Nearby Rivals Buffet St. Petersburg Port : Shipping: Russia’s No. 2 city struggles with competition from Finland and the Baltics--and a lack of funds.

St. Petersburg, Russia’s main shipping outlet to the West, is struggling to weather a storm of competition from neighboring nations, amid a dearth of funds for reconstruction and expansion.

The port, founded by Peter the Great nearly 300 years ago, is racing against time to meet the challenge.

“Finland and the Baltics want to steal our business,” port director Anatoly Bilichenko said.

St. Petersburg can handle more than 14.5 million tons of cargo annually, but last year it processed only 8 million tons--mostly food imports, lumber, metals and machinery exports.

The shortfall, which Bilichenko blamed on inadequate refrigeration facilities and high taxes, has put a fifth of the port’s 1,860 dockers on part-time shifts.

Part of the problem may be linked to a fall in Russian grain imports from about 26 million tons in 1992 to 11 million tons in 1993--and only 3 million last year.

Demand for the outlet’s services from Russian exporters has soared. This year the facility in Russia’s second-largest city turned down requests to ship out 15 million tons of cargo, Bilichenko said.

The port, which was privatized in 1993, is treading uncharted territory in the search for efficiency and investment while remaining tethered to Moscow’s customs and tax regulations.

“The port has improved its unloading procedures dramatically in the past two years but still faces a host of old and new problems,” said Nikolai Popov, director of SovMorTrans, a Russian shipper working with SeaLand Technology of the United States.

Last year it was awarded a $500,000 U.S. government grant to build refrigeration terminals, but it still needs $500 million for reconstruction and expansion.

St. Petersburg, situated at the eastern end of the Gulf of Finland, is the most expensive shipping outlet in the Baltic area, Popov said.

Its state-regulated docking rates are the highest of all European facilities: $10,500 per 24 hours per container ship, nearly twice those of German and Finnish ports.

“Some companies are already diverting their business to ports in Riga (Latvia) and Helsinki (Finland),” Popov said.

Bilichenko complained that long unloading delays caused by Moscow’s customs procedures are also preventing the facility from becoming more competitive.

“We’re always ready to unload, but customs is not, and this can scare some customers,” he said.

What worries Bilichenko most is a plan by the city of St. Petersburg to build oil berths on the port’s state-owned docks without the port having a stake in the project.

The $60-million Golden Gates project would increase oil-handling capacity to 7.7 million tons a year from 2.2 million tons, but it is bogged down in ownership and financing quarrels.

“Golden Gates cannot proceed without the port’s participation,” Bilichenko said.

Lithuania may beat Russia to the post with a project, announced in January, to build an export-import terminal for refined oil products at Butinge.

There are several other such projects in the Baltic states and the Russian enclave of Kaliningrad.

Russian ports have been losing business since the collapse of the Soviet Union in 1991 made 18 of 37 Soviet ports--including 5 of 8 Baltic ports--independent.

Russian ports can now handle 149 million tons of cargo a year, more than 40% less than the Soviet Union’s Communist-era capacity.