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Marek Grzybowski, An exclusive Interview with Łukasz Greinke, CEO of the Port of Gdańsk Authority SA.

The war in Ukraine and sanctions targeting Russia will undoubtedly take a heavy toll on the global economy

By: Marek Grzybowski

The Port of Gdansk has won the ESPO 2021 award for its commitment to social inclusion and aid to those in need during the pandemic for the first time in its history. The Polish Business Leader prestigious award granted to companies by Business Centre Club went to Port of Gdansk Authority SA this year.

The Port of Gdańsk handles 22 regular sea connections. In addition to Europe, goods are traded with the USA, Central and South America, and Asia. Considering the available ocean connections (alliances: 2M and Ocean Alliance), the Port of Gdańsk is the only Baltic port that supports direct container connections with China.

The Port of Gdańsk is looking for an investor for the operator Port Gdański Eksploatacja S.A., which occupies over 89 ha in the Inner Port. It is the fourth largest operator in the entire port area in terms of cargo handling.

An exclusive Interview  to eBlueeconomy with Łukasz Greinke, CEO of the Port of Gdańsk Authority SA the Polish Business Leader

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Marek Grzybowski:  2021 has been a difficult year for global shipping and ports due to ongoing instability. What is the situation regarding shipment handling at the Port of Gdańsk terminals in 2021? Has the market already recovered from the Covid-19 pandemic?

Łukasz Greinke: We handled 53.2 million tons of cargo in 2021, an 11% increase over 2020. It is the highest amount of shipments handled in the history of the Port of Gdańsk. A big part of this result is due to the handling of liquid fuels – 18.8 million tons with an increase of 37.9% (over 5 million tons more than in 2020). This is an absolute record for Naftoport – nearly 18 million tons. An increase of 10% was recorded by containers. Cargo handled at the DCT terminal reached 2.1 million TEUs. Even better results are expected soon due to the construction of Baltic Hub 3 and the expansion of facilities at the T2 terminal.

Grains are also on the rise – shipment handling in this cargo group amounts to nearly 1.6 million tons, a 7.6% increase. There was a 5.5% increase in general cargo handling, including containerized cargo – total cargo handling of this cargo group reached 23.3 million tonnes.

A brilliant result was recorded in the timber category – a jump of as much as 795%. This is a cargo group that appears in the Port of Gdańsk, depending on the economic situation of the local market. This record result is proof that we have coped with the effects of the pandemic very well.

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Marek Grzybowski:  The Port of Gdańsk has direct oceanic connections to Asia and the Far East. The Port of Gdańsk is a window into the world for Polish companies. What does this mean as we look ahead to 2022?

Łukasz Greinke: Currently, the Port of Gdańsk handles 22 regular sea connections. In addition to Europe, goods are traded with the USA, Central and South America, and Asia. Considering the available ocean connections (alliances: 2M and Ocean Alliance), the Port of Gdańsk is the only Baltic port that supports direct container connections with China.

The world’s largest transoceanic vessels, requiring deep-water berths, arrive at the port. Due to its geographical advantages, we already are one of the key points on the logistic map of the world, one of the main links of the Trans-European Transport Corridor No. 6, which connects the Scandinavian countries with the countries located at the Adriatic Sea. This makes the Port of Gdańsk a gateway for goods imported and exported by Central and Eastern European companies.

Gdańsk and the entire coast are a large window to the world. This is recognized by Polish entrepreneurs who locate their businesses here. Krajowa Spółka Cukrowa S.A. built the most modern sugar terminal in Europe in the port.

Thanks to this investment, Polish sugar reaches markets all over the world, passing through the Port of Gdańsk. Soon other clients will join our team. We signed a contract with Cedrob, a company specializing in poultry production, to build an automatic high storage freezer at the port.

We are also talking to dairy industry representatives because we can see that Polish food products are very popular in the world. We can see a need for warehouses that are able to handle these types of cargo. In 2021, Polish exports were doing quite well – up 22.8% compared to 2020. What will this year be like?

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Marek Grzybowski:  Russia’s aggression against Ukraine has created a new situation in the maritime transport and port market.

Łukasz Greinke: The war in Ukraine and sanctions targeting Russia will undoubtedly take a heavy toll on the global economy. The conflict will have a real impact on the global food production market. Ukraine, called the granary of Europe, is the third-largest exporter of corn in the world and the fourth-largest exporter of wheat (Russia is the first).

The way global supply chains function will change. This raises the question of what is next for the New Silk Route. NSR rail networks run through China, Kazakhstan, Russia, Belarus, and other countries, connecting Chinese trade centres with European cities.

More than one million containers, which normally travel more than 9,500 kilometers by rail connecting Western Europe and Eastern China via Russia, must now seek new routes. Exporters and logistics companies transporting auto parts, cars, and computer equipment avoid rail corridors running through Russia and Ukraine.

There are many indications that the cargoes will take the marine route. It will be quite a challenge for us as a port.

Marek Grzybowski:  Port of Gdańsk Authority S.A. announced a tender for a long-term lease of developed land with a total area of over 27 ha. What investments are currently being carried out in the Port of Gdańsk?

We have announced several important tenders and competitions; we are implementing quite a number of investment projects, which are at various stages of advancement. The tender you mentioned is a very attractive plot of land, located in the deep-water part of the port; one could say very unique.

Two bids were submitted in the tender for the development of the plot, one by the Danish company CM Partner, which is part of the holding Copenhagen Merchants, and the other by DCT. But in the meantime, the situation has changed dramatically.

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The government has committed to creating conditions for the implementation of an installation terminal for the offshore wind sector. The water body adjacent to Pirs Rudowy falls within the area that can be used for this purpose. Therefore, the selection committee canceled the tender on March 24. We plan to re-open it.

We are also looking for an investor for Port Gdański Eksploatacja S.A., which occupies over 89 ha in the Inner Port. It is the fourth largest operator in the entire port area in terms of cargo handling. Seven companies are interested in buying shares in PGE.

These include both domestic entities, companies based in the European Union, as well as entities from outside the European Economic Area. Those interested in acquiring PGE shares submitted written bids, and our selection committee requested that they be corrected, which they were.

We are also after preliminary negotiations to get us closer to final bids. In terms of our expectations of bidders, two things are most important. The first is the price per PGE share, which from our perspective, should be as high as possible because we are pursuing the interests of the State Treasury.

The second thing is we expect a satisfactory level of investment so that we can be confident of the company’s handling potential, which we estimate at 8-9 million tons per year.

Marek Grzybowski:  The Deepwater Container Terminal Gdańsk is developing dynamically. A new maritime industry is being developed in Poland – offshore wind energy.

DCT Gdańsk is also preparing for a new project. In the second half of 2022, it plans to start construction of a third quay (Baltic Hub 3), which will increase the container terminal’s capacity from 3 million to 4.5 million TEU.

The project will include the construction of a deep-water quay 717 m long, 18 m deep, as well as a 36 ha storage yard. This area will be created as a result of the reclamation of the marine area located within the administrative boundaries of the Port. Baltic Hub 3 is scheduled to be operational in mid-2024.

A great challenge is the already mentioned construction of an installation terminal for the offshore wind sector, primarily in the context of implementing projects in the Polish area of the Baltic Sea, the location of which was indicated by the government in an amended resolution of March this year. In accordance with this decision, we are committed to providing the possibility to make this project a reality.

The Polish government wants to create an offshore facility in our port. We have already published a tender procedure to select an entity interested in reclaiming the maritime area for the construction of this terminal. And we are talking about a very large area, from DCT to Naftoport, which also includes the Central Port concept.

We are now waiting for bidders interested in this project and their plans. Keep in mind that there are more offshore developers than those who are involved in the construction of offshore wind farms in Polish areas of the Baltic Sea, so other entities may also submit bids.

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Marek Grzybowski:  The Port of Gdańsk prepares to modernise four more quays

As far as infrastructural investments are concerned, one of the key investments for the functioning of the Inner Port was “Upgrade of the Waterway, Extension of Quays and Improvement of Navigation Conditions”. This long-term investment of the Port of Gdańsk Authority S.A. included quays with a total length of about 5 km and a 7 km long waterway of the Inner Port.

Thanks to the upgrade of the waterway, the permissible draught of ships entering the inner port have been increased – in the port channel, vessels up to 250 m long, 35 m wide, and with a draught of 10.6 m can be handled.

The expansion and upgrade of the road and railroad network in the Outer Port were completed last year. As part of this project, 7.2 km of roads, 10 km of new tracks, and 16 turnouts were built or rebuilt. There were 4 new overpasses built, and 2 existing ones were demolished.

There is an additional track to the DCT Gdańsk container terminal, new tracks to coal terminals, and a modern rail traffic control system. A buffer car park for lorries – the first in this part of the port – was also built. This year sees the continuation of two other important projects for the Port of Gdańsk. One of them is the “Expansion and Upgrade of Core Network Nodes for Road and Rail Infrastructure in the Industrial Quay Area”.

Within the scope of this project, the road system will be reconstructed on a section of about 1.6 km, and the railroad system on a section of about 6 km. In addition, the construction of an internal access road, along with a stormwater drainage system and site utilities at the North Port, will be completed. Further planned investments, including those carried out by our clients, will bring the Port of Gdańsk into a new era of shipment handling.

Thanks to funding from the European Union (CEF2 Instrument), the upgrade of the quays is to continue. The project entitled “Improving Access to the Port of Gdańsk – Upgrade of the Waterway 2”, envisages the expansion of four quays together with railroad infrastructure, with a total length of over 1.9 km. All these investments are crucial for the port business. The intention is to increase the competitiveness of the port and its share in Baltic direct shipments.

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