By Atom Markarian
A far-reaching project to create a commercial ferry link between Armenia and Russian through Georgia, seen as an opportunity to boost their modest bilateral trade, has failed without getting off the drawing board, a leading Armenian businessman said on Friday.
Arsen Ghazarian, who heads the Armenian Union of Industrialists and Entrepreneurs, said the $10 million project is now considered dead because of bad planning by the two governments and a “lack of consistent support” from Russian and Armenian businesspeople.
The idea to establish ferry communication between the Black Sea ports of Poti in Georgia and Novorossiisk in Russia was floated in the mid-1990s and was backed by all three governments. It was expected that the Armenian and Russian sides, the main beneficiaries of the undertaking, will share construction and other costs involved. Ferries connecting the two ports were due to be capable of carrying heavy rail cars laden with commercial cargos.
The link would have effectively restored rail communication between Armenia, Georgia and Russia which was disrupted with the outbreak of war in nearby Abkhazia in 1992. The two South Caucasus countries have since exchanged goods with Russia mainly by trucks via the treacherous Russian-Georgian mountain passes that often shut down in the winter.
That trade route has meant disproportionately high transportation costs -- a key cause of the small volume of Russian-Armenian trade which stood at less than $160 million or just 16 percent of Armenia’s overall external trade last year. Meeting with a group of Russian businessmen on Thursday, President Robert Kocharian again deplored the modest figure, saying that the absence of inexpensive and reliable trade routes is the main factor hampering economic ties between the two allied nations.
“To plan stable exports of raw materials or manufactured products from Russia to Armenia or vice versa is to do a heroic work,” Ghazarian told several dozen business executives from the former Soviet Union and Eastern Europe who gathered in Yerevan for an annual conference of their International Congress of Industrialists and Entrepreneurs (ICIE).
Ghazarian, himself an owner of a transport company, said the Armenian and Russian business communities have now no option but to continue to rely on the expensive overland communication. But he said the two governments can substantially reduce its costs by setting up a big joint venture specializing in cargo shipments.
The two-day conference of ICIE drew to a close on Friday with a call for the restoration of commercial ties among countries that used to be part of the Soviet bloc. Most members of the Russian-dominated association run Soviet-era factories that have struggled to remain afloat since the collapse of the command economy a decade ago.