BAKU, Azerbaijan, November 8. Immediate investment needs for Middle Corridor infrastructure upgrades are about €3.5 billion, the findings of EBRD’s study said, Trend reports.
European Bank for Reconstruction and Development (EBRD) is carrying out a research on sustainable transport connections between Central Asia and Europe, funded by the European Commission. The study, which should be completed by summer 2023, aims to identify the most sustainable transport connections between Central Asian economies and the extended Trans-European Transport Network (TEN-T).
The research finds that the Middle or Trans-Caspian Corridor through Kazakhstan is generally considered the second-best overland option.
“In Q1 2022, close to 20,000 TEUs travelled through Kazakhstan to the Caspian ports of Aktau and Kuryk. Assuming that demand will continue to rise, the annual volume of freight cargo through the Middle Corridor in 2022 may reach 80,000 TEUs. This is not far from its maximum throughput capacity of 100,000-120,000 TEUs, constrained by a limited number of vessels in the Caspian Sea and non-regular shipment schedules,” the EBRD said.
THE EBRD noted that should this corridor become the preferred new route for freight companies, existing Caspian Sea infrastructure may become a real bottleneck.
“A diversion of transit cargo exceeding 10 per cent of the Northern Corridor’s tonnage will require large investment across the entire corridor and its economic efficiency is yet to be assessed. The EBRD estimates immediate investment needs for Middle Corridor infrastructure upgrades to be in the region of €3.5 billion,” the EBRD said.
Thus, the route through Kazakhstan to its ports on the Caspian Sea seems to be most stable option for cargo travelling through Uzbekistan, but there are multiple inefficiencies at border crossing points between the two countries and bottlenecks in the ports of Aktau and Kuryk.
"What is more, the Caspian Sea is not always navigable, so the Uzbek authorities are keen to explore alternatives. Alternative transport connections may incentivise Kazakhstan to improve the quality of commercial services and border management," the EBRD said.
The report also said that eventually, the success of the Middle Corridor will depend on the ability of all countries along the route, including Kazakhstan, to work seamlessly, eliminate trade barriers and set up regular and reliable freight schedules.
"If the Middle Corridor is to become a viable transportation alternative, it must offer a predictable and reliable environment for all parties involved," the report said.