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October 22, 2021

The bright road of Kazakhstan

Kazakhstan is actively implementing one of the most ambitious infrastructure projects of the century – the “New Silk Road” and intends to become a key transit point between the Asian and European markets. This is evident in the number of infrastructure projects, the speed of their execution, and in the volume of investments.

By 2020, the volume of freight traffic between China and Europe will reach 170 million tons. While the main part of goods goes by sea around the entire continent through the Suez Canal, this is difficult task to “switch” the transit to land particularly as the transit of goods by sea route is cheaper.

According to “Kazakhstan Temir Zholy” (“Kazakhstan Railways”) the speed of delivery is the main advantage of the overland route. Container train from Zhengzhou (China) to Hamburg (Germany) overcomes the distance of 10 500 km in 13-14 days. Chinese goods reach the European markets by sea in 40-60 days. Over speed comes at a price: the shipping of container by overland route would cost to the cargo owner 8-9 thousand dollars, while by sea – 3000.

Despite the ambiguous benefit of such route, Kazakhstan relies on the overland transit across its territory and is intensively developing the transport infrastructure. So, Kazakhstan Railways plans to bring the share of transit traffic in the total income of the company to 50% in the medium term, whereas today the figure is 25%.
According to Kazakhstan Railways, 295 route trains from China to Europe and from Europe to China were organized for eight months of 2015. The figure increased by almost three times compared to last year – it was launched 105 block trains at that time.

In mid-October of this year, foreign diplomats and journalists visited a transport and logistics hub Khorgos in Almaty region at the invitation of the Foreign Ministry of Kazakhstan. The delegation got acquainted with the activities of the Special Economic Zone (SEZ) “Khorgos – Eastern Gate”, which includes a dry port, logistics, and industrial zone, Altynkol railway station and Kazakh-Chinese International Center for cross-border cooperation.

Here, on the border with China, “New Silk Road” has already become a reality. Containers with Chinese goods are loaded in Khorgos from European gage, which is used in China, to a wider Kazakhstan, common to the whole Eurasian economic space, and are preceded to European markets.

In late July, the country’s first land port with the area of 149 hectares started working in SEZ territory. The Kazakh authorities positioned the dry port Khorgos, as the largest goods distribution center, which would provide opportunities to enter the global markets for China and Kazakhstan. By 2020, the planned capacity of the dry port will be TEU 500 ths.

The project of a hub on the border with China clearly demonstrates Kazakhstan’s multi-vector approach to the development of the own transit potential. For example, the Kazakh party has attracted experienced managers from the UAE that those helped to turn Khorgos into a powerful logistics center. Today Astana is developing a hub in collaboration with one of the world’s largest port operators – Arab DP World (Dubai Port World), which operates 65 terminals worldwide.

China is also interested in the project SEZ “Khorgos”, supported by international agreements between Astana and Beijing. China Jiangsu plans to invest in the development of logistics and creation of industrial zones of SEZ “Khorgos-Eastern Gate” some 600 million US dollars for five years.

This is the second joint project of the Kazakhstan logistics companies and Jiangsu. Earlier, Kazakhstan Railways invested in its own terminal facilities in the Chinese port of Lianyungang on the east coast of China. Thus, the company received a permanent collection point for the Chinese transit in Kazakhstan.
It should be noted that the project SEZ “Khorgos-Eastern Gate”, actively promoted among potential foreign investors is an important part of an ambitious program of Kazakhstan infrastructure development and turning it into a transit state – “Nurly Zhol” (“Bright Road”).

In November 2014, the President Nursultan Nazarbayev announced that in the context of oil prices downturn and the global economy slowdown, the country is launching a new economic policy “Nurly Zhol”. The core of the program – is the creation of efficient transport and logistics corridors within the country territory.

Transit ambitions of Kazakh authorities coincide with the Chinese vision of the region. The issues of synchronization of transport projects of programs “Nurly Zhol” and the “New Silk Road Economic Belt” were discussed between the heads of the two states during the visit of President Nazarbayev to China.

It is planned that “Nurly Zhol” program, designed for 2015-2019, will allow to double the traffic volume of transit cargo through Kazakhstan by 2020.
Kazakhstan is developing transit corridors through its territory by two routes: “Northern” route implies access to Russia and further to European markets, “southern” or a trans-Caspian route – goes along the TRACECA corridor through Aktau port with access to Azerbaijan, and further to Georgia and Turkey.

The modernization of the transport network within the framework of “Nurly Zhol” is conducted in several directions. The first is the development of road transport. The state program includes 11 road sector projects. In whole, more than 7 thousand km of roads will be reconstructed and built by 2020. This will require 8 billion US dollars, of which 3.3 billion will be the loans from international financial institutions.

The largest project in the road sector is the international automobile transit corridor “Western Europe – Western China”. The total length of the route will be 8445 km, the length of the Kazakh section of the auto road – 2787 km. Kazakhstan plans to complete construction of its section by 2016.

In addition, the radial highways must connect Astana with the major logistics centers in Almaty, Ust-Kamenogorsk and Atyrau. The identical “rays” will link together the regional transport hubs themselves – the state program involves the creation of a network of transport and logistics centers throughout the country. The chain of Hubs in Aktau, Pavlodar, Kostanay, Semey, Aktobe, Atyrau will help Kazakhstan to become a key goods distribution hub.

In the field of railway transport it should be noted the construction of the line Borzhakty – Ersai, which is approaching completion. The railway line is an infrastructural basis for the Kuryk ferry complex with the capacity of 4 million tons of cargo a year on the Caspian Sea coast. The complex building started in the spring of this year. The new project is aimed at the development of transport along the Transcaspian International Transport Route (TITR). In Kazakhstan Railways the potential for container traffic along TITR is estimated at TEU 300 thousand by 2020.

An important part of “Nurly Zhol” infrastructure program – is the modernization of the country’s only seaport Aktau, located on the Caspian Sea. The harbor, as well as a dry port in Khorgos, is developed together with DP World. Throughput of the port for 2014 amounted to about 14 million tons. Today a number of projects on modernization and expansion of transshipment capacities is implemented so, that to increase the port’s capacity to 19 million tons by 2020. Aktau port is a strategic point in the “southern” route, which goes around Russia.
Transit – is an area where the economy is closely interlinked with politics. The itineraries of cargo movements are determined not only in accordance with the business logic, but also with a certain strategic calculation.

Astana has a clearly articulated strategy in economic as well as in geopolitical terms: cooperation with the widest possible range of partners and at best value for all parties.
“Forget about the concept of the “Great Game” – it is outdated,” – Kazakh Foreign Minister Yerlan Idrisov said. Kazakhstan adheres to the philosophy of “Great Gain» for all – “for Russia, China, USA, Europe, India, Iran, Turkey, and, of course, Kazakhstan”, Idrisov stressed, speaking to diplomats and journalists in Khorgos.

Looking at the ambitions of Kazakhstan (and, more importantly, at their implementation) in the context of the “New Silk Road”, it may be made a clear conclusion: Astana is an absolutely correct “Bright Road”.

For Romanian authorities, the new infrastructure that links Asia Pacific to Central Asia, the Caucasus, the Black Sea and Europe is “the key of global stability.” It is the key of global economic growth and represents a project of exceptional strategic importance.

According to the Romanian Foreign Minister’s opinion, expressed this year at the Euro-Asia Economic Summit in Istanbul, the rebuilding of the “Silk Road” gives Romania the opportunity “to take part in the development of economically strategic projects that can substantially contribute to easing trade and economic cooperation, particularly with emerging economies in Asia.”

At the same time, the new “Silk Road” represents an opportunity to attract investment and to ensure access to the Asian market, which is an important core of innovation and technological progress.

In 2014, Romania opened the new Ilychevsk (Ukraine) – Constanta (Romania) – Batumi (Georgia) maritime link, which efficiently links-up with the TRACECA corridor and which will open new outlooks and will create new conditions for the boosting of activity along this corridor. Also in 2014, Romania became the sixth state that takes part in the Viking Train, an international service that links the Baltic Sea and the Black Sea, thus contributing to the development of this corridor and, consequently, to the easing of freight transport between markets in Turkey, the Balkans and Western Europe.

Romania is interested in taking part in the projects related to the rebuilding of the Silk Road, projects that concern the mobility of goods, services and persons, in line with the principles of free market economy and with European and international trade and transport regulations.

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