On Risks and More

On Risks and More
5 (100%) 15 votes

In this article I would like to describe peculiarities of transportation projects not from the viewpoint of performers, but from the reverse side – in Client’s eyesight. I would also like to point out the risks arising in the course of implementing significant infrastructure transportation projects.

Delivery expenses and costs of mounting main equipment into permanent position constitute only a tiny bit of capital investments in petrochemical upgrade and construction projects. Actually, this stage calls for special attention, since it is the most hazardous part in the context of time and money loss.

Professional circles can cite certain examples of Clients wasting a lot of months by giving complete control over this work to manufacturers of equipment.

It is indeed convenient to conclude a contract with a manufacturer and decline all responsibility for carriage. It may seem that insurance and bank guarantees ensure safe and timely delivery of equipment to a construction site. But this is only on the surface. In fact, risk of time loss in such cases is great.  Manufacturers in petrochemical industry are mostly foreign companies which sign contracts with their shipping or forwarding agents that have no idea of how the work is done in Russia.

We happened to meet the Czech freight forwarders, competing in a tender and knowing little about the navigable river in Nizhnekamsk, or Italian partners who were not aware that the point of planned unloading did not have any cargo port and definitely any harbor cranes capable of reloading the equipment onshore.

As a rule, nobody knows about the RF Government Regulation No.87 dd. February 16, 2008, in accordance with which any equipment delivery project is subject to state expert review.

Another risk factor is striking a tender contract based on a low price only, with no due attention paid to professional reputation and expertise of companies.

Like foreign carriers, inexperienced domestic forwarders are not able to properly evaluate the costs of reinforcing bridges, roads, overpasses, berths and other infrastructural elements, while working at a low tender proposal. They know little or ignore the regulations of obtaining permits for large-tonnage equipment haulage along the Russian roads, payment of road damage charges. By offering dumping prices, forwarding agents cannot imagine all logistic intricacies.

One of the cases took place in 2013. The forwarder held a tender for delivery of the equipment for Achinsk Refinery (Rosneft), including the 1,306-ton load. It also specified the route of transportation: from Italy along the Northern Sea Route and Ob to Chulym River. When the winter was over, 1,200 kilometers on high flood water to Achinsk were to be covered with further haulage to the refinery site.

SpetsTyazhAvtoTrans Group won this tender. However, upon carrying out detailed design and survey work, they found out that it was not possible to deliver the cargo using this route. The forwarder’s idea of passing the Chulym in flood water was inconsistent. Survey reports and logistic analysis were submitted to the refinery management resulting in a conflict situation.

Design engineers and logistics experts managed to prove the need for changing the shipping route. The new way involved the Northern Sea Route along the Yenisei to Krasnoyarsk and further 203 kilometers of M-53 highway to the destination point.

At first, this option seemed incredible. Such heavy weights had never before covered more than 200 kilometers not only in Russia, but in the world. Nevertheless, this was the only variant. It led to the design change, a new tender and extremely tight schedule.

The specialists had only six months to carry out the entire FEED, develop detailed design and fulfill necessary construction works to prepare the route and installation site. The 200-kilometer highway included 168 power lines, 16 rivers and bridges, 3 railway crossings, flyovers, overground pedestrian crossings above the M53, several descents and ascents with a slope of up to 12 degrees.

I can say that the truck haulage of “The heaviest 1,306-ton cargo to the distance of 203 kilometers” was given a world record title on November 12, 2013.

The third risk is indistinct responsibility for multimodal transportation. Dividing it into several stages and assigning them to different performers, the Client runs a risk of giving up on gains and facing losses at all stages of delegation of responsibilities for the cargo to various carriers. Such decisions of Clients are the rule rather than the exception.

Speaking of the project of delivering 15 overweight items to Nizhnekamsk for the Complex of advanced refining of heavy still bottoms under construction, 4 performers were in charge of equipment carriage. Three foreign crane ships delivered the cargoes to Saint-Petersburg from India, Italy and Korea. SpetsTyazhAvtoTrans Group was responsible for river transportation and haulage of the equipment to the construction site. They developed a scheme and schedule of delivery from the North capital port. Navigation possibility and a plan of loading special-purpose river vessels were also taken into consideration.

But… the first crane vessel was three weeks late to Saint-Petersburg, and the second one unexpectedly arrived a week earlier. As a result, the barges had no time to discharge the first vessel and accommodate the equipment from the second vessel. The Client faced additional significant demurrage-related expenses and the risk of not fitting into navigation. If the whole shipment had been assigned to a single performer, theoretically a carrier, it would have been much easier to adjust the delivery schedule and leave out any extra expenses of the Client.

And now more details about the delivery of 15 heavy-weight items to TAIF-NK Complex of advanced refining of heavy still bottoms under construction. The entire project was completed on November 15, 2014. Total weight of the outsized equipment exceeded 10,000 tons. The project involved discharging of three ocean crane ships in Saint-Petersburg, reconstruction of SpetsTyazhAvtoTrans Group own barges to enable Ro-Ro loading and sailing more than 2,000 kilometers of the Russian rivers (the Neva, Lake Ladoga and Lake Onega, the Upper and Lower Volga, Kuybyshev Reservoir and Kama River). It was also required to renovate and broaden 23 kilometers of the road in Nizhnekamsk and upgrade the dock section.

By the way, I would like to mention the far-sightedness of Tatarstan clients. In 2006, prior to carriage of the equipment for Tatneft, SpetsTyazhAvtoTrans Group came up with an absolutely new engineering solution for Russia – dock section project which made it possible to solve a formidable problem regarding heavy-lift unloading in Nizhnekamsk. This problem involved the alternating water level in the Kama and the high left bank.

The dock section is operated in the vicinity of Transkama cargo port, on the territory of Management Company KamaGlavStroy. The loading dock section is located on the left bank of the Kama, the so-called Old Kama (its second name is Afanasovskaya volozhka) in the Kama reach of Kuybyshev Reservoir. The section is designed for rolling out of heavy-lift and oversize items from barges. The essence of this method is as follows: the laden barge is towed into the dock section. The tow boat then sets the water gate at the dock section head, and the gate is filled with water to submerge, so that the dock section is closed from the river. The water gate pump unit feeds the water into the pressurized facility. The water is pumped into the section, until it floats above its supports. Then it is pulled onto the bank pier by hawsers. Upon coupling of the barge, the tow boat approaches the bank pier and tows the wheel platform with the equipment.

In 2014 SpetsTyazhAvtoTrans Group upgraded the dock section and completed delivery for the advanced refining complex, the landmark project for the Republic of Tatarstan. It will allow reaching 95 percent of oil refining efficiency.

On September 12, 2014 the Editor-in-Chief of the Record Book of Russia registered two records in Nizhnekamsk: Record of Russia and Record of Europe on “River transportation of the heaviest 1,377.9-ton load”. The nationwide record of the truck haulage of this very cargo was registered on October 01, 2014.