Economy, Domestic Economy

Azerbaijan Calls for Expediting INSTC Project

Azerbaijan Calls for Expediting INSTC Project
Azerbaijan Calls for Expediting INSTC Project

Azerbaijan’s President Ilham Aliyev has issued a decree for accelerating the construction of the Azerbaijani section of the International North-South Transport Corridor in cooperation with Iran.

Aliyev ordered the country’s ministries of foreign affairs and economy to work with Azerbaijan Railways Company to draft a framework agreement with its Iranian counterpart for devising a strategy for the construction and financing of the rail route and a connecting bridge on the border, IRNA cited Azerbaijan’s presidential website on Monday.

Under the new decree, Azerbaijan’s State Customs Committee and its State Border Service are also instructed to ensure the establishment of customs and border infrastructures required for the rail bridge.

The INTSC mega-project involves ship, rail and road routes designed to facilitate freight transport connecting India, Russia, Iran, Europe and Central Asia for increasing trade between major cities including Mumbai, Moscow, Tehran and Baku.

The project, which will connect Azerbaijan’s rail network with that of Iran, was discussed between the neighboring countries during a meeting of the joint commission early October.

During the meeting attended by director general of Iran’s Railways Company, Mohsen Pourseyyed-Aqaei, Iran’s Minister of Communications and Information Technology Mahmoud Vaezi and Azerbaijan’s Minister of Economy and Industry Shahin Mustafayev signed a memorandum of understanding on linking the railroads through a rail project connecting Azerbaijan’s Astara city to a port city of the same name in Iran by the end of the next Iranian year (March 20, 2017).

Under the deal, Baku will extend its railroads by 8 kilometers up to the border from where Iran needs to build 2 kilometers of railroads inside the country to Astara Port.

The Astara-Astara route, along with other routes inside Iran, including Astara-Rasht and Rasht-Qazvin railroads, which will be jointly completed with the northern neighbor, are the missing links in INSTC.

The international transit pathway, when completed, is expected to increase the 600,000 tons of commodities currently traded between Iran and Azerbaijan to 5 million tons per year, helping bilateral trade to dramatically increase from the current $500 million per year.

“We’re planning to create a combination of rail, sea and road transport networks in Astara. The multi-modal transport infrastructure will provide the means for the transit of goods from the Persian Gulf to Azerbaijan and Russia,” said Vaezi.

The railroad projects also come with side projects that boost collaboration between the neighbors.

“A terminal will also be built at the end of the 2-kilometer railroad from the border to Astara [in Iran]. That project will also be offered to both countries’ investors,” he said.

The government is also counting on Baku to finance the Qazvin-Rasht Railroad whose construction was stopped due to shortage of funds. The project is 80% complete.

Azerbaijan says it is determined to make investments key to completing the International North-South Transport Corridor. The project, according to Mustafayev, will lead to a tenfold increase in transit between the two countries.