Any successful development of the Middle Corridor will at best take years and at worst remain uncertain, Franz J. Marty writes.
The Middle Corridor, a transport corridor meant to connect China to Europe via Kazakhstan, the Caspian Sea, the South Caucasus, and the Black Sea, has received increasing attention and is often displayed as a main future thoroughfare and replacement for the Northern Corridor between China and Europe, which goes through Russia. However, while efforts to develop the Middle Corridor are underway, there are also various questions; one uncertainty is to what extent Georgian Black Sea ports will be able to handle the increased cargo in a way that is economically viable.
The Middle Corridor, which is also called the Trans-Caspian International Transport Route, is not a new idea. It is based on an agreement that the national railway companies of Kazakhstan, Azerbaijan, and Georgia signed back in 2013. That said, the Middle Corridor only attracted a significant deal of interest after the start of Russia’s Special Military Operation in Ukraine in February 2022 and the subsequent imposition of ever-broader sanctions against Russia by the EU led European shippers to turn away from the Northern Corridor.
Given that parts of the Middle Corridor have long been in use, it is not easy to pinpoint the first shipment that went through the Corridor. However, officials only recently, namely in late May 2024, hailed a pilot shipment of three lorries from China as the first co-ordinated and streamlined use of the Corridor. It was later, in early July 2024, followed by a larger convoy of 26 Chinese trucks.
In any event, many see great potential in the Middle Corridor. For example, a detailed World Bank study published in November 2023 stated that cargo volumes transported along the Middle Corridor are expected to triple by 2030.
However, the same study also pointed out various current problems affecting the Middle Corridor, including insufficient coordination, issues with ports on the Caspian and the Black Sea as well as railway interconnections, and delays at border crossings.
As such, Georgian ports are among several key points along the Middle Corridor to watch. That said, one of the main problems with currently existing Georgian Black Sea ports is, according to the World Bank, that the dwell times of containers are “relatively high” and “longer than in modern container ports”, amongst others due to the inadequate maritime and on-shore infrastructure at such ports.
To remedy this, the Georgian government plans to build a brand new, modern deep water port on Georgia’s Black Sea coast, namely in Anaklia. The Georgian Minister of Economy recently described this planned port in Anaklia as “the most important element that many international companies expect» for the Middle Corridor to operate «at its full potential.”
That said, while Anaklia Sea Port does, at the time of writing, only exist on paper, the Georgian Ministry of Economy has asserted that work on the design and construction of the harbour basin and breakwaters is to start already in late August or early September 2024. Given that the tender for dredging and building of breakwaters was, as of mid-July 2024, still open, this appears, however, to be a very ambitious timeline.
Even if all should go smoothly, the Georgian Ministry of Economy has stated that it is expected that it will take three years from the start of construction until Anaklia Sea Port becomes operational and that the commencement of the port construction itself is envisaged as starting within nine months after a concession agreement is signed with the winner of a separate tender. Given that negotiating the latter will take several months, this means that Anaklia Sea Port will not be ready for at least another four years.
Whether or to what extent other ports could bridge this gap is uncertain. APM Terminals, which currently handles the lion’s share of Georgia’s Black Sea container trade in the port of Poti, in March 2024 announced its willingness to invest at least 200 million USD to expand and modernise Poti port. However, as both, APM Terminals and the Georgian Ministry of Economy stated, as of mid-July 2024, negotiations on this are still ongoing; it is not clear whether and when this proposal might get a go-ahead. Even if it should, APM Terminals indicated that “the building timetable is projected to take up to 36 months”.
In any event, Anaklia Sea Port still is the main focal point, but is also subject to various controversies that raise additional questions. Before and after the Georgian Minister of Economy announced on May 29, 2024 that the contract to construct and later operate the port itself in a public private partnership with the Georgian government will be awarded to a Chinese-Singaporean consortium led by China Communications Construction Company Ltd. (CCCC), there have been accusations of foul play, claiming that the Georgian government tilted the tender in favour of the Chinese consortium. This is regularly attributed to an alleged recent pivot of the Georgian government towards China and Russia and away from the West. Moreover, critics also express worries about the track record of CCCC, citing examples of CCCC having been involved in cases of briberies in other countries around the world.
Scrutinising such criticism directly relating to the Anaklia Sea Port project reveals that it is mostly based on speculations and the conjectural argument that the Georgian government’s lack of transparency on the details of the project must mean that something nefarious is going on. The Georgian Ministry of Economy rejects this and assures that the whole project, including the selection of partner, is being conducted in an open and transparent manner.
Be that as it may, these continuing controversies have the potential to significantly delay or even threaten the construction of Anaklia Sea Port and, by extension, the development of the Middle Corridor. This is all the more the case as, in 2020, various controversies, including charges of money laundering against involved individuals, eventually sank an earlier project to construct a deepwater port in Anaklia by a consortium that included major US companies.
In view of all this as well as other issues, any successful development of the Middle Corridor will at best take years and at worst remain uncertain.
