Kazakhstan, Azerbaijan and Georgia To Establish ‘Eurasian Rail Alliance’ Joint Venture

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New JV will smooth over transit rail/maritime cargo between Europe and Asia via the Trans-Caspian International Transport Route, while avoiding Russian transit to EU 

Legal and diplomatic work is underway to establish a joint venture through the railway administrations of Azerbaijan, Georgia, and Kazakhstan, Batyr Kotyrev, the Chief engineer of the Kazakhstan Temir Zholy (Kazakhstan Railways) company and a Director of its technical policy department has stated.

Kotyrev stated that this is in order to fully exploit the transit potential of the Trans-Caspian International Transport Route (TITR) for cargo flows from China/Central Asian countries to the EU countries and back.

“The joint venture will render the qualitative multimodal, transport and logistics services, help establish a through rate for the transportation of goods across the countries whose railway organizations, ports and sea carriers will be the founders of the joint venture,” Kotyrev said, noting that it will also contribute to the introduction of a single and unique IT platform for the implementation of the activity of the joint venture. That is intended to fully automates the services required for transporting goods from China to Turkey and the Black Sea ports. The route also connects with the INSTC, which links the Caspian ports to Iran, the Gulf States, East Africa and India. It provides an alternative to Russia given the sanctions problems the country has and is a significant development to hasten completion of the about to be in huge demand, Southern BRI routes from China to Europe via Kazakhstan, the Caspian, on to Turkey and the Black Sea Ports to the southern EU members Bulgaria and Romania. Significant EU funding can be expected to expand facilities at Romania’s Constanta Port, and at Bulgaria’s Burgas and Varna Ports.

Kotyrv said the new JV would be called the “United Transport and Logistics Company – Eurasian Rail Alliance”.

“Transportation volumes will increase, and logistics be optimized as a result of this joint venture,” Kotyrev said, and “will also helped decrease the rates for customers and keep tariffs stable.”

“The JV is expected to have the same effect as the joint venture of Kazakhstan Railways, Russian Railways, and the Belarusian Railways on a parity basis. The container transportation via the China-Europe-China route has been increased from 21,200 TEU to 546,000 TEU, i.e. by 23 times from 2014 through 2020 since the establishment of the United Transport and Logistics Company.”

The chief engineer added that there are clear advantages for creating a joint venture on the TITR route, namely, the introduction of a unified management and sales system, diversification of risks, achievement of parity, the process of rendering the integrated logistics services on the route, and so on.

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Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates. The firm assists British and Foreign Investment into Asia and has 28 offices throughout China, India, the ASEAN nations and Russia. For strategic and business intelligence concerning China’s Belt & Road Initiative please email silkroad@dezshira.com or visit us at www.dezshira.com