TRIUMPH OF "IRON BROTHERHOOD"

Azerbaijan is gradually becoming a crossroads of international transport corridors (ITC) North-South and East-West. Another route was the recently initiated South-West direction for cargo transportation. Azerbaijan provides a unique opportunity for the transit of cargo regardless of the prevailing, sometimes difficult, political relations among regional countries - Turkey, Poland, Ukraine, Russia, Iran, India, Pakistan, China, etc..

BTK: time to set a date

Recently, the leaders of railways companies have intensified the meetings in the capitals of various Eurasian countries. It is time to officially announce the date when the Baku-Tbilisi-Kars railway section will become operational. The route will ensure regular transportation of goods from Turkey and Europe to the countries of Central Asia and China, as well as to the south to Iran, the Persian Gulf, Pakistan and India.

The coordination council of the Baku-Tbilisi-Kars railway project (BTK) discussed various issues at one of the regular meetings in Tbilisi, including rehabilitation, reconstruction and construction works along the BTK route from Marabda, Georgia to the Turkish border, budget of Marabda-Kartsakhi Railways LLC for 2017, as well as the state of the Zalga-Akhalkalaki checkpoint and the construction of new infrastructure on the Akhalkalaki-Kartsakhi site. The Georgian section is financed through a concessional loan (almost $1 billion) allocated by the Azerbaijani government from the resources of the State Oil Fund of Azerbaijan (SOFAZ).

The Turkish Minister of Shipping and Communications, Ahmet Arslan, who has earlier announced the commissioning of BTK in June 2017, said that the estimated date was shifted to August. The reason for the delay was a landslide occurred on the Georgian section of the BTK. In any case, a few weeks is left until a very important event in the transport sector of the region. Azerbaijan expects a new source of income in its state budget soon. During the first stage of operations, BTK is supposed to transport 1 million passengers and 6.5 million tons of cargo. In the second stage, the volume of cargo transportation can reach 17 million tons annually.

Russia is an active participant of ITC North-South

Another transit corridor, which is almost ready for commissioning, is the North-South. The works are being carried out at an accelerated pace. At the recent meeting in Tehran, the heads of railway agencies of Azerbaijan, Georgia and Iran noted that after the construction of a 82.5-meter railway bridge across the Astarachay River on April 20, 2016 on the Azerbaijani-Iranian border, the construction of a single-lane railway from Astara station (Azerbaijan) to the Iranian border and the bridge was completed quickly and a test train was launched across the border.

It was also reported that the works continue in Iranian Astara. This includes construction of a railway station and unloading terminal covering a territory of 35 hectares.

Also, the railway agencies of Azerbaijan and Iran signed an agreement on the construction of the Astara loading and unloading terminal, which envisages the construction of a 1.4 km long railway line and four terminals with high transshipment facilities on the Iranian territory. According to the document, Azerbaijan Railways rents the above-mentioned railway line for a period of 15 years, and terminals - for 25 years.

The North-South route will dramatically reduce the transportation period for goods from Scandinavian countries to Iran and India. Currently, the Finnish cargo reach final consumers in 45-60 days. Thanks to North-South, the cargo from Scandinavian countries through Russia and Azerbaijan can reach the same consumers in 15 days only.

Russia, Iran and India initiated the project North - South in 2000, and Azerbaijan joined it only in 2005. Currently, Russia is going to actively use this direction for the supply of Russian grain and timber. Russia and Azerbaijan later established a joint company AzRusTrans. According to AzRusTrans CEO Javid Guliyev, his company was ready construct in Iran a grain terminal worth $20-30 million, which would allow to store about 60,000 tons at the same time. AzRusTrans’s grain terminal will be used as a staging post to the largest port of Iran, Bender-Abbas, from where the Russian grain will go to Saudi Arabia, Dubai, Egypt and other countries. Also, deliveries of significant volumes of sawn wood are provided from Russia through Azerbaijan to Iran and neighboring countries.

The throughput capacity of North-South will initially amount to 6-10 million tons of cargo per year and 15-20 million tons at the second stage of project implementation.

New project: ITC South-West

Azerbaijan also actively supports the expansion of cooperation on the South-West route, which will serve to optimize transportations to India-Persian Gulf-Iran-Azerbaijan-Georgia-Ukraine-Europe. At the multi-lateral meeting held in June in Baku, the heads of the railways companies of member-states agreed to explore the possibilities for joint use of preferential tariffs for goods that will be transported along this route.

Under the agreement, Azerbaijan Railways will be coordinating the activities between the railways of Azerbaijan, Georgia, Iran, Poland and Ukraine. At the same time, a coordinating committee will address strategically important issues, as well as the prospects for the development of the South-West route. In order to identify and overcome existing and possible obstacles with cargo transportation along the route, a working group consisting of representatives of the railway departments of Azerbaijan, Georgia, Iran, Poland and Ukraine will be established under the coordination committee. Following the meeting, relevant documents were signed.

The benefits of the 7,645-km South-West route for cargo carriers are obvious. If marine cargo from India via the Suez Canal to Europe ships for 40 days, then with South-West it reaches the destination in 15 days only going from Mumbai (India) to Bandar Abbas (Iran), Astara (both in Iran and Azerbaijan), Gazakh (Azerbaijan), Poti or Batumi (Georgia), Chernomorsk (Ukraine) and Slavkov (Poland) for only 15 days.

By the way, the participant countries consider the implementation of the project not only in the theoretical aspect: only this year it is planned to transport 200 thousand tons of cargo through this route. At the initial stage, it is planned to increase the volume of traffic to 10 million tons per year, and in the future - to double this volume.

The classics: transportation of goods from China to Europe

Perhaps the most significant "railway" event in June was the round table in Astana dedicated to the development of transport infrastructure, increasing efficiency and competitiveness of transportation along the Trans-Caspian International Transport Route (TCITR) with the participation of over 80 leaders and representatives of railways, port administrations, transport associations, shipping and transport-logistic companies of regional countries.

By the end of round table discussions, the parties signed a Memorandum of Cooperation between the International Association of TCITR and the Association of Transport and Communications of China. On the same day, the TCITR founders held a general meeting, where they discussed the issues of revising earlier action plan and approval of new tariff rates along the route, including transportation to-from the Black Sea ports of Ukraine.

Later in Baku, a Chinese delegation headed by Zhang Jin, deputy general director of Chengdu International Railway Company discussed cargo transportation from China with Azerbaijan Railways CJSC. Javid Gurbanov, Chairman of Azerbaijan Railways, said that all forces have been mobilized to increase the efficiency and competitiveness of cargo transportation through the territory of Azerbaijan, and the country was ready to provide all possible support to the Chinese side. According to Zhang Jin, China is interested in using the transport corridors running through Azerbaijan to transport Chinese products to Eastern Europe, the Middle East, as well as to Turkey and Georgia. By the way, same as other routes, TCITR allows to transport cargo from China by sea goes to Europe within 10-14 days.

Currently, the parties are focused on discussions on the unified tariffs between the countries along the corridors North-South, South-West and TCITR to convince the shippers to transit cargo through Azerbaijan.

In any case, the railway workers will gradually play more significant role in the transportation of transit cargo. The success of international transport projects passing through the territory of Azerbaijan will depend on them.