Central Asia joins Europe through Caspian Sea - Black Sea Corridor

Central Asia joins Europe through Caspian Sea - Black Sea Corridor

At a meeting in Bucharest on March 3-5, the Ministers of Foreign Affairs of Turkmenistan, Azerbaijan, Georgia and Romania signed a declaration on the development of the Caspian Sea - Black Sea international transport corridor. The route will pass from the Turkmen port of Turkmenbashi to Azerbaijan, then by rail to Batumi or Poti (Georgia) and along the Black Sea to Romania (the port of Constanta).

According to experts, the political statement made by the foreign ministers of the countries participating in the project can be regarded as a way to revitalize the interest of large investors in Russia and Iran’s participation as allied countries in the Caspian Sea. China's participation will also bring considerable benefits. It is obvious that such large transport projects can contribute to ending national conflicts and achieving peace in the region; therefore, the more potential participants are attracted, the more countries there will be interested in the stability of the region and project profitability.

The heads of the foreign affairs agencies of Turkmenistan, Azerbaijan, Georgia and Romania recorded the political will of their states to develop new transport routes in the Caspian region. "By signing the declaration, the ministers stressed the importance of this route in the transit scheme connecting West and East, and noted that connecting Europe with Central Asia through two seas is the shortest and most profitable route among the transport networks that exist so far,” the report reads. The inclusion of the EU member, Romania, in the new route line will contribute to the further active participation of the EU in this transport corridor.

"Initiatives for the development of transport routes are complementing each other. The road already exists. It is based on two other corridors, the Trans-Caspian and Lapis lazuli. The only difference is that the transportation of cargo is carried out from the port of Turkmenbashi through the Caspian Sea to Azerbaijan, then to Georgia via Baku-Tbilisi-Kars railway (BTK), and again by ferry (via the Black Sea). As an option, transshipment of dry cargo can be carried out in the port of Poti and along the Black Sea to the Romanian port of Constanta. It is necessary to proceed from the following: the new route is just the name of the transport logistics that already exists, Alexander Karavayev, a researcher at the Institute of Economics, told Vestnik Kavkazka.

Recall, Lapis lazuli is designed to deliver goods from Afghanistan to the European Union and back. The test run took place at the end of last year: wagons loaded with small quantities of dried fruits, cotton, wool, handicrafts were sent from Afghani Herat to Turkey, and in the port of Turkmenbashi, cargos were loaded on ferries and delivered to the destination point.

The Trans-Caspian International Transport Route is created for the delivery of goods from China to the European Union. The Route passes through the territory of Kazakhstan and involves the crossing of the Caspian Sea via Aktau-Baku and Kuryk-Baku lines and the further transportation of goods in the European direction is carried out through Turkey, by BTK highway or by road.

Each new initiative in the field of international transport communications has two sides. Political, connected with the issues of geopolitics, when it is announced that a number of states will attract their funds to improve logistics. And economic, when the question arises whether the business will participate in a project. "This concerns not only the Caspian Sea - Black Sea Route, but also the Belt and Road Initiative, Lapis lazuli,  North-South and International Transport Corridor projects. And no matter what route is discussed, whether it is the construction of the Suez Canal or the Panama Canal, the political necessity is at the forefront,” Karavayev said. “The question is whether there are enough resources to debug the entire chain of this corridor, making it profitable for business." And this, according to the expert, is provided by the goods flow. In the case of the Caspian Sea – Black Sea Corridor, there is a goods flow, but yet not that large as it is planned for the long term.

The same can be said with regard to the Trans-Caspian Corridor, in which Azerbaijan and Kazakhstan have invested fairly large financial resources, including in the development of port infrastructure (Kuryk and Alat ports), access roads, renewal of the sea merchant fleet, etc. However, whether it will be possible for the project participants to attract large volumes of cargo into their territory in order to recoup the investment is difficult to say at the moment. According to the information of the Kaspiyski Vestnik portal, the participants of the Trans-Caspian Corridor managed to transfer about 15 thousand containers across the Caspian Sea. At the same time, by the end of the year, over 500 thousand containers were transported via the alternative China - Kazakhstan - Russia - Belarus - Europe railway route.

There is a part of the route with well-established logistics: Azerbaijan-Georgia, from ports on the Caspian Sea to ports on the Black Sea. There is a certain set of goods that are in demand - petrochemical raw materials. But the question arises of what to transport to the other side of the Black Sea - to Bulgaria, Romania and even to Ukraine. If we are talking about goods from China, then so far established supply lines go through the Indian Ocean or through Russia and win in a competition. Therefore, it is too early to say that they will soon achieve breakthrough results.

According to Karavaev, the project participants are focused on attracting a share of trans-regional traffic of the EU-China Route. Regional segments, such as the Caspian Sea - Black Sea Corridor, can exist only if the local industry focused on neighboring countries develops, for example, Azerbaijan - on Georgia, Georgia - on Romania. And if they can attract 1-2% of the cargo flow already formed by China and the EU, this will be enough for the success of the project. Export supplies of Turkmen liquefied gas to Constanza will also make a difference. (See VK New Caspian Sea - Black Sea transport corridor is becoming a reality).

Alexander Karavayev also noted that for such projects as the Caspian Sea - Black Sea transport corridor, cheap and well-managed logistics is needed. According to the expert, it is necessary to talk about the development of the corridor considering the development of regional economies. The chances of the new corridor would increase if Uzbekistan becomes an active participant and supplies its goods (cotton, agricultural products, etc.) to the European markets and in the opposite direction.

For Russia, the new corridor is of pure institutional interest. It is possible that in the future the Russian Federation will use this route, just as it currently uses BTK to supply its grain to the world market. A Russian-Azerbaijani joint venture has already been established. It will export grain to Turkey, thus helping to unload Novorossiysk when exporting grain from Stavropol.

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