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“Bulgaria” boat disaster to change the industry
“Bulgaria” boat disaster to change the industry


The tragic death of 122 passengers of the river boat "Bulgaria" on Volga river will inevitably lead to some changes in government regulation of river passenger transport industry.Wednesday, 03.Aug.2011, 23:38 (GMT+2)
The tragic death of 122 passengers of the river boat "Bulgaria" on Volga river will inevitably lead to some changes in government regulation of river passenger transport industry. A number of operators will most likely leave the market, others will make additional investment to meet the new requirements of security and service quality. Russian Prime Minister Vladimir Putin has supported a number of proposals by the Transport Ministry, which would increase the requirements for shipping companies and tighten state control over their activities.

Shipowners to deal with Safety Management Systems

During a joint meeting of the Public Councils of the Russia’s Transport Ministry and the Federal Agency of Maritime and River Transport (Rosmorrechflot), which explored the possible measures to be taken to prevent similar tragedies in future, the representatives of the shipping industry have made a number of suggestions.

The president of the Association of Shipping Companies of Russia (ASA) Alexey Klavin said that, above all, the so-cold self-control must be increased of the market participants by establishing a self-regulatory organizations (SROs), following the example of other industries. ASC believes establishing SROs will help reduce administrative barriers and simultaneously improve safety and quality of services the shipping companies provide. "It is business that better knows than anyone else the weak spots in the organization of transport and therefore the self-organization seems to be most effective," Mr. Klavin said at the meeting.
He added that along with the formation of SROs the Association will create a Compensation fund and possibly a Mutual insurance fund. For that ASA is establishing mutually beneficial cooperation with insurance companies.

The Association considers the introduction of Safety Management Systems (SMS) is another crucial point, which would be mandatory for all passenger ships of inland navigation. The SMS criteria could be established either by the federal law or by the order of the Transport Ministry. It will include the requirements for the shipping company, its personnel policy, regulatory procedures, the company’s responsibility for a ship, plan of actions in case of emergencies.

ASA believes that the shipowners' associations should be allowed to develop their own SMS oriented on leading companies that give due attention to security issues.

These measures may lead to consolidation in the market of river navigation, as smaller companies will be unable to meet increased demands and implement the SMS.
United Shipbuilding Corp.’s President Roman Trotsenko, who is also the ASA Board member, the industry consolidation is inevitable and will only be for the best. "We have today more than 1,000 shipping companies that carry passengers. Some of them have only one ship – without a license, a poorly trained captain and the crew not instructed... so the first thing that we offer is the need to consolidate the business, which transports passengers and has a significant impact on passenger safety ", Mr. Trotsenko was quoted as saying.

Russian Transport Minister Igor Levitin has supported the idea of enlargement of river shipping companies. However, this will require changes in legislation, he said.

It is believed that not only the business but the executive authorities, responsible for its regulation, should be reformed. Alexey Klavin complained, that the authorities’ work, after the division of supervisory and control functions in the course of administrative reform, has become less effective. He suggested that the functions should be united again as it was before 2004. More specifically, it is proposed to reallocate functions between Rostransnadzor and Rosmorrechflot leaving Rostransnadzor the function of control over licensing.
From theory to practice

Transport Minister Igor Levitin has presented a package of proposals to the Prime Minister Vladimir Putin. Among them - the introduction of mandatory insurance on inland waterways, unscheduled inspections of legal entities and individual entrepreneurs in the transport sector, the introduction of port state control and the transfer of quay walls now being managed by the Federal Property Management Agency to the RF’s regions.

Vladimir Putin has supported the proposals of the Ministry. It is expected that the State Duma may enact the bill in September-October 2011.
Port News

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