Finns want to extend term of lease on Russian section of Saimaa canal

Talks on extending the term of lease on the Saimaa canal got under way in Helsinki this week. As a Rosbalt correspondent was informed at the Finnish Transport Ministry the Finnish delegation is being led by Deputy Transport Minister Juhani Korpela while the Russian delegation is being headed by Deputy Transport Minister Nikolai Negodov.

The current term of lease will not run out until 2013. Nonetheless, the Finnish Transport Ministry believes it is essential to start negotiations on extending the term of lease now as any uncertainty about the future of the Saimaa canal may have a negative impact on investments.

The Finns are also seeking to expand the current agreement by raising the flow of traffic on the canal from 2 million tonnes to 4-5 million. This is primarily in view of the timber which is shipped along the canal for the timber industry in South East Finland. Russia is proposing that Finland import timber along the Saimaa canal from the port of Ust Luga in the Gulf of Finland.

During the negotiations, the two sides are expected to agree on the term of the lease, the cost, the shipping schedule and the level of investment in the canal.

The Saimaa canal connects the Gulf of Finland with the Saimaa lake area. The canal is 42.9 kilometres long in total, 19.6 kilometres of which belong to Russia and are therefore leased. The canal was first opened for shipping purposes in 1856. In 1962 the Finns signed an agreement with the Soviet Union to lease the canal for a 50-year period.

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