President Vladimir Putin signed a decree in 2003 setting up an alternative naval base for the Black Sea Fleet in Novorossiisk after Ukraine demanded the base in Sevastopol be withdrawn by 2017.
"In five years, we will finish the construction of breakwaters and piers," Russian Navy Commander Admiral Vladimir Masorin said. "As a result, the base will be able to accommodate up to 100 ships of the Black Sea Fleet."
Russia has allocated 12.3 billion rubles (about $480 million) for the construction of the new base between 2007 and 2012 under a targeted federal program.
Masorin said three piers had been constructed and the work was underway on building breakwaters.
The construction of other infrastructure at the base, including facilities for coastal troops, aviation and logistics units, will continue beyond 2012, the admiral said.
Meanwhile, Ukrainian leadership has been pushing for the withdrawal of Russia's naval base in Sevastopol in Ukraine's Crimea Autonomy by 2017, in compliance with a previous bilateral agreement.
"The Black Sea fleet must leave the Crimea by 2017. Period," the Ukrainian Defense Ministry quoted Anatoly Hrytsenko as saying in May.
Russia and Ukraine signed an agreement in 1997 stipulating that the Black Sea Fleet's main base in Sevastopol, on the Crimean Peninsula, be leased to Russia for 20 years, with the possibility of extending the term.
The annual rent of about $100 million is deducted from Ukraine's debt for Russian energy supplies. In addition to the main base, the Black Sea Fleet maintains two airfields and a ship re-supply facility on the Crimean Peninsula.
But Ukrainian President Viktor Yushchenko said Tuesday that the current rent could be increased in the future.
"Certainly, the rent for the Black Sea Fleet base in the Crimea will be changing because it is linked to other factors that determine the final amount," Yushchenko said in an interview with the Vremya Novostei newspaper.
