NOVOSTI
2005-01-31 15:15 * RUSSIA * TRANSPORT * CORRIDOR * CONSTRUCTION * END *
RUSSIA COMPLETES NORTH-SOUTH TRANSPORT CORRIDOR

MOSCOW (RIA Novosti economic commentator Vasily Zubkov) – The last
month has seen two important events in the implementation of the North-South
International Transport Corridor project. First, Russian engineers opened a
700-meter railroad bridge over the Buzan river. Second, the Uljanik shipyard
at the Croatian seaport of Pula launched the first of four ferries capable
of carrying 52 train cars across the Caspian Sea. After the finishing
touches are added, it will be handed over to a Russian customer,
Makhachkalinsky Morskoi Port, by early summer. Each vessel comes with a $20
million price tag and the second one should be ready by August.

Taking into account that a project to construct a 49-kilometer railway
line toward the seaport of Olya was completed late last year in several
months, instead of the scheduled two years, Russia can be considered to have
finished its part of the North-South International Transport Corridor.

The new facilities are extremely important for Russia, which Prime
Minister Mikhail Fradkov’s attendance at the opening ceremony of the
Yandyki-Olya railway line in Astrakhan highlighted. Another high-ranking
official, Vyacheslav Ruksha, the head of the Russian Federal Agency for
Maritime and River Transport, was in Croatia for the ferry launch.

Linking the technological chain will soon directly affect performance
indicators, such as freight turnover, passenger miles, loading and unloading
rates, and accelerated cargo delivery. This will save foreign shippers’ time
and money. The North-South Corridor will cut shipping time from Northern
Europe to India and Iran from 37 to 13-15 days.

The project was devised to link India and Iran with Russia and
northern Europe through the Caspian Sea. And the figures suggest that it is
worth it. Indeed, experts estimate current Europe-Asia shipping yield totals
$140 billion a year. Iran alone claims it is going to gain extra $5-10
billion from cargo transit a year. Moscow is entitled tothink it will earn
just as much.

The consortium implementing this project, which was coordinated and
approved in the autumn of 2000, includes 10 countries: Russia, Iran, Iraq,
Oman, Kazakhstan, Belarus, Tajikistan, Azerbaijan, Armenia, and Syria. Other
states, particularly the United Arab Emirates, have also displayed an
interest.

According to the Transport Ministry, Russia carried some 5 million
metric tons of bulk cargoes worth over $5 billion through the North-South
corridor in 2003. Although last year’s final results still have not been
calculated, preliminary estimates put cargo traffic growth at 15-20%. In two
to three years, the annual volume of freight traffic through the corridor is
expected to reach 15 million metric tons. The potential volume of transit
container cargoes is well over 20 million metric tons, the All-Russian
Market Research Institute reports. A container terminal with capacity of up
to a million TEUs a year is being built in the port of Olya to ensure that
these targets are hit.

Work on the project has accelerated since fierce rivalry emerged in
the Caspian region for cargo transit bypassing the Suez Canal. The rivals
are the TRASEKA International Transport Corridor (Europe-Caucasus-Asia), the
Trans-Kazakhstan and Trans-Asian railways. Moreover, the Caspian commercial
fleets of Azerbaijan and Kazakhstan are growing increasingly powerful. The
latter adopted a program to create a national commercial fleet last year.

Competition is forcing the founders of the North-South Corridor to
take a more flexible approach toward determining a strategy of further
development. Russian experts believe it is reasonable to use a transport
model combining the trans-Caspian ferry sea route and the
Iran-Azerbaijan-Russia railway route, along the Western coast of the Caspian
Sea. The huge resources of Russia’s river fleet and river-sea navigation
vessels could be used along the corridor to carry cargoes through the
Volga-Don and Belomor-Baltic canals to northern and southern Europe.

The Russian Railways joint-stock company is in talks with Iran and
Azerbaijan on reviving railway communication with Iran, which was broken off
some time ago. The advantages of carrying some of the cargo across land
route are evident. Freight does not need to be reloaded, while it is
transported faster and is not dependent on the weather.

The North-South International Transport Corridor is beginning to play
an increasingly significant role in international traffic between Europe and
Asia. The sooner difficulties are settled between Russian railway
functionaries and shipowners, and generally between Russian and Iranian
transport officials (delays in Iran’s returning empty containers), the more
attractive the corridor will be.

Even greater support for the project from the two countries’
authorities would help raise the North-South Corridor’s profile still
further.