Yakutsk bridge: Sinohydro to study Lena ice drift

Sinohydro (中国水电) will study the Lena river May ice drift in preparation for the design of the Yakutsk bridge, says YakutiaMedia.

The Heilongjiang Economic Daily (黑龙江经济报) reports that Sinohydro has already presented the Russians with a proposal on the “basics” of financing for it. Once meant to be paid for the Russian government, with a degree of Chinese participation in the construction, the bridge is now expected to be built by a Chinese contractor with Chinese financing, to be eventually repaid in instalments, in rubles, after the bridge is finished.

Sinohydro to propose financing for Lena bridge

Chinese SOE Sinohydro (中国水电) will propose a “basic financing model” for the construction of a bridge that will join Yakutsk to Russia’s transport network, says RIA quoting the federal road agency (Росавтодор). The proposal should materialise before the end of this month.

More on the Lena bridge project here.

Chinese-Russian ‘intergovernmental commission’ to discuss Yakutsk bridge: Russian sources

An “intergovernmental commission” including vice-premiers Zhang Gaoli 张高丽 and Igor Shuvalov will look into proposals for Chinese companies to build the long-awaited bridge over the Lena river and join Yakutsk to the Russian transport network. That’s according to a press release from the Yakutian railway company ОАО (behold the nested quotes: ОАО «АК „Железные дороги Якутии“»), jointly owned by the federal and Yakutian governments. This information has been reflected in media reports by Interfax and others, but so far all Chinese reporting is just sourced to Sputnik’s Chinese service.

The information about the remarkably high-level involvement comes in the context of an agreement signed a few days ago in Moscow between the Russian side and Sinohydro (中国水电) and somehow related to the construction of the bridge. Again, this information is still based only on Russian reports, and not of the highest quality (as evidenced by a miscyrillisation of the name of Sinohydro chairman Song Dongsheng 宋东升 in the Interfax story, a sign that suggests reporting involving no Chinese expertise).

I’ve discussed the background of the Lena bridge project in some detail in the past. In a nutshell, long-term interaction between the Sakha Republic (i.e. Yakutia) and Heilongjiang governments, originally mediated by private businesspeople, has led to increasingly concrete plans for Chinese contractors to build the much-needed bridge, but funding from the Russian federal government failed to materialise after Crimea’s accession to the federation reshuffled infrastructure development priorities. While the Yakutians have been actively looking for Moscow and/or the Chinese to finance the bridge, the federal government seems to need some more convincing. For an analysis of how much importance Chinese (and specifically Heilongjiang) government entities are likely to attach to infrastructure development in the Russian Far East, you’ll have to wait for my forthcoming writeup on the topic.

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.

Silk Road through the Russian Far East: Chinese to invest in Yakutsk IT park

Meetings with Chinese companies at the East Russia Economic Forum (Восточный экономический форум) in Vladivostok have resulted in agreements to build an IT park in Yakutsk, capital of the Sakha Republic, also known as Yakutia. There have also been further talks on an oil refinery project said to be backed by CNPC.

The Chinese partner is Huaqing Housing Holdings (华清安居控股有限公司), a developer established by research institute of Tsinghua University (‘Huaqing’ is just ‘Tsinghua’ spelt backwards) and backed by SOEs and state financial institutions. As I’ve been describing in a series of posts during the last few months, Huaqing have been one of the Yakutian government’s main interlocutors in talks on potential Chinese investment in the republic, and Zhu Chunyu 朱春雨, the company’s chairman, is a frequent visitor to Yakutsk.

Huaqing has also signed an agreement to cooperate with Almazergienbank Алмазэргиэнбанк, the largest in Yakutia, which has been increasingly partnering with Japanese and Chinese institutions, including China Construction Bank (建设银行).

China goes into Russian rare earths

A Rostec subsidiary is in talks with Chinese partners to extract rare earth elements in Russia with Chinese technology. Rostec, together with Aleksandr Nesis’ ICT and other investors, own TriArk Mining, with rights over two major sources of rare earth elements: Th+REE monazite concentrate stocked in Krasnoufimsk near Yekaterinburg since the ’40s, and large REE deposits in Tomtor, in the Far Eastern region of Yakutia.

Chinese companies have shown a degree of interest in new REE deposits abroad (cf. China Nonferrous at the Kvanefjeld mine in Greenland, potentially Minmetals in Greece).

Chinese-invested refinery in Amur oblast

A private company from China and its Russian partner will refine oil in the Far Estearn Russian region of Amur oblast to ship fuels to Chinese customers across the border (Amurskaya Pravda). In order to do that, they’ll have to build the refinery first. The location is the village of Beryozovka Берёзовка, some 50 km from the regional capital of Blagoveshchensk which itself faces Heihe 黑河, Heilongjiang across the Amur river. The place is expected to be designated as one of the ‘areas of priority development’, a federal government initiative to transform old ‘monotowns’ in the Far East into industrial parks through tax benefits and state investment (these areas are attracting a good deal of interest in China, as I wrote a few days ago). This should be good news for the refinery project, that has existed for a few years but only last April was approved by the National Reform and Development Commission.

The Chinese investor is Menglan Xinghe Energy (梦兰星河能源股份有限公司), a subsidiary of Jiangsu-based Menglan Group, led by chairwoman Qian Yuebao 钱月宝. Menglan started as in the textile industry but has diversified to invest, notably, in the company behind the Loongson (龙芯) microprocessor (said last February to be planning to invest in Intel rival AMD). Menglan have been active in the Russian Far East for a while, notably in Yakutia (to which I’ll return in a future post).