Efficiency of Middle Corridor between Europe and Asia assessed

    ECONOMICS  12 August 2023 - 16:30

    The total investment required to significantly improve the Trans-Caspian International Transport Route (Middle Corridor) is estimated at around EUR 18.5 billion.

    Report informs referring to a study by the European Bank for Reconstruction and Development (EBRD), these investment needs are related to the rehabilitation and modernization of the railway and road network, the expansion of rolling stock, the increase in port capacity, the improvement of border crossing points, multimodal logistics centers and ancillary network connections in all five countries of Central Asia.

    The identified investment needs take into account the own needs, priorities, opportunities, and specific conditions of each Central Asian country.

    According to a study of land transport corridors between Europe and Asia, total trade between the EU and Central Asia has grown by 38.8 per cent over the past decade, from €34.2 billion in 2012 to €47.5 billion in 2022, with two a third of the total trade imported into the EU.

    The main products imported by the EU are mineral products, base metals, and products made from them, as well as chemicals and related products (92 per cent of all EU exports). The main EU exports to Central Asia are machinery and equipment, chemicals or related products, and transport equipment (70.7 per cent of total EU exports).

    “Despite the growth of trade between Europe and Central Asia, China is the largest supplier of goods between Europe and Asia. It is also one of the two largest trading partners of the EU. Historically, most merchandise trade between Europe and China has been by sea (estimated at around 80-85 per cent of all trade between the EU and China), with land transport accounting for around 10 per cent, and air transport accounting for about 10 per cent,” the report says.

    Land transportation between Asia and Europe is carried out along three main corridors.

    The Northern Corridor between Asia and Europe runs from China through Kazakhstan, Russia, and Belarus and then enters the EU through Poland. Trains also run through Mongolia or directly through Russia via the Trans-Siberian Railway. This route has a length of about 10,000 km, and the travel time is an average of 14 days.

    The Trans-Caspian International Transport Route connects Asia and Europe through Kazakhstan and the Caspian Sea. Goods enter the Caucasus through the port of Baku, and continue on to Georgia, from where there are two alternative routes before reaching the EU via Bulgaria or Romania: a land route via Turkey, or a sea route via the Black Sea. Although shorter than the Northern Corridor (7,000 km), it currently includes unpredictable timelines that can range from 14 to 45 days, but could take up to 60 days depending on the circumstances, EBRD analysts say.

    The southern corridor passes through Kyrgyzstan or Tajikistan, Uzbekistan, Turkmenistan, Iran, and Turkey before reaching Europe through Bulgaria or Greece. As noted in the study, another potential route along the Southern Corridor passes through Afghanistan and Central Asia and on to the EU via the Caucasus, but this option was not evaluated for the purposes of this study for geopolitical reasons. This is the land corridor mostly preferred by road carriers as it avoids crossing the Caspian Sea and its associated problems, including port inefficiencies and limited and unpredictable transit times. Transit time is noted to be around 14-20 days for non-EU destinations, but may take 60 days or more.

    Despite the region's strategic position and its ability to act as a land bridge between two continents, frequent disruptions, delays (mainly related to crossing the Caspian and Black Seas) and numerous international border crossings with inconsistent transit procedures hinder container traffic and lead to transportation of mostly time-insensitive goods along the Central Asian corridors,” the EBRD notes.

    According to the assessment, the Middle Corridor is identified as the most sustainable transport link between Europe and Central Asia.

    “Thanks to its two-level coverage area - 300 km north and south, the Middle Corridor covers all the main economic and population centers of Central Asia and provides communication within the region and with Europe through key transport networks. This route has the greatest potential for further development, as it allows not only to develop the transport network but can also support regional development in Central Asia. This region has an extensive transport network, which can serve as a basis for further regional cooperation and coordinated project implementation,” the study says.

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