Russia may fall out of the Chinese project silk road — this year the goods from China should go along the railway line Baku – Tbilisi – Kars railway bypassing Russia. The Chinese are not satisfied with the speed of delivery of cargo in Russia in the EU. But the main thing is the political uncertainty in relations between Moscow and Brussels.
In September will begin service of a new railway from Baku (Alyat port) via Tbilisi to the Turkish city of Kars. The length of highway of the Baku – Tbilisi – Kars (BTK) amounted to 826 km. This thread was started in 2008. And I wanted to finish in three years, but finished only now. In July of this year has finally officially announced the beginning of test drive of the railroad, reports the Turkish newspaper Daily Sabah.
As expected, the BTK will begin to fully operate in late 2017 or early 2018. And it should be part of the “New silk road” China mega-project “One belt and one road”, designed to connect China’s high-speed and secure trade corridor to Europe.
In the first years of operation on the highway is expected to transport 1 million passengers and 6.5 million tons of cargo, at the second stage the volume of cargo transportation may reach 17-20 million tons and 2 million passengers per year.
Georgia: the ambition is not to save
The idea of the construction of the railway Baku – Tbilisi – Kars railway was discussed in the 90-ies of the last century, after the collapse of the Soviet Union. Implementation began in November 2007 from the territory of Georgia. The project was launched by the solemn ceremony with the participation of the presidents of the three participating countries.
The then President of Georgia Mikhail Saakashvili once described the project of “great geopolitical revolution” and linked it with China.
Saakashvili said that “all the Chinese goods that do today to Europe through the territory of Russia, will go on this way.” At the initial stage on this road was supposed to carry no more than 4-5 million tons. It questioned the profitability of the project. But Saakashvili has assured partners that will help Kazakhstan. Supposedly Astana decided to redirect to this site of 10 million tons of cargoes coming into Europe via Russia and Belarus.
The Georgian part of the highway is the road from Tiflis to Kars, which was built by decree of Russian Emperor Nicholas II. For new construction here rail journey Georgia took a loan from Azerbaijan. The amount of the credit line — $775 million First tranche of $200 million for 20 years the State oil Fund of Azerbaijan gave the Georgians under the symbolic 1% per annum.
The second tranche in 2011, $575 million was worth 5%, and repayment period extended to 25 years. Before the crisis in Georgia was discussed and less expensive projects, three times cheaper, but Saakashvili decided not to save on their ambitions.
Azerbaijan wants to become a Dubai
Most interesting is that even after repayment of the loan Georgia will not be entitled to set tariff policy on their part of the route of BTK. Exclusive to set tariffs for transportation of cargoes on BTK intends Azerbaijan — with unconditional support from Turkey.
Like neighboring Georgia, Azerbaijan is trying to use its geographical position to extract a transit rent. But Baku also had to spend money to the BTK transport corridor has been effective and attracted the attention of global beneficiary — China. In Azerbaijan, in 2007 decided to expand the bottleneck of the future trade route — sea port on the Caspian sea.
The existing port in Baku for such a role was not suitable and was moved to 65 km from the capital, to the village of Alat. Now here in the area of 20 square kilometres to build a port terminal for road and rail transport under the container transportation. Alat was also a free trade zone. New Baku port to become the largest logistics hub linking China with Europe, East with West.
Free port of Alyat is created on the model of the Jebel Ali Free Zone (JAFZA) in Dubai. There is not just a transport hub, and the whole conglomeration with industrial enterprises, banks, the residential sector. The first part of the project Alat is designed to carry 10 million tons of cargo and 50 thousand TEU (20 ft equivalent to measure the capacity of containers). The second part of the project starting in 2017 will increase the capacity of the port to 17 million tons of cargo and 150 thousand TEU.
The master plan of the port of Alat was developed by the Dutch Royal HaskoningDHV based on the experience of the largest European ports — Rotterdam and Hamburg. The project consultant is the company DP World, participated in the development of the special economic zone Khorgos in Kazakhstan. Khorgos is also considered part of the project “New silk road”.
Transit Renta beckons
The completion of the line to Turkish Kars means that now the way from China to Europe has become easier because there is no need to transship goods via the Black sea. From Kars to the border with Europe (through Greece and Bulgaria) has established rail links.
To earn on transit of goods from China to Europe dreams of almost every country whose geographical position allows it. To win over the “silk road” would not only Azerbaijan or Turkey, not just Russia or Kazakhstan, Mongolia, and Poland, Bulgaria, Romania, Ukraine. Last year, Ukrainian Railways, announced the launch of trains in China to bypass Russia.
The cargo to the border with the EU, Ukrainian railwaymen promised to deliver in 11 days. But in the end the delivery took 15 and a half days.
China will try to be friends with all countries, which geographically may be relevant to the project “New silk way”, promising the content of the routes, goods, General Director of InfraNews Alexei Bezborodov.
While Russia have won the same Azerbaijan and Turkey due to the relative cheapness of transport.
Moreover, their cost is off the charts. It is not profitable. “Today bring in one container by sea only, on the same period — through the Caspian sea — is worth $1200. For the money it is possible to transport a container from Vladivostok to Moscow,” — says Bezborodov.
Then you are not the UN security Council
However experts do not exclude that Russia in future years may fall out of the project “New silk road”. China trying to test different ways of transporting goods in Europe, to diversify them. Each of them has advantages and disadvantages. The majority of freight to the EU is by sea. For inland transportation of goods from China account for only 5-6% of its cargo. Their main scope is on the Russian TRANS-Siberian railway (1.5 million tons), with a cost of $6-7 thousand per container.
“But the problem lies in the workload of the TRANS-Siberian railway Russian domestic goods and the low throughput of the highway. To withstand significant additional transit from China difficult,” says mark Goikhman, a leading analyst GK TeleTrade.
The second significant problem for increasing transit through Kazakhstan and Russia to Europe — speed freight trains. The average speed on the TRANS-Siberian railway is about 12 km/h, there are a lot of “narrow areas” in which movement is inhibited, the resembles the real. According Bezborodova, the speed of container delivery from China and for export amounts to 40 km/h.
China understands this, but is in no hurry to invest in the transport infrastructure of Russia, experts say.
Beyond declarations of intent and signing a joint Memorandum between Beijing and Moscow is not going. And the problem is not in money, but in geopolitics, the aggravated relations between Russia and the West.
The Chinese like to say that between China and the United States cool political relations, but hot economic relations. China has long spelled out all the US companies and banks. With Russia it’s the opposite. Ideologically, the two countries are close to each other that repeatedly prove, for example, the voting results on the agenda of the UN security Council. But economic integration is developing with difficulty.
This is not the road with camels
“One of the main problems that occurred with Russia in recent years is that it has become difficult to predict a country with an unpredictable foreign policy”, — said the first Vice-President of the Center for political technologies, Alexei Makarkin.
Not surprisingly, many partners of Russia, even if it seems politically loyal, tend in any case to look at alternatives, the expert adds. China now has deployed at least six options for the delivery of goods to the EU.
The Chinese themselves, when asked, what’s the problem, why now reviving the “silk road” from China to Europe may pass through the neighboring Russian territory, the answer is philosophically evasive. “The silk road” is not a line on the map, not the delivery of goods from point a to point B. “the silk road” is not a road with camels,” — said in an interview “Газете.Ru” the Minister Plenipotentiary of the Embassy of China in Russia, member of the Eastern economic forum Zhang Di. This is the path to growth and perfection. To join in this way is entitled to any. And Russia involved in it, reassuring the Chinese official.
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