Page 40 - bne_Magazine_June_2017

40 I Special focus
bne June 2017
There are as yet few takers at Aktau, the Western Gate of the New Silk Road.
Gateway to the New Silk Road
warehousing operations. China’s Jiangsu province has signed an MOU with the Kazakhs to invest $600mn into the SEZ.
Aktau, once a “secret” Soviet uranium mining city but now the mainstay of Kazakhstan’s oil industry, is striving
to do its part. Right now, cargo pass-
ing through the Western Gate is ferried across the Caspian Sea, with wagons and trucks chained to the deck, but Aktau is being prepared for containerisation.
The Western Gate is also set on pioneer- ing its very own SEZ. Manufacturing and warehousing operations will be relieved of taxes on corporate income, land and property, and of VAT on imported goods, as well as customs duties. But there are as yet few takers.
In an April 15 Forbes article which took a look at Kazakhstan’s “other hub”, Steve Huang, the CEO of China operations
for freight forwarding company DHL, said: "The rail connection from Khorgos to Aktau port will enable cargo to be transported along the Caspian Sea and the Caucasus to Europe as well as to the south through Iran to the Persian Gulf. With the new railway line connecting Georgia and Turkey, cargo can now also be shipped via Aktau over the Caspian Sea and then by rail through Azerbaijan and Georgia for delivery in Turkey and beyond."
China’s One Belt, One Road is comprised of six silk road land corridors said to make up an economic belt and a maritime silk road. There are three northerly land cor- ridors, two of which pass through Russia and one of which avoids Russia, taking the Kazakhstan route. The latter is known as the China-Central Asia-West Asia Cor- ridor, and runs from Western China to Turkey. It is the opportunity to avoid Rus- sia – so often involved in tit-for-tat trade sanctions with the West – that the Kazakhs will be counting on in attracting traffic.
“Our goal is to bring Kazakhstan into the top 30 economies of the world by 2020,” Minister of Finance Bakhyt Sultanov said in a country presentation at the European Bank for Reconstruction and Development (EBRD) annual meeting
in Cyprus on May 10. With the economy currently ranking around 50th place, that objective might not be entirely out of reach. But climbing any higher will depend on breaking the oil dependency. Khorgos and Aktau have a job to do. ”
Will Conroy in Prague
In January this year, a train pulled into
a freight depot in Barking, London. Carrying clothes and other retail goods, it was the first ever freight train to have crossed the 12,000 kilometres from eastern China to the UK. In April, the British repaid the compliment, waving through the first ever freight train to depart the UK for China. Both trains went via Kazakhstan.
Whether China’s One Belt, One Road infrastructure crusade – pushed by the May 14 One Belt, One Road summit in China attended by 29 world leaders – will reshape global trade is a trillion dol- lar question, but Kazakhstan is buying into the planned modern-day version
of the ancient Silk Road in a big way. The world’s largest landlocked country hopes to become no less than a great trade crossroads in the centre of Eurasia, linking to China in the east, Russia to the north, Iran to the south and, via the Caspian Sea, to Azerbaijan, Turkey and Europe to the west. If the dream can
be realised, it could even one day end Kazakhstan’s sometimes debilitating dependence on hydrocarbon exports.
Crucial to their New Silk Road trans- Eurasian transport, trade and logistics dream are two hubs: on the eastern side
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of Kazakhstan, right on the Chinese bor- der, is the well-known Khorgos Eastern Gate Special Economic Zone and dry port, while on the western extremity of the country, on the coast of the Caspian Sea and surrounded by desert, is the Aktau Western Gate.
As recently as 2010, there was little to see around the Khorgos Eastern Gate but sand dunes, despite grand plans to build an entirely new city, a new Dubai even. Now each month around three or four score trans-Eurasian trains, amounting to approximately 7,000 TEU, trans-ship goods through Khorgos’s $250mn state of the art terminal.
The goal is half a million TEU per year, but the dry port is currently contending with the fact that most China-to-Kazakhstan cargo has to go via the 50% Russian- owned Dostyk port to the north. That’s because Astana signed a deal on the facil- ity that rules out diverting shipments to alternative terminals. Still, Khorgos can at least by now boast of trains connecting 11 European locations with 27 Chinese cities.
Away from the dry port is the wider Khor- gos Eastern Gate SEZ which is being read- ied for large-scale manufacturing and