TRANSPORTING SUCCESS

Azerbaijan 2015 | TRANSPORT | REVIEW: TRANSPORT

The upcoming European Games will encourage the improvement of transport options across the country, strengthening an already solid national infrastructure.

For Azerbaijan, the inaugural 2015 European Games is shaping up to be one of the country's most anticipated cultural events as well as a major boon for industry, and the transportation sector is no exception. In fact, transportation is becoming a leading sector for the economic development of the country, surpassed only by the country's vibrant oil and gas industry, and comparable in share to the storage and communications sectors, according to the Asian Development Bank (ADB).

Already in place in preparation for the Games is a new fleet of eggplant-colored London-style taxis that now await new arrivals in front of Baku's Heydar Aliyev International Airport. The airport itself received a major reconstruction in 2013, with a new futuristic 60,000sqm terminal. The terminal, along with the 2014 launch of a ferry terminal at Alat International Sea Trade port, were two of the countries most important projects over the last few years. Still, more transport infrastructure upgrades planned by the Ministry of Transportation are being developed to ease traffic congestion in the capital with the aid of ADB. ADB plans to unveil its project to modernize Baku's transportation system in the beginning of 2015, to cover the expansion of subway lines, metro-bus lines and tram development, special bus lanes, rapid bus transport, and railway.

A central fixture on the historic Silk Road, Azerbaijan's rapidly changing economy is redefining and advancing Baku's status as a major hub for regional transportation. The country's plan to modernize its road infrastructure includes the construction of numerous road junctions, bridges, tunnels, and underground and aboveground pedestrian crossings in the capital and beyond.

RUSH HOUR

Roads, highways, and railway network account for the majority of the transportation sector in the country, with roads carrying approximately 79% of total passengers in passenger kilometers and about 28% of total freight volume. Within the sector, the share of road transport is only expected to grow in relation to the country's economic development, says ADB.

As of 2013, there were 1.05 million cars and 30,334 buses on Azerbaijan's roads. There are just over 19,000km of highway in the country, 18,841km of hard pavement, and 8,636 of asphalt-concrete. The non-urban road network comprises about 25,000km of roads. Asphalt-concrete roads have also been destroyed in the process of setting up new communication lines in the country, which has added restoration costs to transport infrastructure.

In 2013, 125 million tons of cargo was transported by road as well as 1.5 billion passengers. The average distance of goods moved was 112.8km in 2013, while the average distance of passengers moved was 14.3km. Road transport employed 18,467 in 2013, up from 17,789 people in 2012, increasing their nominal monthly wage to AZN512 from AZN482.

The government passed a provisional law on the usage of toll roads, and preparation of implementation documents are still underway, the Transport Ministry told Azer News in 2014. Last year Aliyev inaugurated the completion of the multi-tiered road junction on Ziya Bunyadov Avenue, which had been one of the major targets for state company Azeryolservis last year.

Another major project that has been proposed by the Ministry of Transportation is the construction of special parking lots in the northeast and western entrances of Baku, to ultimately ban cars from entering the capital from other regions of the country. With public transportation or taxi, people will be able to enter Baku after leaving their cars in the lots, in an effort to reduce heavy traffic jams.


ON THE RIGHT SIDE OF TRACKS

While the volume carried by roads increased 20 times from 2006 to 2010, the majority of freight is still carried by rail, according to ADB. As of 2013, Azerbaijan had a total of 2,068km of operated lines. Arif Askerov, former Chairman of the JSC Azerbaijan Railways announced that in the first ten months of 2014 19.9 million tons of cargo was transported, 5.9 million of which was domestic cargo and 3.8 million for export.

Azerbaijan's railways have not been excluded from the country's transportation modernizations plans. According to Azer News, Azerbaijani Railways has received 85 passenger trains, and another fleet of cars is planned for overhaul by the summer of 2015. In June 2014, a contract for 30 new passenger cars was signed between Azerbaijan Railways and the Stradler Company for the Baku-Tbilisi-Kars (BTK) Railway project.

At the closing of 2014, the Transport Ministry announced the first pilot train had successfully been tested for the Georgian section of the Baku-Tbilisi-Kars railway, and plans to complete the project by the end of 2015 are now on track after surmounting years of delays. The investments into the BTK in the Georgia-Azerbaijan territory are estimated at $2.8 billion.

Azerbaijan is set to be the main supplier on the BTK energy corridor railway that will connect with Turkey and Georgia, across 826km of track, 721 of which are already in use. By connecting Azerbaijan to Turkey, the country's oil exports will not only meet Turkey's oil-importing needs, but will also link Azerbaijan's energy products to the European market via port and railway connections in Turkey. Beyond its freight potential, the BTK line expects significant passenger traffic, projected at 1 million passengers annually, and 3 million in the long term, according to Rail Turkey.

FLY TO BAKU

The history of flight in Azerbaijan stretches back over 100 years, with the first plane flying through Baku in 1910. In recent years, Azerbaijan has invested significantly in its transportation sector, allowing for the development of both a successful domestic transport system as well as constantly improving its maritime, rail, and air potential. In Baku itself, a steady increase of the famous London Cabs is expected in 2015 while bus numbers will increase as 2015 continues. Looking specifically at aviation, an updated fleet is important for several reasons. Attention to high quality and customer care is fundamental for creating the right impression of Azerbaijan. It also allows for the greater facilitation of both cargo and passenger transport. Finally, it allows for Azerbaijan to expand its transport routes that will undoubtedly support increasing numbers of both business travelers and tourists alike. The timing is not accidental. A surge in interest in Azerbaijan occurred in 2012 with the Eurovision Song Contest, and ever since then Azerbaijan's tourism sector has taken off. Cultural, business, and sporting events have increased in number throughout the country, as Azerbaijan has become a leader of the region in many sectors. Specifically, 2014 was an important year for Azerbaijan as it ramped up preparations for the First European Games in June 2015. It is nigh on impossible to overstate the importance of this event in Azerbaijan, as its impact is universal. For the transport sector in particular, ensuring that athletes and spectators are able to enter Azerbaijan is fundamental and improvements have been made accordingly. Enlarging Azerbaijan's air fleet is part of a long-term strategy to enhance the quality of the transport sector. However, in the short term, ensuring that transport to and from the country prior to the European Games is first-rate has meant that developments have been made quickly and efficiently in this particular area. In December 2014, Azerbaijan Airlines (AZAL) received two Boeing 787-8 Dreamliners, one of the most advanced passenger planes in the world. The plane has a capacity for 210 passengers and can travel on routes with a distance of over 15,000km, meaning that a range of new routes are now available for AZAL. The airline, the first among CIS countries to acquire such an airline, has announced its intentions that the new plane will operate on flights to London, Beijing, and to other destinations in Europe, while there are plans to begin direct flights to New York in the summer of 2015. Silk Way West Airlines, the major all-cargo carrier of Azerbaijan, announced its intention to purchase three Boeing 747-8 aircraft in the period of 2015-16 and signed a contract with Boeing on the purchase in December 2014. These new planes represent an upgrade in quality. An improving air fleet is also beneficial from a human perspective. Currently, there are a total of 66,100 jobs attributed to aviation and aviation related tourism, while the aviation segment supports 1.8% of Azerbaijan's GDP and employment for 1.5% of the country's employed population. With a $3 million expansion of Heydar Aliyev International Airport, an enlarging fleet, and an increasing number of destinations, aviation will contribute more over coming years. The announcement in January 2015 that AZAL would launch direct flights from Berlin to Baku starting in May 2015 is a clear sign that Azerbaijan is willing to open up to the world. The First European Games are a landmark event for many reasons; most importantly, it has coerced various sectors to undergo extreme renovations and improvements. An aviation fleet that has increased both in size and quality is an important development not only for the sector, but also for Azerbaijan as it further integrates the country with the rest of the world.


UP, UP, UP AWAY

The Azerbaijani Minister of Transport had predicted last year that Heydar Aliyev International's new terminal would make it one of the most sophisticated airports in the world. Consistent with that vision was the airport's four-star certification by Skytrax Air Travel Rating and Reviews in 2014. The terminal “will definitely increase the opportunities and will contribute to the development of the aviation industry in Azerbaijan… and help to establish Baku as a regional hub," Galymzhan Seilbayev, Country Manager of Air Astana in Azerbaijan, told TBY. “As for the transport sector, it is also following this trend. Azerbaijan has the potential to become a strong regional hub for both passenger and cargo aviation. The transport sector in Azerbaijan is worth investing in."

Aliyev announced at the opening of Heydar Aliyev Airport new terminal complex that modernization of air transport is one of the countries main priorities, and the major investments to infrastructure, opening of new routes, and expansions to both cargo and passenger transportation over recent years are a testament to that.

Azerbaijan Airlines (AZAL), the country's flag carrier, consists of completely modern airliners, and most recently added a Boeing 787 Dreamliner to its fleet in December 2014, making Azerbaijan the first recipient in the CIS of this type of aircraft. The Azerbaijani cargo carrier Silk Way West signed a contract for more than $1.1 billion in 2014 for the purchase of three Boeing 747-8 aircrafts, according to Azer News. The cargo carrier operates flights across Europe, the Middle East, and Asia.

In 2013, 126,000 tons of goods were transported via air transport, compared to 82,000 in 2012. In 2013, 1.66 million people passed through Azerbaijan's airports, up 1.59 million from the previous year, and Heydar Aliyev Airport's new airport terminal has tripled Baku's airport capacity to 9 million passengers per year.

Azerbaijan has built seven other airports over the past ten years, and five of the country's airports hold international status in Baku, Nakhchivan, Ganja, Lankaran, and Zagatala. The Head of the International Relations and Information Department of the State Committee for Urban Planning and Architecture in Azerbaijan Jahangir Gojayev announced in October 2014 the planned construction of a new airport in the Alat settlement 65km south of Baku, according to Azer News.

SEA POWER

The future airport in Alat, along with a major trade seaport and logistics center under construction, suggests that the settlement will soon develop into a city, Gojayev told Azer News. In addition to the logistics center, the $1.1 billion international trade seaport will include the establishment of a free economic zone. In September 2014, a ferry terminal opened in the seaport, as a part of the first three construction stages for the complex, which began in November 2010. Two ferries and three cargo berths stand to be completed for stage one, three additional cargo berths are planned for stage two, and two more cargo berths are set for the third stage. By the final stage, the port's capacity will reach 25 million tons of cargo.

Azerbaijan's existing Baku International Sea Trade Port was founded in 1902 and has maintained its status as the busiest and largest port on the Caspian Sea since, laying claim to the largest tank fleet. It is at the center of a busy domestic petroleum economy, and its significance has only been strengthened with increases in trans-Caspian oil trade volumes. The port's capacity reaches up to 15 million tons of liquid bulk and up to 10 million tons of dry cargoes.

In keeping with its robust regional relationships for air and rail transport, Azerbaijan is open to strengthening ties with its neighbors for maritime development, particularly Turkey. According to Azer News, Turkish Transport, Maritime, and Communication Minister Lutfi Elvan told local Turkish media in early January that he expected the commissioning of the BTK railway to intensify maritime transportation in the Caspian Sea, and proposed to establish a joint venture with Azerbaijan for the systematization and improvement of maritime transportation in the Caspian Sea.

While its future potential to expand its regional connections is in view, there is also a substantial amount of short-time excitement surrounding the European Games in readying Baku's infrastructure. Industry leaders credit the government for its efforts to stimulate the surge of investment over recent years. Reshad Abasov, General Director for ASE Express in Azerbaijan told TBY, “The leaders of the country, Heydar Aliyev, and the current president, Ilham Aliyev, adopted a balanced and sensible approach to developing the country's economy, and ensured every investor can have their projects realized."

Galymzhan Seilbayev
GALYMZHAN SEILBAYEV
Country Manager, Azerbaijan, Air Astana
Aviation is developing quickly in Azerbaijan. Opening the new terminal in Baku International Airport will definitely increase the opportunities and contribute to the development of the aviation industry in Azerbaijan. It will also help to establish Baku as a regional hub. It is a state-of-the-art terminal, which is convenient for the passengers. Azerbaijan is a fast growing market and attractive for investors.