Following Tuesday’s declaration that Russia is to settle its Soviet-era debts with Malta by the year’s end, it transpires that the debts owed to Malta by Russia amount to at least Lm40 million ($120 million).
As reported by The Malta Independent yesterday, Russian Finance Minister Alexei Kudrin on Tuesday confirmed that the country intends settling its debts with all creditors. His deputy, Sergei Storchak, elaborated that the Russia’s outstanding debts with Malta, Serbia, Montenegro, Croatia, Slovenia, Macedonia, and Greece would be settled by the year’s end.
The Malta Independent can reveal that the debts in question amount to at least Lm40 million and are owed in respect to timber carriers built by the Malta Drydocks for the Muscovite company Sudoimport.
The MDD had signed an agreement in 1984 with the company for the construction of eight timber carriers, two of which were actually delivered to the company – one in 1989 and the other in 1990. The remaining six timber carriers, meanwhile, had remained in Malta until 1997 when they were sold off by the Malta Investment Management Co. Ltd (MIMCOL).
Answering a parliamentary question tabled by Michael Asciak in May 2004, Investments, Industry and IT Minister Austin Gatt had stated that the Russian debt in respect of the timber carriers alone had amounted to Lm23.7 million ($70,725,000), while interest due on the debt until that date had amounted to Lm17 million ($50,718,261) at the applicable interest rate of 6.75 per cent. Further interest has also presumably accumulated between May 2004 and today.
The Maltese authorities have been in discussions with their Russian counterparts with a view to recovering the dues for some time. The discussions had been led by the Finance Ministry and MIMCOL, while the Foreign Affairs Ministry had also played a role through the Maltese embassy in Moscow and its head office in Malta.
However, Government sources speaking with this newspaper, have confirmed Malta has still not received formal notice of Moscow’s intentions to repay the debt.
While the Lm40 million could certainly go a long way toward addressing Malta’s financial woes, there could very well be more repayments from Russia in the offing.
These include the Malta-Soviet Union Trade Protocol of 1987-1990 and the Malta-Russia Trade Exchange Protocol of 1992 (Camarco). Debts with regard to the latter protocol relate to monies due on goods delivered and confirmed orders associated with the Malta-Russia Trade Exchange Protocols covering the periods of February 1991 to December 1992 and December 1992 to December 1994.
More detailed information on the exact amounts from the trade protocols was not immediately available yesterday.