The integration of the Dagestan Republic in the foreign trade of Russia on the southern border is increasingly becoming a subject of discussion and interests of different forces: the Russian North Caucasus there is a real economic potential and key benefits here from Dagestan. However, in order to enter the foreign trade market the most southern of the Russian entity will have to “defeat” the most powerful functionaries of the Caspian basin.
The investment project “Caspian transport-logisitically complex” of media and references in the media would envy even the most high-profile and popular projects at the Federal level. Since April this year there was no month to discuss the prospects of “mega-idea” called “Caspian hub” did not go in the top Federal agencies. New expansion project of the Caspian potential of Russia already had time to christen “a major construction project for the North Caucasus Federal district”, this means that before the Dagestan and Makhachkala international trade port opens up new prospects of foreign trade relations.
Makhachkala port: competitiveness against “sleeping crisis”
The need to create on the basis of the only on the southern borders of Russia ice-free port in the Caspian hub primarily due to the increasing speed of traffic, which over the past two or three years grew faster pace. The problems and disadvantages that, unfortunately, the Makhachkala port will not allow it not only to enter new markets of the Caspian economic zone, but even to improve their own ROI. According to the plans of Minkowksi Russia, thanks to the project “Caspian hub” in the Makhachkala port will be inspired with new life, while exports will increase to values of largest Caspian port of Iran, Kazakhstan and Azerbaijan.
In the Caspian, Russia has three functioning ports of Astrakhan, Olya and Makhachkala. Not only that, the first two are not located on the coast and inside the continent, in the marine zones of the Volga river, so they also can’t boast of year-round ice-free waters. In this Makhachkala wins at Astrakhan and Olya port and the Northern port of Kazakhstan. However, for the beautiful presentation and far-reaching plans are the requirements, constraints and all sorts of the need, the solution to which is presented only on paper.
In an interview, the Dagestani media adviser to the Minister of the Russian Federation for the North Caucasus Rizvan Gazimagomedov clearly identified two conditions that must be met Makhachkala sea transport hub: “first, the Makhachkala port must be connected to a single logistics center with the international airport of Makhachkala (“Uytash”), which recently opened a new terminal, and next year should open another terminal for international flights. The airport also needs to receive the stevedoring complex (for handling of containers, including refrigerated). Second, in the port should be a new storage and infrastructure that can handle the peak load of the supply of goods is not only container but also bulk. You need to understand that we are talking about millions of tonnes of cargo and billions of tax deductions in budgets of all levels,” said Gazimagomedov.
The fact that the Makhachkala sea trading port time to pull up from the “sleep crisis” to bring it into conformity with the requirements of the international freight traffic was clear without the “Caspian hub”. However, this project has already constructed its main curator of the odes by Baisultanova to Federal, gives hope that the “paper” plans and ideas will find, finally, their actual implementation. Otherwise, plans, and ideas, and the project itself is worthless.
Alignment — to the South!
Of course, launching of the project “Caspian hub”, the eyes of Russian interests, was directed to Iran, the total trade turnover which last year amounted to 104 million dollars. Over the past three years, from Iran to Russia by sea was imported over 1 million tons of cement and shipped to export the same amount of grain. Moreover, his interest in the project for the transformation of Makhachkala in Russia’s largest knot in the Caspian sea has already shown the largest Iranian investment company. At the moment we have signed documents on creation in Dagestan of two joint ventures — a large cattle-breeding complex for processing of meat and dairy products and a logistics centre with warehouses of temporary storage of agricultural products and its processing. And here the role of the “Caspian hub” is difficult to overestimate — almost all of this turnover, undoubtedly, will be “on the water”, and thus, the Makhachkala port will have to meet the highest requirements of international Maritime transportation.
In this respect, it is remarkable the words of the Minister of the Russian Federation for the North Caucasus Lev Kuznetsov, who noted that “Caspian hub” will be an invaluable pillar of foreign economic relations of Russia with the countries of Asia and the Arab region: “the Goods will go through not only in Dagestan but in the adjacent country, so over time you need to connect to the work of regional ministries and agencies of other entities. In addition, it is the only ice-free harbour of the Russian Federation in the Caspian sea, which can accommodate ships with a displacement of 12 thousand tons”.
However, many experts and journalists have already managed to cast doubt on the prospect of the project and even the possibility of its realization. So, a journalist with the Dagestani newspaper “Novoe Delo” Ali Gasimov believes that before thinking about implementing such a large project, the Makhachkala sea port “first should at least recoup the investment that has been made in the development of its infrastructure in the past decade, and it’s the least RUB 2 billion by the beginning of 2010. In 2011-2015 the cumulative net profit of Murmansk commercial seaport amounted to 278 million rubles, or about any of return of the question”.
However, the reality was quite different. In fact, the port of Makhachkala, which became the centre of the project “Caspian hub”, last year increased its net profit by almost 14 times. In monetary terms this figure is 161,5 million. According to base “SPARK-Interfax”, the proceeds from sales rose 3.9% to 657,4 million rubles, while cost of sales fell by 3.9%, to 344,5 million. Gross profit and profit from sales last year increased 14.2%, to 313 million. Other income of your company declined by 15.8% to 377,7 million rubles, and other expenses — by 23.1%, to 476,1 million. As a result, profit before tax increased 3 times — up to 202,6 million roubles.
And here’s the official comment on this issue by the acting Director General of Murmansk commercial seaport Murad Hidirova: “the increase in net profit resulted mainly from exchange rate difference. In addition, in 2015, the port management had resolved the issue of transfer of vessels involved in the rental and the elimination of subordinated shipping company. Last year brought losses of 65 million rubles.”
By the way, at this stage, projected tax revenues, which will be allocated to the budget of Dagestan in the event that the project earns. Called the number from 5 to 7 billion rubles per year, this means that the projected cost of the “Caspian hub” (110 to 120 billion) tax (!) point of view will pay off within 10-15 years.
Iran as a litmus test
The theme of Russian-Iranian relations in the context of the implementation of the project “Caspian hub” surfaced repeatedly. Sometimes it even seemed that the Iran Russia extends the capabilities of the port of Makhachkala. But, whatever it was, the international importance of the project of the Caspian transport-logical complex and for Dagestan and for Russia as a whole will be directly connected with the international position of Iran and its Caspian ports.
After a long confrontation with the West country and lobbying for its geopolitical interests of the investment company moved again to the Islamic Republic. The Renaissance of foreign trade (including trade) relations of Iran with the global market directly impact on the strengthening of its presence in the Caspian. It was in the North (Caspian) territories of Iran are focusing their efforts the British and the Dutch began to establish their connections with Kazakhstan.
By the way, Kazakhstan claims to informal domination in the Caspian sea more than ambitious. Alas, but the Russian port of Makhachkala is practically nothing to put against Kazakhstan created on the coast a powerful fuel and energy complex, which also invested in the British capital. The principle of “you give us money and technology — we give you fuel”, which is now Kazakhstan cooperates with the United Kingdom, allowed Astana to turn the Caspian port of Atyrau in Kazakhstan’s economic centre “the North-Caspian project”, which focuses on the development of new oil fields.
Of course, we can say that the “Caspian hub” only “born”, and its practical implementation can be stretched not for a couple of years. And indeed it is. The project is promising, it has already gained the status of Federal, and therefore the chance to really come to life tends to 100 percent. But competitors in the Caspian sea are not asleep, but Dagestan is difficult to call them a worthy competitor. He’s decent, but its real possibilities are, alas, not “pull” this economic and trade competition in the sea.
However, here in Dagestan there is another “trump card”. This is a new railway branch of the transport corridor “North-South” (it is also called the “New silk road”). It is planned that the new branch railway will pass through Dagestan, connecting at the same nodal points of Russia, Azerbaijan and Iran. And it is here Makhachkala commercial sea port has the potential to become the economic center, while the geopolitical interests of Russia, which she definitely has in the South Caucasus.
Throughout the history of the Caspian hub we asked only one question: whether Dagestan to cope with its responsibility for the conclusion of trade and economic relations of Russia in the Caspian sea to a new level? The answer to this question depends on the political maturity and economic foresight of the Republican authorities who are directly responsible for everything that happens on the Dagestani land and its waters. In this regard, the project “Caspian hub” will be a real test on foreign policy worth the Dagestani leadership and its ability to integrate Dagestan in the international trading and economic market.
