Ekonomichna Pravda reports…
Russia has prohibited transport of Ukrainian goods and Ukraine tried to establish a road around [Russia]. However, the “Silk Road” project did not work. What happened?
After the introduction of transit embargo on Ukrainian goods by Russia in early 2016, Ukraine has joined the international project “Silk Road” -a route circumventing Russia.
Not long after that, the first, experimental train, which included both a railway and ship across the Black and the Caspian sea, was launched along the route out of the port Chernomorsk, through Georgia, Azerbaijan, Kazakhstan, and into China.
Highest rank officials have taken part in the launch ceremony: the Minister of Infrastructure, Andriy Pyvovarskyi, the Minister of Economic Development, Ayvaras Abramovichus, Deputy Prime Minister, Hennadiy Zubko, and also the head of Odessa Regional State Administration, Mikheil Saakashvili.
The first train attracted attention in Europe and Asia. A special map was published on the website of Ministry of Infrastructure, with the help of which one could track online the movement of the train.
It was mentioned that the train will start working in a business regime within several weeks. However, from the beginning something went not according to plan. Subsequently, all the people involved in the launch have mentioned this project less and less, and then the project completely disappeared from the information field of Ukraine. What happened?
On 15 January 2016, Ukraine launched an experimental freight train to China, along “the Great Silk road”, circumventing Russia by going through Georgia, Azerbaijan and Kazakhstan.
After the launch, then Minister of Infrastructure, Andriy Pyvovarskiy, said the train could start working fully starting March 2016.
The train was composed of ten cars and twenty 40-foot containers. The cars were partially empty, and partially loaded with metal products* to be offloaded in Georgia. The empty cars were to be loaded with products in China.
It was expected that the duration of the route to Dostyk, on the border of China and Kazakhstan, would be 11-12 days. Back then, the Ministry of Infrastructure informed us that the test train was launched to workout the route, and for operators of the train to establish mutual working relationships in the participating countries.
The demonstrative train went through the Black Sea, and through main stations, the port of Batumi, Alyat, Aktau-port, Beyneu, Zhezkazgan, Balkash-1. After 15.5 days the train arrived in its final destination, to the Dostyk station, which is on the border of PRC. After that, the cargoes should have gone to the large industrial cities of China.
After that, problems began. The train has been stuck at the Chinese border, and it could not return for a long time over the absence of clients. Only on 7 April the train was dispatched empty out of the Dostyk station, and it arrived in Chernomorsk on 19 April.
The Ukrainian Railways have said the regularity of the train would depend on market demand. The company said in April: “At this time, the potential traffic flow is being studied, which can be reoriented into a transport train. We are looking at making this a regular service.”
A train that couldn’t
Questions about the way have already appeared during the preparation phase of the project. The experts talked about a significantly longer delivery time in comparison with the habitual route through Russia, and about the regularity of trains, which prevented businesses to schedule loads.
Doubts have also risen around the two maritime stages of the route: the train was exported on ferries across two seas. That is four entries into a port, ride on a specially equipped ferry, and a high probability of adverse weather.
According to an expert in river and maritime transport of the Ukrainian Logistic Association, Oleksandr Lysenko, first they should have studied the demand for this route.
Was this done?
The Ministry of Infrastructure said domestic producers of carton, stone, ceramic tiles, rubber products, metal constructions, furniture, food and agricultural products are interested.
Judging by the fact that the train did not become regular, there did appear any demand.
After two and a half years, EP (Ekonomichna Pravda) asked Ukrainian Railways what is going on with the project since nobody announced its closure.
It seems nobody is engaged in it. We received the same answer from the company which was publicised already in April 2016. [Exactly] word for word:
“At this time, the potential traffic flow is being studied, which can be reoriented into a transport train. We are looking at making this a regular service.”
During this time, the company only determined the single comprehensive cost of transport on the route: Slawkow (Poland) – Altynkol’ (Chinese-Kazakh border) for a 40 feet container. It is $4281, and the journey takes 15 days. We did not receive any information about a commencement of regular work of the project from the company.
For the future
Experts the EP has asked say the project has failed because it could not compete with other variants of transporting cargo from China to Europe.
Oleksandr Kava says:
“Other routes had been more attractive than the so called Transcaspian route, since it has many intermodal moments: [that is] reloading from the railroad to one ferry in the beginning, then another ferry. The number of container trains on the Eurasian route through Kazakhstan, Russia and Belarus is increasing. While the Transcaspian corridor has stagnated.”
Ivan Ous, an expert of the Institute of Strategic Studies also acknowledges the economic bankruptcy of the plan:
“The project had political pluses. It was a period when Russia began to restrict our export. Back then it was important. However, it is more expensive, and the business did not immediately agree with it.”
Former Deputy Minister of Infrastructure, Volodymyr Shul’meyster says:
“The first question is cost, the second is regularity. The Businessmen cannot make orders if they are unsure whether the train will run.”
That is a one important aspect, which has to do with marketing. According to Shul’meyster:
“Problem was in how to correctly “sell” this route. The Ukrainian Railways have a weak marketing policy that’s why they cannot sell normally, even though there is a demand for such a train. Finding a cargo on both sides is a major problem. The more full [the train] will be, the cheaper it will be.”
Does this project have a future? Opinions on this differ. Kava said:
“It doesn’t have any future. Even after the route got cheaper, the dispatchers prefer the Russian option because in that case the cargo moves on the railway the whole time. They increased the speed of traffic and the Transcaspian route with two ferry lines lost in the competition.”
“I would not abandon this idea. It is an expensive option but one that allows not trading through Russia. Moscow has created a significant problem for us, we have a choice, either expensive or nothing. I think we will use this option.”