By Maria Zhigadlo
The Caspian Post presents an interview with Kazakhstani expert and blogger Alzhan Ismagulov.
- What are the main challenges facing the development of the Middle Corridor, and how can they be addressed?
- The Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor, was launched in 2013 during the second International Transport and Logistics Business Forum "New Silk Road" in Astana. During the forum, the heads of Kazakhstan Temir Zholy (Kazakhstan Railways), Azerbaijan Railways, and Georgian Railways signed an agreement to establish a Coordinating Committee for route development. By February 2014, the Coordinating Committee, including railways and seaports of Kazakhstan, Azerbaijan, and Georgia, was formally established.
In December 2016, the decision was made to create the Trans-Caspian International Transport Route Association. The route begins in China, passes through Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, Türkiye, and ends in Eastern Europe.
Before the onset of the Special Military Operation (SMO) in Ukraine, the primary flow of goods from China to Europe passed through Russia. With the start of the conflict, TITR member countries intensified efforts to develop alternative routes to mitigate losses.
However, the Middle Corridor faces significant challenges. Inadequate infrastructure and limited attention to the route have resulted in underdeveloped transport systems. Western countries have been hesitant to invest, expecting route nations to shoulder development costs independently. Regulatory discrepancies, such as a lack of unified regulations for tariffs, documentation, and customs fees, create difficulties. Insufficient storage and terminal facilities further hamper progress.
Ports in participating countries lack capacity, including insufficient depths to handle larger cargo. The problem is exacerbated by the Caspian Sea's receding water levels, necessitating a reevaluation of port infrastructure. Multimodal transport inefficiencies also increase costs and delivery times. For instance, goods transported from China to Aktau must traverse the Caspian Sea to Baku, then by land to Türkiye, and again by sea to Eastern Europe. This makes the Middle Corridor less competitive compared to the Northern Route through Russia, which offers three times faster delivery at a lower cost.
A World Bank report highlights additional issues, including poor coordination and management of the route, low efficiency of ports on the Caspian and Black Seas, underdeveloped railway infrastructure, border delays due to operational inconsistencies, and a lack of modern IT solutions integration. Experts suggest measures such as simplifying procedures and documentation, digitizing data, and modernizing infrastructure to address these problems.
- What projects or initiatives are Kazakhstan and Azerbaijan implementing to enhance cooperation within the Middle Corridor?
- Kazakhstan, Azerbaijan, and Georgia have agreed to establish a joint logistics company to streamline freight transit.
Kazakhstan has developed the Port of Aktau, which processes up to 12 million tons of cargo annually, including 7.5 million tons of oil. A container hub with a capacity of 240,000 containers per year is under construction, financed by China's Port Lianyungang Group. Ongoing dredging operations and modernization efforts include extending berth No. 3 and upgrading oil-loading facilities.
Azerbaijan is modernizing the Port of Baku to increase cargo throughput from 15 to 25 million tons per year. Plans include constructing grain and carbamide terminals. The Baku Port has received the "EcoPorts" certification from the European Sea Ports Organization, recognizing high environmental standards.
- What role do international financial institutions play in financing and developing the Middle Corridor's infrastructure?
- International financial institutions play an active role in supporting the Middle Corridor. The World Bank allocated $660 million to modernize the Kars-Divrigi railway line in Türkiye, increasing its capacity from 750,000 to 20 million tons per year. The Islamic Development Bank and the Asian Infrastructure Investment Bank are also funding projects in the region. The European Bank for Reconstruction and Development (EBRD) plans to invest $1.5 billion, while the European Investment Bank has allocated €320 million. Through its Global Gateway initiative, the EU has pledged €10 billion for route development.
The EBRD estimates that $18 billion will be needed to fully realize the route's potential by implementing 40 priority projects.
- What economic benefits do Middle Corridor countries gain from freight transportation, and what are the prospects for revenue growth?
- In 2023, 2.7 million tons of cargo were transported via the Middle Corridor, compared to 37 million tons through the Northern Sea Route. Even if capacity increases to 10 million tons per year, the route will remain three times less efficient than the Northern alternative.
The main beneficiaries are the European Union and the route countries. The EU supports the route as it facilitates the political isolation of Russia, even if it means paying higher logistics costs to avoid cooperation with Russia. Azerbaijan and Türkiye directly benefit from shipments bypassing Russia.
However, the anticipated conclusion of the SMO (expected in 2026-2027) will likely restore the Northern Route's prominence due to its economic advantages. While the Middle Corridor will remain significant for regional trade, it will struggle to compete globally with the Northern Route.
