Azernews.Az

By Aynur Karimova

Railways are the dominant mode of transportation in the region today, and Azerbaijan is keen on keeping pace with rising cargo traffic and driving the country’s economy.

Signing of a protocol on setting competitive preferential tariffs for cargo transportation via the Trans-Caspian International Transport Route will increase the role and importance of Azerbaijan as the main transit country linking the Central Asian and Eastern European countries, expert Ilgar Velizade believes.

He told Day.Az that this protocol provides for an active participation of Ukraine in the Trans-Caspian International Transport Route project, particularly on the background of ban of transit of Ukrainian goods through Russian territory, as well as the products to be imported to Ukraine through the transportation infrastructure of Russia. This, in turn, will further increase the role and importance of Azerbaijan as a transit hub.

Last week Ukraine sent a container train for a test journey on the Trans-Caspian International Transport Route to China through the territory of Azerbaijan. The train via the Ukraine-Georgia-Azerbaijan-Kazakhstan-China (via the Caspian Sea and the Black Sea) route was sent from Illichivsk.

The Ukrainian test train departed from Illichivsk a day after the signing of this protocol.

"The same can be said about the increasing role of Azerbaijan in implementation of multimodal transportation through the route as part of the North-South cooperation. Removal of Iran from the sanctions regime, on the one hand, and Russia's desire to intensify cooperation with the countries of the Arabian Sea basin, on the other hand, allows counting on an early activation of the shortest section of the North-South project passing through Azerbaijan," Velizade noted.

Trans-Caspian International Transport Route enjoys an opportunity to become attractive and profitable for consignors from European countries.

This route will transport approximately 300,000-400,000 containers by 2020, bringing hundreds of millions of manats in profit to Azerbaijan.

The first container train on this route arrived at Baku International Sea Trade Port from China in August. The train, consisting of 44 wagons, departed from the Alashankou export station of the Chinese Urumqi-Xinjiang province and arrived in Tbilisi in eight days transiting through the territory of Azerbaijan.

An agreement creating a coordinating committee to develop a Trans-Caspian International Transport Route was signed by Kazakh, Georgian, and Azerbaijani representatives in late 2013.

The project is being implemented by Kazakhstan Temyr Zholy, China Railways, Azerbaijan Railways, Azerbaijan Caspian Shipping Company and Baku International Sea Trade Port.

The expert also believes that these projects acquire particular relevance on the backdrop of withdrawal of the country from its dependence on the oil factor and implementation of plans to diversify the national economy.

"Enhancing transport links with neighboring countries and regions can be a significant incentive for the further liberalization of the Azerbaijani economy and its active integration into the regional and international economic and trade relations, enhance the participation of Azerbaijan in regional and international division of labor," Velizade stressed.

Azerbaijan's advantageous geographical position at the crossroads between East and West and developed transport infrastructure, attracts various countries, which wish to transport their cargoes through the country’s territory.

The government regards the transport sector as a central direction to diversify the national economy and to minimize the impact of the ongoing economic crisis to the nation.

Azerbaijan has invested billions of dollars in the development of sea, railway, road and social infrastructure. Developed infrastructure and good business climate has paved the way to attract foreign direct investment in this sector, as well.

With suitable location between East and West, Azerbaijan attracts foreign cargo companies.

Azerbaijan also applies the principle of "single window" for transport of transit cargoes through its territory via the railways, maritime transport, ports and terminals.

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 and transshipment via the sea terminals.

Large transport and logistics operators of Azerbaijan, Turkey, Kazakhstan and Georgia have already agreed to establish a consortium engaged in the shipping of cargoes from China to Europe, which will become possible through the Trans-Caspian international transport route "China-Turkey-Europe". The first container train from China arrived in Baku in August 2015.

Growing interest in the transport infrastructures passing through Azerbaijan's territory is expected to make Azerbaijan a major transport hub in the region. Expansion of transport routes will further increase Azerbaijan's attractiveness for investors in terms of easing delivery processes.

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Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

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