Low-key port could be future gateway to Scandinavia

  • 2001-09-27
  • Aleksei Gunter
PALDISKI - "Trade harbor. Passport control and customs. Well-sheltered from surf during storms. Depth at mooring 5.5 meters, mooring to hull rope. Wharf height 3 meters. Currency exchange, stores, bars, post office at the town center. The town looks highly exotic with its super-Soviet architecture and Russian culture. It's worth seeing."

So runs the laconic, two-paragraph description of Paldiski South Port at a tourist Web site dedicated to the ports of Western Estonia. But there is much more to Paldiski than meets the eye.

The small town, which has a population of some 4,000 mostly Russian-speaking people, boasts two small ports. Both lack modern facilities and badly need upgrading.

But the local administration is working on it.

At summer's peak, up to 500 people a day use Paldiski to reach Kappelskar, Sweden. The line is operated by the Hansatee shipping company under the Tallink brand name.

However, a new, higher-tech passenger terminal is not set to open until the first half of next year. So even the Estonian TKE Grupp's wood processing plant, which opened on Sept. 6 and brings much-needed investment and employment to the town of Paldiski, so far prefers to use the Port of Tallinn 50 kilometers to the east.

Brian Lasenyik, head of the sales department at Baltic Lumber and Moldering, which distributes TKE Grupp products in the U.S.A. and Canada told The Baltic Times that TKE used Tallinn's port because there was no shipping line in Paldiski that could handle this type of product.

Lasenyik added that selling the moldings to North America was a very long-term business. "But they sell. Americans like to put moldings everywhere in the house," he said.

TKE Grupp is so far the largest employer in Paldiski, with about 300 employees at the plant. More jobs are to come in auxiliary services as the plant develops.

About half the wood comes from Estonia, because the characteristics of local pine are similar to its quality Siberian relative, which journeys all the way to Paldiski from Irkutsk via Nizhny Novgorod. A test bundle of Latvian wood also arrived recently.

The 150 million kroon ($8.82 million) plant is the largest in the Baltics and one of the biggest in Northern Europe, with a maximum processing capacity of 120,000 cubic meters of wood per year. It sorts, dries, molds and packs wood later used in furniture production, and produces moldings for interior and exterior decoration.

The plant sits on the highway to Tallinn, a kilometer away from Paldiski's deep-water port. It even has its own rail link to the Tallinn-Paldiski railroad.

Kaupo Kallas, mayor of Paldiski, told The Baltic Times he thought the prospects for transporting more products, including TKE's, through Paldiski were realistic. "But it's hard to say how much the necessary port facilities will cost."

"A development program for Paldiski foresees the merger of the south and north ports," he added.

Paldiski is located on a scenic stretch of coastline, with cliffs 25 meters high and rare plants and birds. At one point, a waterfall sends a stream plunging into the sea below. A lighthouse dating back to 1889 is still the tallest in Estonia.

To make the town itself more attractive and accessible to tourists, a small harbor for yachts and boats is planned for both it and nearby Pakri Island.

Perhaps one of the most interesting projects, which has also TKE Grupp involved, is to rejuvenate a run-down former training center for submarine crews known as the Pentagon.

Paldiski was a closed military base in Soviet times. As soon as the Russian troops left the Pentagon, a complex of 36 buildings situated on an area of 43.2 acres, in the mid-1990s locals stole everything from the light bulbs to the linoleum. Now it's a real eyesore. Every window is broken, and the ruins are surrounded by a barbed wire fence. A security guard and his German shepherd keep unwanted visitors away.

TKE has the ambitious plan to turn the Pentagon into an exclusive apartment block, hotel, shopping center and nightclub. But the project is still in the early stages.

Steven B. Steinmetz, an attorney with the U.S. law company Ivey, Barnum & O'Mara, has established the legal background necessary to launch the distribution of TKE products. It was his first experience of Estonia. He said the positive side of setting up a business here was the openness of the local and national authorities compared to neighboring countries.

Nevertheless, the American attorney has also found some drawbacks to the local financial world. "I wish there were more large banks. It would speed up competition and create more flexible services," he said.

Valdo Valjas, head of the port registry of the Estonian Maritime Administration, said 12 ports were registered in the country, and six more applications were pending as some ports did not meet all the requirements.

Paldiski South Port, actually a branch of the state-owned Port of Tallinn, is one of those not yet registered.

Overall cargo traffic through Estonian ports last year came to 39,802,000 tons, according to the national department of statistics. Transit cargo made up 27,116,000 tons of the overall traffic.