Review of transport sector in Azerbaijan (2015)

Analysis Materials 11 February 2016 10:28 (UTC +04:00)

Some events occurred in 2015 and in January 2016 amid the global economic crisis and the fall in oil prices. A sharp increase in the volume of transit cargo transportation through the territory of Azerbaijan can be a consequence. This will bring the multi-million revenues to the country.

The first meeting of the working group of Coordination Committee of Trans-Caspian international transport route was held in January 2015 in Baku. During that meeting, the sides reached an agreement on adopting measures on organizing container service on China-Kazakhstan-Azerbaijan-Georgia-Turkey route.

The first container train arrived at Baku International Sea Trade Port from China via the Trans-Caspian international transport route. The train consists of 82 containers and 41 platforms. It traveled more than 4,000 kilometers.

A competitive tariff was set on transportation via this route.

Large transport and logistics operators of Azerbaijan, Turkey, Kazakhstan and Georgia have agreed on creating consortium for cargo transportation from China to Europe. The agreement was reached during the presentation of opportunities and prospects for the Trans-Caspian transport route "China-Turkey-Europe" in Istanbul.

The founders of the consortium will be Chinese Minsheng Logistics, Kazakh KTZ Express, Azerbaijan Caspian Shipping, Azerbaijan's Karvan Logistics company and Georgian Trans Caucasus Terminals.

Reportedly, the Turkish side will be represented in the consortium as an associated member.

Taking into account the favorable situation, the country's government is taking a number of important measures that directly affect the quality of services and the time spent for cargo transportation through the territory of Azerbaijan.

The preferential tariffs for transportation were introduced. The Coordination Council for Transit Cargo has been established. In particular, it is noted that a "single window" principle must be used while transporting transit cargo through the country's territory. Significant reforms are being made in the customs area.

The new route became more attractive in late 2015 after Russia imposed restrictions for Ukrainian and Turkish cargo transported through its territory. As a result, the route through Azerbaijan and the Caspian Sea has become the shortest route for cargo transportation from Ukraine and Turkey to Central Asia, i.e., hundreds of thousands of tons of transit goods.

There is another important project with the participation of Azerbaijan - the North-South transport corridor.

"Azerbaijani Railways" CJSC and "Russian Railways" JSC signed a memorandum on joint cooperation. The main purpose of cooperation is to increase the volume of transportation in the direction of Iran-Azerbaijan-Russia-Europe as part of the North-South transport corridor. Azerbaijan and Iran signed a memorandum of understanding on the construction of the railway [the Qazvin-Rasht-Astara section] as part of the North-South transport corridor. It will serve as a bridge to connect the railways of Iran, Azerbaijan and Russia. According to the preliminary estimates, its capacity will be 1.4 million passengers and 5-7 million tons of cargo per year.

In this regard, the implementation of major infrastructure projects - the commissioning of the Baku-Tbilisi-Kars railway in 2016 and the completion of the Baku International Trade Seaport become significant for Azerbaijan as the country will have to cope with the sharply increased volumes of transshipment of transit goods.

The Azerbaijani transport sector carried 222.4 million tons of cargo in 2015 or by 0.2 percent more than in 2014, according to the Azerbaijani State Statistics Committee's report as of 2015 said.

According to a report, the volume of non-oil cargo increased by 1.6 percent, reaching 161.6 million metric tons.

Around 80.3 percent of the total volume of goods transported accounted for the private sector during this period.

Some 61.9 percent of all cargo were transported by vehicles, 27.4 percent - by pipelines, 7.7 percent - by railway, 3 percent - by ships.

Some 1.892 billion people used passenger transport in 2015, which is 3.5 percent more than in 2014. Most of the passengers were transported by vehicles (88.1 percent) and metro (11.7 percent).

Automobile transport takes the lion share in the transport field of the country. Some 137.6 million tons of cargo were transported by vehicles, which is 7 percent more than in 2014.

The volume of passenger transportation hit 1.666 billion people (a 3.6 percent growth). Some 96.2 percent of the passengers were transported by buses and 3.8 percent - by cars.

Freight turnover by vehicles increased by 7 percent during the reporting period, while passenger turnover - by 3.6 percent.

Some 17.1 million tons of cargo were transported by railway in 2015 compared to 21.8 million tons in 2014.

On average, the number of loaded carriages made up 374 and unloaded - 446. Average daily load of carriages in the northern direction is 15,300 tons and in western direction 4,200 tons and southern direction - 1,800 tons.

Around 6.6 million tons of cargo were transported by ships during this period compared to 9.9 million tons in 2014. All cargo accounted for international operations. The volume of goods handled in Azerbaijani ports amounted to 8.55 million tons in 2015.

Some 64.9 percent of cargo shipping fell to oil and oil products. The volume of international transit cargo handled in the ports hit 94.3 percent. As of January 1, 2016, around 132,400 tons of import cargo left in the ports for transportation.

Some 45.7 million tons of oil were transported via main oil pipelines in 2015. Some 76.2 percent or 34.81 million tons of oil accounted for BTC.

Some 5.5 million tons of transit oil were transported via the BTC in 2015.

Gas transportation via main gas pipelines made up 21.2 billion cubic meters in 2015 or by 3.2 percent less than in 2014. Some 31.4 percent of the transported gas fell to the South Caucasus Pipeline. Some 6.65 billion cubic meters of gas were transported via this pipeline.

Some 1.8 million passengers were transported by air transport in 2015 which is 1.8 percent more than in 2014. Some 0.5 percent of shipment by this kind of transport fell to private sector.

Some 222 million people were transported by metro (a 3 percent growth) compared to 2014.

Some 47.8 million metric tons of cargo were transported through the Eurasian transport corridor TRACECA (Europe-Caucasus-Asia) in January-November 2015, the Azerbaijani State Statistics Committee said.

Around 58.3 percent of the total volume of transported cargo fell to vehicles, 29.8 percent - railway, 11.9 percent - ships. Some 18.3 percent of transported cargo accounted for transit goods.