European Commission representative talks about the potential of the Trans-Caspian route
The Coordination Platform of the Trans-Caspian transport route was opened in Turkmenistan this month. Henrik Hololei, Hors Class Advisor to the Directorate-General for International Partnerships of the European Commission, talks with Kazinform News Agency correspondent in Brussels what this event will bring to the development of an actual transport corridor between Europe and Central Asia.
“Well, this is a high priority project that we have with the Central Asian partners and beyond. And what we have accomplished over the last 16 months has been also quite remarkable. When we look back, we would have never thought that we are getting as far as where we are today because it all started with the publication of the EU financed study which was done by EBRD concerning the bottlenecks and the investment needs in the Transcaspian transport corridor,” he said.
“It was of course followed up by the very successful investors forum in January with more than 600 participants and of course a very high-level delegation from Kazakhstan where also the Central Asian countries had the opportunity to organize their own events to talk about the investment opportunities since the conference was also attended by the international financial institutions and private sector,” Henrik Hololei stressed.
He added that the European side had the launch of the coordination platform on the senior officials’ level in Astana on the 12th of June again all key countries were present. “Not only the Central Asian countries but all countries across the corridor which means the South Caucasus countries and Turkey as well,” he added.
“Since then, we have also started practical work we are holding workshops with the countries we had one also in September with Kazakhstan to discuss concrete priority for investment projects. Also, how we can bring the financial institutions and private sector but moreover the investments so that these projects can also materialize on the ground.
Now the last event was the high-level ministerial launch of the Coordination platform attended by EU Commissioner for international partnerships and high-level dignitaries which took place in Ashgabat and Kazakhstan again was very well represented on the level of the deputy minister of transport.
This event confirmed also a strong commitment from the political side to the work of the Coordination platform but moreover to the development of the Trans-Caspian transport corridor,” Hors Class Advisor to the Directorate-General for International Partnerships of the European Commission noted.
According to him, when one looks at Trans-Caspian corridor one needs to observe two things.
“First this is the corridor which connects Central Asia but even beyond I would say China Southeast Asia through Central Asia to Europe via the Caucasus or Turkey. This corridor has become highly relevant over the last years for various reasons and conflict in Ukraine has significantly decreased the use of the old so-called northern corridor. This is not great to bounce back any time soon. The European companies practically do not use it and do not intend to use it,” he emphasized.
In his words, there is also a very difficult situation when it comes to access to the Red Sea because of the Houthi rebels who affect the International Maritime trade. 40% of the International Maritime trade used to go via the Red Sea and Suez Canal coming from Asia. Now none of the big international European shipping companies, none of them use the Red Sea but rather go via the Cape of Good Hope of the western coastal Africa which adds to the journey something like 12 more days on average.
“The third of course is also the tensions which are there for quite some time and continue to be around the South China Sea which also is a very much used maritime route,” he pointed out. “Which also of course affects. This creates a situation where the Trans-Caspian transport corridor becomes highly relevant, and we can see that also in the statistics concerning the increase of the trade cargo but more specifically I would say the increase of the container traffic and container traffic is obviously which has the biggest potential. Where still there is a lot of improvement possible and the second aspect is the link and the integration of the Central Asian countries between themselves. To create better links so that they their cooperation using the transcripts transport corridor and creating also a new network of routes can support the regional integration as well as the economic development of the five Central Asian countries.”
According to Henrik Hololei, this route should become an adaptable, affordable and of course smart and sustainable, modern, effective, competitive, multimodal route which means also that the goods from the Chinese border to Europe should not be on the route more than 15 days.
“This is not an overly high ambition but today the problems are still there very much also stated to predictability. One day you can do it fast, maybe even you know less than 15 days. Normally not but let's say 20 days but the other time it can take 40 days. Of course, for the trade route for the economic route it's important to have a predictable time and big element that needs to be addressed would be related to the customs procedures and border crossing,” he stated.
“If you talk to the private sector, then and those who are operating in the corridor, then they consider this the biggest challenge for the moment. This is a challenge which doesn't take much money and doesn't take too much effort. It needs a political will, and it also needs that the countries agreed themselves, uniform same standard documents, digitalized documents. And make sure that the border crossings are efficient so that the Trans-Caspian transport corridor can function.
In the end of the day, Henrik Hololei says, we can also call it as the Renaissance of the Great Silk Road because the Silk Road was never one route it was always a network of different corridors which passed through the Central Asia and made it the most prosperous and knowledgeable place in the whole world.
This corridor was not only about people and business, in his words, this corridor was also about the knowledge, ideas, culture and I think we have a great chance to try to replicate what our ancestors successfully did long time ago.
“I mean all Central Asian states prioritize digitalization. It is part of the modernization of their economies. It's also part of the modernization of the government functioning and public administration. Digitalization can really make things faster and more efficient. In this concrete context it really would help to make the contact border crossings and customs procedures so much more efficient,” he underscored.
According to Henrik Hololei, it is needed where you have the border crossings. It's equally needed on the other side of the Caspian Sea, in South Caucasus and Turkey and it's also needed in the among the Central Asian countries. Still there is too much friction and what is also a key is that while countries develop their own digitalization policies then it has to be also interoperable. So that the systems can talk to each other.
“And that there is no problem let's say if there is a cargo coming from Tajikistan and going to Azerbaijan that the system that is used in Tajikistan will function along the corridor while crossing the different borders. Because this becomes a problem where you need to cross the borders the systems don't talk to each other, the standards are different. And that doesn't help and that of course concerns both the rail and the road but we also know that on some borders there are quite significant delays. Especially the trucks crossing the border,” he adds.
The EU representative noted that some states for example have also visa policies which of course affects. Even though it takes time; we need to make sure that this queue is well managed, and digitalization can also provide you with the possibility to do queue management. So that the truck driver would know that the possibility to cross-border is then the time then.
And don’t need to wait for long hours or even days to get to the border so that you can much better plan the system. I do believe that for example when we look at the Transcaspian transport corridor and as I said it is a network of corridors. Then the southern corridor has a huge potential which has yet not materialized and the southern part of the Trans-Caspian corridor would entail Tajikistan, Kyrgyzstan, Uzbekistan and Turkmenistan and would be going to the port of Turkmenbashi which is very modern port.
“The idea is that all the five countries of CA are connected and that and they can also obviously benefit from both options either linking themselves to the northern part of the Trans-Caspian corridor which goes via Kazakhstan and uses the ports of Aktau and Quryk or also develop the southern part of the corridor where the big potential of course is for Uzbekistan cargo for whom the access to the Turkmenbashi port will be the fastest way for its cargo,” he continued.
“So that's why we need to concentrate on all countries and make sure that digitalization unlocks the potential that is currently being held back by the complications on crossing the border. But of course, this is not only about that I mean these are now just what we see daily. What we really need are the hard investments and this is the projects we are discussing with Kazakhstan with the other countries which is part of the work of the coordination platform like invest investments in the hard infrastructure making sure that the roads are linking the railway is functioning and these take of course a lot of money,” Henrik Hololei added.
“Our assessment was that the study put on the table the number of 16.5 billion EUR and that of course is needed for the corridor to be fully functional and effective, but this is going to take time. We have no more time to waste, that's why we are doing it now, but we will see the results not tomorrow but in five-ten years,” he said in conclusion.