Chinese contractor to build Yakutsk bridge, get concession without tender

Yakutsk, capital of the Sakha Republic (Yakutia) in the Russian Far East, could at last be joined by land to the rest of the country if an agreement is reached with Chinese state investors to build a bridge over the Lena river. Although the project, and a degree of Chinese involvement in it, have existed for quite some time, the likelihood that it will actually be built is increasing as Chinese investors take a more central role and get more favourable conditions from the Russian side.

The bridge project was talked about last week at the event formerly known as the Harbin International Economic and Trade Fair (哈洽会), which Li Keqiang and Medvedev agreed last year to rename the China-Russia Expo (中俄博览会). The name change, fitting to the climate of cooperation between China’s Northeast and Russia’s Far East, implies a change of venue as well. Next year‘s edition will be held in Russia, and the city of Khabarovsk has already come up as a candidate to host it.

Yakutsk was founded in the 17th century on what, from the point of view of today’s existing transport infrastructure, looks like the wrong side of the Lena river. The river can be crossed by ferry in summer, on ice in winter, and not at all the rest of the year. Once on the other bank, things aren’t necessarily easy, but they used to be worse. One option is to drive east through the world’s coldest inhabited area on the road (called the ‘Kolyma road‘ (Колымская трасса)) to Magadan 2000km away. The road in the other direction was once known as one of the world’s scariest, but it has recently been paved. The railway is also about to reach Yakutsk: a line that took nine years to construct now links Nizhny Bestyakh, just opposite Yakutsk across the Lena, to the national network.

The missing link is thus the Lena bridge. It has been planned for years. Funds were earmarked for it, and a tender to build it was won by a Russian consortium (which I understand already included the Chinese contractor as a partner), but then the federal government’s priorities changed, allegedly as a result of Crimea’s accession to the Federation. (One of Crimea’s infrastructure needs is also a bridge, the one over the Kerch Керчь strait, that will link the peninsula to the rest of the country.) The fund reallocation meant the Yakutians would have to wait until 2020.

Yakutian officials haven’t given up though. Yakutia has been quite active in the last couple of years looking for Chinese (as well and Korean and Japanese) investment to develop the region, something I’ve written about on a few occasions. In the Chinese case, most of the exchanges I know about have been facilitated by a few businesspeople with heavyweight SOE contacts (the most visible names can be found in my earlier post on the Yakutsk bridge), and the main state interlocutors have been the Heilongjiang provincial government and a few municipalities.

Chinese interest seemed to have been successfully aroused last July, when representatives from China Railway 24th Bureau (中铁二十四局集团), a subsidiary of the state-owned CRCC (中铁), showed up in Yakutsk to go into the technical nitty-gritty of the project. Even more auspiciously, Russian media quoted Chinese (private) interlocutors as explicitly referring to the possibility of Chinese financing for the project. Although I haven’t read it in so many words in Yakutian sources, Chinese financing is what the promotion activities Yakutian officials have been so busy at recently regarding the bridge project (first at the East Russia Economic Forum (Восточный экономический форум) in Vladivostok, now at the Harbin Expo) are conceivably about, given that a contractor for the actual construction has already been found in the 24th Bureau.

The 24th Bureau (ultimately owned by the central government) is likely going to be involved in the Yakutian project in partnership with the Heilongjiang provincial government, through a jointly owned company such as Zhongtie Longxing (中铁龙兴), that is already active in projects in Siberia. (More details on companies called Longxing, sometimes mistransliterated ‘Lunsin’ from its Palladius Cyrillisation Лунсин, in my previous post on the subject.) It was indeed with the Heilongjiang gov’t that Yakutian officials agreed to form a “work group” on the bridge project, and the same group of Heilongjiang companies is also getting ready to make other investments in Yakutia (notably the Tirekhtyakh Тирехтях lead mine in Ulst-Yansky Усть-Янский district, at around 69°N and just 200km from the Laptev sea).

There’s also talk of favourable conditions being advertised to convince Chinese investors to come over and get the thing built. Aleksey Zagorenko Алексей Загоренко, director of Yakutia’s investment development agency, has said the concession agreement will guarantee the investors “an acceptable level of profitability”. What’s more, unlike in the previous attempt to build the bridge, the contractor will be chosen (or has been all but chosen already) under new fast-track rules that don’t require public tender procedure before awarding them the project.

Certain details about the project remain unclear, such as how much it will cost, who will pay for it, and, crucially, whether it will be a road and railway bridge from the start, or first a road bridge to be later made railway-and-road somehow.

If all goes well and everyone agrees on everything by next year, construction could start in 2017 and finish in 2022 on time to celebrate the centenary of the end of the Yakut Revolt and the establishment of the Yakutian ASSR.

It wouldn’t be the first time Chinese intervention gets such a project done after Russian funding fails to materialise. The rail bridge that will link Tongjiang 同江 in Heilongjiang to Nizhneleninskoye Нижнеленинское in the Jewish Autonomous Oblast across the Amur river, could be finished by early 2017 now that the Chinese companies building the Chinese half (with which they say they’ll be done before the end of the year) have agreed to do the Russian half as well (the Russians hadn’t even started). Auspiciously for the Yakutians, some of the companies involved in the Yakutsk project also have interests in the Amur bridge. Perhaps a bit less auspiciously, the international bridge over the Amur is considerably more important for Chinese economic interests (including, serendipitously enough, for General Nice through IRC) than the Yakutsk bridge, well inside Russia.

Nor would it be the first Chinese-built bridge in the (near-)Arctic. The steelwork for the Hålogaland bridge, near Narvik in northern Norway, is being built by Sichuan Road and Bridge Group (SRBG, 四川路桥). That deal was technically won through a tender, but SRBG’s bid was found to have been prepared in, shall we say, involuntary symbiosis with a better known German company. The case earned the engineer who led SRBG’s winning bid four years in a German jail, but the project went on anyway. (I wrote about the German court case last December. The story has recently reached (paywall) Norwegian local media.)

There’s an old argument over whether Lenin chose his alias after the Lena river. From what I’ve read, he didn’t, since he was already signing ‘Lenin’ years before the Lena Massacre alleged to have motivated the choice of the moniker, and when his earlier Siberian exile was spent near the Yenisei, not the Lena. Whoever came up the modern Chinese name for the river (勒拿) seems to agree with that view: the modern name has nothing Leninist about it (instead it rhymes with the Chinese for ‘Saint Helena’). A more Leninny name (列拿) can be found here and there though. The earliest Chinese name for the river is the one that appears in (at least some) Qing documents, namely 里雅那江 Liyana jiang. That’s a word of some historical significance. The negotiations between the Qing and Russian empires that led to the Treaty of Nerchinsk in 1689 started off with Qing official Langtan 郎坦 announcing his side wanted the border to be as far as the Lena. The Chinese name itself looks like a transcription from a Manchu intermediate form, and it indeed makes sense for the name of the Lena to have entered the Chinese language through a Manchu rendition of the Russian name. Nerchinsk negotiations were carried out in Latin through Jesuit interpreters, and documents were translated into Russian and Manchu. (Manchu was possibly the primary language of several of the Qing representatives, including Songgotu, the leader of the Qing delegation, and indeed Langtan.) The ‘Map of the Nine Rivers of Jilin’ (吉林九河图) used by the Qing side at Nerchinsk has place and river names in Manchu only (as reproduced here on the website of Taiwan’s National Palace Museum, unreadable at this resolution though; look for the Lena near the top left corner).

Now you’re waiting for me to say that perhaps Langtan would rejoice at the sight of a Chinese-built bridge over the Liyana, three centuries after he angered the Russians by throwing that name in. But I won’t.


China’s CNOOC starts exploring for Icelandic oil

Surface exploration began last month in the Dreki area off Iceland, in an area licensed to China’s state owned oil company CNOOC (中海油) together with two minority partners, Norway’s Petoro and local company Eykon Energy. Measurements were conducted on the Oceanic Challenger, that operated from Reyðarfjörður with a crew of 60, and a support vessel. (News I reported in June indicated the operation would be exempt from port fees.) This first stage of exploration was expected to last for around three weeks (at any rate the ship is already in Dunkirk).

Eykon chairman Heiðar Már Guðjónsson says the plan is to conduct exploration drilling in three phases, in 2020, 2022 and 2023. The area is quite expensive to explore, and estimates about possible hydrocarbon reserves tend to be rather speculative due to the presence of a thick layer of basaltic lava that makes ascertaining the presence of any oil at all rather tricky without boring actual holes through it. Heyðar Már and others from Eykon have attracted a lot of attention in the past with estimates in the high gazillions, but hardly anyone else is half that upbeat. No oil majors showed interest in Dreki licenses when they were for grabs, and the holders of one of the three awarded licenses, Faroe Petroleum, actually gave up on it last year. CNOOC, on the other hand, are enthusiastic enough to invest in exploration, while keeping remarkably quiet about it (no information on Icelandic oil has shown up on Chinese media).