The Saimaa Canal is an important conduit in Finland for ships carrying cargo to ports in Europe. It currently carries regular shipments from nine ports in the Saimaa water network of eastern Finland to the Gulf of Finland, accounting for the transport of over 1.2 million tons of goods each year to cities in Central Europe.
This year traffic in the canal has been brisker than in recent years, in part because the market for raw timber has been favourable.
But many of the larger vessels that carry goods through the canal date back to the 1980s, and will soon reach the end of their user life. New ships will be considerably bigger, and the current length of the Saimaa Canal's locks (82.5 metres) is insufficient to accommodate them.
"Extending the size of the locks is absolutely crucial for the future of Saimaa's cargo traffic," says Seppo Kykkänen, office manager of the Saimaa Canal council.
60-million-euro investment decision ahead
After the next parliamentary elections in April 2019, the new government and parliament will have to decide whether to lengthen the Saimaa Canal locks by ten meters. This would mean that 93-metre cargo vessels – able to carry up to 3,500 tons of goods at a time – would fit comfortably. The project would cost the Finnish state 60 million euros.
"This would increase cargo capacity, and thus improve the competitiveness of water-borne transport. This is exactly what industry is waiting for," says Kykkänen.
These new longer ships would run on liquefied natural gas, or LNG. The vessels could stop to fill their tanks at a new LNG terminal planned for the eastern Finnish city of Lappeenranta. LNG could also be transported from the new terminal there to industrial centres in Finland's eastern region.
Passenger traffic through the canal has also picked up this year.
"Things were a bit quieter in July due to the heat, but we have already exceeded our all-time passenger record in August," says Kirsti Laine, managing director of Saimaa Travel, operator of the M/S Carelia cruise line that regularly carries approximately 200 passengers between Lappeenranta and the Russian city of Vyborg (or Viipuri in Finnish) through the canal.
New generation cruise boats running on LNG are also a future business opportunity. Travel agencies like Saimaa Travel could start carrying Asian tourists, for example, from St Petersburg to Saimaa through the canal.
Since the end of July, over 500 yachts have sailed through the canal, as boating and tourism in eastern Finland both pick up speed.
The canal's 50-year history
The Saimaa Canal, the only connection between Finland's Saimaa lake district and the Gulf of Finland, was built in 1856 between the cities of Lappeenranta and Vyborg, back when both cities were part of the autonomous Grand Duchy of Finland in the Russian Empire.
The Moscow Peace Treaty of 1940 ceded the area to Soviet Union, but a new agreement in 1963 saw the ÙSSR lease the Soviet section of the canal to Finland for fifty years.
Finland made a major investment updating the canal, as most of it had been destroyed in preceding wars. Some 12 million cubic meters of earth was moved to make the channel deeper, costing 200 million Finnish marks.
The route was reopened in 1968 to much fanfare. During the christening ceremony, then-President Urho Kekkonen said that the finished product was a monument to joint work and friendship between Finland and the Soviet Union.
In 2010, the governments of Russia and Finland entered into a new lease treaty which went into effect in February 2012. The agreement allows Finnish traffic to cross through the Russian territory, which is governed by Russian law. Visas are not required for passing through the canal, but a passport is checked at the border.
New negotiations between the two countries in 2008 agreed to a 50-year extension of the lease. The annual leasing fee that Finland had paid to Russia had only been raised one time from 1963 to 2013. With the new pact, it jumped in a single bound from 290,000 euros to 1.22 million euros, with provisions made for adjustments to the fee for every ten years thereafter.