WB recommends that Azerbaijan Railways continue tariff reforms

Azerbaijan Railways CJSC (ADY) serves as a strategically crucial link in the Middle Corridor (Trans-Caspian International Transport Route, TITR), but requires continued transformation in tariff policy and corporate governance, Report informs, citing the World Bank update titled "Integration: World-Class Trade Logistics along the Trans-Caspian Transport Corridor."

The country's total railway network spans 2,100 km, carrying an annual freight volume of approximately 18.5 million tons. The World Bank recommends that ADY transition to a cost-to-serve pricing model to provide greater transparency for international shippers. Additionally, the bank suggests introducing commercial financing mechanisms to attract private investment for modernizing rolling stock and infrastructure facilities, as well as signing long-term public service obligation (PSO) contracts with the state to clearly delineate commercial operations from social transport obligations.

Optimizing logistics processes and shifting a portion of cargo flows toward rail and efficient maritime transport along the Middle Corridor could reduce greenhouse gas emissions from regional freight transport by 3.2% by 2040.

At the same time, the report draws attention to the corridor infrastructure's vulnerability to climate risks and natural hazards, including landslides, extreme heat waves, and fluctuations in Caspian Sea water levels. According to World Bank estimates, a potential five-day disruption at the Port of Aktau caused by weather or technical issues may inflict direct and indirect losses amounting to millions of dollars on households and businesses across the region. Therefore, all new infrastructure projects along the corridor should be built in compliance with climate resilience standards.