Officially opened in 2000 by Russian, Iranian and Indian representatives, the transport corridor (ITC) South - North connects the European community countries via Russia - Iran - India to the South and Southeast Asia states and the Middle East. ITC is a combined railway - waterway route passing through: port Mumbai (India) - Arabian sea port Bandar-Abbas (Iran), further through the Iranian soil to the Caspian port of Enzeli (Iran) – across the Caspian sea to port Olya (Astrakhan, Russia) – by Volga-Baltic system of the rivers and channels to river ports of Moscow and seaport in Saint Petersburg (Baltic sea) or port Murmansk (Kola Gulf), and further to the Western Europe.
Direct delivery of containers from port of Enzeli (Iran) up to the Russian ports on the Black and Azov seas, and further to ports of the Mediterranean Sea is also possible. Transportation of goods by main ITC channel South - North (India – the Baltic sea) is at least 30 percent cheaper and twice faster, than transportation through Suez channel – up till now the only way of delivery from the South Asia to Europe. For example, ITC shortens a traveling distance from India to Russia from 16 thousand km. to 6 thousand. It allows reducing a transportation time of Indian goods to Europe, and in particular to Scandinavian countries, by two weeks.
Earlier the transportation fee reached up to 70 percent of the cargoes' cost. Due to depreciation of transportations through ITC service, Indian goods became much more competitive on the European and on the global markets.
Development of ITC promoted creation of an additional line: port Aktau (Kazakhstan) - port Turkmenbashi (Turkmenistan) and construction of a branch line Uchkuduk-Nukus (Uzbekistan). It allows transporting of cargoes from the adjoining to the route areas of the Central Asia and Southern Kazakhstan.
The ITC`s opening construction gave a push to capital investments in ports and infrastructure of the countries taking part in the project.
From 11 seaports on the Caspian Sea there are 3 Russian, 5 Iranian, and one of belonging to each ex-soviet republic - Azerbaijan, Kazakhstan, Turkmenistan.
Russian port in Astrakhan is able to process up to 2 million tons of cargoes a year, but its infrastructure will be unable to cope with escalating grow of goods flow. Nonfreezing port Olya (Astrakhan) that was designed to have a processing capacity of 8 million tons a year has the greatest prospects. Russia appropriated more than 7 billion dollars till 2010 for ITC development. Russian Minister of transport Sergey Frank has noted, that minimum of $250 million must be allocated in 10 years in southern part of the corridor in the Astrakhan area alone. (For comparison: from 1999 to 2002 Russia has allocated only $29 million in development of all its ports, including 12 million for modernization of three ports on the Caspian sea).
More than $100 million dollars were spent in 2003-2004 on the construction of 49 km. long branch line to access port Olya, and the maintaining of regular trains movement. The line was opened on July 28, 2004.
Azerbaijan, Kazakhstan, Iran and Turkmenistan also prioritize highly the development of seaports.
In 1999-2000 Azerbaijan invested $15 million dollars in port of Baku. In the same time, same sum was invested by Turkmenistan in port Turkmenbashi. Kazakhstan poured about $80 million on port Aktau.
Iran invested $150 million in ports on the Caspian Sea and in the Persian Gulf (including attraction of 30 million in foreign funds). $40 million went in 1999-2001 to the reconstruction of Amirabad port (the Caspian Sea), 15 million for the port of Enzeli (the Caspian Sea).
Iran received appeals from 17 countries interested in usage of the ITC South -North: Qatar, Bahrein, Kuwait, Iraq, Pakistan, Sri Lanka, Oman, South Korea, Malaysia, Singapore, Thailand, Lithuania, Belarus, Latvia, Finland, Kazakhstan and Armenia. Kazakhstan and Armenia officially expressed their wish to participate in the project. Among probable candidates for participation in ITC are: Turkmenistan, Saudi Arabia, United Arab Emirates, and Indonesia.
Owing to the South -North corridor, trade relations between Finland and India rose to a new level, as Finns are interested in purchases of provisions and other perishable goods.
The analysis of freight traffics reported at Russian Federation State council session on January 2003 showed, that 5000 containers pass annually from India alone through the ports of the Baltic countries, Finland and Saint Petersburg, transporting tobacco, medicines, tea and other goods of the Indian export.
Russia annually delivers to India through Saint Petersburg's and the Ukrainian ports on the Black sea more than 100 thousand tons of the Russian manufactured paper alone.
The annual commodity circulation between Europe and Asia reaches today about $600 billion, of which 250 billion - between Europe and the countries of the Southeast Asia.
The goods largely are transported through the Indian Ocean, the Suez channel and the Mediterranean Sea: a route, which is lengthy, overloaded and limited. For this reasons the role of Indo-Iranian-Russian corridor in the global economic transactions will grow very fast. Owing to ITC South - North, Russia becomes the largest intermediary and an irreplaceable element of economic relations between the United Europe and the "economic tigers" of the South and Southeast Asia.
Conclusion:
Significance of such inter-regional transport resource as ITC lies not only in its profitness for Moscow. It is also the most powerful lever of geopolitical influence on a multitude of countries and international processes. First, ITC strongly pulls together Russia and India, putting New Delhi in economic and strategic dependence on Moscow's policy, as, except for reduction the Indian export prices, the corridor has transformed this country into a transit state for its Asian neighbors, rising Indian status in the region.
Secondly, from the point of view of international relations, Iranian part in the project is highly consequent. Iran, whose confrontation with the USA is on the verge of military action, appeared in the key part of the transport route, necessary and favorable for a large amount of European and Asian states. Therefore, Tehran turned to be an essential economic and even political partner for many countries, including traditional American allies in Europe in the US struggle against terror, not to mention the European opponents of America.
Undoubtedly, this situation weakens the American position in region, creating additional difficulties in case of a need to apply military pressure on Tehran.
And this, again, serves the interests of Russia that opposes the antiterrorist actions of the USA in the Middle East.
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