In one of the previous 168-Zham newspaper editions, we informed that the regular operation of the Caucasus-Poti ferryboat continues to be delayed. Strangely enough, Armenian statesmen aren’t rushing to provide explanations about the reasons for the delay. It was also strange that the Armenian media didn’t broadcast the initial launching of the boat from Caucasus port to Poti, which took place about a month and a half ago. The Russian media provided more information about the launching. As opposed to that, when Russia sent the 5 locomotives rented from Armenia back to us, the Armenian media went to no end publicizing that, and even some journalists were sent to Ayrum (the train station in Noyemberian). Information about the operation of the ferryboat may be attained only among the transporters. It seems that this boat is the only means for business for Armenia. Perhaps it would be so if our country wasn’t in a blockade and had access to the sea. In fact this small ferryboat, which can take only 50 wagons, is more than just business for Armenia. This boat may become an alternative to Poti-Ilyichivsk boats, and may considerably facilitate and make cheaper the process of cargo transportation. There is no official information about the operation of the ferryboat. It’s not excluded that the process is being prolonged because of the absence of state support. They say that the reason of the delay is the resolution of technical matters. The Reserve Capital Corporation, which is operating the ferryboat, is going to verify certain provisions of the contract with Armenia, Georgia and Russia. If this process is too prolonged, the boat may even not sail on behalf of Armenia. The reason is that the boat only carries a business meaning for its owner, Khakim Matchanov, of Uzbek descent. For us it has strategic importance, and is our salvation. During our conversation with the director of the “Apaven” cargo transportation company, Gagik Aghajanyan, we tried to find out the actual reasons of the delay of the operation of the boat, and the history of the boat. He is directly involved in this project.
– Mr. Aghajanyan, perhaps we will start our conversation with this question. Who’s Khakim Matchanov, and how did he appear in the epicenter of Armenia cargo transportation?
– Khakim Matchanov is the director of the Cargo Transportation Union of Uzbekistan. He has the same position as I had in Armenia. He is also a large cargo transporter. We are colleagues and have communicated a lot in the past. Matchanov is well aware of the issues of our freight transportation. He also knew that Russia has a Caucasus port but is not able to fully use its capacities because the depth of water in that area is only 4-5 meters, and modern ships and boats need at least a 7-8 meter depth. It’s impossible to always clean the sand from the bottom of the sea. Thus we had to find a technical solution of the problem. Russia had the problem of developing its Caucasus port, but didn’t have appropriate ships to harbor there. Armenia had an issue of cargo transportation, and could benefit from the Caucasus port, but also had issues with the boat. Matchanov realized that free market is involved here and activities could be expanded. For that purpose he started to build 2 ferryboats in Kherson, the depth requirement of which was not more than 3.8 meters, even when fully loaded.
– This means that the resolution of the issue was so easy that all we needed was a businessman who’d provide the necessary boats.
– Of course it wasn’t that easy. Having a boat doesn’t mean the whole solution of the issue. So what if you got the ships? How are you going to use them? This means to have 10 “Gazel” minibuses but not to have a route. Matchanov realized that he needed to work on Russia. But that’s not so easy. Here he needed the support of Armenia. Our goals matched, and Armenia was able to receive consent from Russia. Those issues were solved and Matchanov’s “Smat” ferryboat entered the port. Now we have other issues. Now if our statesmen don’t realize that political control is needed on this boat we will lose it.
– But in April when Matchanov, Andranik Manoukyan, and Arsen Ghazaryan presented the project of the boat exploitation, they didn’t exclude the possible participation of Armenia. Doesn’t this mean that the Armenian side wishes to be involved in the process?
– I thought so too, but so far no concrete recommendations have been received.
– At that time, Matchanov informed that the ferryboat cost him 20 million USD. It’s necessary for Armenia to be fully involved in such a strategically important project, especially if this involvement assumes only a 10-20 million USD investment. Each Armenian oligarch can easily afford to get a ferryboat like that.
– I don’t know who of our oligarchs can afford to pay 20 million USD on his own but I’m sure if they unite and take over this sector they will definitely make a profit. The state may also take control of it. Matchanov is ready for that. He built this ship not at the expense of his own pocket; he took out credit for that. It’s possible to negotiate with Matchanov, but Armenia hasn’t done anything in that direction. Nobody has thus far stated that he wants to invest in this sector. I was very glad when our President inaugurated the new terminal of “Zvartnots” airport and announced that this is our gate, our security. What is this then? Let’s not build a 10-km road and instead spend 10 million USD on purchasing a ferryboat and control the process.
– Is this control so important?
– Very important. Matchanov was so far-sighted that he built rails conforming to European and Russian standards. Russian standards are applied in CIS countries, and the European ones in European states and Turkey. If the ferryboat doesn’t profitably work in Caucasus-Poti, it can easily take the Russian wagon from Novorossisk, take it to the Turkish port at Samsun, and take European standard wagons from there. This boat is supposed to ensure a cargo turnaround of 100%. If Matchanov realizes that this route is less profitable for him than other routes, he will definitely switch it. This is one of the main rules of business. In order to make sure this doesn’t happen, we should have our participation in the project and control the situation.
– There is information that Matchanov is going to set as high prices for cargo transportation as demand the Poti-Ilichevsk boats despite the fact that in April he and Manoukyan announced that the prices would be considerable cheaper.
– Yes. But later Matchanov did further calculations and realized that the ship has its advantages and may enter Russia within 48 hours. We reach Ilichevsk within slightly more than 48 hours. After that we need several more days to cross the whole territory of Ukraine and reach Russia. In the segment Poti-Ilichevsk we pay 2,300 USD for each wagon and then about 1,000 USD when crossing Ukraine-Russia. Now Matchanov offers us to pay 3,200 USD and transport us directly to Russia. If in the first version the cargo gets to Russia within 6-7 days, he’s able to do it within 2 days. You will benefit from the shorter time needed. However, he can easily lower the price, especially when he is not going to pay at Ukraine-Russia and cross double the distance. If from Yerevan to Moscow one wagon costs 5,000 USD, then 1,000 USD is 20% of it. The decrease of 20% of the price would be a great achievement. But in business one tries to benefit as much as possible. Why would they lower the price? For their love for Armenia? I don’t want to sound like a pessimist, but to be realistic we need to realize if we don’t take control of the boat, Matchanov will move his business. I am sure that once we start to operate this ferry boat, the owners of the Poti-Ilichevsk boats will feel the lack of demand and will lower their prices. There will be competition and Matchanov will also make compromises.
– What technical issues are we talking about here, which cause the delay of the operation of the ferryboat?
– Unfortunately, there are many technical issues regarding sea-land cargo transportation. This becomes even more evident in connection with railroad transportation – issues with expired wagons, outdated rails, security issues, etc. You can’t station the wagon in the train station without security, especially when you have half a million USD worth of goods inside. So we need a security system. When the ship arrival is delayed, I have to move my wagons from one rail to another in order to avoid wagons piling up on each other. This is also service and somebody needs to be in charge of it. These are only few of the issues. But there are also other more professional difficulties.
– Is it possible that the technical issues are so many that the ferryboat operation will not only be delayed but also cancelled?
– This boat will definitely bring cargo to Armenia, but for how long I can’t say.
– Can Armenia provide 50 wagons every 3 days to ensure the profitability of the business?
– I don’t worry about that because usually there are lines of wagons to be transported. Besides that, a transport system will be developed and people will start to work to provide efficient operation for that. This ferryboat will transport not only Armenian but also Georgian, Ukrainian and Russian goods. Gradually this route will become trustworthy. Fifty wagons is really a ridiculous number for cargo transportation.
– There is information that Matchanov wants to transport the Armenian cargo not only through the Black Sea but also from Yerevan to Russia. Will Armenian cargo transporters suffer as a result?
– Yes, Matchanov wants that, but it’s possible to regulate that. For example, the “Armenian Railways” CJSC may impose a condition to work only with local companies. This is an acceptable condition in the international cargo business. This issue may also be solved in Georgia. But once again I am repeating that for this we need state support and control. Otherwise we will lose everything we achieved so far.