TO ALL PARTS OF THE WORLD

The outgoing year 2016 has become very encouraging for national railmen in terms of the expansion of geography of cargo traffic and the turning of the country into a regional hub for the transportation of transit cargo from Asia to Europe.

A paradigm shift occurred in the organization of the North-South international transport corridor (ITC), which may become yet another incentive to enhance the shipment of goods through ITC Europe-Caucasus-Asia (TRACECA).

Azerbaijan is the point of contact of these two routes, as in the future, the cargo from the Persian Gulf and South Asia can move not only to Russia and the Nordic countries but also to Turkey, the countries of Central and Eastern Europe and vice versa. In this regard, the role of the Astara (Azerbaijan) - Astara (Iran) railway, which will be commissioned by the end of this year as part of ITC North-South, significantly increases. The Baku - Tbilisi - Kars railway through the East-West corridor will be commissioned in early 2017.

Azerbaijan is getting closer to the restoration of direct rail link with Turkey and Iran, which was discontinued after the Armenian aggression and occupation of Azerbaijani lands. The solution of this problem will allow Azerbaijan not only to more actively participate in the implementation of regional projects, but isolate the leadership of Armenia even more to unless official Yerevan does not give up aggression and withdraws from all the occupied Azerbaijani lands.

However, the national transport sector is primarily tasked to ensure a considerable increase in foreign currency earnings thanks to railway transit. The chairman of CJSC Azerbaijan Railways Javid Gurbanov has outlined the threshold that the railmen should strive to achieve: $2.5 billion of revenues per annum. The required number is formed by multiplying the volume of transit goods (50 million tons per year) by the price of transit per ton ($50).

The only remaining issue is to attract several streams of goods from China and India going in European direction to Azerbaijan.

Competition for goods from Asia to Europe

The traditional "container route” for the transportation of goods is carried out by the Chinese and Indian fleet sailing from Indian Ocean - Arabian Sea - the Gulf of Aden - Red Sea - Gulf of Suez - Mediterranean Sea to south-eastern Europe. These ships with supplies for the Nordic countries continue the way through the Strait of Gibraltar into the Atlantic Ocean and then through the Strait of La Manche in the direction of the North Sea to the ports of Germany, Norway and Sweden.

The main portion of the route, which gives an idea of ​​the volume of goods transported by sea, is the Suez Canal, through which goes 10% of all maritime traffic in the world. On average, 50 vessels pass through the Suez Canal every day. The volume of cargo transportation through the Suez reaches 1 billion tons per year.

Some nuances of attracting cargo to ITC North-South were disclosed during the International Railway Business Forum "Strategic Partnership 1520: the Caspian region" held in Baku. According to the First Vice-President of JSC Russian Railways (RR) Alexander Misharin, the company is actively working with partners in India to attract cargo from Mumbai port, which exports nearly 40% of all Indian goods to the world market, to the North-South transport corridor.

The First Deputy General Director of JSC Russian Railways Logistics (RRL) Eduard Alyrzayev noted that in October 2016, the first dispatch of industrial radiators from Mumbai (India) to Kaluga region of Russia was jointly implemented with PJSC TransContainer, Iranian Railways, Azerbaijan Railways and the forwarding agent ADY Express. The transit of goods took 22 days, which is two times faster than the traditional sea route.

"The shippers are used to ship through other routes, and they need time to adapt to the new situation", said Alyrzayev.

An effective solution of these problems should be the establishment of a regular quality of service and its active promotion on the markets of member countries of the corridor: India, Iran, Azerbaijan and Russia.

At the same time, the shipment of goods along the North-South corridor will accelerate the completion of the construction of the Astara - Rasht railway section in Iran, which will contribute to arranging the railway traffic from the Iranian port of Bandar Abbas in the Persian Gulf to the port of Helsinki (Finland). The cost of the Astara-Rasht section of the railway is estimated at $1.1 billion.

According to the Vice-President of Iranian Railways, Hossein Ashur, the Iranian side is holding negotiations with Azerbaijan on financing and construction of the Rasht-Astara section of the route (162 km). "The sea route from Mumbai to Moscow takes 45 days, while through the international transport corridor North-South this time is reduced by 40% and shipping costs - by 30%", said Mr. Ashur.

Ultimately, it will take only 14 days for the delivery of goods from India and then through the Persian Gulf, Iran, Azerbaijan and Russia in the direction of the Nordic countries and Northern Europe. In the first stage, it is planned to organize the transportation of 6-10, and in the second – 15-20 million tons of cargo.

The Baltic countries show interest in the route. According to the Deputy Chairman of JSC Azerbaijan Railways, Igbal Huseynov, the cargo from the Persian Gulf and South Asia from the Iranian port of Bandar Abbas through Azerbaijan and Russia will be delivered to the Estonian port of Paldiski, and then to the Nordic countries, and vice versa .

Combined routes of ITC North - South

Six agreements were signed in the course of the recent Railway Business Forum, among which the Memorandum of Understanding between the Azerbaijan Railways and Ukrainian Railways deserves a particular attention.

The government of Ukraine is very interested in the North-South project in order to dispatch their cargo through Azerbaijan to Iran and then to the countries of the Persian Gulf or South Asia, this interest is indicated in the memorandum.

In this case, the cargo from Iran via Azerbaijan and Georgia will be supplied to the Ukrainian port of Odessa, and then to the countries of Eastern and Central Europe. The combined train "Viking" is a joint project between the railways of Ukraine, Belarus and Lithuania, which connects the Lithuanian port of Klaipeda to the Ukrainian ports allows the transportation of cargo from India and Iran through Ukraine. Viking started regular operations in 2003, and in May 2016 CJSC Azerbaijan Railways joined the project. Thus, expanding the geography of trains routes will maintain the existing volume of container traffic and will help increase the multimodal transport volumes in the international corridor Baltic - Black - Caspian Sea.

A new page in the rail transport of Azerbaijan

The commissioning of the Baku-Tbilisi Azerbaijan - Kars (BTK) railway in mid-2017 will open a new page in the history of Azerbaijan Railways. The connection of railways of Azerbaijan and Georgia with Turkey will enable transportation of cargo from Azerbaijan to Turkey and the European Union.

By the way, Iran is now reviewing the possible use of BTK for transportation of Iranian goods to the European countries through the South-West corridor.

Afghanistan is also interested in the prospects of the BTK with high hopes to connect to the East-West corridor through the transport project Lapis-Lazuli. In the course of Amritsar International Conference "Heart of Asia" held in early December 2016, it was decided to hold the next ministerial conference in 2017 on Afghanistan in Azerbaijan. One of the main issues at the conference in Baku is expected to be the project Lapis-Lazuli to create a transport corridor from Afghanistan to Europe via Turkmenistan, Azerbaijan and Georgia.

While the coming year of 2017 is expected to be a tense year for Azerbaijani railmen, it also promises to obtain the first large dividends from the beginning of the transit of goods through the ITC North-South, as well as the Baku-Tbilisi-Kars railway route.