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Working Paper 07 December 2009 © EUCAM 2009 ISBN 13: 978-92-9079-958-0 December 2009 Optimisation of Central Optimisation of Central Asian and Eurasian Trans-Continental Land Transport Corridors Michael Emerson Evgeny Vinokurov working paper 07 December 2009 © EUCAM 2009 ISBN 13: 978-92-9079-958-0 December 2009 OPTimisaTion OF CenTRAL asian and euRasian TRans- conTinenTAL Land TRansPORT coRRidoRS EUCAM Working Paper No. 7 Michael Emerson and Evgeny Vinokurov Table of Contents Abstract 4 1. From trans-European to a trans-Eurasian vision of transport corridors 4 2. The transit and transport potential of the trans-Eurasian land routes 5 3. Key issues affecting Eurasian inter-continental cargo transit 5 4. Existing and emerging international transport corridors in the region 7 5. Discussion of priorities 9 6. Conclusions 11 7. Endnotes 12 4 EUCAM Working Paper No. 7 Abstract There is at present an overlapping but inadequately coordinated combination of strategic trans-continental transport corridors or axes stretching across the Eurasian landmass, centred on or around Central Asia. There are three such initiatives - from the EU, China and the Asian Development Bank, and the Eurasian Economic Community. This paper reviews these several strategic transport maps, and makes proposals for their coordination and rationalisation. So far the EU Central Asia strategy has not paid much attention to these questions. However the EU’s own initiatives (the Pan-European Axes and the TRACECA programme) are in need of updating and revision to take into account major investments being made by other parties. In particular the case is made for a ‘Central Eurasian Corridor’ for rail and road that would reach from Central Europe across Ukraine and Southern Russia into West Kazakhstan, and thence to the East Kazakh border with China, thus joining up with and completing the West China-West Europe corridor promoted by the Asian Development Bank. There should also be a North-South corridor that would cross over this Central Eurasian Corridor in West Kazakhstan and lead south to the Middle East and South Asia. These adaptations of existing plans could become an exemplary case of cooperation between Central Asia and all the major economic powers of the Eurasian landmass. 1. From a trans-European to a trans- as its outer periphery. This paper explores the case for opening this view towards a coherent trans-Eurasian Eurasian vision of transport corridors transport strategy with particular reference to the case of Central Asia. This would imply an updating and revision of For over a decade, the EU has been promoting a transport the present EU policies. corridor system reaching from Southeast Europe across the Caucasus into Central Asia, called TRACECA, which It is already clear that all four major economic powers of nevertheless does not seem to live up to early expectations. the Eurasian land mass – the EU, Russia, China and India At the same time it has been working to develop a set of – have serious interests here. Each of these four major Pan-European corridors or axes through the new member economies are concerned with the logistics for trade flows states of Central and Eastern Europe into Ukraine, Russia between each other, first of all in diagonal routes that can and the wider European neighbourhood, but which do not go around Central Asia: extend to Central Asia. • west-north (EU-Russia, by land), north-east (Russia- These eastern moves by the EU now meet virtually China by land), west-south (EU-India by land and symmetrical western moves coming from Asia, with China sea), south-east (India-China by sea), west-south- and the Asian Development Bank strongly supporting east (EU-China by sea) a set of corridors running through Central Asia under a programme called CAREC. This now sees large-scale However there are vertical and horizontal connections investment in a complex of corridors which are effectively running through Central Asia, for example: changing the strategic transport map of Central Asia, • west-east (EU-Central Asia-China) and opening it to external neighbours at all points of the • north-south (Russia-Central Asia-India) compass. ... and also some diagonal routes passing through Central Most of the existing road and rail infrastructures of Asia: the region were of course constructed in Soviet times, • north-east to south-west (West China to the Middle and a core group of former Soviet states led by Russia East) and Kazakhstan, organised as the Eurasian Economic • north-west to south-east (Northern Europe to India) Community (EurAsEC), seek to renew the potential of this network in order to support economic growth of the Figure 1. Schematic map of EurAsian transport corridors region. These three sets of transport are not explicitly coordinated. For example Russia is not a member of the Asian Development Bank (ADB); and the EU and CAREC programmes seem to be hardly coordinated at all, although the EBRD (European Bank for Reconstruction and Development) participates in some CAREC projects. However, Kazakhstan, whose territory stretches one third of the way between Berlin and Beijing, could be a facilitator of coordination given the central place of its national transport policy choices. The EU seems to remain focused on its wider European neighbourhood, with Central Asia perceived by some Optimisation of Central Asian and Eurasian Land Transport Corridors - Michael Emerson & Evgeny Vinokurov 5 These axes are presented in a deliberately stylized map in even to some degree with the CIS countries, the most Figure 1, which may serve to prompt reflection on the case pertinent source for expanding shipments through land for a concerted trans-Eurasian transport corridor strategy. corridors is Western China, a home to 150 million people Alternatively one can look at the detailed transport planning and rapidly expanding industry. Commodities that can be maps of the EU (Maps 1 and 2), CAREC (Map 3) and transported by road and rail from China to Kazakhstan EurAsEC (Maps 4 and 5), which taken together become and Russia include: chemicals (hazardous), foodstuffs a spaghetti bowl of complex and overlapping connections (perishable), electric instruments; stereo, video and audio that the mind cannot easily grasp. systems; mobile communications equipment; TV sets; electric cables; furniture; clothes and shoes; cosmetics. 2. The transit and transport potential of the The following commodities can be considered as possible trans-Eurasian land routes backhaul road transport cargoes moving from Europe to China: industrial and agricultural equipment; metals (high- At present practically all (99%) of the goods traded value non-ferrous metal goods, higher-purity metals and between the EU and the Asian Pacific region are being other high-value goods which are usually purchased in 1 shipped by sea. In 2007, 17.7 million containers (of 20- small quantities); integrated circuits; various fine chemical foot equivalent units – or TEUs) were transported from products and polymers; consumer goods and foodstuffs Asia to Europe, and 10 million TEUs from Europe to Asia. (e.g. meat). The difference of 7.7 million TEUs represents empty containers returning to their point of origin. According to Certain cargoes, such as bearings, are not suitable for sea the UN Economic and Social Commission for Asia and the transportation without specialised and costly packaging to Pacific (ESCAP), by 2015 containerised transportation protect them from the sea air. from Asia to Europe and from Europe to Asia may reach 26.1 million TEUs and 17.7 million TEUs, respectively. But Thus, there are several niche markets for the China-EU the Suez Canal is expected soon to reach its maximum traffic through northern Eurasian land corridors, with capacity for container vessels, so the opportunities for railway transportation being able to offer competitive land routes to gain traffic may grow. tariffs and times of delivery for an intermediate category of high value and low weight goods (the highest value/lowest Overland containerised shipments from China enter weight goods will be sent by air freight). Kazakhstan via the Dostyk-Alashankou border-crossing point. In 2008, the daily throughput at Dostyk-Alashankou Figure 2. Transshipment of containers at Dostyk was 520-550 rail cars. Most trains consist of 48-50 rail (thousand TEUs) cars, including container wagons. It is estimated that Dostyk could transship2 about 306,000 TEUs annually. However in 2007, according to Kaztransservice, the official Source: Forecast by Kaztransservice. container operator, Dostyk transshipped 109.7 thousand 3 TEUs, albeit an increase on 2006 of 37%. The vast transit potential of land routes through northern Eurasia is, at present, very much underused. The current Kaztransservice forecasts that by 2015 the trans-shipment transit cargo flows from and to non-CIS countries are of containers at Dostyk’s railway terminal could increase negligible compared with transit from and through to 730,000 TEUs (see Figure 2), although this is more EurAsEC countries to third countries. optimistic than the forecast of UN ESCAP. Nevertheless, there is a consensus that trans-shipment volumes will grow considerably in the medium term, which justifies the 3. Key issues affecting Eurasian inter- development of overland transport systems. continental cargo transit While southern and eastern China will always prefer sea The huge preponderance of sea transit routes between and air transportation routes in its trade with the EU and China and Europe reflect basic competitive conditions. Cheaper tariffs. International shipping companies with extensive and cost-efficient fleets at their disposal can ichael Emerson is senior research fellow at CEPS. keep their port charges and freight rates low. In many MMr Emerson has during his career held positions cases, the shipping cost is the main consideration for at the OECD in Paris (1966-1973), the European consignors as they strive to minimise the transportation Commission (1973-1996), including the position of EU component of the price of commodities in order to keep ambassador to Moscow. them competitive in the destination country.
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