First Russian container port on the Caspian Sea

Russia opened its first con­tainer terminal on the Caspian Sea tast month, a cargo hub that senior govern­ment officials are hailing as a logistical milestone that will strengthen Russia’s hand in the energy-rich region and boost trade with India, Iran and Kazakhstan.

The terminal is part of an ambitious agreement Russia signed with India and Iran three years ago to develop a north-south transport corri­dor. Belarus and Kazakhstan entered the agreement in September and the Russian Transportation Ministry has said Tajikistan, Armenia, Syria and Oman are also close to joining the project.

The terminal, which has an initial capacity of 500,000 tonnes per year, is located near Astrakhan in the seaport town of Olya.

With the opening of Olya, countries in the Persian Gulf and Indian Ocean regions can now ship goods to Europe much more quickly and cheaply. Shipping goods to Europe via Olya takes between 15 and 23 days and is 40 % cheaper than shipping via the traditional Suez Canal route which takes between 35 and 40 days.

However, without a rail link to the national railway network, the port’s capacity is limited to receiving goods by truck only. Once it is integrated with the national rail system, the terminal’s capacity is set to skyrocket.

Russian Railways Co (RZD) president Gennady Fadeyev said the first 11 km of a new track to connect with the Astrakhan-Grozny line – which will eventually be more than 50 km long – would be ready by the end of the year and be fully operational by September.

This year, Olya is expected to handle 4m tonnes (mt) of cargo, and the volume is expected to double to 8 mt in 2010.

Once the strategic link is completed, Russia, India and Iran will be able to double the volume of goods they ship to Europe, according to the Transportation Ministry.

The rail link is expected to cost some US$100m and will be financed by the RZD and the European Bank for Reconstruction and Development (EBRD).

RZD, which has just inherited the commercial functions and infra­structure of the Railways Ministry, will invest a total of 130bn rubles next year on infrastructure projects. “The lion’s share of these funds will go to the development of trans­port corridors with exits to seaports,” Fadeyev said. “This is about 45% of the investment programme.”

Russia plans to invest a total of $15bn developing international transport corridors through 2010.

2. Russia locking China in?

Russia’s Vice-Minister for Transport Chingiz Izmaylov has reiterated his country’s strong opposition to Chi­na’s proposal to take a long-term lease of the Russian Far East (RFE) ports of Zarubino and Posyet.

China tabled the proposal at the last meeting of the Russo-Sino Intergovernmental Commission on Economic Co-operation in March. The Chinese want a 49-year long lease of both or either of the ports.

By linking China’s landlocked, coal-rich north eastern provinces with the Sea of Japan, the Baikal-Amur and Transsiberian (TSR) landbridges, Zarubino and Posyet would focus transit flows between the Asian and North American Pacific coasts under the West-East Transport Corridor project en­dorsed by the governments of Russia, China and the USA

However, China’s plans to use the ports for exporting coal to North America and Japan have alarmed Russian coal producers. They have already objected strongly to proposals to link the Chinese coal fields with the TSR.

The Chinese still have a chance to strike a bargain with the ports’ private shareholders, Uni­verse Holding at Zarubino and MDM Group in Posyet. They are linked to Russian coal interests but are said to be keen to boost throughput of Chinese coal.

The Chinese favour the long-mooted new port at the mouth of the Tumangan River which divides North Korea, China and Russia. The project, backed by the UNO, is widely seen in Russia as a catastrophe for the RFE ports.

This project obviously cannot go ahead without Russian approval. However, experts say Russia cannot carry on being obstructive without offering Chinese an alternative.