Russia, together with the other countries of the Eurasian Economic Union (EAEU), suggested more than 40 collaborative projects in the area of transport, claiming the co-financing of China. They should establish end-to-end logistics among China, the EU and the Eurasian Union and along related routes supplementing the main transport corridors of Eurasia (Western Europe - Western China, North - South, East - West, and the Northern sea route).
Russia, together with
the other countries of the Eurasian Economic Union (EAEU), suggested more than
40 collaborative projects in the area of transport, claiming the co-financing
of China. They should establish end-to-end logistics among China, the EU and
the Eurasian Union and along related routes supplementing the main transport
corridors of Eurasia (Western Europe - Western China, North - South, East -
West, and the Northern sea route).
The details of the project and its expected effect on the economy were
reported to "Rossiyskaya Gazeta” by the EEC Minister in charge of Energy
and Infrastructure Adamkul Zhunusov.
The pairing of
Russia and China was agreed in May 2015, but until now the Parties have been
trying to determine an aspect matching the intention of China to build a
powerful transit infrastructure in Asia leading to Europe. For Russia it is
important to redirect to its territory a part of Chinese trade flows following
now to the EU by sea, and at the same time attract Chinese money on its roads
and transport hubs, create new jobs there.
On December 7,
the list of projects will be discussed by the Transport Ministers of the EAEU
countries, and this block will be included in the agenda of negotiations with
China within the framework of pairing of the Eurasian integration and the
Chinese Silk Road Economic Belt. For these projects, as confirmed by the
Minister, the five countries have good reasons to make common cause with China
in the negotiations.
- Adamkul Orokeevich, the Silk
Road is a good image, and when will it start to materialize for us? I mean
specifically the sphere of transport and infrastructure.
- I will have
to disappoint all skeptical experts who questioned the interest of the EAEU
countries in the opportunities of the multilateral format (of cooperation with
China - editor). The interest is
really high. We have now a little more than 40 proposals. Construction of new
roads and renovation of the existing ones, creation of transport and logistics
centers, development of key transport hubs, and so on.
We have to
understand here that Beijing always sticks to economic reasonability, and it is
important for us to properly articulate benefits for China from the development
in the direction of the Eurasian integration. Today it is a market with
emerging common rules in almost all spheres of the economy and for the
population of over 180 million people. That is roughly a quarter of the densely
populated Europe. And if we talk about the prospects of the pairing project, it
is not just about its transit opportunities.
On the other
hand, modernization and construction of the infrastructure have a number of
advantages. Those are jobs, of course. Moreover, the implementation of
infrastructure projects could be a driver for the development of national
economies. In fact, the infrastructure is nothing but a set of industries,
providing for the efficient functioning of social and economic systems at macro
and micro levels.
- What is the implementation
phase of these projects?
- It depends.
Some of them are already implemented, some others are in their final stages or
still only on paper.
- Will you give examples, please?
Railway Iran-Armenia. Due to its difficult geographical situation, Armenia is
extremely interested in the development of relations with Iran. This
corresponds to the vector of the Union for the conclusion of a free trade
agreement with Iran. After the implementation of the project this road can run
through Iran to Kazakhstan, China and further on. The real opportunity is not
only a direct railway between Iran and other Gulf countries, but also the
possibility of land transport among these countries and other States of the
- And Russia’s part is the
high-speed railway Moscow-Kazan, isn’t it?
- Partly yes.
There is another road from St. Petersburg to the border of Kazakhstan in the
framework of international transport route “Europe-Western China”. As you may
know, this is a very large investment project, covering the territory of
Russia, Kazakhstan, and China. It envisages construction of a new highway and
large-scale reconstruction of the existing one.
There is also a
question about the development of transport and crossing capacities of
Baikal-Amur and Trans-Siberian railways. Development of the Trans-Siberian
railway is interesting not only for Russia, but also for Belarus, Kazakhstan,
and China. The “Transsib” plays an important role in the delivery of products
to the regions bordering on Europe not only from the Far East, but also from countries
of the Asia-Pacific region. The transit from China to Germany by Transsib takes
approximately 20 days less than by sea. Both projects will contribute to the
significant increase in the international transport of goods, primarily goods
proposes inviting “Integrated transport and logistics company” (OTLK) in the
negotiation framework. OTLK is actually a not purely Russian project - the
company was created by railway administrations of Russia, Belarus and
Kazakhstan as a container transit operator on the route China-Southeast Asia-EU
and backwards. This project is the first and only of its kind, it is already
successful, but requires further development.
- And what about other countries
- Belarus, Kazakhstan, Kyrgyzstan?
- For Belarus,
it means the construction of a high-speed railway from the border on Poland via
Brest, Minsk and Orsha to Russia within the framework of the project
Kazakhstan’s proposals is the reconstruction of several highways and railways,
construction of six transport and logistics centers, including in Pavlodar,
Ust-Kamenogorsk, and Kostanai. The logistics centers are intended for the
markets of the Ural-Siberian region of Russia with access to Chelyabinsk,
Yekaterinburg and Omsk. As you can see, these mentioned projects are of
interest for the EAEU partner countries, they will give a powerful impetus to
the development of border regions of Russia and Kazakhstan.
proposes considering creation of three transport and logistics centers and
several railway construction projects as part of the pairing with the Silk
Road. The most important of them is the railway China-Kyrgyzstan-Uzbekistan.
The project will allow the Kyrgyz Republic to create a single internal rail
network and connect the EAEU countries with China through its territory. This
will form a new southern corridor of the continental bridge of Eurasia. And it
is quite clear that the implementation of such projects will have a positive
impact on the growth of the country's competitiveness in the international
market of transit shipments.
- How will a shortlist of
projects be generated before they can be discussed with the Chinese party, what
are the priorities within the EEC mandate?
- We are still
in the process of reviewing and harmonizing of the list of priority projects
that can be included in the "road map" for discussion with China.
Today, the parties have generally agreed only on projects in the fields of
transport and infrastructure.
selection criteria, after some debates we came to the conclusion that the draft
"road map" should meet three key criteria. First, focus on increasing
and improving the efficiency of transit potential of the Union States and
pairing with the transport system of China. Second, the need for funding,
including certain stages of the project. And most importantly, two or more
Union States should be interested in the project.
I think we will
agree on the final version of the proposals at the meeting of heads of
transport departments and submit the list to the EEC trade sector - to Minister
Veronica Nikishina as the main negotiator with our Chinese partners.
- How will it correlate to the
Main directions of the transport policy of the EAEU?
- System work
on the list of infrastructure projects is an important part of the activity of
the transport sector of the EEC and the competent authorities of the partner
countries, including in the framework of this document. It will define the
entire sequence of actions in order to create a common market for
transportation services and the common transport space of the Union. We have
almost finished developing the Main directions, and in late December we plan to
report the results to heads of states within the Supreme Eurasian Economic
are equal conditions for market access of transport services and
infrastructure, creating competitive environment, harmonization of transport
conditions and rules, and effective use of the common transit capacity. This
will eventually lead to lower transport costs, increased traffic, increased
availability of transport and citizens’ mobility.
- Adamkul Orokeevich, have you
analyzed the indicative cost of all these projects?
- Based on
those data that we have received from the countries, the total volume of all
the projects is more than 30 billion dollars. But it's very conventionally,
because, again, they are at different degrees of development and
implementation. The cost of complex infrastructure projects is built at the
stage of feasibility study, but it can evolve, sometimes significantly, because
the transition from design to implementation could take several years.
- Does profitability of projects matter?
- Our goal is
to develop a package of proposals. The EEC is neither a financial institution,
nor an investment company. At the same time, our colleagues from the
international infrastructure banks believe that every dollar invested in the
Silk Road Economic Belt will bring a refund of 20 cent. This is high
profitability, as you might know. But it all depends on the project, for some
of them the expected payback period exceeds 20 years. And this is normal for
- How much money can be invested
by China in these projects?
- The financial
side of the issue is the subject of a separate discussion. Options of public
and private partnerships, participation in projects on co-financing terms or
crediting, or under concession are likely to be considered. Such proposals can
be already heard from the partner countries on the EAEU. In general, it is
about attracting financing from China, and the Union countries are very much
interested in that. It is too early now to discuss the potential volume of this