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Caspian region is transportation hub at Europe-Asia junction

Business Materials 3 December 2010 17:36 (UTC +04:00)

Azerbaijan, Baku, Dec. 3 / Trend /

Trend deputy head Seymur Aliyev

Today, the Caspian Sea region is mainly considered in the world as the concentration of hydrocarbon resources capable to provide a variety of world markets with oil and gas. However, successful geo-strategic location of the region also makes it attractive as a significant regional transport hub. Using and planning various transport corridors passing through the region are the evidence.

The Caspian countries can become one of the connecting links of the transport chain between the biggest markets, engaging in mutual trade turnover of goods, including Western Europe and China and South-East Asia, in the future plans. It is necessary to establish transport infrastructure to cope with these challenges.

The considerable work in this direction is conducted by Azerbaijan, located at the intersection of major transport corridors such as TRACECA and North-South.

Today, the major infrastructure projects are implemented and supported by the state involving both local and famous international companies, with rich experience in creating such an infrastructure. The construction of a new international trade seaport on the Caspian Sea, the establishment of railway communication via the Baku-Tbilisi-Kars railway, as well as within the railway transport corridor North-South are among these projects.

Azerbaijan launched constructing the largest port complex, designed by Dutch company Royal Haskoning, in the Caspian region, in November.

The area of 400 hectares was allotted for the construction. The construction will be carried out in three stages. Transporting cargo by the port complex at the first stage will hit 10 million tons - about 40,000 TEU containers. The figure will hit about 17 million tons of cargo and about 150,000 TEU containers at the second stage. The figure will hit 25 million of goods and about 1 million TEU containers at the third stage. The first phase of construction will be completed in 3,5 years.

It is also planned to build an international transportation and logistics center in the port complex. Experts in the field of transport of the European commissariat, realizing the project to establish the international transport and logistics centers within TRACECA, recognized advantageous the location of the port complex at the junction of corridors East-West and North-South. A general plan for logistics center designed and prepared by a grant from the European Union.

The project of creating the railway transportation via the route Baku-Tbilisi-Kars project, implemented by Georgia, Azerbaijan and Turkey is the continuation of the TRACECA transport corridor. Opening of this railway route will deliver the goods from Azerbaijan through Georgia to Turkey and through the Marmaris tunnel under the Bosporus to Europe in the future. The peak capacity of the corridor is expected to reach 17 million tons of cargo. This figure will hit 1 million passengers and 6.5 million tons of cargo at the initial stage of operation, scheduled for  late 2011 - early 2012.

The relevance of opening the railway transport corridor North-South significantly increased.

The project of the "North-South" transport corridor envisages creating a single railway transportation from Europe via Russia, Azerbaijan and Iran to India, South-East Asia and the Persian Gulf. The project will require more than $ 400 million. The most work will be done in Iran, which has no railway to the border with Azerbaijan. The operations worth about $35-40 million must be conducted in Azerbaijan. Transportation of goods through this corridor is projected in the first phase at 5 million tons per year. It will be increased up to 10-15 million tons per year in the future.

Implementing all these infrastructure projects will increase the transit potential of not only Azerbaijan but also all other participants of these corridors. Moreover, the possibility of integrating these transportation corridors with other similar projects such as TRACECA and Viking (Lithuania, Belarus and Ukraine) is being considered. Today, the main points of appearing the goods on the Eurasian continent are China and the European Union. They hold leading positions in terms of exports of goods.

One can talk about millions of dollars of transit revenues by using small volumes of goods, particularly from China, to transit through these infrastructure projects.

However, the high-quality infrastructure will be insufficient to bring goods in these corridors. It is necessary to use a balanced, reasonable tariff policy that increases economic efficiency and reasonability of transportation via these routes. Today, some countries pull a large volume of cargo transportation through their territories by using the dumping tariff policy. However, one can expect this process to end in the future because the dumping is prohibited according to the rules of the World Trade Organization. The attractive rates of the country's transport corridors, and especially TRACECA member-states will significantly increase the volume of cargo transportation via the corridor.

The issue of quickly and free border crossing has great significance in the process of increasing volumes of cargo transportation. This question is also urgent for TRACECA, as 14 countries are participants in this corridor.

Adhering to all of these factors, including infrastructure, tariffs and border crossing, the transport corridors in the region, and in particular those passing through the territory of Azerbaijan, can significantly increase the volume of cargo transportation. It will lead to a significant increase in financial flows in the economy of the member-states of these corridors. This will also turn the region into a major transportation hub at the junction of Europe and Asia.

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