Ministry for the Development of the Russian Far East and Arctic to support major industrial and infrastructure projects in Yakutia
© RIA Novosti. Evgeniy Epanchintsev

Ministry for the Development of the Russian Far East and Arctic to support major industrial and infrastructure projects in Yakutia

Alexei Chekunkov, Minister for the Development of the Russian Far East and Arctic, held a series of meetings in Yakutsk, with discussions on major industrial and infrastructure projects being implemented in the Republic of Sakha (Yakutia).

In particular, they considered the Kyuchus deposit mining cluster development in the Arctic zone. The total investment in field development projects, construction of power engineering and infrastructure facilities will amount to at least 235 billion rubles.

According to Alexei Chekunkov, the promising cluster is directly linked to the development of the Northern Sea Route.

"The government has adopted a plan for the development of the Northern Sea Route, prepared by our ministry. The volume of traffic along the Northern Sea Route in three years should exceed 100 million tons, and by 2030 – 200 million tons. Projects aimed at the development of field clusters, supply the Northern Sea Route with cargo and create export revenues for Russia. All the technologies to implement a comprehensive approach are in place. We are completing the legal and financial structuring of the project. We will go to the Government with a comprehensive implementation plan. I hope that by the next World Economic Forum (WEF) all the main parameters will be approved," said the Minister after the meeting, noting, however, that such projects as the Kyuchus cluster development deserve to be recognized as priority development areas (PDA).

We are working on solutions to extend PDAs to the entire Far East, which will enable investors to receive benefits under this preferential regime much faster.

The investment plan for the cluster's development provides for the construction of a small-capacity nuclear power plant near the village of Ust-Kuyga in the Ust-Yansky District. As noted by President of Yakutia Aysen Nikolaev, it will become the "heart" of the cluster, ensure the operation of industrial facilities, allow geological exploration for tin, gold and coal deposits to begin, and improve people’s quality of life. The facility will replace the existing diesel power plants and coal-fired boilers in the settlements. To provide the energy infrastructure, it is also planned to build five substations and five overhead power transmission lines from the small capacity nuclear power plant to the Kyuchus, Tirekhtyakh, Deputatsky deposits and Ust-Kuyga and Deputatsky settlements.

There are also plans to build an access road from the Nizhny Bestyakh railway station to the cargo terminal, reconstruct the river ports of Nizhneyansk and Ust-Kuyga, dredge and construct navigational facilities on the Yana River, and build highways.

In terms of communications, it is planned to build a fiber-optic communication line to the Ust-Yansky District and to reconstruct cellular towers there. Plans also call for building a number of new social facilities, as well as residential complexes for 400 apartments in the settlement of Ust-Kuyga thanks to the implementation of the project.

The meetings also discussed a project to upgrade four Sakhaneftegazsbyt oil depots which are involved in the northern freight shipping. As Aysen Nikolaev noted, this company is the key participant in the northern delivery operation and the largest owner of the tank farm for fuel storage. The company has 19 oil depots and is 100-percent state-owned. More than 80% of the tank farm for fuel storage was built in the 1960-80s. Over such a long lifespan in extremely harsh climatic conditions, the tanks have developed a large number of defects.

"It is a serious problem that there is a potential threat of harm to the environment, life and people’s health. Of course, we all remember what a terrible accident Nornickel had: practically an environmental disaster because of the leakage, and Rosprirodnadzor estimated that the accident caused 148 billion rubles’ worth of damage. And we have to do everything to prevent such a hazard in the republic," said the head of the republic. According to him, it is necessary to reconstruct four oil depots in Belaya Gora, Zhigansk, Ust-Kuyga and Khandyga and to invest 6.6 billion rubles for these purposes.

According to Alexei Chekunkov, the project may make use of the Far Eastern Concession mechanism that is being implemented by the Ministry of the Development of the Russian Far East and Arctic and the Corporation for the Development of the Far East and the Arctic. The concession mechanism makes it possible to accelerate infrastructure development for new enterprises and the social sphere. The state compensates investors up to 100 percent of the estimated cost of an infrastructure facility for at least 10 years after the facility is put into operation.

"We have three main priorities in terms of applying the Far Eastern Concession mechanisms. First, the projects that are being implemented by order of the President; second, the projects envisaged by the master plans of the Far Eastern cities and third, the infrastructure for the "Far Eastern neighborhoods". Given the peculiarities of the republic and the lack of any alternative to the northern delivery service, I think it is possible that the Far Eastern Concession mechanism could be appropriate for this project. On the whole, we support the project; I ask that the model be finalized. The increase in the cost of the facility to the budget, from the funds it attracts, should not exceed the target inflation rate – four percent per year," the minister said.