Caspian Economy Poised to Grow As Azerbaijan, Turkey Launch Logistics Center

Azerbaijan and Turkey are planning to build a logistics center in Turkey’s eastern Kars region as part of the Baku-Tbilisi-Kars (BTK) railway line currently under construction, to go online by October 2018, according to Turkey’s Ministry of Transport, Maritime Affairs and Communications.

"This route will lead to China,” said Ahmet Arslan, Turkey’s Minister of Transport, Maritime and Communication, in July, referring to the rail line. “Every train that passes through Turkey on the line will pay a fee. We will be able to carry 34-35 million tons of cargo per year. This figure will increase every year, and a cargo from China will go as far as London.”

The agreement to jointly build the logistics facility was inked on July 19, when the chairman of Azerbaijan Railways Javid Gurbanov visited Kars.

Three hundred thousand square meters has already been allocated for the center, which will cost around 93 million Turkish lira ($26 million). Included in the plans are warehouses, container loading-unloading and storage areas, bulk unloading areas, as well as maintenance, repair and washing facilities, all constructed to the latest standards. The center will also be home to customs service buildings, personnel offices, canteens, banks, restaurants and hotels. Turkey expects 412,000 tons of cargo to move through the facility each year.

The center will also be connected to Turkey’s domestic line, the Ankara-Erzurum-Kars high-speed railway.

Officials in Ankara believe that the BTK railway, dubbed the “Iron Silk Road,” is important for growing Turkey’s $857 billion economy, and position the country as a major hub for Eurasian commerce and transportation. The logistics center is expected to form the backbone of the BTK line, which will be integrated into the One Belt, One Road (OBOR) east-west trade corridor being spearheaded by China.

The 826 km (513 mi) line connects Azerbaijan, Georgia and Turkey and is expected to boost their economies. The line starts at the Caspian Sea’s western capital city of Baku, in Azerbaijan, continues westward to Tbilisi, Georgia, and ends in Kars. There it will connect with Turkey’s broader rail system and continue on to Europe.  

An overland ride for cargo traveling from East Asia to markets in Europe will be twice as fast routes by sea, and half the price of air transportation. The line’s initial passenger capacity is about one million passengers and 6.5 million tons of freight, eventually expected to increase to three million passengers and over 17 million tons of cargo.

Azerbaijan, the largest South Caucasus country on the western shore of the Caspian Sea, is expected to be the biggest benefactor of the project. Azerbaijan, an oil exporter, will now have a link by land to Turkey, a net oil importer, and will be able to take advantage of Turkey’s domestic railway networks to facilitate Azerbaijani exports to Europe.

Besides fitting into the OBOR mega-network, the BTK railway forms part of the Trans-Caspian International Transport Route (TITR), a network of rail and sea lines designed to connect Eurasia via China, Kazakhstan, Azerbaijan, Georgia and Europe via Turkey and Ukraine.

"Kazakhstan railway workers and our Chinese colleagues are waiting for the opening of a new railway [the BTK], which will expand the geography of cargo transportation along the corridor, with access to Turkey," said Kanat Alpysbayev, Chairman of the Board and President of JSC NC Kazakhstan Temir Zholy, during his visit to Azerbaijan and Georgia last month.