Azerbaijan-Eurasias transport hub

Restoration of Great Silk Road

An international conference on the restoration of the Great Silk Road was held in Baku on September 7-8 1998 on the initiative of national leader Heydar Aliyev. It was attended by presidents of 9 countries (Azerbaijan, Turkey, Georgia, Ukraine, Moldova, Romania, Bulgaria, Uzbekistan and Kyrgyzstan), and representatives of 13 international organizations and high-level delegations from 32 countries. The conference ended with the signing of the Basic Multilateral Agreement on International Transport for Development of the Europe-the Caucasus-Asia Corridor within the EU`s TRACECA programme and the adoption of Baku Declaration.

In accordance with the provisions of the Basic Multilateral Agreement, a decision was made to establish the Permanent Secretariat of TRACECA Intergovernmental Commission in the city of Baku. The headquarters of the Permanent Secretariat were inaugurated on February 21 2001. By contributing to the restoration of the historic Great Silk Road, Azerbaijan has played a crucial role in determining main development trajectories. Azerbaijan is presently a participant of the Silk Road Economic Belt initiated by China. A memorandum of understanding on joint encouragement of the establishment of the Silk Road Economic Belt was signed between the Government of Republic Azerbaijan and the Government of the People’s Republic of China during President Ilham Aliyev’s state visit to China in December 2015.

Baku-Tbilisi-Kars transport corridor linking Europe with Asia

Commissioned on October 30 2017, the Baku-Tbilisi-Kars railroad is designed to restore the Great Silk Road through linking the Trans-European and Trans-Asian railroad networks.

An agreement on construction of the Baku-Tbilisi-Kars railroad was signed in Tbilisi, Georgia, on February 7 2007, on the initiative of President of the Republic of Azerbaijan Ilham Aliyev. The groundbreaking ceremony of the railroad was held in Marabda, Georgia, in November of the same year. In July 2008, the inauguration ceremony of the Kars-Georgia border stretch of the railroad took place in Kars. A 504km-long stretch of the railroad, which is 850km in length, runs through the territory of Azerbaijan. A 263km-long portion runs through Georgia, while a 79km-long section through Turkey. The Baku-Tbilisi-Kars reduces transit time between China and Europe, which makes it more than twice faster than the sea route. The railroad, which contributes to stability and security, is expected to have an annual capacity of 5 million tons of freight at the initial stage. And the capacity will then reach 17 million tons and even more in the future.

The construction of the project on the historic Great Silk Road increases its attractiveness for regional countries and at the same time provides easy access to the European and world markets for the Central Asian countries – Turkmenistan, Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan, as well as Afghanistan. It plays a crucial role in developing their trade relations and boosting and integrating their economies.

One of the main advantages of Baku-Tbilisi-Kars project is that Azerbaijan gets a direct railway link with Turkey through the territory of Georgia. This, in turn, contributes to strengthening relations between the two states. Another advantage is that project stretches up to Nakhchivan Autonomous Republic. It is planned to build a separate railroad from Kars to Nakhchivan which will lift the Armenian blockade of the autonomous republic and ensure its transportation independence.

Created in Alat settlement in Garadagh district, Baku, under instructions of President Ilham Aliyev, the Free Trade Zone, which also covers the territory of the Baku International Sea Trade Port, will play a crucial role in transforming Azerbaijan into an international transport hub. Apart from playing a leading role in international cargo transportation and Europe-Asia logistics chains, the Free Trade Zone will significantly contribute to promoting the local production and ensuring the recognition of “Made in Azerbaijan” brand worldwide. The Free Trade Zone is expected to serve a market with a total population of 130,000,000 people and covering the Southern Caucasus, Central Asia, Russia and a part of Turkey.

North-South Transport Corridor which connects Northern Europe and South Asia

Azerbaijan plays an active role in creating the North-South Transport Corridor in accordance with the "Strategic Road Map for Development of Logistics and Trade in the Republic of Azerbaijan". This transforms the country into a key transport and logistics hub at the intersection of two transcontinental corridors at the center of Eurasia. The North-South Transport Corridor will link India, Pakistan, Iran, Azerbaijan, Russia and Northern Europe.

Azerbaijan is the only country in the world, which has land borders with both Russia and Iran, and this geographic location is of crucial importance to developing trilateral regional cooperation.

Work to establish the Azerbaijani section of the North-South Transport Corridor has already entered the final phase. An important part of the corridor – a section stretching from the Azerbaijan-Russia border to the Azerbaijan-Iran border – is fully ready for use. In addition, Azerbaijan also participates in financing the construction of Astara-Rasht-Gazvin railroad in the territory of Iran. Azerbaijan plans to grant a $500 million loan to Iran for the construction of Astara-Rasht railroad and its logistics.

In accordance with the strategic road maps, Azerbaijan will get the following shares through increasing the volume of transit trade in the region until 2020:

- 40 per cent on the Central Asia and Black Sea route;

- 25 per cent on the Central Asia and Europe route;

- 3 per cent on the China and Europe route;

- 40 per cent on the Russia and Iran route;

- 25 per cent on the Iran and Black Sea route.

There are also plans to integrate the North-South and Baku-Tbilisi-Kars transport corridors. Azerbaijan is an active participant in both projects. This will benefit China, Kazakhstan, Central Asian countries, Azerbaijan, Georgia, Turkey and Europe.

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The process of transforming Azerbaijan into an international transport hub continues in the following directions:

- development of economic, trade, transport and logistic relations between European, Black Sea, Caucasus, Caspian and Central Asian regions;

- development of the shortest multimodal land corridors between China and the EU;

- creation of the North-South Transport Corridor;

- attraction of transit cargo as part of the Great Silk Road;

- considerable improvement of logistic and trade infrastructure and Azerbaijan’s transformation into an even more attractive hub in this area through the regulatory stimulus;

- digitalization of the Great Silk Road through Azerbaijan`s Digital Transport Network and TASIM projects;

- coordination of relations between different transport areas;

- coordinated policy concerning international and domestic tariffs on cargo and passenger transportation;

- development of the coordinated activity programs on the organization of multimodal transportation, etc;

The commissioning of new international airports and construction of new roads across Azerbaijan, the country`s leading role in implementing regional projects, as an integral component of Azerbaijan`s purposeful policy, on the one hand, contributes to the development of domestic transport infrastructure, and on the other, transforms the country into Eurasia’s transport hub.