What’s coming in the 21st century
PROSPECTS FOR EURASIAN THOROUGHFARES
What’s coming in the 21st century
Lately, the world has been revealing a stable trend towards further development of strategic global and Eurasian communications. The priority in this process is paid to establishment of multimodal transport corridors, which are in fact the organizational and technical facilities that serve as focal points for the general types of transport, such as railways, motor vehicles, watercraft, aircraft, pipelines, and telecom lines. The crossroads of the key multimodal corridors will become the places for communication junctions that will speed up the transfer of trade, industrial, and financial capitals, and will amplify the scope of information and cultural exchange.
Sure thing, thoroughfares will pass through countries with different political regimes and economies. This will call for closer international cooperation and joint efforts to overcome customs and tax barriers, reconcile port charges, and other transportation tolls. The issue of combining national interests with international projects is becoming especially urgent when setting up special/free economic zones in the road junctions.
The main events of the 21st century will evolve between the Western European and the Asia-Pacific poles of economic and technical progress. Seaways will retain their top priority in trade contacts of Western European and Asia-Pacific economies with the USA, while transcontinental thoroughfares will become much more important within Eurasia.
At present, there are several projects involving construction of new main-line railways, namely building of the Trans-Asian and Asian-North American main line, and reconstruction of the existing Trans-Siberian Container Line, and a railway that passes from the Baltic States to the Black Sea coast.
The project of Istanbul-Beijing Trans-Asian main line involves building of a railway through Central Asia, Mari of Turkmenistan, Tashkent, and Alma-Ata, with a branch line shooting towards Afghanistan and India. More than 40 countries are interested in this railway project. An international treaty on this project was signed back in 1991. Turkey, Azerbaijan, Turkmenistan, Georgia, Iran, Iraq, China, and Japan, i.e. the countries with crucially important thoroughfares, are involved the most in construction of the main line. The Mari-Meshed (Iran) section of the railway that should lock up the main line along the whole route was built in 1996. China has set up a special economic zone in Lan-chou, a crucial junction in the west of the country. Right next to highway bridges over the Bosporus, Turkey plans to build a transport tunnel passing under the strait (the estimate cost of this project comes to a billion of US dollars). However, regional conflicts and tensions hamper the tunnel-building process. At this point of time, the actual efforts are made on the middle alternative route, namely, the Black Sea – Transcaucasia – the Caspian Sea – Central Asia.
The 21st century will see building of the Asian – North American main line passing from Singapore – to Bangkok – to Beijing – to Yakutsk – via a tunnel under the Bering Strait – to Vancouver (Canada) – to San Francisco (the USA). This multimodal transport corridor is virtually a straight line connecting the end points. Large railway sections in Russia, Alaska, and Canada will be built for the very first time. Russian specialists have already worked out the necessary design plans and engineering papers for the Tynda – Yakutsk section. The second 1,000-km section will shoot towards Magadan and will bend from Omsukchan settlement to the Cape Uelen.
Japan will be directly linked to the mainland by the already functioning tunnels between the Honshu and the Hokkaido islands, as well as by the design-in-progress tunnels under the La Perouse Strait (Sakhalin) and an 11.7-km-long tunnel passing beneath the Tatar Strait (Lazarev town on the mainland – to Pogibi on Sakhalin). Japan and Russia have been negotiating development of Sakhalin and Far Eastern infrastructure and thoroughfare construction recently. For instance, on June 10, 1997, during the Tokyo visit of Boris Nemtsov, the former first vice prime minister of the Russian Federation, Japan and Russia entered into an agreement to extract mineral resources on Sakhalin and on the island’s shelf. Sakhalin has already become a special/free economic zone. The Japanese party has delivered tax-exempt equipment worth $100 million to the island. Today, Japan accounts for some 1% of the cumulative investment in the Russian economy and this portion should increase further on. Mr. Nemtsov mentioned that development of the Far East is among the Russian priorities.
Since there are several islands located in the Bering Strait, it becomes possible to drive head tunnels from the four main points. In fact, it is scheduled to build three 100-km-long tunnels under this project costing roughly $50 billion. The tunnels will slash railway freightage costs 1.5 times on the route from the US Pacific Coast to Bombay, India. At the moment, Transcontinental international syndicate is working on the Asian – North American main line project. Transcontinental does business in the USA and has its registered branch office in Russia. The Asian – North American main line will make it possible to develop the vast Russian and Alaskan areas; will give a push to economic development of Russia’s Far East; create a direct entrance from Europe to America; give China an outlet to Europe; eliminate dependence of Northern areas on seasonal cargo shipments; and take advantage of local mineral inventories and other resources.
Besides, the existing Pacific sections of transcontinental main lines, such as the Baikal – Amur Railway, Trans-Siberian Railway, and Chinese-Siberian Railway, set all the prerequisites for emergence of a new railway junction at the mouth of the Tumangan River on the borders of Russia, China, and North Korea. This will shorten the route from Europe via China’s Harbin by 2,300 km.
The Trans-Siberian Container Line handles cargo passing from Asia-Pacific via Russia to Europe. This line connects the Far Eastern ports of Vostochny, Vladivostok, and Vanino with the Baltic ports and railway stations of Chop in Ukraine and Brest in Belarus. US firm Sea Land has signed a cooperation agreement with the Russian Ministry of Communications to do container transit by the Trans-Siberian Container Line. This US company has also opened its representative offices in St Petersburg and Vladivostok. Company’s spokesmen believe that it will take 22 to 23 days to deliver containers from Europe to Asian countries via this line.
It is scheduled to make use of the existing main-line railway Vyborg – St Petersburg – Moscow – Novorossiysk with a branch heading to Tuapse in order to create the Russian transport corridor from the Baltic Sea to the Black Sea. This project involves construction of St Petersburg – Moscow rapid-transit railway and simultaneous reconstruction of the Novorossiysk-headed section. Russia views this main line as an integral component of the common European transportation network.
Yet, there is an alternative project that provides for building of a shorter and more economically justified transport corridor from the Baltic ports of Klaipeda (Lithuania) – Tallinn (Estonia) – Ventspils (Latvia) – and Riga (Latvia) via Minsk and Kiev to the Ukrainian Black Sea ports of Odessa, Yuzhny, Ilyichevsk, and Nikolayev.
The European Union has already launched the long-term multimodal corridor projects to assist integration of East European countries. The TACIS and FARE programs pay extra special attention to this issue. Back in March 1994, the EU singled out nine top-priority transport corridors costing some $50-70 billion. The European transport corridor No.1 is a route passing Latvia from north to south (Tallinn – to Riga – to Kaunas – to Warsaw, with a Riga – Kaliningrad branch). Today, some 90% of transit cargo, i.e. some 40 million tonnes, go through Latvia heading westwards. As a matter of fact, Latvia pays much heed to transit conveyance, because transit transactions yield some 25% of the country’s gross national product. According to the Latvian mass media, some 44 million tonnes of various cargo were transported through Latvia in 1996 and about 50 million tonnes in 1997. The Latvian executive authorities approved the 1996-2010 National Transport Development Program that contains a special section on transit expansion. To further develop transport corridors, Latvia schedules to invest some $500 million in modernization of ports, railways, highways, and to perform a feasibility study on construction of an oil-conveyance pipeline till 2010.
Four out of the nine top-priority EU transport corridors should pass through Ukraine, namely:
the 3rd Berlin – Kiev corridor;
the 5th South-European corridor from Lisbon – to Marseilles – to Milan – to Chisinau – to Ukraine;
the 7th Danube River corridor going down the Danube and via the Rhine – Main – Danube Canal (this waterway will link Ukraine’s Danube ports with virtually all the inland water ports of Western Europe);
and the 9th corridor from Greece – to Ukraine – to Russia – to Finland. The latter is the largest and the most important route that will pass from Helsinki – to St Petersburg – to Moscow – to Kiev – to Chisinau – to Bucharest – to Dimitrovgrad – to Athens.
Within the TACIS program, there has been generated the Traseca project to create a transport corridor from Europe via Ukraine, the Black Sea, Transcaucasia, and the Caspian Sea to Central Asia. Other projects provide for reconstruction of Georgian ports and railways.
It is planned to grant the common European status to the Odessa – Gdansk corridor, to a circular corridor passing around the Black Sea within the boundaries of the Black Sea Economic Union, and to the Euro-Asian Transport Corridor, which is already being constructed. For example, the first section of Ilyichevsk (Ukraine) – Poti (Georgia) ferry was unveiled in 1996. Preliminary estimates show that this corridor can handle 20 to 30 million tonnes of cargo per year in the coming two to three years. The main cargoes to be conveyed will be crude oil and petroleum products, metal, grain, and cotton. Under the condition of transport blockade and volatility in the region, creation of the Euro-Asian Transport Corridor is among the priorities of the Transcaucasian foreign policy.
Furthermore, under a contract with the Georgian party and within the TACIS program, EU experts have started generating a project to reconstruct the Chiatura-Sachkher manganese ore deposit located in Chiatura town, central Georgia. This project involves $35 million of foreign investments. A number of European and American companies, notably, British Steel, have already exhibited their interest in the project. Meanwhile, Russia has started doing export-import business with Georgia after opening a seaway between Taganrog and Poti in mid-1996. Two cargo-carrying ships chartered by Tagarog-based firms service this seaway now. Kavkaztransexpeditor company represents the Georgian party of the project. Passing through the Strait of Kerch, these vessels carry metal, timber, foodstuffs, and spare parts from Russia, and deliver manganese, copper concentrate, and wine from Georgia.
Russian pipeline development shows a stable trend towards shift of the main Russian oil and gas extraction centers to the Arctic, and westward conveyance of crude oil and natural gas via Baltic ports and Belarus.
Intensive development of oil and gas deposits of the Caspian Sea is of special interest. For instance, Tengiz offshore oil-extraction project (the Kazakh deposit near Tengiz town) is assessed at $20 billion. US Chevron has already invested over a billion US dollars in execution of this project and has started transporting crude oil to the Black Sea coast.
The $8-billion Azerbaijani ‘contract of the century’ has been signed. In compliance with the contract terms, 5 American companies obtained a 44% interest in a new international syndicate.
Expanding contacts with the western world, Azerbaijan’s Pres. G. Aliyev additionally signed three $10-billion contracts on extraction of Caspian oil during his official visit to the USA in 1997. Afterwards, the United States proclaimed the Caspian region the area of vital US interests.
Cooperation between the authorities of Azerbaijan and Turkey made it possible to sign 8 agreements back in 1997, particularly, a treaty on development of communications including pipelines. It is scheduled to build a $2-billion oil-conveyance pipeline passing from Baku – to Jeihan (Turkey) – to Yumurtalik (Turkey). Railway transportation of Azerbaijani crude oil to the Black Sea via Georgia commenced back in 1997.
There have been defined the following routes for conveyance of Caspian oil:
the Russian route from Baku – to Grozny – to Tikhoretsk – to Novorossiysk;
the Georgian route from Baku – to Poti – to the Black Sea ports;
the Turkish one from Baku – to Jeihan – to Yumurtalik – to the Mediterranean ports;
the Iranian one to the Persian Gulf;
and the Eastern route to Asia-Pacific and to Pakistani ports via Afghanistan.
Keeping in mind that the alternative oil-conveyance routes pass through the areas with pending regional conflicts, such as Chechnya, Nagorno-Karabakh, Kurdistan in northern Iraq, Afghanistan, Georgia, and Abkhasia, priority will be given to the routes that are kept under control of the USA and the NATO. Therefore, the most likely alternatives are the transit routes via Turkey and the Georgian route heading to Romania, Bulgaria, Ukraine, and Moldova. The Russian route is considered disadvantageous because of large distances, poor conveyance capacity of local pipelines (up to 5 million tonnes per year), unstable schedule of fares, and Russia’s dislike of the NATO expansion eastward.
Since Russia lost some of the largest seaports and oil terminals on the Black Sea, the Baltic Sea, and the Caspian Sea after collapse of the USSR, this country makes efforts to build new facilities. The layout of transportation and technological port facility locations approved in Russia back in spring 1993 mentions construction of 4 ports on the Baltic; the Ust-Lug dry-cargo-handling port with engineered handling capacity for 35 million tonnes per year (joint-stock company Kompaniya Ust-Luga executes the construction works); an oil-loading port for 15 million tpy of petroleum products in the Batareynaya Bay (construction is performed by JSC Kinex with financial backup coming from Surgutneftegaz company, while petroleum products will arrive to the port by railway only); an oil-loading port for 45 million tpy of petroleum products in Primorsk (construction is run by JSC Baltport, petroleum products to be delivered by the 800-km-long Torzhok – Kirishi – Primorsk pipeline and the 900-km-long Yaroslavl – Kirishi – Primorsk pipeline); and a general-and-refrigerated-cargo-handling port for 3 million tpy of cargo in Lomonosov.
The Golden Gate project provides for reconstruction of an oil-loading section of St Petersburg port to boost its handling capacity from 2.3 to 5.2 million tpy of petroleum products. The EBRD, France’s Bange Parias financial group, and joint-stock company Neftenalivnoi Raion take part in this project.
Besides to port construction in the Baltic Sea region, there are made efforts in the Caspian Sea as well. For instance, a large trade seaport has been founded at the outlet of the Volga River’s delta, just some 100 km southeast of Astrakhan. This new year-round seaport was established to open the shortest way for transit cargo between Europe and Central Asia. 4.5-meter-draft seagoing ships, inland water-to-sea watercraft, seagoing ferries, fishing boats, and barges can moor in this port. Russian experts have estimated that taking advantage of the new port one can save up to $10 per conveyance of a tonne of cargo.
Besides to building port facilities, Russia undertakes reconstruction of the functioning and building of brand-new oil terminals. Russia’s Lukoil company plans to enlarge an oil terminal located in Murmansk area. The new capacities should handle 600,000 to 700,000 tpy of petroleum products bound to the Arctic ports. The first stage of an oil terminal located on the grounds of the former military base has been opened in Baltiysk port of Kaliningrad region, which has become a place for a special/free economic zone. The terminal can store 35,000 tonnes of petroleum products and can handle up to two 10,000-tonne-deadweight tankers. After construction of the second stage, the oil terminal will be able to store 60,000 tonnes of petroleum products. Danish ING bank finances the construction works.
Therefore, the mentioned development trends of Eurasian thoroughfares reveal that the transportation system of Western Europe, Central Asia, and Asia-Pacific is taking new shape now. The most dynamic transport corridor progress is traced in the regions that have the essential resources and opportunities, namely, in the Baltic States, Transcaucasia, the Balkans, Turkey, and Russia.
The geopolitical situation in Eurasia will evolve depending on the countries’ political and financial opportunities to create new and renew the existing transit cargo routes, as well as on the opportunity to control the main oil & gas conveyance routes. The Asia-Pacific region will keep on creating mighty port-industrial and transit-distribution complexes, with leadership held by China, Japan, and Russia.
In the European part of Eurasia, development of transmodal thoroughfares linking up the Baltic States, Russia, and the Black Sea region will facilitate economic contacts with Western European economies. However, this process witnesses severe competition for extraction and conveyance of Caspian oil, which has become the clash of interests for such countries as the USA, UK, Russia, Kazakhstan, Azerbaijan, Turkmenistan, Georgia, Armenia, and Turkey. The situation is as tangled as it may be because the status of the Caspian Sea is still undefined. Since distribution of the spheres of influence on the Caspian fields’ exploration is almost over now, one should anticipate Turkey and Russia to heighten competition for the right to transport crude oil via the Caucasus region to Western Europe.
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