Future of Caspian transportation and logistical complex has been discussed in Sochi

28 february 2017

"The development of transport infrastructure in the Caspian basin meets the national interests of Russia and ensures the implementation of a number of state strategic goals," stated Deputy Head of the Analytical Center Svetlana Ganeeva, speaking at a business breakfast, participants of which have discussed the potential of trade-economic and investment cooperation in the Caspian transportation and logistical complex. The event was held on February 28, within the framework of the Russian investment forum in Sochi.

The port infrastructure of Russia on the Caspian Sea is, first and foremost, a deep-water ice-free port of Makhachkala, a port cluster in Astrakhan (the leader on ship activity), and the Maritime port of Olya. According to developers of the strategy, the development of ports and rail and road passages to them will support the infrastructure for the export of grain, the operation of the new logistical corridor also linked to inland waterways, as well as it will ensure the social and economic development of the Caspian regions of the country, and enhance the prospects of trade cooperation of the regions of the North Caucasus with the countries of the Persian Gulf, East Africa, and India.

"The volume of cargo transshipment at domestic ports of the Caspian basin currently constitutes less than 1% of cargo turnover out of all Russian seaports," said Svetlana Ganeeva, adding that over the past few years, not only the strong reduction of this indicator has been observed, but a significant change in the structure of cargo traffic. "If in 2010, the metal accounted for 78% of the turnover, to date, its share has dropped down to 35%. At the same time, the share of grain, on the contrary, has grown from 5 to 38%, having increased in absolute terms from 300 thousand to 1 million tons".

Ms. Ganeeva explained that the strategy has been developed among other things, in compliance with prospective future changes in the foreign trade balance of Iran in segments intersecting with the foreign trade of Russia. And even if in the future next 3 years, Iran, focused on the development of its own metallurgic engineering – from mining to steelmaking, cuts the volumes of metal importing, the economy will require coking coal in amounts exceeding 10 million tons per year. Deliveries that are now being carried out from the ports of Astrakhan can expand, but one needs to consider competition from the side of Australia and China, she warned.

The expert stated that agricultural products also look promising for export to Iran. Among them, there are components for combination fodder, cereals, prepared food products, as well as Halal products and edible oils. In the long term, only within the cereals component, Russia plans to increase exports by up to 48 million tons up to 2030. The strategy includes the active development of industrial clusters, including the cluster for deep processing of grain with the production of protein-vitamin additives and feed gluten.

The development of new offshore projects on oil production and logistical schemes for its transportation, as well as the political situation around Iran and the limitation on the quality of oil will be the key drivers of changes in the situation with oil transshipment in the ports of the Caspian Sea, the volumes of which has been also reduced by the present moment. Supply of industrial equipment to Iran – for energy, oil, and rail facilities of the country – will also help fill the cargo flow. At the same time, experts recognize the competitiveness of container transportation through Iran towards India – at a fixed cost of shipment, a domestic sender of freight may reduce the delivery time by 3-4 days and thus save working capital from USD 30 up to 140, depending on the value of goods.

In addition, the presence of places of interest on the territory of the Caspian region that have historical and cultural value, as well as the unique natural area also create preconditions for the development of passenger infrastructure and sea cruise tourism.

The strategy is developed by the order of the President of the Russian Federation. In the near future, the document will be posted on the website of the Ministry of the North Caucasus Affairs of the Russian Federation.

Photos are taken from open sourses.