THE TRANSIT ROUTE

One of the most tangible results of the two years of crisis was a considerable reduction in international trade.  This, in turn, had a negative impact on the main sectors of the global transport system.  Practically all CIS countries experienced lower volumes of domestic and transit passenger and cargo transport.  However, Azerbaijan's transport sector, which maintained an acceptable stability in 2009, achieved in 2010 its highest growth rate in cargo transport since independence.

Investments yield results

This is really no surprise. Some AZN 10 billion has been invested in the development of the country's road, rail, sea and air transport infrastructure in recent years. Considerable investment in the transport infrastructure was also a feature of 2010.

These investments helped to bring a considerable section of the country's transport infrastructure into conformity with international standards, expand its role in regional development and, most importantly, increase domestic and transit transport volumes from North to South and in TRACECA.  "This work continues, new motorways are being built, railways modernized, new passenger aircraft, tankers and bulk carriers are being purchased.  Last year, the foundations for the region's largest international commercial harbour were laid in Alat, and Azerbaijan also began work on a shipyard, so, in the near future, we will begin building and exporting ships of different types. This year, construction of the Baku-Tbilisi-Kars railway will be accelerated and once it is put into operation a new and very profitable land route between Europe and Asia will be available", said Azerbaijani President Ilham Aliyev.  All these projects require major investment, the president said, and the state attracts them so that a modern and powerful transport infrastructure is created for the future, making it possible to take advantage of Azerbaijan's geographical location at the junction of East and West.

In the mean time, the transport infrastructure already created in the country presents great opportunities for increasing transport volumes.  In the five years before the global economic crisis, transport volumes in Azerbaijan grew at an average annual rate of 10-12%. Although the crisis peaked in 2009, growth in the transport sector slowed only slightly compared with preceding years.

Last year the Azerbaijani transport sector achieved its highest volumes since independence:  according to the State Statistical Committee, a total of 196.3 million tons of cargo was transported by all modes of transportation; 3.1% more than in the corresponding period in the preceding year.

Growth in all sectors

As before, the leading mode of transport in 2010 was by road, accounting for more than half of transport volumes:  99.9 million tons of cargo and about 1.2 billion passengers, 6% and 7.7% respectively higher than the figures for the corresponding period of 2009. Most of this was traditional domestic. The growth observed is clear proof of increased economic and social activity in the country last year.  Another fact is worth noting:  despite a slowing in vehicle fleet upgrades in the post-crisis period, an additional 56,700 motor vehicles were purchased last year; their total number currently exceeds 983,000.

The second largest carrier in the country is the pipeline sector; this accounts for about a third of total transport volumes. About 50 million tons of oil passed through the trunk oil pipelines in 12 months of 2010, of which 76.6%, or 38.8 million tons, were carried by the main Baku-Tbilisi-Ceyhan export pipeline.  In a relatively short period of 2009, the BTC pipeline transported 38.2 million tons of oil. It is notable that early last year the amount of oil passing through Azerbaijan's pipelines decreased slightly. This was due to the refusal by the Tengizchevroil company, which developed the Tengiz deposit in Kazakhstan, to supply oil through BTC because of a disagreement about tariffs.  The situation changed when Turkmen oil began to flow through BTC in July 2010 - about 1.3 million tons was pumped from the Cheleken shelf deposit, which is developed by the UAE-based company Dragon Oil.

As for the trunk gas pipelines, the increase there was almost 33%. The reasons for this growth were the gas agreements with Turkey, signed in June 2010, and increased export through the South Caucasus gas pipeline (the Baku-Tbilisi-Erzerum route).

The third largest transport sector is the railway - it accounted for about 12% of total transport volume.  Last year, 22.2 million tons were transported by rail, which was a growth of 6.6%, and it is particularly heartening that this increase was achieved after a noticeable fall in 2009. Naturally, last year's results fell short of those in the pre-crisis year of 2008, when rail transport moved more than 25.3 million tons of cargo.  However, this was to be expected, because the rail sector is closely linked to international transit and suffered most from the fall in international trade.

The volume of sea transport decreased somewhat - its share of the country's total transport volume shrank from 7.1% to 5.9%.  In the 12 months of 2010, our tankers and bulk carriers transported only 11.7 million tons of cargo, which is 11.2% less than in 2009. This was also due in large part to the refusal of the Tengizchevroil company to transport oil via the BTC. For the same reason, the ratio of hydrocarbon raw materials to bulk cargoes changed:  while last year oil and oil products accounted for about 75%, now they do not exceed 66% of total sea transport in Azerbaijan. Among last year's achievements is the 22.6% growth in the international transit of cargo by ship and Azerbaijan's seaport infrastructure.

The situation with regard to air carriers - both state-owned and private - has stabilized and even improved somewhat.  In the reporting period, they transported about 1 million passengers, compared with 941,200 in 2009. Last year, Azerbaijani aviation moved almost 40 million tons of cargo, which is also more than last year. Naturally, the figures of the pre-crisis year 2008, when 1.3 million passengers were transported, were not reached. But this is hardly surprising; the world over, air carriers have been going through bad times for two and a half years now. The global economic crisis affected the tourism industry significantly and forced companies and organizations to sharply reduce expenditure on international business trips.

The Silk Road

Transport volumes along the international Eurasian TRACECA corridor are increasing.  In 11 months of 2010, 47.2 million tons of cargo and 205.2 million passengers passed through the Azerbaijani sector of the corridor, which is 8.8% and 8.2% respectively more than in 2009. Including the cargo shipped in December 2010 will bring Silk Road transport volumes close to figures for the pre-crisis year, when 48.7 million tons of cargo was transported.  Furthermore, the volume of transit transport increased by 12.4%.  It is significant that the volumes of transit cargo (mostly hydrocarbons and derived products) were evenly divided among the sea, rail and pipeline sectors.

In the mean time, despite the reduction in the transit of hydrocarbons, the TRACECA transport corridor has proved its ability to diversify flexibly and alter the structure of transport volumes, increasing the share of dry and container cargoes and increasing passenger flow. The core growth was in the rail and road transport sectors. Yet another distinctive feature of last year was the seven-fold increase in the transport of container cargo. This was due to the delivery of containers of humanitarian aid to Afghanistan which started in March 2009. Whereas in 2009 the Baku International Commercial Harbour processed about 240,000 tons of dry cargo, including about 2,000 containers, in 10 months alone of 2010 the total volume of dry cargo reached 700,000 tons, and the number of containers rose to 13,700. The bulk of processed dry cargo consisted of cement clinkers imported from Iran.  As for container cargo, most is still humanitarian aid - medicines, construction materials and food from Europe, bound for the seaport of Aktau and on to Central Asia.  From January-October 2010, 2.27 million tons of ferry cargoes passed through the Baku commercial harbour (mostly rail cars with dry cargo), compared with 1.92 million tons in the corresponding period last year.

The increase in dry cargo volumes was in large part accounted for by the coordinated policy of the transport departments of Azerbaijan, Kazakhstan and Turkmenistan which, from the beginning of the year, conducted a series of discussions to boost the volume of sea transport, first and foremost in the non-oil sector.  During meetings of the TRACECA working group, attention was focused on developing a new tariffs policy in the Caspian section of the corridor, which offers discounts and preferential terms for dry and container cargoes.

The leitmotif of practically all meetings and sessions conducted by the member countries of the TRACECA Europe-Caucasus-Asia transport corridor was discussion of ways to increase transport volumes in the countries of the region, more rational use of trading opportunities and acceleration of regional integration of transit transport between Europe and Asia. There are plans to achieve this by adopting simplified trans-border procedures and making cargo and passenger transport movement permanent, as well as by improving the region's road, sea, air and rail infrastructure. The final goal of optimising tariffs and procedures and upgrading the local infrastructure is to gain access to the Trans-European transport system. This would require the integration of states in the Black Sea and Caspian regions into the Trans-European transport network by creating a south-eastern branch and increasing the volumes of non-hydrocarbon cargoes.

Summarizing the results of 2010, it can be said that the Azerbaijani transport sector has, by and large, maintained a positive dynamic of development. Bearing in mind the multibillion-dollar investments into the development of infrastructure and the opening of new international transport corridors, considerable growth in transport volumes is sure to be a feature of the country's future.