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Russia at a crossroads of international transport corridors

9 Dec '08
Oleg Kouzbit, Managing Editor

The importance of international transport corridors (ITC) can hardly be overestimated for any country that works its way to prominence in the global arena. Commercial interest is just one side of the coin. When we speak of projects of such magnitude, we evaluate them from broader perspectives of a country’s economic and other security for years to come.

Analysts claim there are three economic pivots currently dominating in the world, namely, North America, the EU and North-East/East/South-East Asia. Russia is outside the triumvirate despite all the prerequisites it has.

A serious deficiency it is given Russia’s favorable geographic location that could, ideally, position this country as a “must-choose” channel for most of freight traffic between Europe and Asia. With a correct transport strategy and thought-out decisions the goal is still realistic and could be achieved within an estimated 10 to 15 years.

Russia’s task is to pursue this goal using, among other things, the opportunities that economic globalization and its mechanisms open for us. One of most powerful tools are international transport corridors.

There are quite a few of them that connect Europe and Asia and bypass Russia. Most sizable are the following:

– a southern waterway that crosses three oceans (Pacific, Indian and Atlantic) and rounds Africa;

– a southern waterway that crosses the same three oceans but includes the Suez Canal instead;

– the Southern international transport corridor that connects South-East Europe, Turkey, Iran, Central, South and South-East Asia, and Southern China;

– the TRACECA international transport corridor (from Eastern Europe to the Black Sea and the Caucasus, and further eastwards via the Caspian Sea to Central Asia), which is under construction now.

A sophisticated network of railroads, motorways and interior water arteries opens a wide window of opportunities for this. But as we speak of transport of the 21st century, a breakthrough is only possible through an upgrade and expansion of the transport system, higher shipment speed, and improved lading management including logistics, IT and security. All these measures would give a boost to intra-national communications as well by laying the groundwork for economic development of regions that are far off Central Russia’s passable infrastructure.

ITCs: what to choose from

Let’s take a look at the most notable international transport corridors relevant to Russia.

ITC # 2

First of all, it’s the already functioning ITC # 2 (Berlin - Warsaw - Minsk - Moscow – Nizhny Novgorod). It could be part of a long-planned (but repeatedly postponed) transport corridor to connect China, Kazakhstan, Russia and Belarus, thus opening access to ports of the Asian-Pacific basin in the West-East direction.

East-West

Of paramount importance is the project of a global overland transport corridor from Japan via Russia to Europe. It could easily incorporate ITC # 2 and the Trans-Siberian Railroad, as well as rail lines towards Russia’s northern (Murmansk and Arkhangelsk) and north-western (Baltic) ports.

The East-West ITC’s key link is the high-capacity, electric power driven double-track Trans-Siberian Railroad. It runs through 20 Russian regions where more than 80% of industrial power is concentrated, over 65% of Russia’s coal extracted, almost 20% of oil processed and 25% of lumber produced. Those regions have the impressive export potential and are developing faster than other Russian territories.

The railroad with its linkage to rail networks of the two Koreas, China and Mongolia in the east and of European countries in the west brings together the economies of the Asian-Pacific basin and those of Central Asia and Europe.

There are some sizable competitors to the East-West project, including the Suez Canal route that currently accounts for the entire volume of Euro-Asian seaway freight traffic; a rail project from China to Europe via Kazakhstan and Russia (the Trans-Asian Railroad, or the South-West ITC); the Northern Seaway (the shortest route from Northern Europe to South-East Asia or Alaska notorious, though, for bad infrastructure); and the EU-funded TRACECA project (Europe-Caucasus-Asia). The strongest challenger of all seems to be the South-West ITC that has made remarkable progress over the years.

As far as TRACECA is concerned, it appears to be the EU’s political lever to influence the Caucasus rather than an economic project, so it’s premature to speak of any cost-effectiveness there.

ITC # 9

This is an intermodal transport corridor from the Russian-Finnish border via St. Petersburg and Moscow to Rostov-on-Don and further south to Novorossiysk and Astrakhan. Since Russia’s North-West is the country’s only area to border on the EU, the corridor is responsible for most of freight turnover with Western Europe.

North-South

Unlike the East-West concept, the North-South ITC is a really developing project. It has been designed to create favorable conditions for transporting cargo between the Middle East and the Baltic area. Goods will be shipped from the Gulf, India and Pakistan via Russian ports and interior waterways to North-West and beyond to any Western European country. The corridor utilizes the deep-water Volga-Don river system, too.

Russia’s most important sea link in the North-South ITC is beyond all doubt the Makhachkala ice-free port on the Caspian Sea. It offers Russia direct trans-Caspian access to international transport routes. The port processes about 2 million tons of dry cargo and over 4 million tons of bulk-oil lading.

Its development may become instrumental in re-channeling freight traffic via the Persian Gulf instead of today’s Atlantic route. One of scenarios suggests shipping lading from the Bander-Abbas port on the Gulf by railroad to Iranian ports on the Caspian Sea and further northward to Russia and Western Europe or eastward to Asia. This would be a much faster and less costly way of cargo shipment that saves about 30% of current expenses, according to expert estimates. At the moment Russia is losing billions of dollars each year as global freight traffic skirts the country.

Under plans, the ITC is to eventually intersect with the Trans-Siberian Railroad, which would create a huge transshipment point between Russia’s two major transport corridors. Thus, North-South has the potential of becoming a main transport artery in this country and taking on most of freight traffic between Europe and Asia.

The Northern Seaway

It’s an old corridor running along the Arctic coastline. It is capable of providing both transit between Europe and Asia and direct access for Siberian and Far-Eastern goods via Siberia’s great rivers (the Ob, the Lena and the Yenisei) to Russia’s trade partners worldwide.

The alternatives to the Northern Seaway are the transport arteries that include the Suez and Panama Canals. However, a ship on a journey, for example, from Russia’s Murmansk to Japan’s Yokohama via the Suez Canal covers 12,840 miles, while taking the Northern Seaway shortens the distance to only 5,770 miles.
Thick ice and two to four months of passage are the inevitable shortcomings, though.

The future of the corridor hinges entirely on how developed mineral resources in the Arctic zone will be. Owners of the Stockman oil and gas field (with more than 3 trillion cubic-meters of gas in reserve) or developers of complex ore and manganese on the Novaya Zemlya archipelago could potentially become sizable clients of the Northern Seaway.
Europe’s Great Water Ring

It is nothing more but an idea yet. It suggests a loop that takes you from the Volga and the Don to the Azov and Black Seas, then along the Danube, the Main and the Rhine to the Baltic Sea, and then again to the Volga and further south to the Caspian Sea.

This could be a unique project. Not for international cargo shipment, though (however, it could be important for intra-European trade), but much rather for international tourism. With political will available this corridor can materialize.

Asian experience, Russian interests

As we can see, Asia is a vital destination (or source) for almost all corridors relevant for Russia. Anatoly Volodin, president of the Euro-Asian Transport Union, believes it is because of Western Europe’s export-oriented economies that the importance of overland transit between Europe and Asia has grown so dramatically over the years. Asia is not only Europe’s trading partner but also a new site for hundreds of European production facilities.

Global competition is getting fierce, which calls for new hi-tech methods of meticulous supervision over each container shipped or vehicle dispatched. The 21st century freight logistics is a failure without all means of transportation, transshipment complexes, customs and frontier services operating in sync. Competition pressures cargo owners and logistics companies to use computers and even space navigation on a broader basis. Transshipment logistics centers are now becoming propagators of technological innovations.

In the 20th century Asia’s technological breakthroughs were nourished by its states’ policies allowing for preferences to international companies that would bring in advanced technologies. So, we have all the reason to believe that with Russia’s policies set up correctly and clearly international transport corridors are expected to trigger a technological breakthrough in this country as well.

Based on materials from www.morinfocenter.ru and www.securpress.ru
Oleg Kouzbit, managing editor: “I’m glad you join us here and take The Bridge walk for Marchmont’s weekly review of the Russian regions’ innovative present and future. Stay close and you’ll find out more of how Russia is bridging the existing gap between its researchers and businesses.”
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