VLADIVOSTOK, Russia -- At the end of a bay filled with the sunken hulks of the once mighty Soviet navy, a former military vessel called the Pallada is moored at a private dockyard, waiting to be cut down to scrap.

It might be a long wait.

Business at the Svatko Ltd. scrap yard should be booming. The bays around Vladivostok, once a closed naval-base city of 700,000 on the Sea of Japan, are filled with rusting battleships, submarines and troop transports -- at least 101 large- and small-tonnage vessels, many sunken.

Foreign firms are eager to buy the ships for scrap metal. But Svatko has not scrapped a ship for months. The regional government refuses to renew its license.

Combined with 43 corroding nuclear submarines in nearby Bolshoi Kamen and dozens more vessels around the Russian Far East, the rusting hulks pose an enormous environmental hazard.

Private companies are trying to clean up the derelict ships and make a buck in the process, but they say Russia's bureaucracy, corruption and insider politics are driving them out of business.

"I have all the necessary technologies for underwater work, but I can't do it," says Yevgeny Biryukov, president of Epron Co., a firm that salvages ships. "Bureaucrats at all levels ignore the [environmental] problem.

"And it is the same all over the Far East. In Kamchatka, one of their submarines sank. They raised it, but it sank again."

Contemporary Russia is in economic paralysis, but the problem predates the current troubles. For decades, the Soviet Union mothballed old ships simply by abandoning them in local bays. But as the ships grow older, the ecological costs of using the sea as a junkyard become increasingly evident.

"Sea water is very aggressive," says Boris Preobrazhensky, chief of the Laboratory for Undersea Studies with the Pacific Institute of Geography in Vladivostok. "When a ship sinks, the water quickly destroys it, forming heavy metal salts. This forms compounds with organic substances and spreads all over the sea."

There are other dangers. Of the 43 nuclear subs moored 12 miles from Vladivostok across Lazurnaya Bay, Biryukov says, "If any of them sinks, it would be such a disaster that nobody will ever come to help raise it from the sea floor."

At least a start has been made on the Bolshoi Kamen subs.

U.S. firms, with funding from Japan, are assembling a floating facility to recycle nuclear waste from them, although that effort has run into delays. But other scrap ships lack high priority for cleanup and are probably destined to sit on the bottom unless a private business can be persuaded to help.

Salvage can bring in $70 a metric ton, down from $140 in 1996 but still more than an average monthly salary in Vladivostok. And that is "hard" foreign currency, not unstable rubles -- international trade with Russia is often done in U.S. dollars.

That kind of money can tempt officials to get in on the deals, and everyone from fire inspectors to health officials has been demanding extravagant inspection fees, according to Anatoly Kovalyov, head of Svatko, which employs 107 people.

Scrap-metal dealers have been the targets of more ominous pressures because, they say, the regional government has been hinting that it is interested in reasserting state control of scrap-metal exports.

One dealer says that a ranking official showed up drunk with a carload of cronies and began shooting at buoys out in the bay. The director of the firm happened to be a former member of an elite police force, and he phoned some of his former colleagues, who came and shooed off the drunks.

Until 1996, the Russian navy owned its abandoned and sunken ships. Thus salvage businesses could cut a deal with the navy to buy hulks and sell them to South Korean scrap-metal dealers.

But when the State Property Committee assumed control, the ships became tangled in a growing web of bureaucracy and corruption, Kovalyov says. He must fly to Moscow to get permission to clean the bay, and he is often met with open demands for bribes.

Recently the government denied Kovalyov's application for a new license, although he had already invested hundreds of thousands of dollars into Svatko.

The federal government blames Svatko for its own problems. Nadezhda Kolosyuk, head of the licensing department for the Federal Committee to Protect the Environment, says Kovalyov didn't submit the necessary papers and has been guilty of bad ecological practices.

"He made a lot of infringements of environmental laws," she says. "He didn't clean up his company's property, and he burned oil inside an abandoned ship."

The problems in cleaning up sunken ships don't lie only with Russian companies and bureaucrats. Foreign firms hired to clean up the bays have also proved to be less than reliable, says Altair Tyumenev, director of Transfes-Eco.

Tyumenev is one of a handful of classmates from the Far Eastern Marine Academy who decided, upon graduation, that they really weren't interested in going to sea. Instead they formed a business to clean the bays.

The effort may sound hopelessly optimistic here. The city pumps its raw sewage into the sea; it deals with garbage by dumping it off a seaside cliff; and it has done nothing about the contaminated soil around an old Stalin-era oil reservoir that leaked tons of petrochemicals over the years.

Who would expect to make money on maritime cleanup in Vladivostok?

But Transfes-Eco found its niche removing garbage from visiting freighters and contracting to encircle offloading fuel ships with a boom that contains oil spills.

The firm provided its boom services to a South Korean scrap-metal company in Trud Bay on Vladivostok's Russky Island. But the company cut off the tops of ships at water level, leaving the vessels even more dangerous to navigation because they are hard to see from the bridge of a moving ship. The Korean company also failed to pay Transfes-Eco for its work, Tyumenev says.

The ecological hazards are exacerbated by vagrants who steal nonferrous metal from the ships.

During the four months of the year when the sea is frozen, they can walk out to a ship, break in and steal whatever they can carry. In spring and summer, vagrants steal boats along the shore, row out to the ships and even build fires on decks. They often know just what they are looking for.

"They are ready to sink a ship for a bottle of vodka," Biryukov says. "They sneak out on a boat and steal a metal valve, and the boat will sink.

"I saw myself how a tugboat sank within 40 minutes after one guy unscrewed a valve to get [10 pounds] of metal."

Pub Date: 6/25/99