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Azerbaijan abandons state regulation of railway rates

10 February 2016 15:22 (UTC+04:00)
Azerbaijan abandons state regulation of railway rates

By Amina Nazarli

Azerbaijan Railways close joint stock company will henceforth regulate the tariffs for cargo and passenger traffic through the railway as the state decided to authorize it with more authorities.

The Cabinet of Ministers amended the “List of goods (work, services), the prices (tariffs) for which are regulated by state”, where the Cabinet excluded tariffs for freight and passenger traffic through railway from this list.

Spokesman for the company Nadir Azmammadov told Trend on February 7 that Azerbaijan Railways has been authorized to regulate tariffs for railway transportation.

“Earlier, the Tariff Council fulfilled these functions as the Azerbaijan Railways was subordinated to the Transport Ministry,” Azmammadov said. “Azerbaijani Railways became an independent body at the presidential decree in 2015 and was transferred to the jurisdiction of the Cabinet of Ministers.”

Now Azerbaijani Railways has entered a stage of dynamic development and is implementing several large-scale reforms.

Azmammadov emphasized the company has established bilateral and multilateral relations with international financial institutions and involved in many international projects.

“Work on the implementation of one of the main projects of the 21st century -- the railway Baku-Tbilisi-Kars railway is underway, which will connect not only three countries, but also play the role of bridge between dozens of states and peoples,” he said.

Last year the company upgraded its wagon and locomotive fleet, signing a contract with Russian “Uralvagonzavod” on purchasing 3,100 freight cars for various purposes, some 3,030 of which have already been delivered to the country.

The company also bought some 50 freight and passenger locomotives from French ALSTOM company.

Last year Azerbaijan Railways and Switzerland’s Stadler Rail Group signed a contract for the purchase of five KISS double-decker trains. Three of these trains have already in Baku.

Azerbaijan enjoys both advantageous geographical position at a crossroads between East and West and developed transport infrastructure, which pave the way for the country to become a regional transport hub.

The history of Azerbaijani railway goes back to the 19th century when it was mainly used for oil transportation. Today, the total length of the country’s railway surpasses 2,932 kilometers.

Today, Azerbaijan has invested billions of dollars in the development of railway infrastructure, applying the principle of "single window" for transport of transit cargoes through its territory via the railways and attracting foreign cargo companies.

Azerbaijan has reduced transit costs by around 40 percent for foreign carriers heading to the Kazakh port of Aktau and Turkmenbashi port of Turkmenistan. The government applies a 30-percent discount on the services of transit of oil and oil products by railway.

The North-South railway project connecting northern Europe to the south-east Asia, serve as a bridge connecting the railways of Iran, Azerbaijan and Russia.

After the removal of sanctions imposed against Iran the trade turnover with the EU will increase significantly, and Azerbaijan can use railway transport for cargo transportation.

The establishment of railway communication between Azerbaijan and Iran and the development of the North-South transport corridor can open significant prospects for the development of cargo and passenger traffic between Europe and Asia, thus greatly contributing to the diversification of Azerbaijan's economy.

The Trans-Caspian international transport route, which runs through China, Kazakhstan, Azerbaijan, Georgia, and Turkey and onward to Europe, has the opportunity to become a profitable route for the country. Azerbaijan expects to earn hundreds of millions of manat from the route which will transport approximately 300,000-400,000 containers by 2020. Azerbaijan Railways can also earn $600-700 million from transit traffic by 2020.

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Amina Nazarli is AzerNews’ staff journalist, follow her on Twitter: @amina_nazarli

Follow us on Twitter @AzerNewsAz

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