Trans-Caspian International Trade Route (TITR): Silk Route of the Present Day

^ From China to Turkey – Image Courtesy of Jim Vallee at BigStockPhotos.com

A Novel Concept

August 3, 2015 was a day of celebration for the delegates gathered in Baku, Azerbaijan. These representatives from member countries of the Trans-Caspian International Trade Route (TITR) has gathered to welcome the Nomad Express.

A container train, the express began its journey in Shihezi in Northern China and arrived at the Alyat Port in Baku, Azerbaijan after traversing 4,000km along the TITR that included crossing the Caspian Sea. This was the first successful transit along the TITR.

Exactly two months later, the second container train arrived in Georgia via Azerbaijan. Shortly thereafter, on October 15 to be precise, the TITR Coordination Committee set up a consortium to promote this project in a serious bid to attract customers to this route.

A 4,766km long multimodal freight corridor that includes 4,256 km of rail route and 508km of sea transit, the TITR is an ambitious project that will connect China to Europe via Central Asia and the South Caucasus. The route could be ready in a matter of months.

Promoters estimate the route will see trade of $1trillion by 2020. Member nations will of course gain millions if not billions from the trade expansion and infrastructure development. Forecasts place the annual capacity of the TITR at 27.5 million tons of containerized cargo.

Why is Infrastructure so Important?

Infrastructure is the support structure for the main areas of the economy. The importance of infrastructure is rooted in its ability to improve the productivity and speed of all the human and material resources necessary for commercial operations.

Infrastructure: The Foundation of Economic Development - Image Courtesy of Panimoni at ShutterStock.com

Infrastructure: The Foundation of Economic Development – Image Courtesy of Panimoni at ShutterStock.com

And the genuine, long-term driver of real economic growth is productivity expansion. Real economic growth is the total economic growth minus the inflation. This is precisely why economists worship top infrastructure. This is also the reason why they hold innovation in such regard.

Now, infrastructure deficit is not a very important issue in the developed world but it is so in the developing world. As the developing world seeks to launch their economies on higher growth trajectories, upgrading infrastructure becomes the first vital step.

Apart from boosting productivity, good infrastructure also improves the quality of life of the people. Infrastructure can be:

  • Economic Infrastructure that includes roads, railways, ports, airports, power stations, dams, telecommunication, and oil-gas pipelines

Financial infrastructure viz. banks and other financial organizations is a part of economic infrastructure

  • Social Infrastructure such as educational and health institutions as well as sanitation systems

Details of the TITR

Oceans and seas are the channel of preference for most of the prime intercontinental transport routes. This is because maritime transport is the most inexpensive transit route.

TITR will connect China and Europe via Kazakhstan, Azerbaijan, Georgia, and Turkey. You can judge the potential of the route from the fact that the trade between China and Europe totals to an astounding $600billion a year at present.

Good Infrastructure Boosts Productivity - Image Courtesy of Michael D. Brown at ShutterStock.com

Good Infrastructure Boosts Productivity – Image Courtesy of Michael D. Brown at ShutterStock.com

TITR Coordinating Committee is implementing the project. It includes representatives from the:

  • national railway companies of Azerbaijan, Kazakhstan, Georgia, and Turkey
  • ports of Baku and Aktau
  • State Caspian Shipping Company of Azerbaijan

Now, the idea for the TITR was mooted way back in. But it was the prospect of expansion of trade between significant markets in Eurasia from $800billion in 2014 to $1.2trillion in 2020 that catalyzed the execution of the TITR.

 

It also helped that these land-locked countries are located far, far away from major maritime routes. Then again, the global fall of crude oil escalated the importance of freight routes for countries such as Azerbaijan and Kazakhstan that had to find alternative income.

Azerbaijan and Kazakhstan produce oil and gas in significant quantities. In 2014, Azerbaijan produced 41.9 million tons of oil and gas condensate while Kazakhstan produced 83 million tons.

Container is Synonymous with High-Volume Trade Image Courtesy of gyn9037 at ShutterStock.com

Container is Synonymous with High-Volume Trade
Image Courtesy of gyn9037 at ShutterStock.com

Travelling via the TITR, a cargo train from China will reach Europe only in 14 days. This takes the average speed to 1,100km a day. The route will be the transit channel for 300,000-400,000 cargo containers by 2020.

This compares well with the 15-19 days that cargo trains from China currently need to reach Europe via Russia. And if you opt for the present maritime route between China and Europe, the cargo takes over a month to reach Europe.

Estimates place the trade along the TITR at $1trillion by 2020 and its eventual capacity at 27.5 million tons. Many believe, Azerbaijan stands to gain most from the TITR. The Baku-Tbilisi-Kars rail sub-route is the critical part of the corridor where oil is the commodity of focus.

Kazakhstan too will profit from the TITR. Its Zhezkazgan-Beineu rail route will complement the Baku-Tbilisi-Kars rail line to enable the shipment of containers to the port of Atkau.

By including the Alyat port in Baku, Azerbaijan and the Aktau port in Kazakhstan in the TITR, promoters have ensured that tariffs stay competitive. This makes life easier for the consortium that looks to rope in clients.

Finally

Relevant institutions of member nations need to coordinate their efforts in order to adjust their individual custom procedures and tariff policies. They also need to upgrade the capacity of the routes and stations along the TITR and its complementary routes.

Be as it may, the TITR is indeed a breath of fresh air in a land crying for development. It won’t come as a surprise if the TITR eventually triggers the development of numerous multimodal transport hubs in Eurasia.

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