Thursday, June 20, 2024
 
 

Investors Forum brings the Middle Corridor into EU-wide focus

Long term application of sanctions on Russia boost interest in Eurasian land transport routes bypassing Russia
international-partnerships.ec.europa.eu
Opening Session of the EU Global Gateways Investors Forum for transport connectivity

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Huge investment numbers were thrown around in Brussels January 29-30 at the Global Gateway Investors Forum for the European Union – Central Asia Transport Connectivity. While European and international financial institutions announced total investment commitments of 10 billion euros (US$10.2 billion) for the development of the Trans-Caspian International Transport Route (TITR) connecting Europe and Central Asia, the crucial point to remember is that this impressive total is the large headline figure the EU always strives to position as the key event take-away, leaving all the details for the fine print, and there are many, as there are myriad geopolitical variables.

The Trans-Caspian International Transport Route, frequently referred to as the Middle Corridor, is a multilateral institutional development project linking the containerized rail freight transport networks of the People’s Republic of China (PRC) and the European Union through the economies of Central Asia, the Caucasus, Turkey, and when possible, Eastern Europe. It is of key strategic importance as it provides a shorter, and at least for today,  totally sanctions free intermodal alternative to Russia’s older Trans-Siberian route which remains the largest trans-Eurasia rail network in operation.

The longest stretches of the TITR cross the territory of Kazakhstan, covering the entire distance between China and the Caspian Sea, making that country the unquestionable key player in all regional policy decisions. Transit times from China to Turkey have been steadily decreasing as work on the TITR has progressed, at times falling to less than 25 days, compared to a China to Europe maritime transit time of 35-45 days if/when the Suez Canal is actually accessible, not something that can be taken for granted these days.

Investors Forum a pivotal step for the Middle Corridor

European Commission Executive Vice-President Valdis Dombrovskis summed things up effectively in his opening remarks. He noted “In the spirit of collaboration and progress, the Investors’ Forum marks a pivotal step towards realizing the ambitious vision of the Trans-Caspian Transport Corridor. Together, we strive to achieve a faster, more reliable connection between Europe and Central Asia, fostering stronger ties and opening new avenues for cooperation and trade. I am very pleased to see that international partners present today are committing to provide 10 billion euros ($10.2 billion) in investments to develop sustainable transport connectivity in Central Asia, including new European Commission and European Investment Bank commitments of 1.5 billion euros ($1.6 billion), with more to come through the Commission’s open architecture for investment guarantees.”

Not missing a chance to promote the EU’s “Global Gateway” ambitions, Commission Vice President Margaritis Schinas called the Investors Forum “an important milestone in the EU-Central Asia partnership, bringing together public and private investors from both regions to kickstart the work on the Trans-Caspian Transport Corridor to link Europe and Central Asia in a fast, safe, and sustainable way, in line with the EU Global Gateway strategy.” Commission Vice President Josep Borrell took the opportunity to emphasize the need for closer partnerships to address global challenges.

The EU has identified 33 areas for investment and upgrades in the physical infrastructure of segments of the Middle Corridor, according to Commissioner for Transport Adina Valean. “The modern TITR is a cornerstone of the EU’s efforts to promote regional economic integration and improve connections with Europe. We have identified 33 investment needs for the TITR infrastructure, ranging from the modernization of railways to increasing the capacity of ports on the Caspian Sea and upgrading the fleet,” Valean explained.

As part of the opening session, high-level representatives from Central Asian countries, Deputy Chairman of the Cabinet of the Ministers of the Kyrgyz Republic Bakhyt Torobayev, Deputy Prime Minister of Uzbekistan Jamshid Khodjaev, Transport Minister of Tajikistan Azim Ibrohim, Deputy Director-General of the Agency for Transport and Communications under the Cabinet of Ministers of Turkmenistan Batyr Annayev, delivered opening remarks, commending the EU’s support and expressing hope for continuing cooperation.

Kazakhstan’s Minister of Transport Marat Karabayev briefed the Investors Forum about the energetic role his country has taken regarding both land and air transport sectors (he has since submitted his resignation in anticipation of an upcoming government reshuffle). He noted that 80 percent of the rail transport between China and the EU already transits Kazakhstan and that the volume of freight transit transport by road to all destinations is steadily increasing, up 43 percent in 2023.

Kazakhstan’s aviation sector has been liberalized, Karabayev explained, with the use of the country’s airspace doubling in the past two years. An aviation agreement has been negotiated with the EU to fully open airspace in each region to airlines of either side, he noted. The country’s two largest airports have been privatized (Astana and Almaty) and the remaining 22 are available to interested EU investors, he said.

Large and steadily increasing EIB role

As part of the two-day event, the European Investment Bank (EIB) signed memoranda of understanding for project co-financing with Kazakhstan, the Kyrgyz Republic, Uzbekistan, and the Development Bank of Kazakhstan (DBK) worth 1.5 billion euros ($1.6 billion).

EIB Vice-President Teresa Czerwinska explained the EIB’s approach, “Transport is the backbone of the modern economy, facilitating personal mobility and enabling goods, capital, and services to be exchanged between the countries of the region. In addition, investing in sustainable transport is key to addressing climate impact and enhancing the resilience of transport networks.”

The EIB’s support for sustainable transport across the region is expected to mobilize additional capital resulting in total support for sustainable transport projects of 3 billion euros ($3.2 billion).

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CEO/Editor-in-Chief.  Former US diplomat with previous assignments in Eastern Europe, the UN, SE Asia, Greece, across the Balkans, as well as Washington DC.

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