IT WILL BE BIG

Azerbaijan 2016 | TRANSPORT | FOCUS: BTK RAILWAY

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.