_ Vyacheslav Ilyumzhinov, Professor, Eurasia Finance Ltd. Report at the 5thWorkshop“Developement of Transport and Infrastructure in Eurasia” within the IIASA research project “Challenges and Opportunities of Economic Integration Within a Wider European and Eurasian Space”. Laxenburg, 15 – 16 September 2015.
First of all, let me express my thanks to Dr. Pavel Kabat, Dr. Anastasia Stepanova for the kind invitation to attend the event dedicated to the problems of development of transport infrastructure in the Eurasian continent, and see you all worthy representatives of business and science, representing the original corners of the vast and beautiful Eurasia.
For me a great honor to welcome you not only as a guest from the multi-ethnic and multi-confessional Russia, but also as a representative of the Kalmyk people — a fragment of an ancient nomadic world, which for many centuries was essentially the manager of the Great Silk Way. This highway has played in the history of many countries of Eurasia role, do not consider my indiscretion, comparable only to that of the influence of the Gulf Stream on the nature and life of the peoples of the northern hemisphere.
Given the fact that I represent and the Republic of Kalmykia (SC), one of eighty three (83) regions of the Russian Federation, bearing in itself life-giving currents of Europe and Asia, let me say a few words about my native land.
Kalmykia is located in the southeast of the European part of Russia, between the great European river Volga and Egorlyk, a tributary of the Don River, and is washed by the Caspian Sea. If the north from us is world renowned city of Volgograd (Stalingrad), in the south of the river Kuma we touch with the Caucasus republic of Dagestan, the most southern regions of Russia. The total area of the Republic of Kalmykia more than 76 thousand sq. м. km, which is equal to the territory of Belgium, Holland and Luxembourg. The Kalmyks are from Central Asia, which are the only Mongoloids by language and Buddhists by faith, living in Europe.
Great Silk Way that connected more than two thousand years ago Europe and ancient China, and it was for all the fifteen hundred years of existence of this overland road a natural habitat residence of my ancestors involved with Attila in search of the horizon of where the sun disappears, sought in the campaigns of Chingis – Khan to wash horses in the latter waters of ocean.
Just as the Armenians are proud to say that they have tamed Golden Prague inhabitants drink coffee, Kalmyks are experiencing similar feelings, because thanks to our ancestors, tea was brought to the Tsar of Russia and the entire Muscovites first learned the taste of this wonderful drink. And these amazing discoveries have occurred because the Silk Way has always served for the benefit of all the people living in the East and in the West, performed the main its purpose — to make the life of the inhabitants of the continent better and safer.
President of Kazakhstan N. Nazarbayev put forward the idea at the St. Petersburg Economic Forum (June 10, 2007), to revive a project to build a water channel «Eurasia», which aims to connect the Caspian Sea with basin of Azov and Black Seas on the Kuma-Manycheskoy lowland, the ancient riverbed of the Strait, millions of years ago, connects the Black and Caspian Seas.
Leaders of Russia Vladimir Putin and Dmitry Medvedev reacted favorably to the proposal of the President of the neighboring country that inspires us. We consider the transport corridors through Kalmykia as integral and essential elements of the «modern Silk Way».
Being historically, geographically, mentally deeply involved in the processes taking place on this path in the ancient times, Kalmyk want to contribute today in this huge-scale work, unfolding in front of our eyes.
Documentation of the channel length of 650 km was first developed in 1936. Most of the channel will take place on the territory of Kalmykia, so the inhabitants of our republic are the most ardent supporters of the idea, and are actively lobbying for it. Representatives of the Republic met with officials and businessmen of all Caspian states and everyplace have found understanding and support.
The channel will begin just south of the district center of Lagan on the shore of the Caspian Sea, where it is planned to build a port on 2-3 million tons (Phase 1) and then pass to the side Chogray Reservoir (Lake Manych) and further the channel will come to the Sea of Azov between the towns of Azov and Yeysk. Port Lagan is supposed has to be connected by the railway with station Ulan Khol located 42 km from the city, providing access to the railway Moscow-Astrakhan-Baku.
The cost of the channel varies $ 5-6 bln. We are interested in the fact that the channel was the most technologically advanced and safe from all points of view. For this purpose, it must be covered with a waterproof material to prevent filtering and lifting underground salty water.
Cargo throughput exceeds 3 times the channel capacity of the Volga — Don, the way which is 650 km longer before access to the sea, and gateways more by 3 times (5-6,compared to 18). With a width of 120 m and a depth of 6.5 m new waterway, indeed allows all Caspian neighbors feel the maritime powers and create a fleet of ships of 12 -14 thousand tons. The trip will be 3 days compared to 7 days at the Volga — Don.
As a result of reducing the cost of maintenance of gateways and delivery of goods, the savings will be around $ 3.2 per 1 ton of cargo. Time of transportation of goods from Asia to Europe will be reduced from 1.5-2 months to 10 days.
Caspian — Black Sea waterway will spur technological level of the economy. To supply electric energy the water channel, it is expected to take about 90 MW of electricity after the completion of a wind farm with a capacity of 300 MW. On factor of wind potential, Kalmykia shared 1 — 2nd place with the area of Jungar gates in Kazakhstan during the stay of the Soviet Union. Observation of wind flows around Elista, the capital of Kalmykia, made by experts from Germany, in the new century has shown that the rate is even higher, and single units with a capacity of 3 — 6 MW can be installed in Elista wind farm which is under construction.
In the channel will flow fresh water (1.5 — 2 cubic kilometers), which will develop a drip irrigation system along the route. Water can be taken from the northern part of the Caspian Sea, which is slightly salted water and from the bottom current of Volga, before mixing with seawater. Water usage in a few cubic kilometers of 250-260 cubic kilometers of annual runoff, will not damage aqua systems Volga and the Caspian Sea.
The objections of ecologists about the destruction of the unique places of rest for the birds removed by simply changing the route of the channel by its construction parallel to the existing water bodies. The Government of Kalmykia organized in 2011, the International Ornithological Conference, where they arrived well-known experts from many parts of the planet. Direct inclusion of satellite monitoring showed that our birds, permanent guests at Lake Balaton, Hungary.
Three bird species are unique to Eastern Europe, they come from Africa in the summer, only in Kalmykia, is one of the first places in the country for a variety of birds. This creates a basis for the development of ecotourism. Creation of the park, such as in Agmon Ahula in Israel, which is visited by 400 thousand tourists from all over the world. I hope such a solution of the problem satisfy the most avid critics of the project.
One of the major problems of calculations on payback channel «Eurasia» is the lack of information on the potential volume of cargo in the Caspian basin. As we can see, this is the second, after the expert opinion of ecologists, and is the reason a certain pause from the Russian authorities. Officials have not decided the decision of the channel «Eurasia» and the construction of the port in Lagan Kalmykia, apparently due to concerns that not enough cargo for profitable operation of existing ports, not to mention the new ones..
Kalmykia view of port workload is more optimistic. According to our estimates, after commissioning, the channel «Eurasia» will be both timely and cost-effective. Moreover, there is a possibility for the construction of a new railway from Bassy to Elista (250 km) to allow via the station Aksaraiskaya take cargo from Central Asia and from the nearest ports. They can be redirected to the deep-sea port of Taman on the Black Sea.
Trade is the primary element, based on a natural interest and accurate arithmetic calculations, which is all-powerful enzyme of development and boost cooperation in all spheres.
At the same time, the construction of transport infrastructure is the primary link in a chain of trade turnover growth. Highways attract traders and roads are being built by people not related to trade. Water carriage is the cheapest and the most demanded: that is why it accounts for over 80% of world trade.
Currently, Asian countries show the highest economic growth rates in the world. At the same time the population reached 4.3 billion people, and by 2050 will add another 1 billion. It is there hundreds of millions of new consumers are growing, which will not only rotate the flywheel of the global economy, but surely will seek for the highest standards of consumption by taking as a sample European model.
In the middle of the century in Central Asia would be living 182 million people, in India — 1.69 billion, in China — 1.3 billion. The engine of the world economy is moving here.
Currently, 8 million containers from China to Europe annually transported mainly by water. But the appearance of alternative routes in the Caspian region will certainly attract the attention of carriers and reduce transport fares. Construction of «Eurasia» channel will enable carriers to ship «river-sea», to feel confident enough to compete with the land competitors.
According to our estimates, after commissioning, the channel «Eurasia» will be both timely and cost-effective. Moreover, there is a possibility for the construction of a new railway from Bassy to Elista (250 km) to allow via the station Aksaraiskaya take cargo from Central Asia and from the nearest ports. They can be redirected to the deep-sea port of Taman on the Black Sea.
The volume of cargo will sharply increase after removing of sanctions against Iran. One of the impulses of modernization can become an implementation of the ideas announced by the Minister of Energy Majid Maggio, in August 2012, on the construction of a channel connecting the Persian Gulf with the Caspian Sea, valued at $ 7 billion and a length of 600 km. Half of the distance will pass on river beds Kyzyluzen and Kerhe. Implementation of the project in conjunction with the channel «Eurasia» will create a through route from the Indian Ocean along the Volga to the Baltic Sea, via the Danube river to the North Sea, and through the Bosporus to the Mediterranean.
The presidents of Turkmenistan, Kazakhstan and Iran, at the station Akyayla opened railway linking Kazakhstan — Turkmenistan and Iran, the 3rd December 2014 In fact, it means that the window from Central Asia to the Indian Ocean broken through.
Iran has decided to increase the volume of transit cargo in 5 times, and to reach 50 million tones, similar work is being done in neighboring countries.
Azerbaijan has made one of the fastest economic breakthrough in the last 15 years. Even after the launch of the Baku — Kars (Turkey) at the end of this year, we are confident that in Azerbaijan there are loads for our channel.
Turkmenistan was included the top ten countries in the index of foreign direct investment to become an industrial — agrarian country. So, trade with Belarus has increased over 6 years up to 6 times. All this growth happens on the old transport network. But at this rate of growth, the issue of the construction of new transport corridors will inevitably arise.
An agreement on the construction of a railway line: Afghanistan — Turkmenistan — Azerbaijan — Georgia — Turkey. Considering a similar agreement with Tajikistan, Kyrgyzstan, and their plans to connect to the railway system in China, then in the near future, the transport geography of Central Asia will change dramatically.
Kazakhstan is most active, and has high hopes for the creation of a continental transport hub. For this purpose capacity of the port of Aktau on the Caspian Sea, increased from 12 million to 16 million tons. In September, 2014. President of Kazakhstan set the task by 2020 to increase the capacity of the port to 22 million tonnes. The special economic zone (SEZ) has been created, where annual production has already exceeded $ 1.2 billion.
The segment of the railway Zhezkazgan — Beineu is being built, which will deliver the goods all over the country in the latitudinal direction that brings loads of Xinjiang just to the Caspian Sea.
It should be noted that the distance from the growing north-western regions of China, in particular, from Urumqi to the Caspian Sea, is shorter than to Shanghai.
The potential volume of transit goods is evidence in favor of Caspian waterway both on along the axis of Europe – Asia and on Africa – Europe.
The new route will reduce by a third distance of transport of goods with the countries of the Middle East and for a quarter with the countries of South and South — East Asia.
The presence of a new corridor will provide the shortest access to Danube River and the water system throughout Europe. Vessels carrying out the transport of the rivers and seas will be able to quickly deliver the goods from the ports of the Indian Ocean directly to Vienna.
The world is changing rapidly. And there is no doubt that Europe and Asia will accelerate its movement toward progress, if the Great Silk Way will be revived in the twenty-first century, after five centuries of the hibernation, right before our eyes and with our participation.