CONSTRUCTION OF THE CENTURY

In late June, Turkish President Recep Tayyip Erdogan took part in the ground-breaking ceremony of the Istanbul Canal construction project. The project started with the construction of one of the six bridges across the canal. “We are building not only the canal; it will include ports and other infrastructure facilities that will secure jobs for many people. It will give a new breath to Istanbul. In six years, the construction will be over,” Mr. Erdogan said, essentially outlining the contours of the project dubbed as the Construction of the Century. This is how it is usually called in the Turkish media. This is not an exaggeration, since the operation of this grandiose facility will seriously affect not only the geo-economic, but also the geopolitical situation in the Black Sea region and in the surrounding geography.

Political Economy of the Istanbul Canal

Experts believe that the implementation of the project will not only reduce the load on the existing route through the Bosphorus Strait, but will also stimulate the development of cargo transportation associated with the Black Sea. According to estimates, navigation through the Istanbul Canal will be 13 times safer than on the Bosphorus.

Presumably, the project will also stimulate the development of transport links in the region. In particular, it will increase the attractiveness of the Caspian-Black Sea route through the Volga-Don Canal. Considering the special ties between Turkey and Azerbaijan, as well as Turkey and other Turkic states along the Caspian Sea that do not have access to the World Ocean, Istanbul Canal will provide additional opportunities for using the seaports of Aktau, Kuryk and Turkmenbashi. The construction of the Istanbul Canal can become one of the topics of discussions among the member states of the Cooperation Council of Turkic-Speaking States (CCTS).

It is known that the port of Alat in Azerbaijan, as well as the Central Asian ports on the Caspian Sea, are mainly used for cargo transportation along the East-West route, or the median route. They also play an exclusive role as transport links within the CCTS area of responsibility.

Back in April, Turkish Transport and Infrastructure Minister Adil Karaismayiloglu said that “Since Istanbul is located at the intersection of the East-West and the North-South corridors, it will become a global trade hub, with cargo transportation through the straits increasing every year.” Energy activity in the Black and Caspian Seas and investments in ports of the Black and Aegean Seas make it possible to confirm this, minister noted.

Thus, the operation of the canal will intensify political dialogue within CCTS, Organization of the Black Sea Economic Cooperation (BSEC), and other regional platforms. Beneficiaries of the project are states that, setting aside meaningless speculations about geopolitical risks and Turkey's political hegemony, will enjoy its advantages.

Alternative and new possibilities

According to experts, by 2050, the number of ships passing through the Bosphorus Strait will increase from the current 50,000 to 78,000 annually. Meanwhile, the safe transportation capacity of the strait is 25,000 ships, or 120 ships daily. The average waiting time for a passage is already 14.5 hours, and in subsequent years, with the increasing volume of cargo transportation, this number may reach 36-48 hours. Accordingly, this factor will negatively affect the global trade flow.

The new 45-kilometre canal is to become a back-up artery in support of a 30 km long strait running right in the middle of Istanbul. According to plans, mainly the largest ships with dangerous goods should pass through the Istanbul Canal. In total, over 180 ships will be able to run along the new canal every day.

The funds invested in the new channel can pay off within a decade, which makes it attractive for foreign investors as well. It is expected that the passage through the Istanbul Canal will cost a lot of money. Now ships pay about $1,000 for passage along the Bosphorus, meaning about 50,000 ships passing there annually pay some $50 million to the Turkish authorities. However, the authorities hope to collect about $1 billion annually for the transit through the new canal. The cost of the construction itself is now estimated at almost $10 billion.

The construction of the new canal will allow Azerbaijan to increase the number of tanker shipments as well. Thanks to the purchase of new tankers for the transportation of export consignments of oil and oil products by the Caspian Shipping Company, new opportunities increase the profitability of maritime transportation in general. In December 2019, the Baku Shipyard put into operation the main Caspian product chemical carrier-tanker of the new generation Lachin with a deadweight of 8,009 tons of the RST12C project for the Azerbaijan Caspian Shipping Company. Three more tankers are currently under construction. Remarkably, Azerbaijani tankers carry out oil supplies from the Mediterranean Sea (port of Ceyhan) to Black Sea, as well as through the Bosphorus Strait. Now they will have a chance to pass through the Istanbul Canal as well.

No problem with the Montreux Convention

The construction of the Istanbul Canal caused heated discussions regarding the possibility of revising the provisions of the Montreux Convention applied to the maritime transportation in the Black Sea straits. At the same time, most of the talks and speculations concerns the intention of Turkey to reconsider its political status as a country that controls the Black Sea straits.

In May, Turkish President Recep Tayyip Erdogan said in Ankara that Turkey remained committed to the Montreux Convention on the status of the straits and was aware of its advantages. Turkey is currently not interested in changing the provisions of the convention, as it threatens with significant geopolitical risks.

The Montreux Convention was discussed by the heads of Turkey and Russia in Antalya on June 30. During a press conference with Russian Foreign Minister Sergei Lavrov, Turkish Foreign Minister Mevlut Cavusoglu confirmed that the convention would continue to operate after the operation of the Istanbul Canal. “The Montreux Convention does not concern the Istanbul Canal, and vice versa. We will remain committed to the convention without any changes, same as we did before,” said Mr. Cavusoglu. In turn, Lavrov noted that Russia is satisfied with the interaction with Turkey under the convention, adding that during the negotiations both sides confirmed that the plans to build the Istanbul Canal would in no way affect the parameters of the presence of foreign navies in the Black Sea.

The Montreux Convention on the Regime of the Black Sea Straits was adopted in 1936. On the one hand, it restored Turkey's sovereignty over the Bosphorus and Dardanelles. On the other hand, the document preserves the freedom of passage through the straits for the merchant ships of all countries.

Thus, formally, the Istanbul Canal does not mean Turkey’s withdrawal from the convention, as it also applies to the Dardanelles Strait. Passage through the Black Sea is ensured by the successive passage of ships through two straits in succession. The project is not about constructing a canal parallel to the Dardanelles. Not yet, as many experts believe. Since it will not be technically difficult to dig a canal through a narrow place on the Gallipoli Peninsula. Its length can be only 5 km. However, all this is in theory.

On a practical level, the main topic of discussions is often maintaining the military balance in the Black Sea. The convention regulates the issues of the presence of military vessels of non-regional countries in the Black Sea area. The current conflict in eastern Ukraine, situation around Crimea, unsettled political and legal relations over the ownership of the Black Sea water area, tension in Georgian-Russian relations, as well as the NATO activities in the Black Sea create tension around the issue.

An incident, which took place in the Black Sea on June 23 caused both NATO and Russia tighten their approach to the military presence of corresponding parties in the sea. The British destroyer Defender crossed the border in the Black Sea, which the Russian and Ukrainian sides consider theirs, and penetrated three kilometres deep into the territorial waters near the Crimean Cape Fiolent. Russian border patrol ship made two warning shots, and dropped bombs in the direction of the destroyer, after which the destroyer changed course. At the same time, Kiev said that it did not object to the actions of the British. The NATO Secretary General's Special Representative for the South Caucasus and Central Asia James Appathurai said that the Alliance refuses to withdraw its representation in the Black Sea and will strengthen cooperation with partners in this region.

However, fears that with the construction of the canal the provisions set forth in the Montreux Convention will become void and that NATO's extra-regional forces will noticeably strengthen their presence in the Black Sea are not well founded. The presence or absence of an additional water canal does not change the international legal regime established by the convention in relation to the Black Sea. The Turkish leadership understands this very well, hence suppressing all sorts of speculations from the very beginning. At least in the medium term.

However, the convention was adopted many years ago. Even the most far-sighted politicians cannot predict what happens to the legal regime of the sea in the long term.