SILLAMAE In the early 1960s, the Kremlin ordered the Soviet military to blow up the port of Sillamae to prevent enemy ships from infiltrating this industrial town of 18,500 where uranium was enriched to build nuclear bombs during the Cold War.
Now, Tiit Vahi, a former Estonian prime minister and a leader of the country's revolution against Soviet rule, wants to lure the ships back. His aim is no less than transforming a place once nicknamed "Uranium Lake" into a commercial port that will allow Estonia, a European Union member since last year, to serve as a bridge between East and West and shake up European trade.
"Even if we could transport the dust on the containers coming from China, we'd be happy, since the Chinese cargo flow is so huge," said Vahi, who helped lead Estonia's independence movement in 1989 before becoming transport minister and prime minister and then entering the business world.
While European companies are lobbying the EU to rein in low-price Chinese imports - a move that culminated in thousands of containers of Chinese T-shirts and sweatshirts being held up at EU ports over the summer - European ports like Sillamae are frantically casting around for even a fraction of China's enormous trade. The money at stake is huge. In the past 25 years, EU-China trade has increased nearly thirtyfold, to E146 billion, or $173 billion.
Officials reopened the port of Sillamae in October, revamped with a reconstructed berth, a railway station and 2.5 kilometers, or 1.5 miles, of metal pipes for pumping oil to and from ships. It is now the EU's most eastern port - so close to the Russian border that you can see the city of Ivangorod, 25 kilometers away, sparkling in a haze across the Baltic Sea.
Vahi said this location was the key to attracting China, since Chinese companies could cut by more than half the time it took for their goods to travel to Europe by putting them on Russia's Trans-Siberian Railway.
Today, most Chinese companies send their goods on giant container ships to major West European ports like Rotterdam, where they are loaded on to smaller ships that fan across the Atlantic. By sending goods to Sillamae via Russia, Chinese companies could bypass the slow passage through the Suez Canal and shrink their travel times to 14 days from 40.
The prospect of such time and cost savings prompted President Hu Jintao of China to invite Vahi to meet him in Beijing this summer to present his plans. A delegation of Chinese companies from Hong Kong, Shanghai and Beijing also visited Sillamae this month.
"We are interested in how we can use Sillamae as a gateway and distribution center," said Liu Mingguo, commercial counselor at the Chinese Embassy in Tallinn.
Yet even if Sillamae succeeds in attracting the Chinese, there are also logistical issues to contend with. Although Estonian port authorities do not expect Russia to object on political grounds, transport experts note that using Russia as a supply route from China to the EU could prove difficult, as the Trans-Siberian Railway has parts that are old and outmoded. The Kremlin has been slow to .....
...... grant foreign companies access to its commercial railways. What is more, analysts say, Russian regulations governing the granting of foreign licenses are complicated, and foreign companies cannot be assured that Moscow will not interfere with their plans.
Moscow has also imposed double tariffs through the next two years on goods that are shipped to and from Russia using non-Russian ports, making the use of Russia's commercial railways an expensive proposition.
Then there is the Estonian port's Soviet-era image, straight out of a John le Carré novel. For 50 years, Sillamae was one of the most heavily guarded cities in Estonia because of the Kremlin's fears that nuclear secrets would leak out. Locals say KGB agents kept watch and arrested trespassers. Inside its gates, the town was preserved as a Soviet-style utopia, with uniform Stalinist architecture and palm trees stored in special greenhouses during the winter. Many Estonians recall it as a foreboding place where no one ever smiled.
Still, with its strategic position on the Baltic Sea, Pavel Telicka, an EU official coordinating a multibillion-euro project to upgrade the Baltic railway system, said Sillamae was another small step in bridging the Baltic countries and the West. "The potential for Estonia - and the Baltics - to act as a gateway between East and West is strong, but the transport infrastructure needs to be integrated with the rest of the bloc while Russia has to liberalize its transport markets," he said.
Also weighing on Sillamae is the need to rebrand a place once considered one of Europe's biggest environmental hazards. When the Soviet military withdrew in the early 1990s, it left behind 12 tons of greenish-brown radioactive waste. For years the sludge remained beside the Baltic Sea. With the help of EU funds, Estonia fortified the site with walls, covered it with 15 meters, or 50 feet, of concrete and planted soil on top. Today, the grassy mound sits vacant. But Sillamae remains better known for its nuclear history than its commercial prowess.
Anton Gans, Sillamae's marketing manager, says that Sillamae is so environmentally friendly today that the port could build a golf course on the area where the nuclear waste was dumped - though the EU has forbidden any building on the mound for 100 years. "We can thank the EU for the fact that our teeth don't shine from standing here," he said.
Sillamae can also thank the EU for one of its other main draws: a 600-hectare, or 1,480-acre, free trade zone where companies can store goods ranging from DVD players to oil for three years without paying taxes or customs duties.
Rival ports already are grumbling that the trade zone gives Sillamae an unfair advantage. "If the EU doesn't shut it down, other ports will make a huge stink," said Minco van Heezen, spokesman for the port of Rotterdam.
But Maria Assimakopoulou, the European Commission spokeswoman for taxation, said Sillamae was entitled to have the zone and noted that goods were taxed when they arrived at their final destination.
Vahi is hoping that incentives like this will attract investment to Sillamae and help the town regain some of the cachet it had when the surrounding area was a favorite vacation destination of Russian aristocrats in the 19th century. But he acknowledged that Sillamae was still trying to shed its reputation as a Russian enclave. During Soviet times, the Estonian language was not taught in Sillamae's schools, and many Estonians grew up here without speaking their native language.
Vahi said he was confident that the port would prosper as globalization opened the Chinese and Russian markets. And he is undaunted by critics who dismiss Sillamae as just another port in a country of 1.4 million people with 101 ports. "I am used to seeing potential where other people see nothing," he said.
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