The fact that the Caucasus-Poti ferryboat isn’t operating is like a strange dream for Armenia that can’t be understood. It is worth mentioning that before the parliamentary elections the issue was introduced by the government as something that was already a reality, and they said that there were only several technical problems to solve before the ferryboat would be in use. However, time has shown that it is very difficult for us to solve such small problems, and not only can the ferryboat not be used now, but also in the future. As for us, we will have an opportunity to stress that that process was just a part of the pre-election show. It is just how the Azeri press recently covered that issue.
To note, this ferryboat, which would be able to carry 50 containers, was constructed by Uzbek businessman Hakim Matchanov for the purpose of carrying Armenian shipments. Initially they announced that the ferryboat would start operating on March 15. However, the ferryboat has come to Poti from Caucasus harbor three times so far. The first ferry was a test, which took place in April. The second time it appeared in Poti, it ferried 5 train wagons leased by the Armenian railways, which it brought free of charge. By the way, Matchanov did not do that to do a favor for Armenia, on the other hand it was the wish of the Russian railways company. The second time it ferried, it brought the pipes of ArmRusGazard company on June 2. This was the only commercial operation of the ferryboat on this route. It is not excluded that the ferryboat would not bring those shipments for Armenia if the Russian railways, ArmRusGazard, and later Gazprom did not want it. Moreover, it is not excluded that the ferryboat will not ferry shipments for Armenia if the Russians don’t want it.
Anyway, we wonder why the ferryboat doesn’t start its operation. The problem is not connected with the ferryboat or its owner, but again it is connected with some Russian services. As we have informed previously, Matchanov does not have a long-term permit for the services of the Caucasus harbor, which are issued by the Russian border services. During the mentioned three ferries, the permission was issued for one time only. Three weeks ago, Matchanov asked the Armenian transport minister, Andranik Manukyan, to negotiate with Russia to obtain a long-term permit from Russia for that purpose. We don’t know yet whether the minister or other Armenian officials have tried to solve that problem. The government does not say anything concerning that issue. The next reason for not operating the ferryboat is connected with the customs services of Caucasus harbor. The shipments are subject to customs examination, which means that they can check on what is inside the ferryboat. The harbor does not have the necessary facilities to organize that examination. Shipments are different, and it is not always possible to examine the shipments in the open air. In the case of pipes it is possible to organize the examination, but it becomes impossible when importing flour or grain. It may snow or rain during that process and spoil the products, and besides that the customs services have their own rules. The Caucasus harbor does not have the necessary facilities to organize such examinations. Certainly, it is Russia’s problem, but the fact is that they don’t have the mentioned opportunity. Moreover, we can only guess when they may have it.
There are some problems with the railways and Poti harbor of Georgia in terms of transporting the shipments from there, but the Armenian carriers assure that it is easier to solve problems with that country. The carriers are optimistic, and they believe that at least the existing problems with Russia will be solved too. However, as people say, “don’t count your chickens before they’re hatched”. Furthermore, even if these problems are solved and the ferryboat operates, the Armenian government will not have any guarantees that it is secure and that the ferryboat will operate normally on that route long, since this business is private and the owners may revise their policy any time they want. There needs to be control for this purpose, i.e. we need to obtain property rights on it. The Uzbek owner has suggested 45 % of the ferryboat share. Notwithstanding, the Armenian government has not replied positively so far. The ferryboat construction cost EUR 20 mln, and the 45 % share of this sum is not more than half. Certainly, there are oligarchs in Armenia who can make such an investment. However, there hasn’t been such an offer so far. Our businessmen definitely don’t want to set foot in that difficult business, as they don’t understand anything about it. It is not as easy as the construction and import businesses. Certainly, it is their right, and it is up to them to decide, but sea shipments are considered to be profitable. Anyway, if the private sector does not want to purchase the shares, it can be done by the government. Armenia is in a blockade now, and the government should not lose any opportunity of having a way out. This ferryboat is one of those opportunities. The government has not shown any positive sign to this offer either. Can’t it find money for that purpose? Two days ago the government decided to make amendments in the budget of 2007, as the economy is developing faster than planned by 2%, and it is expected that the budget will have AMD 9 bln more income. Half of that added income is more than sufficient to purchase the mentioned 45% of the shares.
Now let’s make a calculation concerning the profitability level of the ferryboat. Armenian companies pay $2300 to ferry one container from Poti harbor to Ilyichevsk harbor of Ukraine, and later they pay $1000 to take the shipment to Russia. Matchanov offers to pay $3300 to transport the shipments directly to the destination in Russia through a route that is half the distance and needs half the time. Here businesses can save time and shorten the distance. Parallel to this, Matchanov charged $20 per ton more for transporting ArmRusGazard pipes than the Armenian carriers were given when doing their order. One container can store about 20-25 tons of pipes. It means that the prices offered by Matchanov are higher by $ 400-500 per container. In a word, it is profitable to be the owner of 45% share of the ferryboat, both in terms of having a carrier and of getting consistent high profits.