To Abstain from Tariff Policy Dictate

Georgia strives not only to become a tourist Mecca of the entire Caucasus region, successfully using its natural resources and human potential for this, but also realizes concrete projects to become part of the Great Silk Road. It is about creating a modern rail service and strengthening the maritime infrastructure to attract goods from all over Asia.

Already in November this year, Georgia intends to begin implementing a new infrastructure project - the construction of a new port of Anaklia on the Black Sea. The first stage of construction costing $ 586 million is designed for the port's capacity of eight million tons of container cargo per year. The new terminal of the deepwater port of Anaklia should open in 2020. By this time, its capacity should increase to 20 million tons per year. With the completion of this project, the Georgian authorities expect to double the throughput capacity of their country in terms of container shipments between the West and Asia.

This was stated at a recent press conference by Ambassador Extraordinary and Plenipotentiary of Kazakhstan to Tbilisi Ermukhambet Yertysbayev.

The increased interest of the government of this Caspian oil republic to Georgian transport projects is explained: Kazakhstan investments occupy a significant part of the budget of the implemented initiatives. Suffice it to say that the owner of the Batumi terminal is the Kazakh national company KazTransOil, which in 2006 acquired it for 49 years for $ 92 million. This acquisition was dictated by the need to obtain a direct exit for the main Kazakhstani export goods, oil and grain, through the Black Sea to the markets of the Middle East and Europe.

However, what does the Kazakh-Georgian deal and joint projects have to do with Azerbaijan? This is most direct. All these years, oil and grain from Kazakhstan went to the Black Sea terminals of Georgia through Azerbaijan, which brought considerable revenues to the local budget. The volume of transit of goods, oil products and grain, reached six million tons a year. Until 2015, this level was preserved, but today the pace has declined. The reason is that the Caspian Pipeline Consortium (CPC) pipeline began to operate, and Kazakhstani oil began to move directly to the world markets through the territory of Russia. It is faster and cheaper than transportation over the Caspian Sea and then through the territory of Azerbaijan to Georgia, and then again transshipment on the Black Sea. Therefore, in Astana, they thought about withdrawing from the deal on the Batumi port, which became unprofitable, and about the sale of this facility. In addition, because of the construction of the new port of Anaklia in a couple of years, Batumi will serve only civilian ships and become a tourist center.

There is another reason that Ambassador Yertysbayev diplomatically bypassed (or held back) at a meeting with journalists. As Georgian mass media write, the problem lies in the fact that Azerbaijan, on its way to Georgia, tries to monopolize not only road transport, but also railroads. Tariffs unilaterally raised by the Azerbaijani side nullify all efforts of Georgia to use its transit potential. Therefore, the sounded proposal about the need for Kazakhstan to withdraw from the Batumi project is dictated by pragmatic interests.

By the way, this topic was touched upon at the XI Eurasian forum KazEnergy, which was held in Astana this September. Asked by a correspondent of www.abctv.kz about the prospects of reaching an agreement with Azerbaijan on the adoption of a single tariff throughout the Caucasus corridor, Georgian Energy Minister Ilya Eloshvili found it difficult to answer.

"We will build new ports and create infrastructure. And although it is difficult to guess what the situation will be, we must be ready for the moment when the political and economic conjuncture will be favorable. In addition, it is not only about the transit of Kazakhstani cargo, but also about the attraction of goods from all over Asia - China, India... Georgia intends to become part of the Great Silk Road," Eloshvili said.

But even if the Georgians can agree with the Azerbaijanis, then there is no guarantee that these agreements will be actually implemented, and tariffs will be reduced, the website writes.

The conclusion suggests itself: Azerbaijan should moderate its monopolistic appetites and should not dictate its tariff policy to its neighbors, whom we should be friends with. Otherwise, the flow of goods not only from Kazakhstan, but also from China and India will bypass the country and find a way to the European market in other directions...--0--