Paldiski port project on track, environmentalists wary

The Paldiski South harbor on Estonia's north-western coast is emerging as one of the country's leading transit hubs, cheering up locals but giving headaches to environmentalists.

The harbor has to date been handling mainly scrap metal, fertilizers, timber, road metal, peat and ro-ro cargo, but the range is to widen after the opening of a new liquid bulk terminal and construction of a new quay with ro-ro facilities and a modern passenger terminal.

Fast growth has been fostered by an abundance of cheap land and labor around the former Soviet military base as well as easy access to Scandinavian and Western European shipping routes. For instance, a journey to Sweden is cut by several hours when departing from Paldiski instead of Tallinn.

Some 50 kilometers west of Tallinn, the Paldiski area is relatively calm and ice-free even during rough winters, with the new 300-meter quay able to service up to 40,000 DWT ships. Operators are optimistic about the future, as continuous price hikes in road transport are rendering transport by sea yet more favorable within the EU.

The harbor, once among tsarist Russia's three leading marine cargo channels, was partly closed after World War II when the invading Soviets founded a military base there. Starting in 1962, the city was restricted to outsiders because the Soviets started to build a nuclear submarine training base, which later featured a unique model sub with an operational reactor.

Later, another reactor was built, but both were closed down and dismantled in the mid-1990s. Today, a peacekeeping unit of the Estonian defense forces are stationed in the town, but no use has yet been found for the huge training base dubbed "the Pentagon."

After the return to Estonian rule, the Southern harbor was handed over to the state-owned Port of Tallinn and its commercial functions were restored. Since then, it has emerged as one of the fastest-developing seagates of the country, with current short-term investment plans at some 200 million kroons (12.7 millioneuros).

New dry bulk and general cargo terminals should triple capacity to 3 million tons per year in the near future. According to the Port of Tallinn, annual volumes should exceed 5 million tons by 2005.

The fast development has not been all painless. A few weeks ago, reports surfaced of a butchered seashore near Paldiski, where a subcontractor responsible for reinforcement works in the Southern Port had spoiled several hundred meters of coastline by hauling away large quantities of rocks. Specialists say upcoming autumn storms may now erode large chunks of the area.

Other sources of concern are ship-related contamination and the protected limestone bank on Estonia's Northern coast, which could lose some of its picturesque seascapes to new development projects.

Nevertheless, the 300-year old port is proving a gold mine for the area. Among successful incentives are passenger liner connections to Sweden - the Paldiski-Kapellskar line of Estonia's leading carrier Tallink serviced just over 104,000 passengers in the first nine months of 2002, showing a 17.3 percent rise year on year. Meanwhile, some 244,000 passengers used the Tallinn-Stockholm line. After completion of the new passenger terminal, ferry lines to Polish or German ports are a prospect.

The Estonian Marine Agency has just launched works at a new peat terminal to be opened early next year. The largest in Estonia, the terminal was welcomed by peat exporters vying to conquer Europe on account of the country's 2 billion cubic meters of resources.

Plans are also under way to found a car distribution center at Paldiski harbor. The project is led by Wallenius Wilhelmsen, a logistics operator shipping some 1.5 million passenger cars a year worldwide. The center would mostly service the Russian market.

Yet the town itself is still hungry for value-adding industries that have yet to take root. And tourism potential as one of the outposts of continental Europe has yet to be tapped, largely due to the city's Soviet legacy and lack of convenience services.