Baku-Tbilis-Kars, Türkiye-China integration prospects Review by Caliber.Az

Azerbaijan and its partners in the implementation of the "Middle Corridor" are speeding up the work related to modernisation and an increase in the throughput capacity of the Baku-Tbilisi-Kars (BTK) railway.

The main efforts have been directed since spring 2023 to the Georgian section of the BTK, in which the transportation of goods has been limited since mid-May.

A subsidiary of Azerbaijan Railways company (ADY) - ADY Container LLC has recently announced a new alternative route, which will temporarily replace certain sections of the BTK for the period of reconstruction.

Interest in this route is growing rapidly.  Turkish Minister of Transport and Infrastructure Abdulkadir Uraloglu noted that the importance of the BTK railway is noticeably increasing, taking into account the prospects for China-Türkiye integration in transport projects.

The war in Ukraine, which has been going on for more than a year and a half, and the anti-Russian sanctions imposed in this regard, have changed the transit and logistics in Eurasia.

As the competitiveness of the Russian Northern Corridor weakened, the number of applications from forwarders and logistics companies from Europe and Central Asia, China and Türkiye to use BTK’s capabilities greatly increased.

However, the rapidly growing demand for the transit of goods along the "Middle Corridor" should be commensurate with its capacity, infrastructure development and convenience of cross-border transit mechanisms.

That is why the countries of the Caspian-Black Sea region - the countries of Central Asia, the South Caucasus and Türkiye are making unprecedented efforts to intensify cooperation in transport sector, eliminating problems in logistics, infrastructure, customs and tariffs, etc.

The most important step in this sphere was taken on August 18, 2022. Azerbaijan, Türkiye and Georgia signed an agreement on the establishment of a sustainable electronic exchange of primary data on cargo which is transshipped along the BTK to simplify transit and customs procedures on this cross-border railway.

Mechanisms for simplified customs procedures are being introduced. The customs risk analysis will be exchanged through a preliminary exchange of information.

In particular, it is planned to simplify cross-border procedures through the use of primary e-data interchange systems, mutual recognition of customs seals and the results of joint inspections.

Special attention will be paid to goods requiring fast transportation, etc. This will make risk analysis available to all three countries, thus there will be no need for duplication of control measures.

All this will greatly reduce the loss of time during the transportation of goods across borders.

Presently, the customs services and other corresponding agencies of Ankara, Baku and Tbilisi are working on the development of information exchange technology, planning to create a tripartite cooperation commission to resolve all issues and technical aspects.

The law on the intergovernmental agreement "On primary information exchange to simplify transit customs procedures within the BTK project" approved by President of Azerbaijan Ilham Aliyev on June 21, 2023 was the most important step to accelerate the implementation of this agreement.

The agreements on the use of a single tariff for transportation of goods along the BTK have been recently reached on Azerbaijan’s initiative and through the support of its partners - Georgia and Türkiye. The details of a future agreement are already being agreed.

As a key logistics hub in the region, Azerbaijan traditionally acts as a locomotive promoting transport integration in the vast Eurasian space.

Azerbaijan has begun to expand the capacity of the Alat port, and is also implementing a large-scale reconstruction of the Baku-Tbilisi-Kars railway line on the section passing through Georgia to accelerate transport traffic and increase the cargo transportation volume along the "Middle Corridor".

The BTK railway line was put into operation on October 30, 2017. According to ADY company, almost 1.348 million tons of cargo have been transported along BTK since the beginning of its operation and until late 2022.

The representatives of the Turkish Ministry of Transport and Infrastructure said that about 2.4 million tons of cargo have been transshipped through the BTK since its launch and until May 2023.

Thus, on average about half a million cargo was transported annually over five years of operation. Such rates cannot be called sufficient, especially taking into account the design capacity of this branch, initially estimated at between three and more than six million tons of cargo per year.

Despite the cost of cargo transportation by railway is relatively low and competitive, about three-quarters of cargo transportation between Türkiye and Azerbaijan still accounts for vehicles. This also shows that BTK is not fully used.

Experts think that the BTK is not fully used due to a number of problems and bottlenecks in the infrastructure of this railway corridor. In particular, the transportation of goods along the BTK from Baku to Kars exceeds 70 hours.

This means that efforts should be directed to increasing the speed of trains.

In turn, Georgia intends to complete the creation of infrastructure on the Marabda - the border of Türkiye section, and logistics terminals are expected to be put into operation in Georgia’s Akhalkalaki town and Türkiye’s Kars city soon.

It will be possible to increase the handling of goods which are transported along the BTK through these nodal transport hubs.

Azerbaijan has been investing in expanding the BTK’s bottlenecks since early 2023, in particular, the Georgian section of the railway.

Azerbaijan's additional investments in this project will amount to more than $120 million, while the cargo transportation volume through BTK will be expanded from one million to five million tons.

ADY has attracted new contractors for the repair, reconstruction and construction work on the BTK railway branch to speed up the ongoing work and to complete the modernisation of the track infrastructure on the 183-kilometre section in Georgia by late 2024.

According to the ADY, repair and restoration work on the Marabda-Kartsakhi section passing through the mountainous wooded area with difficult terrain will improve the road infrastructure, increase the capacity of the railway line and traffic safety.

BTK has been fully provided with electricity, the railway line construction has been almost completed. Twelve stations have been almost provided with electricity. All necessary communication and signaling equipment, other modern additional devices have been installed at those stations. Administrative buildings for railway station workers are also being equipped with necessary devices.

The transportation of goods has been temporarily limited on the Georgian section of the BTK railway since mid-May for the speedy completion of these operations.

However, an alternative transcontinental route for business clients has been recently presented on the initiative of ADY Container LLC not to restrict traffic on such an important section of the Middle Corridor.

Cargo will be transported by ships from the Turkish ports of Derince, Mersin, Alsancak, Marport and Evyap to the Georgian ports of Poti and Batumi via the new route, and then in these ports the containers will be reloaded onto railway platforms, which will transfer them by railway to the port of Baku, and then they will be sent along the Trans-Caspian route to destinations in the Central Asian countries and China.

It will be possible to maintain the integrity of the cargo transportation chain along the BTK for the period of repair and restoration work in Georgia thanks to such a scheme.

Ankara has also shown great interest in the transport capabilities of the BTK railway. As part of the construction of a high-speed railway in Türkiye, a connecting line will be laid from Erkoy station to Kayseri, and this branch will stretch to Erzincan, Erzurum and Kars.

Thus, Kars, with which the BTK branch has been connected, will become a railway junction, a passenger and transport hub of a strategic corridor of international importance, which has already been called the “Iron Silk Road” in Türkiye.

BTK’s potential is also interesting for China. China has been organising the movement of block trains for transshipment of container cargo to Türkiye and further to the Middle East and Europe since 2019 as part of its One Belt, One Road initiative.

“Turkish President Recep Tayyip Erdogan plans to visit China in October 2023, which is interested in joint work on the Turkish railway lines in Konya, Aksaray, Yenice and Akdeniz, a number of tenders and negotiations have been held in this sphere,” Turkish Minister of Transport and Infrastructure Abdulkadir Uraloglu said.

The minister also said that there are enough opportunities in the region related to the implementation of the Chinese One Belt, One Road initiative. BTK railway plays a significant role here.