Arctic Yearbook 2015 - Page 47

47 Arctic Yearbook 2015 State guarantees for credits granted to Russian enterprises for the implementation of investment projects, technical equipment upgrading, etc., and subsidies to cover part of their expenses on interest rate discharge are also required at the regional and municipal levels. For a number of regions in Yakutia and Chukotka, the transportation costs exceed the costs of one ton of delivered fuel so substantially that the development of local deposits near the key points of consumption would significantly increase the energy security of the local population and decrease regional budget expenses. Development of local coal deposits by small scale and very small opencast mining producers should be conducted with the active participation of regional authorities. Coal prices should be fixed at such a level that they would allow mining companies to operate normally with low economic risks and to be able not only to cover operating and capital costs connected with exploration, but also to achieve the profits necessary for mining. Currently however, the state refuses to use mechanisms of direct and indirect pressure, thus equating small-size and very small coal opencasts to typical enterprises in European Russia. Our calculations reveal the potential for a three-fold coal price decrease, compared to the price of coal delivered externally, if local coal deposits were developed on the Indigikra river in the Abyskiy region (rayon). Even if the price of coal from newly developed coal mines which are close to the consuming communities was equal to the price of transported fuels (11-12,000 rubles per ton for the Ust-Yanskiy and Abyiskiy regions), energy security issues should demand significant improvements in the transportation schemes in the Arctic. Such an approach furthermore conforms with market economy principles. Conclusions This article has addressed mechanisms of state support for fuel and power delivery to the Chukotka Autonomous Okrug and polar regions of the Sakha Republic (Yakutia). The focus has been on the difficulty to access areas of those territories, which experience harsh climatic conditions and specific difficulties in goods delivery. Complicated transportation schemes of fuels delivery, differences in the launch and completion of river and marine navigations, and operation of winter roads lead to a significant increase of time and costs of goods delivery and thus to the deterioration of its quality. Annually, hundreds of millions of rubles are allocated from the federal, regional and municipal budgets for these expensive goods delivery procedures. Transportation expenditures account for 70-75% of the cost of fuel for consumers in the Arctic. The system of state support of fuels delivery has undergone many changes in its long history. During the centrally planned economy, the purchase and delivery of goods was performed by specialized organizations and were financed from the Russian state budget. Since 2003, however, subventions from the Fund of Financial Support for Russia’s Federal Subjects have no longer been purposeoriented. Barakaeva, Batugina & Gavrilov