BTK to increase importance of Azerbaijan Railways, says Fitch
The commissioning of Baku-Tbilisi-Kars (BTK) railway will further increase the importance of Azerbaijan Railways CJSC and Georgian Railway JSC in freight transportation within the region and will enhance their business profiles, said Fitch Ratings July 30.
Fitch said that the freight rail transportation volumes continued to decline in most former Soviet Union (FSU) countries over the first five months of 2015 and it is expected that the rail volumes are to remain weak in the second half of this year on the back of lower GDP growth across the region.
“FSU rail transport companies that are reliant on crude oil transportation are also under competitive pressure as crude oil traffic continues to switch to pipelines from rail,” said the ratings agency.
“Rated rail transport companies are subject to FX [foreign exchange] fluctuations, albeit to varying degree,” Fitch further added.
“A sustained weakening of local currencies could undermine companies' credit metrics. Flat tariff growth in Kazakhstan will put further pressure on JSC National Company Kazakhstan Temir Zholy's standalone profile,” said the agency.
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