Transport

Developing Azerbaijan’s transport sector is one of the government’s top priorities, both to support the country’s continued economic expansion and to enhance Azerbaijan’s role as a regional logistics hub.

Infrastructure upgrades targeted as top priority

Ziya Mamedov, Minister of Transport

Chief goals of the Ministry of Transport include upgrading the country’s main east-west highway, the rural road network, the Trans-Caucasus railway, the international port at Baku on the Caspian Sea, Nakhichevan airport, and metropolitan transport systems. Azerbaijan has extensive road and rail networks, links via Georgia to the Black Sea as well as ports on the Caspian sea, and three international airports.

A trading center along the historic Silk Road for centuries, today Azerbaijan is a major stop along the rapidly developing north-south corridor linking Russia and the Middle East. As Ziya Mamedov, Minister of Transport, explains, “Azerbaijan is situated at the crossroad of East and West. The Ministry of Transport’s goal is to develop and integrate Azerbaijan transport to match international standards.” The ministry is working with the European Bank for Regional Development (EBRD, which has invested some USD 50 million in Azerbaijan’s transport system), the World Bank, the Islamic Development Bank, the Kuwait Fund and other international funding organizations to complete a number of major transport-infrastructure projects.

Planned improvements to the country’s road system include constructing a new 28.3 mile highway along the route of the ancient Silk Road as part of a 318.7 mile road crossing Azerbaijan and leading to Georgia; the ministry hopes to have the entire route upgraded by 2006. Another major project is a 223.2 mile, four-lane north-south highway that meets international standards of quality and safety, and a 195.3 mile southern highway built in cooperation with the government of Iran.

Minister Mamedov adds, “Within five years, the ministry is also planning to restore small roads in compliance with the regional development program started by President Ilham Aliyev. Despite its relatively small size, Azerbaijan has over 14,880 miles of roads.”

As for the 1,295.2 mile rail network, the principal mode of freight transport, both tracks and rolling stock require repairs or replacement. A USD 20.2 million EBRD loan will finance needed repairs to key segments of the system. Around 92 million tons of cargo per year was transported by rail in Azerbaijan during the Soviet era, reflecting the system’s development potential.

Concerning air transport, the country’s three international airports are at Baku, Gyandzha and Nakhichevan; Baku’s Bina International airport opened in 1999 after a USD 64 million upgrade and can now handle 1,600 passengers an hour as well as accommodate wide-bodied jets.

Azerbaijan’s maritime transport system includes the port at Baku, the largest seaport on the Caspian Sea, currently being upgraded through a USD 16.2 million EBRD loan; it will be able to handle 30 million tons of freight per year when renovations are complete. Azerbaijan also transports cargo to the Black Sea via Georgia by road and rail, or through the Volga-Don canal.

Minister Mamedov points out that Azerbaijan’s transport sector represents outstanding opportunities for foreign investors. He says, “Opportunities for cooperation are available in both the private and public sector, in all segments of the transport system.” The Ministry of Transport has developed a number of incentives to encourage foreign investment, including reducing taxes on cargo transport by 50 percent and reducing tariffs on all transport as of April 1 this year.

To potential investors in the United States, Mamedov offers his personal assistance and adds, “In three to five years, Azerbaijan’s transport sector will be up to western standards. You should not be afraid to invest in our transport sector; our country is safe and democratic, with a strong and supportive government.”