Expert: New business opportunities emerge in Azerbaijani part of Middle Corridor

New opportunities and new business prospects are emerging in Azerbaijan's part of the Middle Corridor, Transport Expert Rauf Aghamirzayev told Report.

Aghamirzayev stated that the Middle Corridor is a multimodal transport corridor connecting China with Europe, and after the Russia-Ukraine war, the corridor has gained more attention:

"The Middle Corridor route starts from China, connecting China and Kazakhstan via Dostyk or Khorgos-Altynkol by railway. Then the cargo is transported to Aktau Port by Kazakhstan railway, from there it's sent to Baku Port, passing through Azerbaijan and Georgia by railway, either continuing to Europe via Türkiye by rail or crossing the Black Sea. When the corridor first started operating, it took three times longer than the Northern route (via Russia) due to multiple border crossings, cargo transfers between transport types, and operational inefficiencies. As a result, the corridor had lower priority for long-distance trade. However, countries have since taken important steps for the corridor's development."

"Even before the Middle Corridor became operational, Azerbaijan invested heavily in transport projects. One of the most important projects is the construction of Baku International Sea Trade Port. Currently, the port can handle up to 15 million tons of cargo, including 100,000 TEU containers. Cargo handling through the port increases year by year. In 2024, 7.6 million tons of cargo was handled, which is 3.2% more than in 2023. Azerbaijan intends to further increase the port's cargo handling capacity. Instructions have been given regarding the port's second phase, and work will begin this year. The port's capacity will be increased to 25 million tons and 500,000 TEU containers," he noted.

The expert also highlighted that, since the port's location in the city center didn't create new opportunities, it was relocated to Alat: "The location of the port in Alat was chosen successfully. This area is where East meets West, creating extensive infrastructure opportunities. Baku Port creates opportunities for business. Currently, a Turkish company operates there. It appears that cargo volumes will increase further, which in turn will attract new market participants."

Aghamirzayev further stated that another important segment of the Middle Corridor is Azerbaijan Railways: "Currently, Azerbaijan Railways (ADY) CJSC is transitioning from direct current (DC) to alternating current (AC) power supply, and the process will be completed in 2028-2029. The transition to AC traction will lead to energy and other resource savings, cost optimization, easier operation, increased train speed, and consequently, improved cargo and passenger transportation. With the transition to AC, it is possible to transport 20% more cargo. Accordingly, 40 AC locomotives, 12 system locomotives, and 10 modern mainline diesel locomotives have been purchased. This also increases maneuvering capabilities."

He stated that the Zangazur corridor will become an important component of the Middle Corridor: "The construction of the Horadiz-Agband railway line, which is an important part of the corridor, continues. In 2021, President Ilham Aliyev laid the foundation of the Horadiz-Agband railway line. Shortly after, the design and construction of the railway line began. So far, 60% of the construction work has been completed. The implementation of cargo transportation in this regard will bring large amounts of funds to the country in the future."

According to Aghamirzayev, a total of 358 block trains were sent via the China-Central Asia-Azerbaijan route last year, of which 146 (15,292 TEU) were dedicated to transit cargo and 212 (20,956 TEU) were utilized for import cargo transportation: "Medical supplies, vehicles and auto parts, bicycles, motorcycles, water pumps, food and non-food products and so on, were the main transported goods. Against the background of expanding cooperation, it is planned to increase the number of block trains sent from China to Azerbaijan and Europe more than 3 times to 1,000 per year by 2025. Azerbaijan's infrastructure capacity allows for achieving this result. Cooperation between Azerbaijan and China through the corridor will expand further. China is interested in sending cargo through Azerbaijan."

The expert, emphasizing that Azerbaijan is implementing large-scale projects in the shipping sector, highlighted that Azerbaijan has established its own shipbuilding plant: "This leads to the renewal of our needed fleet and ensures that currency remains in the country."

Aghamirzayev also pointed out that, to boost the efficiency of the Middle Corridor, Azerbaijan, Georgia, Kazakhstan, and Türkiye signed a Road Map in November 2022, detailing priority investments and measures for its enhancement. Additionally, in June 2023, Azerbaijan, Georgia, and Kazakhstan agreed to create a joint logistics operator.

"At the same time, the World Bank, European Union, and other bilateral partners have confirmed their support and interest in the Middle Corridor by providing technical assistance and investments. Because trade turnover between the European Union and China is expected to increase further by 2030. In this regard, 49,000 trains were sent between 2014-2021 with an annual increase of 92.7%. In 2021 alone, 15,183 container trains were sent," he stated.

The expert emphasized that work is currently being carried out to expand the corridor: "In Kazakhstan, the Zhezkazgan-Shalkar-Beyneu railway line connecting east and west has shortened the route by 900 km. Also, the Kuryk port being built south of Aktau has led to reduced maritime transportation time. For the future, the Marmaray tunnel has been commissioned in Türkiye, which for the first time connected Europe and Asia by rail in Istanbul. In the future, by creating a railway connection over the Yavuz Sultan Selim bridge, these transportations will be organized more effectively."

The expert concluded that Azerbaijan stands out with its work towards expanding the corridor: "The development of the Middle Corridor is not an issue that depends solely on Azerbaijan. Further synchronization of activities will develop the corridor."