Azernews.Az

By Sara Rajabova

Azerbaijan’s importance for the neighboring countries has significantly increased recently, as the country’s transit capabilities grew.

This mostly related to the developments taking place in these countries. Azerbaijan’s transit role is increasing by the day in view of the expected lifting of international sanctions from Iran. In the meantime, the increase in the trade transactions between the Islamic republic and Russia strengthens Azerbaijan’s position as a transit country.

Azerbaijan also can be the best transit country for supplying Iranian oil and gas to Europe as the Islamic Republic, with one of the highest energy reserves, has long been eying to supply its hydrocarbon resources to West.

The two neighboring countries took steps to expand cooperation in the transportation field. Recently, Tehran and Baku signed a memorandum of understanding to join the railways of Iran and Azerbaijan.

Iranian ambassador to Azerbaijan Mohsen Pak-Ayeen believes the MoU which was signed during “Astara-Rasht meeting” in Iran will eventually revive the “Silk Road”.

The Silk Road or Silk Route is an ancient network of trade and cultural transmission routes that were central to cultural interaction through regions of the Asian continent connecting the West and East from China and India to the Mediterranean Sea during various periods of time.

Pak-Ayeen said that the implementation of the project will help Azerbaijan to become a key player in the regional transport sector and contribute to Azerbaijan’s goal to increase its revenues from non-oil sector.

During a meeting in Tehran between Shahin Mustafayev, the Azerbaijani Minister of Economy and Industry and his Iranian counterpart Mahmoud Vaezi, it was agreed to create a consortium aimed at providing financing for the project.

Pak-Ayeen said the consortium will discuss financing the project with two Azerbaijani banks, however, he did not disclose any information about the banks.

The envoy further added that access to the world through Iranian roads would be economically beneficial for Azerbaijan’s transport system.

Reminding that there are four active border checkpoints between Iran and Azerbaijan, Pak-Ayeen said that the Islamic Republic is the shortest route for Azerbaijan to reach Europe, Asia, the Persian Gulf and eventually Africa.

Iranian roads enjoy high security which is considered an advantage, the ambassador said, adding that both countries would benefit from joining efforts to cooperate and invest in constructing transport routes.

Iran and Azerbaijan should invest in major transportation projects before the start of a new phase of economic crisis in the world in order to become capable of playing a key role in the transport sector in the region, according to Pak-Ayeen.

Tehran and Baku are participants of the North-South railway corridor with capacity expected to reach 1.4 million passengers and 5-7 million metric tons of cargo per year, according to the preliminary estimations.

This route will serve as a bridge to connect the railways of Iran, Azerbaijan and Russia. This project envisages the establishment of a border railway bridge between Iranian Astara and Azerbaijani Astara, as well as laying an 8-kilometer-long segment on Azerbaijani territory.

The North-South railway project is expected to bring great profits to Azerbaijan and Iran. The railway lines of the two countries will be linked before late 2016.

The construction of Astara-Astara and Rasht-Astara part within the project falls within Iran and Azerbaijan’s responsibility and the two countries are making effort to build the sections.

Azerbaijan and Iran have shared diplomatic relations since 1918. Iran recognized Azerbaijan's independence in 1991, and diplomatic ties between the two countries were reestablished in 1992.

The trade turnover between Azerbaijan and Iran amounted to $110.6 million in January-November 2015. Some $80.5 million of this amount accounted for imports from Iran, according to the Azerbaijani State Customs Committee.

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Sara Rajabova is AzerNews’ staff journalist, follow her on Twitter: @SaraRajabova

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