Transportation possibilities on agenda to increase revenues
By Nigar Orujova
The increasing connectedness of regional countries is boosting the transport sector and Azerbaijan, a nation located at the crossroads of the major Eurasian transport routes, seeks to take the advantage of this.
The country may gain large profits from its developing transport infrastructure by joining the Silk Road project that offers bright future for transportation.
The grand multibillion-dollar Silk Road project was initiated by President Xi Jinping in 2013 with an aim to connect China with Europe and strengthen cooperation between Asia and Africa.
In the near future, the project is expected to become the largest transport route connecting Asia and Europe, and joining this project, Azerbaijan will finally turn into a major transit country.
Economy expert Ogtay Haqverdiyev believes revenues from transport sector will be counted in billions in the future, and this will be especially noticeable when the cargo traffic reaches millions of tons.
“Today, it is equal to 6-7 millions, while by the year-end the figure should reach 10 millions. In the future, passenger traffic may be also observed.”
Time is money
Today, the transport routes crossing Azerbaijan attract many companies, as it allows to save time and money.
The country has significant potential for becoming a major transit corridor between China and Europe, especially since the route of the Silk Road project through Azerbaijan is the shortest.
From August, three container trains have already reached Azerbaijan coming from the Chinese province of Lianyungang and traveling along the Trans-Caspian International Transport Route from China to Kazakhstan and Azerbaijan, and from here to Georgia and Turkey. The Trans-Caspian international transport route runs through China, Kazakhstan, Azerbaijan, Georgia and Turkey, to reach Europe.
The potential of the route is expected to increase even higher after putting into operation the Baku-Tbilisi-Kars railway route. This way will save about 80 percent of transportation time from China to Europe.
Unused potential
In the past couple of years, Azerbaijan commissioned a new shipyard and ship repair company, purchased ferries and tankers, bulk carriers and cargo ships, and launched six modern airports.
However, Minister of Economy and Industry Shahin Mustafayev believes that the country is still not fully using its transportation potential.
“Despite the fact that Azerbaijan has a great potential in the field of transit and freight traffic, now this potential is not fully used,” he told local media. “Despite the advantages of the Europe-Caucasus-Asia transport corridor, covering China, Central Asia, the Caspian Sea, Azerbaijan, Georgia and the Black sea, a decline has been noted recently in freight traffic through this corridor.”
Mustafayev noted that during 2010-2014, the volume of freight traffic by railway through the Azerbaijani section of the corridor was reduced by 45 percent – from 8.3 million to 4.5 million tons per year.
The minister believes this is primarily connected with the weak coordination between the member countries of the corridor, the imperfection of the transit cargo transportation procedures and the lack of competitiveness of transportation tariffs.
He noted that this corridor is the shortest route between China and Europe and thus very profitable for transportations. The possible transit time of the 4,200 km long corridor is 14 days.
Azerbaijan already got ahead with optimization of tariffs on its part of the route, decreasing the prices by 40 percent.
Profitable cooperation
Azerbaijan is also holding negotiations with neighboring countries to promote cooperation possibilities.
Azerbaijan and Turkey have signed a protocol in the sphere of international road transportation in Ankara on December 14 at a meeting of Azerbaijan-Turkey joint commission in international road transportation.
Earlier, the Azerbaijan Caspian Shipping Company reduced tariffs by 20 percent in order to improve the attractiveness of maritime transportation of cars traveling from Turkey to Kazakhstan. According to the new tarrifs, the transit costs for each large goods vehicle going through Azerbaijan in both directions will be about $2,600.
Azerbaijan and Georgia plan to hold a presentation of the transit capacity of the region in China in the near future.