China to invest in Russia’s new Volga River inland port

Samara, Russia (Ports Europe) October 10, 2022 - China is to invest in Russia’s new Volga River inland port project. Sanctions are forcing Russia’s transport and logistics industry to the south of the country. A new multimodal river port is to be build near the Russian city of Samara by 2027. It will improve river-sea logistics on Volga River to and from Caspian Sea. This follows as this is a key route used by Russia to avoid western sanctions. Samara is located at the confluence of the Volga and the Samara rivers and the eight-largest city in Russia. It is a major river port. The port is seen as an international transport hub at the intersection of two logistics corridors - North-South and West-East. It will bel build at the mouth of the Sok River, a Volga tributary, about 30 km north from Samara. The area of the port will be at least 52 hectares. The construction cost for the new port is estimated at 40 billion rubles (€662 million - based on the artificially maintained rate of the rouble). The general contractor of the project will be China Railway Construction Investment Group, controlled by the government in Beijing, which will invest up to 30% of the cost of the project. It is also reported that Chinese investors, stepping into the void left by the exodus of western companies from Russia, are interested in creating other enterprises related to the new river port. This could include a shipbuilding yard to manufacture ice-breaking tugs and barges. Improving river-sea logistics Russia sees a joint development of both inland waterways and sea transport as the future direction of trade. “The Caspian region should become a major trade hub in the near future. Now Iran is completing the construction of the railway there, and the nearest to our border countries will begin to build seaports. The Volga here acts as the main artery through which cargo will go from the Caspian Sea to the Baltic region and vice versa,” the President of Russia’s International Fund for Investment Cooperation (IFIS), Boris Khrul, said. The concept for Russian inland waterways is to increase the volume of transit cargo traffic to 30 million tonnes by 2024. A desperate Russia keeps pushing for increase in cargo via the North-South corridor and its Caspian Sea ports. A key hope is the International North-South Transport Corridor (INSTC). International North-South Transport Corridor (INSTC) Some 14 million tonnes of cargo were transported along INSTC in 2021. Moscow would like to double this figure by 2030. This is at the expense of cargo from Ural, Volga region, Baltic to the Persian Gulf, South Asia, Middle East and Africa. This is not new business, but relocated business. The Caspian Sea region could be one of the largest international transport hubs in Eurasia, Mikhail Mishustin, Prime Minister, Russia, said. However, this upbeat statement can’t hide the fact that in the Caspian Sea region Russia relies on another global pariah state, Iran. For years, Iran has also been under intense western sanctions. Mishustin admitted what experts are saying for months now: southern Russian regions lack modern road and railway connections. Also, Russia’s Caspian Sea ports are not connected with contemporary multimodal infrastructure and not equipped to handle increased cargo volumes. For the establishment of transport and logistics ties between Asia and Europe, the only year-long ice free Russian port in the Caspian Sea is Makhachkala. It is key and its importance is growing. Dagestan authorities are trying to help with the construction of a dry port to the south of Makhachkala. This will be a logistics terminal to increase transshipment capacity from 11 to 21 million tonnes by 2025. Ports Europe: Russia and Iran, two pariah states, try to develop Makhachkala port Given the geopolitical and macroeconomic events (sanctions against Russia), traffic along the North-South axis will inevitably grow. The route is multimodal and depends on transit through Iran and new port infrastructure. Ports in the Caspian Sea are of strategic importance for Russia According to Alexander Mityukov, President of Russia’s Interregional Association of Courier Services, “Ports in the Caspian Sea are of strategic importance for Russia”. They can ensure the transportation of goods from India, China, Kazakhstan and back along new (sanctions-busting) international routes. Conclusively, Moscow is pushing to increase cargo via the North-South corridors and its Caspian Sea ports. However, a lack of infrastructure, funding and markets remain challenging. Paradoxically, some its neighbouring states are actively avoiding sending cargo through Russian territory. Countries such as Azerbaijan want to exploit East-West trade without Russia as well as simultaneously developing North-South trade with Moscow. The involvement of China investing in Russia’s new Volga River inland port would seem to signal that Beijing sees this as profitable business. More Ports Europe news about Russian ports Copyright (C) Ports Europe. All Rights Reserved. 2022.

China to invest in Russia’s new Volga River inland port

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China to invest in Russia’s new Volga River inland port

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