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Railway Consortium

Azerbaijan, Georgia, Kazakhstan to Establish Railway Consortium

Azerbaijan, Georgia and Kazakhstan have agreed to establish a railway consortium to ensure smooth movement of Chinese goods to Europe via the Trans-Caspian International Transport route.

This was announced by Bakytzhan Sagintayev, the First Deputy Prime Minister of Kazakhstan, who led a governmental delegation visiting Tbilisi, Georgia, on February 17. The Trans-Caspian route was one of the main topics of discussions held between representatives of the Georgian and Kazakh governments.

Sagintayev said the railway departments of the three countries agreed that this railway consortium will provide the movement of goods from Chinese ports to the Georgian port of Batumi and then – to Turkey and further to Europe.

“This is a very profitable transit route for all parts, and we all are very interested in establishing such a consortium,” he noted.

The Trans-Caspian route connects China with Europe via the territory of Kazakhstan, Azerbaijan and Georgia. This is a multimodal corridor which uses railway, maritime and road transport for transportation of goods. The official further added that given the route’s profitability, Kazakhstan is eyeing to be an active part in it, and his country is not going to abandon its assets in the Batumi port and the Batumi oil terminal, since it is connected with the Trans-Caspian route.

Dimitry Kumsishvili, the Georgian Deputy Prime Minister, Minister of Economy and Sustainable Development, said Georgia is interested in increase of volume of Kazakh goods which will pass through this route.

Today Azerbaijan is also determined to use its transportation potential, by turning into the transport hub between East and West. Many countries including Turkey, Ukraine, Georgia, Kazakhstan and China are interested in the opportunities to reach markets of interest by means of Azerbaijan, which makes the transportation more convenient, fast and cost-efficient.

The Trans-Caspian 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. Three test container trains have already been sent from China to Europe via this corridor. This project, being very profitable, has involved even Ukraine, the territory of which will make the delivery of goods to customers even faster.

Azerbaijan, Kazakhstan, Georgia and Ukraine have signed a protocol on setting preferential tariffs for cargo transportation via this route, and the final document on resolving the technical problems is expected to be signed this February. Signing of this document will likely lead to full commercial operation of the Trans-Caspian route in March. Experts believe that there will not be an alternative to the Trans-Caspian route in the coming decade.

It also the cheapest and most profitable corridor for freight traffic, Ruchan Kaya, a strategic and political coordinator of the Istanbul-based Caspian Strategy Institute (HASEN), believes. The transport corridor is not yet running at its full capacity, he told Trend, adding that the full operation of this corridor will have a positive impact both on Azerbaijan’s economic growth and its members – countries of the region.

“The effective operation of the Trans-Caspian transport route will positively affect the growth of trade turnover between Europe and China,” he said.

The expert also expressed confidence that the commissioning of Baku-Tbilisi-Kars railway will accelerate cargo delivering from Turkey to the Central Asian markets via the Trans-Caspian transport corridor.