WORK to complete Russia’s largest container terminal, at Ust Luga, has been suspended five months before the scheduled August 2009 opening, with owners unable to say when it will resume. Baltic Sea container imports dived by as much as 60% at terminals at the port of St Petersburg last month, and drastic cuts since November have now raised doubts about Ust-Luga terminal’s current economic viability. Private developers National Container Co had already spent at least $175m at Ust-Luga by last August, the company said, half of the $350m the first stage would cost to build. The high-profile project is Russia’s first greenfield container terminal, based at the Ust-Luga deepsea port where oil, oil products, liquefied petroleum gas and bulk container terminals are also planned or under development. Located in the Gulf of Finland 110 km west of St Petersburg, the Ust-Luga terminal has a planned capacity of 500,000 teu, reaching 3m teu by 2014 to serve containerships of up to 6,000 teu capacity. NCC was unable to raise an unspecified amount of capital to finish the project, its joint venture owner, Fesco Transportation Group said. “Ust Luga has been put on hold,” Fesco investor relations manager Stanislav Vartanyan told Lloyd’s List. “Currently there’s no point in speeding up the commissioning of this new facility under these circumstances.” Although the development was suspended, “it’s still a strategically and extremely interesting project”, Mr Vartanyan said. “But the constraints are a pure and simple lack of investment capital, and of course, in the first place, the lack of need for such an increase in port capacity, and this has resulted in our decision to slow down significantly the progress at the Ust Luga project.” Until 2007, Russian container volumes had grown by an average rate of 24% for seven years, double global growth levels, according to Drewry Shipping Consultants. But executives familiar with Russia’s container industry have now forecast volumes in 2009 could drop by as much as 35%-40%, and take as long as five years to return to last year’s levels of 4.3m teu. A revised opening date for Ust-Luga could not be given because the pace and timing of economic recovery was unknown, but Mr Vartanyan said as much as $500m could have already been spent and this “was not wasted or lost money”. But it was “probably naive” to believe that banks would easily provide funding for new port projects in the current circumstances, he said. The government had already paid to dredge channels to service the terminal, Mr Vartanyan said, where two berths have been constructed. NCC is equally owned by Fesco and First Quantum, and already operates a number of terminals, including First Container Terminal, the country’s largest, at St Petersburg. There, volumes contracted by 30% in February, compared with the same period last year, while rival operator Petrolesport saw its throughput fall by 60%. The fall-off was first noticed at the end of November and December, amid fears that the decline has yet to be arrested, with Far Eastern terminals also struggling to compete amid fierce discounting to retain market share. Leading the trade collapse in Russian ports has been steep falls in ro-ro and reefer traffic, as well as inbound container, which comprise 75% of all throughput, mostly consumer goods, and car parts for Russia’s automotive manufacturers. Volumes on this last sector had “vanished completely”, Mr Vartanyan said. “This segment is now under very heavy pressure, volumes have really, really collapsed.” The shock at the sharp falloff in trade, which first emerged in late November and December on Russia’s docks has been digested, Mr Vartanyan said. Russian car assembly plants were now arranging for deliveries, as manufacturers based around St Petersburg offered deferred payments and merchandise credits to Korean counterparts to get trade moving.