Desperate Moscow seeks unified rules for Caspian Sea corridor ports

Moscow, Russia (PortSEurope) November 19, 2022 - A desperate Moscow is seeking unified commercial and conventional rules for the ports in its sanctions busting Caspian Sea corridor. International shipping in the Caspian Sea today is developing in the conditions of inconsistency at the level of conventional rules and with unequal access to port services, Alexander Melnikov, General Director of Olya Commercial Sea Port, said at the Transport Week event in Moscow. Hard-pressed by western sanctions for its invasion in Ukraine, Russia is redirecting its cargo flows from the North-West of the country to the South-East. The Caspian Sea's underdeveloped potential is critical, providing access to the ports of another global pariah state – Iran. According to Melnikov, among the 12 operating seaports in the Caspian Sea, located in four countries, there are no uniform rules related to the control and maintenance of ships, and in some aspects the ports’ practice is discriminatory. “Iranian ships in Iranian ports are bunkered at domestic prices, while Russian ships are bunkered at export prices, this is a huge difference,” he said. Ships under the national flag have preferences and privileges in cargo transshipment. Unequal service conditions are exacerbated by the different amounts of port dues in the ports of the different Caspian states, with cost differences of more than two times. Also, various conventional rules hinder the development of shipping: “Russian ships operate in accordance with the Paris Memorandum, while the Indian Memorandum is applied in Iranian ports, which leads to serious issues, up to limiting the exit from the port,” Melnikov said. It is wrong to apply the convention on the handling of ballast water, for example, in the port of Turkmenbashi (Turkmenistan), where an international certificate is required from Russian ships operating exclusively in the Caspian basin,” he says. According to Melnikov, the solution to the problem could be the creation of a unified Caspian convention with the participation of all the Caspian countries, an idea the Russian Caspian community hopes to implement with the help of Russia’s Ministry of Transport. Port of Olya Russia is racing to develop its Caspian Sea port of Olya, seeking a sanctions-free trade route to Asia. Olya is in the Limansky District of the Astrakhan Region on the bank of Bakhtemir River connecting Volga River with the Caspian Sea. The reconstruction of berths No. 8 and No. 9 in the Caspian port of Olya (Russia’s Astrakhan region) will be completed in 2023. It will increase cargo handling capacity of the port to 3-4 million tonnes per year. A half of the capacity will be containers, Sergey Milushkin, General Director of Lotos, port’s special economic zone (SEZ) said. SEZ – Special Economic Zone The construction of a SEZ is underway in the port. In accordance with the previous agreements, Lotos is also planning to provide a 50-hectare site for the creation of a logistics centre for Turkmenistan. The site, with equipment for containerised cargo handling, storage facilities, and access railway lines, will help Turkmenistan become a transport hub for transshipment of goods from Russia to Central Asian countries, to Afghanistan and Pakistan. Astrakhan and Turkmenistan are also planning a regular car ferry service between the ports of Olya and Turkmenbashi (Turkmenistan). Caspian Sea Since the decline of the trade caravans in the era of the Arab conquests, the Caspian Sea region became the periphery of world logistics routes. However, currently, western sanctions-hit Russia and Iran are leading the revival of cargo transport between the states located in Central Asia and the Caucasus, as well as the transit traffic to and from China and Europe. The increasing importance of the Caspian region, as part of international transport corridors, is leading to an expansion of the seaports in the five Caspian littoral states despite the fact that they still have huge spare capacity. Currently, these ports can handle some 135 million tonnes of cargo a year but process no more than 30 million. According to local experts, only 20% of the resources of Caspian ports are involved in international cargo transportation. Cargo handling capacity of main Caspian ports (local media estimates): Russia – Astrakhan, 10 million tonnes; Olya 1.6 million tonnes Azerbaijan – Baku, 6 million tonnes; Dubendi 1 million tonnes; Sangachal 8 million tonnes Iran – Astara 2.5 million tonnes; Bandar Anzali, 6 million tonnes; Nowshahr, 1.5 million tonnes; Enzeli 6 million tonnes Turkmenistan – Tukmenbashi, 17 million tonnes; Garabogaz, 15 million tonnes; Hazar, 2.5 million tonnes Kazakhstan – Aktau, 15 million tonnes; Kuryk, 6 million tonnes; Atyrau, 2 million tonnes Russia In Russia, which is trying to shift its sanctions-hit export and import towards the Caspian Sea, work is underway to expand port infrastructure there. In Astrakhan, Olya and Makhachkala, where the draft does not exceed 3.6 meters, a project for dredging up to 4 meters has started. Moscow also pressures Azerbaijan to open a sea transportation route between the ports of Baku and Astrakhan. By the end of 2023, two new berths capable of handling 3.5 million tonnes of cargo will become operational in the port of Olya. The two most sanctioned countries The two most sanctioned countries in the world – Russia and Iran – are trying to improve transport links in the Caspian Sea and to increase mutual cargo turnover. Russia is trying to bypass Western sanctions via the seaport of Astrakhan on the Volga River by planning new multimodal cargo services to Southeast Asia. In June, the Governor of Russia’s Astrakhan region, Igor Babushkin, and the head of the Iranian Mostazafan Foundation, Sayyid Parviz Fattah, signed a cooperation agreement for the period 2022-2026. It includes a new logistics center and a refrigerator terminal in the Astrakhan port special economic zone (SEZ), developing cargo transportation, cooperation in the shipbuilding industry and agriculture. “The Islamic Republic of Iran is the leading partner of our region. We closely cooperate in the areas of trade, transport, logistics, agriculture,” Babushkin said. “More than 90% of all cargoes passing through the Astrakhan port go to Iran. More than 120 companies with Iranian capital are operating in Astrakhan, as well as a branch of an Iranian bank, and the Trade House of Iran. The Mostazafan Foundation of Islamic Revolution is the second-largest commercial enterprise in Iran behind the state-owned National Iranian Oil Company. It is also the largest holding company in the Middle East. The Foundation controls manufacturing and industrial companies. It is associated with the Islamic Revolutionary Guard Corps. Head of the Foundation is Fattah – an Iranian conservative politician, former member of Revolutionary Guard and former energy minister. Russia’s push to find a back door from western sanctions Desperately trying to avoid increasingly harsh international sanctions affecting Russian transport and logistics, Moscow is courting Iran. It is looking for ways to use the Caspian Sea as an export/import corridor, including deepening Iranian ports and dredging its own Volga-Don Canal. The visit in May of Russia’s deputy transport minister Dmitry Zverev to Tehran was an attempt to find a back door to the sanctions paralysing Russian ports. His delegation included representatives of transport and logistics organizations and the (Russian) International Road Transport Association. In a meeting with Ali Akbar Safaei, managing director of Iran’s Ports and Maritime Organization (PMO) and ports officials, Zverev underlined the new role of the north-south corridor and the use of sea, road and rail transportation between the countries. Zverev seeks quick development of cooperation, the purchase of Iranian port facilities by Russia, the possibility for Iran to provide land for the construction of container terminals on the shores of Caspian Sea and Indian Ocean. Conclusively, if anything, this all highlights Russia's need to trade with countries around the Caspian Sea. Whilst Iran welcomes any developments, other countries are wary of attracting sanctions by getting too close to Moscow. Additionally, some of the same countries are developing the East-West Trans-Caspian International Transport Route (TITR), whose key attraction is its avoidance of passing through Russia! Copyright (C) PortSEurope. All Rights Reserved. 2022.

Desperate Moscow seeks unified rules for Caspian Sea corridor ports

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Desperate Moscow seeks unified rules for Caspian Sea corridor ports

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Greek privatisation agency receives ISO recertification

Tailwind extends Koper-Cargo Terminal Graz service

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