Expanding corridors to circumvent sanctions – Newspaper Kommersant No. 201 (7402) of 10/28/2022

Until 2030, the countries participating in the project will allocate $38.2 billion to the implementation of investment projects for the development of the international transport corridor North-South, the largest investments are in Russia ($13.2 billion, of which a quarter is private investment), Iran ($12.9 billion, without private investors) and Kazakhstan ($6.3 billion, 20% of private funds), follows from the report of the Eurasian Development Bank (EDB).

Due to the sanctions, the use of the usual directions of transportation has become more complicated (through land checkpoints with European countries and the ports of the Baltic basin), as a result, the Russian authorities and businesses are forced to accelerate the development of alternative transport and logistics corridors in the hope of finding new trade partners and reducing costs in trade with former. The EDB identifies three alternative supply routes: northern (ports of Murmansk), eastern (land exits through Kazakhstan, border crossings and ports in the Far East) and southern (North-South corridor). The latter is distinguished by multimodality of deliveries (road, rail, maritime transport), throughput capacity reserves and the shortest route to South Asia, East Africa, the Middle East, which allows expanding the geography of transportation and explains Russia’s interest in the corridor. The potential for container traffic along the ITC is estimated at 5.9-11.9 million tons by 2030.

So far, more than 40 barriers have prevented the development of the corridor. We are talking about both non-harmonized procedures and legal regimes, complexities of mutual settlements, excessive requirements (permits, tariffs, paper documents), as well as problems with infrastructure – including differences in standards and dimensions in railway transport, limited capacity on certain sections of roads, natural conditions of navigation in the Caspian Sea, etc. To solve these problems, countries are implementing more than 100 “auxiliary” investment projects – the largest amount of investment is needed for the development of transport infrastructure in Russia and Iran (35% and 34%), Kazakhstan accounts for 16.5 %. While a significant part of the projects is financed from the budget, EDB experts recommend initiating projects with the attraction of bank financing with the prospect of attracting the interest of private investors and international development banks.

Diana Galieva