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Thursday, June 7, 2007
Poti-Caucasus Ferry Route at Risk
By M. Alkhazashvili
(Translated by Diana Dundua)
Armenia remains Russia's strategic ally in the South Caucasus. Armenia's
economic sector has been for a long time tied to the Russian market
although, currently, the Kremlin has no transportation links with Armenia.
Transportation blockade aimed to "punish" Georgia during the "spy row" last
October has negatively influenced Armenia in the process.
Last year, Russia unexpectedly blocked the Kazbegi-Lars customs checkpoint -
the only customs checkpoint controlled by Georgians on the Georgian-Russian
border. Russian authorities argued the checkpoints needed renovations. The
route continues to be blocked and it hurts not only Georgia's interests but
also those of Armenia.
The checkpoint at the Roki Tunnel is not well- controlled, linking Russia
with Tskhinvali separatist authorities.
Russia hoped that the Georgian administration would get accustomed to
travelers and cargo passing through separatist-controlled customs
checkpoints. However, the Georgian government is not supporting this idea.
As a result, Russia has lost its transportation link with Armenia.
The railway connection with Russia is very important for Armenia too.
Armenian experts calculated that Armenian economic sector was losing USD 500
million annually because of the closed railway via Abkhazia.
A while back, Armenia actively demanded that Georgia open the railway,
although they also asked Russia to allow Georgians to control the customs
checkpoints at Psou (Russian-Abkhaz border) and the Roki Tunnel. The Russian
authorities did not do this and later imposed a transportation blockade.
But to support Armenia's interests, Russia was obliged to help create the
Poti-Caucasus ferry route.
This ferry route doesn't make much sense as the cost to transport cargo
appears to be very expensive and if the railway via Abkhazia is reopened, no
one will need it.
According to the Chairman of Armenian Union of Industrialists and
Entrepreneurs Arsen Kazarian, currently the Poti-Caucasus ferry route is not
functioning, as it does not have any cargo to load. He also expressed
dissatisfaction about the tariffs for the route.
Armenian authorities worry that the new ferry route will not last long. The
Swedish company Reserve Capital Enterprising Corporation that controls the
ferry intends to sell 45 percent of the shares in the near future.
According to the Armenian newspaper Aiots Ashkher, the Swedish company wants
to attract funding from Armenian companies to reduce its business risk and
to decrease possible losses to the company as well.
The newspaper reports that when the Poti-Caucasus ferry route was opened,
the company bragged that cargo transportation would not take much time and
it would be cheaper compared to the Poti-Ilichevsk ferry route. Now it is
clear that the cost is approximately the same and cargo arrives in 2 days
instead of 7.
At the same time the owner of the Swedish company wants to be the sole cargo
transporter from Yerevan to Poti and this could put Armenians in a difficult
position. If the existing problems are not solved, the Poti-Caucasus ferry
route will have no future.
Thursday, June 7, 2007
Poti-Caucasus Ferry Route at Risk
By M. Alkhazashvili
(Translated by Diana Dundua)
Armenia remains Russia's strategic ally in the South Caucasus. Armenia's
economic sector has been for a long time tied to the Russian market
although, currently, the Kremlin has no transportation links with Armenia.
Transportation blockade aimed to "punish" Georgia during the "spy row" last
October has negatively influenced Armenia in the process.
Last year, Russia unexpectedly blocked the Kazbegi-Lars customs checkpoint -
the only customs checkpoint controlled by Georgians on the Georgian-Russian
border. Russian authorities argued the checkpoints needed renovations. The
route continues to be blocked and it hurts not only Georgia's interests but
also those of Armenia.
The checkpoint at the Roki Tunnel is not well- controlled, linking Russia
with Tskhinvali separatist authorities.
Russia hoped that the Georgian administration would get accustomed to
travelers and cargo passing through separatist-controlled customs
checkpoints. However, the Georgian government is not supporting this idea.
As a result, Russia has lost its transportation link with Armenia.
The railway connection with Russia is very important for Armenia too.
Armenian experts calculated that Armenian economic sector was losing USD 500
million annually because of the closed railway via Abkhazia.
A while back, Armenia actively demanded that Georgia open the railway,
although they also asked Russia to allow Georgians to control the customs
checkpoints at Psou (Russian-Abkhaz border) and the Roki Tunnel. The Russian
authorities did not do this and later imposed a transportation blockade.
But to support Armenia's interests, Russia was obliged to help create the
Poti-Caucasus ferry route.
This ferry route doesn't make much sense as the cost to transport cargo
appears to be very expensive and if the railway via Abkhazia is reopened, no
one will need it.
According to the Chairman of Armenian Union of Industrialists and
Entrepreneurs Arsen Kazarian, currently the Poti-Caucasus ferry route is not
functioning, as it does not have any cargo to load. He also expressed
dissatisfaction about the tariffs for the route.
Armenian authorities worry that the new ferry route will not last long. The
Swedish company Reserve Capital Enterprising Corporation that controls the
ferry intends to sell 45 percent of the shares in the near future.
According to the Armenian newspaper Aiots Ashkher, the Swedish company wants
to attract funding from Armenian companies to reduce its business risk and
to decrease possible losses to the company as well.
The newspaper reports that when the Poti-Caucasus ferry route was opened,
the company bragged that cargo transportation would not take much time and
it would be cheaper compared to the Poti-Ilichevsk ferry route. Now it is
clear that the cost is approximately the same and cargo arrives in 2 days
instead of 7.
At the same time the owner of the Swedish company wants to be the sole cargo
transporter from Yerevan to Poti and this could put Armenians in a difficult
position. If the existing problems are not solved, the Poti-Caucasus ferry
route will have no future.