IT WILL BE BIG
The Baku-Tbilisi-Kars Railway will change the transport landscape of the Caspian region.
Improving the transport infrastructure of Azerbaijan has been a goal for the country for many years. The past decade has seen the construction of over almost 7,000 miles of new roads and around 300 hundred bridges. Railway transportation is one of the key areas in the transportation sector of an economy. The Baku-Tbilisi-Kars (BTK) Railway is a major project in Azerbaijan, a country in which rail transport is already responsible for the majority of all freight movement. The BTK project is the result of a trilateral agreement between Azerbaijan, Georgia, and Turkey. This 826km railway has been under development since construction first began in 2008, and it is financed by the Azerbaijan State Oil Fund (SOFAZ).
The BTK Railway is set to cement Azerbaijan as a major transit player in Eurasia, connecting both people as well as cargo with a route that travels from the Caspian Sea to Europe, via port and railway connections in Turkey. Azerbaijan sits in an ideal transit location, bisecting both north-south as well as east-west transport corridors. This BTK railway underscores the importance of this location at a level previous unseen.
In the initial stages, the BTK railway will be able to transport 1 million passengers and 6.5 million tons of cargo per year. However, both these figures will increase as the project reaches a higher level of maturity, with officials predicting the peak capacity to be as much as 17 million tons of cargo, translating into over $10 billion worth of goods. The construction of the BTK is a significant step in the creation of an integrated rail freight network between Europe and Asia. This is especially significant because this new railway can quickly deliver freight from China to Europe by avoiding the port of Batumi. The current route to transport goods from China to Europe relies mostly on costly air transport or time-prohibitive sea travel. The BTK railway, in connection with rail lines in Kazakhstan, will offer a new and faster route for these goods. Putting the importance of this into perspective, the total trade volume between China and the EU is a figure that hovers around $600 billion. Adding to this, countries such as India, Pakistan, Turkmenistan, and Afghanistan have expressed an interest in the project as well, increasing both the importance and level of international cooperation involved in this project.
Since the BTK railway will offer a new rail system for transporting goods between Asia and Europe, many different sectors of the Azerbaijani economy will experience positive effects. In addition to raising the overall level of exports of Azerbaijan in a time when additional attention is being placed on diversification efforts, this railway will strengthen the framework of the existing energy corridor between Ankara and Baku. Furthermore, due to Turkey's unique geographic position as a connector between two continents, this railway will facilitate a higher level of energy cooperation with the energy-hungry EU and the entire Caspian region. The BTK route will also service the industrial sector. It will play an important role in the exportation of Azerbaijani chemicals and other raw materials destined for outside markets.
In terms of new developments with the BTK railway, in 2014 Swiss company Stadler Rail Group inked a deal with the BTK project to provide 30 new, ultra-modern passenger trains. These luxury trains will be equipped with all of the modern amenities, such as built-in Wi-Fi and other innovations. While many focus on all of the positive aspects of the project, it has endured its fair share of setbacks. After a Georgian section of the railway successfully tested the first pilot train in late 2014, the project's completion date has been pushed back numerous times, due to some difficulties with construction timelines. The railway was originally set to commence operations in 2015, but now the commissioning is set for November 2016.
IT WILL BE BIG
TABLE OF CONTENTS
Year In Review
Good Times Ahead
<strong></strong><strong>In a year dominated by the overarching theme of low hydrocarbons prices, Azerbaijan showed resilience and verve in putting in place bold measures both to counter the slump in energy prices and put its economy on a surer footing.</strong>
read articleReview: Diplomacy
Operation Outreach
In 2015, Azerbaijan's military budget increased by a notable 27%, to $4.8 billion, or 17.9% of the government's total budget for the year. The first Azerbaijan Defence Exhibition (ADEX 2014), drew over 200 companies from 34 countries, including Russia and the US.
read articleInterview
Rufat Mammadov, President, Azerbaijan Export and Investment Promotion Foundation (AZPROMO)
TBY talks to Rufat Mammadov, President of the Azerbaijan Export and Investment Promotion Foundation (AZPROMO), on large-scale events and their ability to attract FDI and the potential Iran may hold.
read articleReview: Banking
More Interest
In a sector faced with relatively flat growth for 2015-16, new opportunities are still there aplenty, led by the nascent Islamic banking sector, e-banking, and microfinance initiatives. Together, these areas should make banking more diversified and less reliant on a buoyant energy sector for its capital inlay.
read articleReview: Capital Markets
Taking Stock
As Azerbaijan grapples with the knock-on effects of low hydrocarbon prices, the Baku Stock Exchange (BSE) finds itself at the center of the country's efforts to stave off a budget deficit this year. In January, the government announced plans to sell $500 million worth of bonds on the BSE.
read articleInterview
Khanlar Fatiyev, , Chairman of the Supervisory Board, Ganja Automobile Plant Production Association
TBY talks to Khanlar Fatiyev, Chairman of the Supervisory Board of the Ganja Automobile Plant Production Association, on the role of the plant in driving growth in the non-oil sector.
read articleReview: Agriculture
Lots More
Farms across the country are pursuing a policy of increased yields for year-round fruit and in the wheat harvest to stave off an over-reliance on imports. With carefully targeted increases in exports, better routes to port and to market, and greater sophistication of agricultural facilities, farming could soon be the morning star of Azerbaijan's diversified economy.
read articleReview: Education
Baku to School
Azerbaijan's culture has always harbored a deep respect for educational values. This is embodied in the country's Azerbaijan 2020 mission statement, which seeks to raise standards across the sector and introduce ICT as a standard part of the learning experience at all levels.
read articleInterview
Elkhan Mammadov,, Secretary General, Association of Football Federations of Azerbaijan (AFFA)
TBY talks to Elkhan Mammadov, Secretary General of the Association of Football Federations of Azerbaijan (AFFA), on the experience Azerbaijan is gaining in hosting international events.
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