In 2019, Syria signed a landmark agreement with the Russian company Stroytransgaz (STG), controlled by businessman Gennady Timchenko, to modernize Tartus, the country’s second-largest port. The agreement envisioned $500 million in investments over four years to transform Tartus into a modern infrastructure hub. However, the ambitious plans fell apart. By 2022, STG’s activities at the port had effectively ceased, and in 2024, Syrian authorities officially terminated the agreement, marking a significant setback for Russia’s strategic ambitions in the region.
Russian Interests in Tartus
Since the 1970s, the port of Tartus has held immense strategic value for the Russian Navy, serving as a critical hub for repair and logistical support, enabling Russian ships to operate without returning to Black Sea ports. This importance was solidified in late 2017 when President Vladimir Putin signed a law ratifying an agreement with Syria, granting Russia the right to expand its material and technical support point at Tartus.
Under this agreement, the port’s territory and waters were placed under Russian jurisdiction, creating an inviolable zone. The facility’s annual maintenance costs were estimated at 3.2 billion rubles, with total expenditures exceeding 50 billion rubles. Beyond military purposes, the port was also seen as a gateway for Russian companies to enhance their economic presence in Syria.
In 2018, Syrian authorities further announced plans for Russian firms to construct an airport in Tartus. However, these projects encountered numerous obstacles, including management challenges, internal conflicts in Syria, and alleged sabotage by local authorities.
Stroytransgaz: Ambitions and Failures
Stroytransgaz, owned by one of Russia’s most influential businessmen, Gennady Timchenko, was a prominent player in Russia’s infrastructure projects in Syria. Timchenko, known for his close ties to former Defense Minister Sergey Shoigu, leveraged his company to spearhead large-scale initiatives. In addition to port modernization, STG delved into Syria’s phosphate industry, facilitated goods transport from mines in Homs through newly constructed railways, and even planned hotel developments.
However, despite these lofty ambitions, tangible progress at Tartus remained elusive. According to Russian military expert Oleg Blokhin, STG failed to invest even a fraction of the promised amounts. Port management remained largely symbolic, with minimal operational effectiveness. Furthermore, allegations of obstruction by Syria’s former authorities exacerbated the challenges.
Although STG officially secured management rights in 2019, the company began scaling back its activities even before the onset of Russia’s special military operation in Ukraine in 2022. Following the transfer of port management back to Syrian authorities, STG’s involvement became nominal.
Geopolitical Complexities and Corruption Links
The complexities surrounding STG’s projects in Syria extended beyond economic hurdles. The company’s initiatives were closely linked with local elites, including controversial Syrian businessman Bara’a Katerji. Katerji’s company reportedly had connections to Hezbollah and Iran, heightening geopolitical risks for Russian investors. In July 2024, Katerji was assassinated—an act attributed to Israeli forces (IDF or Mossad), adding further volatility to the region.
These entanglements with contentious figures and entities deepened the risks for Russian enterprises, undermining their ability to execute projects effectively.
Outcome: Failure of Russia’s Strategy?
Despite pledges of multi-billion-dollar investments, the modernization of Tartus port remains incomplete. Syrian authorities have publicly questioned whether Russia made any substantial investments at all. By 2011, the total volume of Russian investments in Syria had reached $20 billion, a significant portion tied to Stroytransgaz projects. However, the failure of the Tartus initiative casts doubt on the viability of Russia’s broader economic and strategic objectives in the region.
With the termination of STG’s contracts and the shift in Syrian leadership, the future of Russia’s infrastructure projects in Tartus remains uncertain. This episode not only highlights the challenges of foreign investments in conflict zones but also underscores the fragility of Russia’s strategic ventures in the Middle East.
