Shipbuilding and repair companies from the Primorye region on the Russian Pacific coast have been in discussions with the local government how to reactivate the ailing industry. Only two ships were built and 160 repaired in the first quarter of 2002, according to Primorye Administration’s Department of Shipbuilding and Repairs. The value of repairs was only 23 per cent of the 2001 period, at 257.3 million rubles ($8.3 million), while the tax revenue fell to 14.5 per cent of the 2001 level, at 74.9 million rubles ($2.4 million).

Around 50 per cent of ship repairs in Primorye are carried out on the fishing fleet, which is ageing, and too large for the permitted catch. Ship owners owe ship repairers 262.8 million rubles ($8.5 million). Most of the non-payers are from the Primorye, Khabarovsk and Sakhalin regions. Ship owners for their part complain of high harbour dues, excessive import duty on spare parts and low service standards in Primorye ports. Approximately 500 Russian Far Eastern fishing boats are currently being repaired in China or Korea. The industry also suffers from an ageing work force. The average employee is aged 45 to 50 and young people are not keen to work in shipyards.