $75 million on Northern Sea Route development between 2018 and 2020, and an additional $517 billion until 2025.

The government has likewise said that traffic through the Northern Sea Route has been on an upswing, and reports that 7.4 million tons of cargo carried by 19 vessels was moved through the corridor last year, though that figure is not entirely accurate.

While that much cargo did indeed shuttle between ports within the corridor, only six vessels on total made the entire voyage form Europe to Asia through the Northern Sea Route in 2016 – meaning the passage is far from being competitive with the Suez Canal.

Source: Bellona

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.