The Russia-Ukraine War has led to the emergence of various crises along transit routes between the East and the West, especially in certain regions. These crises have caused disruptions in logistics and energy shipments, resulting in a decline in the economic growth rates of the affected states.
Despite all these developments, Georgia, which has maintained a distant and “biased neutral” policy toward the war, and the South Caucasus region in which it is located, have undergone a transformation from a “choice to a necessity” in terms of natural gas, energy, and logistics transit routes. Particularly, China’s strategic partnership with Georgia and the opening of the Middle Corridor of the Modern Silk Road through Central Asia, the Caspian Basin, and the South Caucasus by land and sea to Europe have increased the region’s significance.
With the Russia-Ukraine War causing a halt to the Northern Corridor, Beijing has focused more on the Middle Corridor, and the Anaklia Port Project, initiated in Georgia, has come to the forefront. Before delving into this project, a general evaluation of Georgia’s other two major ports, Batumi and Poti, will contribute to a better understanding of the potential of the planned Anaklia port.
When examining the Batumi Port in Georgia, various collaborations stand out. Batumi Port is involved in international cooperation projects such as the Trans-Caspian International Transport Route (TITR), the Eurasian Transport Corridor (TRACECA), and the Black and Azov Seas Ports Association (BASPA), particularly in connection with the Middle Corridor. [i] Another notable aspect of the port is the presence of Kazakhstan. Since 2008, KazTransOil JSC, a subsidiary of the Kazakhstan-based national oil and gas company JSC NC KazMunayGaz, has held exclusive control rights over Batumi Port. [ii]
Another significant port in Georgia is the Poti Port. Known as “APM Terminals Poti,” this port is managed by a port operating company based in The Hague, Netherlands, which is a unit of the Danish Maersk company. It has been recorded that Poti Port handled 274,000 TEU containers in the first half of 2024.[iii] Considering the annual container volumes of Batumi and Poti ports, it becomes evident that the potential of Anaklia Port is greater compared to these two ports.
Anaklia Port is operated under an agreement between the Georgian government and a consortium led by China Communications Construction Company (CCCC), one of the world’s top five construction firms. China currently holds a 49% stake in Anaklia, which is one of the most crucial ports along the Middle Corridor.[iv]
The Anaklia Development Consortium aims to establish a world-class port complex in Georgia and transform it into a critical trade hub between China and Europe. To achieve this vision, the consortium is developing strategies that optimize port operations and cargo growth, strengthening marketing and sales strategies, and effectively utilizing the Deep and Comprehensive Free Trade Area (DCFTA) and the Free Economic Zone.[v] The planned annual container handling capacity of the port is stated to be 600,000 TEU containers.
Anaklia Port serves as a gateway through the Black Sea to Romania’s Constanța Port and further into Europe. Multinational logistics companies, such as the UAE-based DP World, are also making efforts to get involved in the project and benefit from this port. Among DP World’s investments in the region is a planned $54.2 million investment in a new transportation platform set to open in Constanța in 2025.[vi] Additionally, it is reported that DP World has doubled the container handling capacity at Romania’s Constanța Port.[vii]
The core functionality of the Middle Corridor, a crucial component of China’s Modern Silk Road project, is to facilitate the transfer of Chinese goods to the European market and contribute to increased trade along the route. According to World Bank forecasts, by 2030, there is expected to be a 37% increase in trade between Azerbaijan, Georgia, and Kazakhstan along the Middle Corridor, as well as a 28% increase in trade cooperation between these countries and the EU. [viii]
The Northern Route of the Modern Silk Road project has been stalled due to the Russia-Ukraine War and sanctions imposed on Russia, leading to weakened trade along this route. This situation has increased the significance of the Middle Corridor, making Anaklia Port a central hub for both maritime and overland route diversification efforts. The blockade of Ukrainian waters in the northern Black Sea and the inaccessibility of ships have intensified the traffic at Anaklia Port, with expectations that the port’s potential will further increase in the coming years.
In a statement on August 1, 2024, Georgian Minister of Economy Levan Davitashvili noted that discussions with the China-Singapore consortium are ongoing.[ix] Georgian Prime Minister Irakli Kobakhidze emphasized that the Anaklia seaport is one of the government’s most important projects. He highlighted that it will accelerate the country’s economic growth and enhance the logistics capacity between Asia and Europe. [x]
Finally, the completion of the bidding process for the construction of Anaklia Port, where the Georgian government holds a 51% stake and the China-Singapore consortium holds a 49% stake, will help China address the disruptions in the Northern Corridor and focus more on the European market along with the Middle Corridor. Additionally, it is expected that Anaklia Port will contribute to the Georgian economy, deepen the China-Georgia strategic partnership, and encourage the participation of other regional states in the Modern Silk Road.
[i] “The Internatıonal Cooperatıon”, Batumi Sea Port, https://batumiport.com/company/partnership, (Date Accessed: 09.08.2024).
[ii] “Management”, Batumi Sea Port, https://batumiport.com/company/management, (Date Accessed: 09.08.2024).
[iii] Natiko Taktakishvili, “How Many TEU Containers Did Poti Port Handle in 6M24?”, Businnes Media, https://l24.im/aCcpUE, (Date Accessed: 09.08.2024).
[iv] Daniil Melnychenko, “Russian trade and the challenge of logistics bottlenecks created by sanctions”, The Load Star, https://theloadstar.com/russian-trade-and-the-challenge-of-logistics-bottlenecks-created-by-sanctions/, (Date Accessed: 09.08.2024).
[v] “Our Goals and Vision”, Anaklia Port, http://anakliadevelopment.com, (Date Accessed: 09.08.2024).
[vi] Michele Labrut, “DP World investing $165 million in Romanian port development”, Seatrade Maritime, https://www.seatrade-maritime.com/ports/dp-world-investing-165-million-romanian-port-development, (Date Accessed: 09.08.2024).
[vii] “DP World Romania increased the volume of container shipments”, Railway Supply, https://www.railway.supply/en/dp-world-romania-increased-the-volume-of-container-shipments/, (Date Accessed: 09.08.2024).
[viii] Aibarshyn Akhmetkali, “World Bank Estimates Tripling Trade Volumes on Middle Corridor by 2030”, The Astana Time, https://astanatimes.com/2023/11/world-bank-estimates-tripling-trade-volumes-on-middle-corridor-by-2030/, (Date Accessed: 09.08.2024).
[ix] “Economy Minister says talks ongoing with Chinese-Singaporean applicant company for Anaklia port project to ‘clarify proposals’”, Agenda.Ge, https://agenda.ge/en/news/2024/40056#gsc.tab=0, (Date Accessed: 09.08.2024).
[x] “Georgian PM says ‘accelerating’ economic growth Govt’s ‘most important national task’”, Agenda.Ge, https://agenda.ge/en/news/2024/39971, (Date Accessed: 09.08.2024).
