Big railway redistribution

Big railway redistribution

On October 15-16th Tbilisi will host the Silk Road forum, during which transport projects will be discussed, in particular the highway ‘Western China-Western Europe’, the rail corridor China-Central Asia-Europe and the Baku-Tbilisi-Kars railway (BTK). This global project is aimed at connecting the infrastructure of the East and the West. Kazakh President Nursultan Nazarbayev, speaking in New York at the 70th session of the UN General Assembly, stressed the importance of the economic revival of the Silk Road at the present level. It is impossible to reach that goal without an appropriate modern transportation corridor. According to the Kazakh leader, the implementation of a global transport and infrastructure project will be beneficial for many countries, and in addition it will reduce the overall transit from the Asia-Pacific region to Europe.

There are a few months left before the completion of the BTC. Azerbaijani Foreign Minister Elmar Mammadyarov called the project a strategic one, important not only for the countries of the South Caucasus, but also for the countries of Central Asia. "Kazakhstan and Turkmenistan are very interested in the use of the railway. China also speaks about the great importance of the BTK project," Mammadyarov said. ‘’It is more profitable for Chinese companies to send their goods to Europe by rail than using sea or air routes."

Azerbaijan and Georgia have already built their sites of the BTK railroad. Now it is up to Turkey. "We are confident that by the end of this or early next year, the Turkish section of the railway will have been built too. The BTC will transit millions of tonnes of new cargo. Thus, both our economic and political interests will be provided for," Mammadyarov said.

The pilot container train Nomadexpress, which was launched in August 2015, travelled from China through Kazakhstan, Azerbaijan and Georgia in 9 days and reduced the distance to 7 thousand kilometers. It is expected that up to a million passengers will benefit from using the road and up to 7 million tons of cargo will be carried.

The peak capacity of the corridor will be 17 million tons of cargo. This is not the limit, in time the BTK capacity will only increase. Experts believe that the BTC is able to change the infrastructure, not only on the scale of the South Caucasus region, but the East-West global transport corridor in general.

The idea of ​​the construction of the BTK belonged to Azerbaijan. In 2007, Baku explained the need for increasing road freight volumes, including exports of hydrocarbons to the west, as well as a desire to have the shortest rail link with Turkey. The projects of connecting the Azerbaijani railway system to the Central Asian or Iranian railway system have resembled a fiction. In addition to the unresolved status of the Caspian Sea and the insignificant economic relations between the two countries, there is a ‘nuclear crisis in Iran, and a conflict remains over the oil and the gas fields in Chirag and Kapaz between Baku and Ashgabat. However, Baku has defended its position. As a result, Iran, for which it is important to have several new overland routes to receive goods and exports, has focused its attention on the railway network of the Azerbaijani branch of ‘Rasht-Astara’.

Today the BTK is becoming a hub for a whole network of rail routes. Turkmenistan, Afghanistan and Kazakhstan are interested in this project. As the President of Turkmenistan Gurbanguly Berdimuhamedov has noted, it is about laying the foundations of a new space architecture, which unites Central Asia and the Caspian countries with the Black Sea region and the Caucasus, with further access to the Baltic States and Northern Europe.

But the relations among a number of the countries in the region are such that, bearing in mind the above-mentioned, they are forced to seek their own versions of ‘windows on the world.’ In particular, Tajikistan and Kyrgyzstan are linked to the outside world through the Russian railway network, which goes through Uzbekistan and Kazakhstan, and conflicts over issues such as water usage or territorial issues have a negative impact on other aspects of cooperation. In particular, Uzbekistan is building a road through the mountain pass of Kamchik at more than 2200 meters above sea level, bypassing Tajikistan. This road will serve as an important part of the new international transit corridor ‘China-Central Asia-Europe.’ Tajikistan is negotiating on the construction of roads in Afghanistan.

China is becoming a major player in the infrastructure projects in Central Asia. The country has already entered the region through Kazakhstan, and now offers the idea of ​​the construction of new railway lines that will cover all the countries of Central Asia. The Chinese authorities have quickly learned and felt the benefits of cheap imports of hydrocarbon raw materials, ores, metal scrap, exporting their own cheap consumer goods through the junction with the routes of Kazakhstan. According to the international consultant of the Asian Development Bank (ADB), Kubat Rakhimov, China’s rail plans will be unprofitable for at least 20 years, but this does not scare off the country.

One of the Chinese railway projects is the China-Kyrgyzstan-Uzbekistan railroad project. Apart from the fact that China expects to achieve a supply of their products to the local market through this road, it is also eyeing imports of Uzbek hydrocarbons, Kyrgyz ores and rare earth metals. Kyrgyzstan is ready to ‘sign up’ for this road at any time. Uzbekistan is more cautious. Tajikistan is not far behind its neighbors either, the country is trying to win the agreement of China's railway construction. And given the current ‘railroad addiction’ of Tajikistan from its neighbors, it seems, it will be glad of any alternative route. The implementation of these projects will create a new reality, in which the influence of China in the region  will inevitably grow, and the influence of Russia, according to experts, on the contrary, will decline.

‘’China, and to a lesser extent Iran, are the key regulators and investors of the new rail system. And the rail projects are ceasing to concede to the energy projects in their importance. Turkmenistan, for example, is interested in the new structure more than in the notorious Trans-Caspian Pipeline, which is a purely political project and does not carry any significant economic benefits, neither for Europe nor for Turkmenistan, given that the project exacerbates the country's relations with Iran and Russia. Another thing is the sale of oil and gas through Iran and the Caucasus on the new railway system, which is pushed by a powerful China. It is the shortest and the most effective way out for Turkmen oil and even liquefied gas to Europe and the Gulf countries. The trade of these raw materials, still on a small scale, has been carried out by the Turkmen authorities for a long time with active co-operation with Iran, and more recently, with Georgia, Azerbaijan and Turkey, of course," the leading researcher of the Institute of Oriental Studies of the Russian Academy of Sciences, Shohrat Kadyrov, told Vestnik Kavkaza. According to him, the only compensation is seen in the development of the North-South transport corridor, meaning the construction of railway lines from Armenia to Iran and from Abkhazia to Georgia.

The Armenian-Iranian project seems promising in view of Armenia joining the Eurasian Economic Union and the agreement on the creation of a free trade zone reached with Tehran, as well as an earlier proposal by Iran to the Armenian side of zero transit rates on its territory, including the ports of Anzali on the Caspian Sea and Bandar Abbas in the Persian Gulf. The alignment is interesting for Moscow, as Armenian Railways are under the concessional control of the Russian side, and Russia will be able to gain access to the Middle East and to create an effective transport axis involving Iran through Armenia.

Another option for Moscow is the access of Russian Railways to Armenia via Abkhazia and Georgia. In Sukhumi, on the one hand, they understand that the commissioning of the line in the Georgian direction promises transit revenues, it is important for the budget of the republic, which is absolutely dependent on Russia. But on the other hand, Sukhumi is not inclined to develop economic relations with Georgia before the regulation of political relations between the two countries. And the possibilities of Russia should not be exaggerated in this case, the country has a large, but not an absolute influence on Abkhazia, and almost no influence on Georgia. Meanwhile, the connection of the railway systems of Azerbaijan and Iran mentioned above with the deepening of relations between Moscow and Baku will provide the Russian side with access to Iran without further costly connections between Armenian and Iranian roads, this problem will be a political one for Russia.

However, among the abundance of the optimistic assessments of the rail projects there are some which sound quite restrained. The head of the Association of Cross-border Planning, Alexander Sobyanin, told Vestnik Kavkaza that he believes that the majority of the projects announced will not be implemented, because they do not meet the objectives of the economies of the largest players in the wider Black Sea-Caspian region, Russia and Kazakhstan. "Most of the projects have emerged because Russia did not advance its own interests,’’ Sobyanin said.