Country receives direct access to western market via North-South project
The North-South project is one of the key points of political interaction between Russia and Azerbaijan, respectively, the significance of the transport corridor is high for both states, Russian analyst at the Center for Political Information Ivan Pyatibratov told Trend.
He was commenting on the agreement to establish a working group for the further development of cargo transportation on the North-South ITC between Azerbaijan, Russia and Iran.
The matter was discussed in Moscow as part of a recent meeting between Russian Deputy Minister of Transport Alexei Semenov, Azerbaijani Deputy Minister of Transport, Communications and High Technologies Elmir Velizade and Deputy Minister of Roads and Urban Planning of Iran Shahram Adamnejad.
The parties to the meeting considered the issues of cargo transportation between the three countries, noting the increase in their volumes.
Based on the results of the discussion, the sides decided to establish a joint working group to address issues of further development in transport between countries, as well as an appropriate monitoring system.
Pyatibratov noted that the importance of the North-South ITC for Russia is primarily due to geopolitical reasons, more precisely expanding its diplomatic and economic presence in the East.
"For Azerbaijan, this corridor is more interesting from economic point of view: the country receives direct access to the western market, as well as the status of an international transport hub, which guarantees its economic growth. Therefore, the potential benefits of the North-South corridor are very real and understandable for our countries," Pyatibratov said.
He noted that besides Russia and Azerbaijan, Iran, which is the most important element of the project and the Astara-Rasht-Qazvin transport corridor in particular, also participates in North-South ITC project.
"It is obvious that presently, the Iranian side has objective problems: in 2018, the US withdrew from a nuclear deal with Iran and imposed sanctions against the country, which dealt a serious blow to its economy. At the same time, the fall of the Iranian rial and the rise in food prices, as well as the drought led to massive social protests. Thus, one of the partners of Russia and Azerbaijan in the North-South project is in a state of economic and political turbulence, and when it comes out of it, isn't clear yet. In this regard, it can be assumed that the implementation of the entire North-South project will be delayed until the issue with Iran is resolved," Pyatibratov added.
The expert stressed that Russia and Azerbaijan do stop working on the project, which means that the part of the project for which they are responsible will be implemented on time.
"It is worth noting that both the Russian and Azerbaijani sides are making efforts so that Iran does not withdraw from the project. And I think that the decision to create a trilateral working group on the development of the North-South corridor in November 2018 is a clear confirmation of this," the expert said.
The idea of the North-South transport corridor appeared in 1993. However, only on September 12, 2000, Russia, Iran and India signed a corresponding agreement, which was ratified in 2002. Azerbaijan joined the project in 2005.
The implementation of the idea has stalled due to Western sanctions against Iran. With the lifting of sanctions against Tehran in January 2016, the project again acquired its relevance.
The length of the international transport corridor is more than 7,000 kilometers.
A significant part of the North-South corridor runs along the Russian railways, which, depending on the route, account for 33-53 percentage of the total length of the land part of the corridor.
The INSTC in its southern part involves several routes for the passage of goods using rail transport:
Trans-Caspian route implies using of the Russian sea ports of Astrakhan, Olya, Makhachkala and the ports of Iran - Bender-Enzeli, Nowshehr and Bender-Amirabad.
The western branch of the corridor is a direct rail link through the Samur (Russia) -Yalama (Azerbaijan) border crossings with further access to the Iranian railway network via the Astara (Azerbaijan) - Astara border (Iran).
The eastern branch of the corridor is a direct rail link through Kazakhstan, Uzbekistan and Turkmenistan with access to the Iranian railway network through the border crossings Sarakhs (Turkmenistan) - Sarakhs (Iran) and Akyaila (Turkmenistan) Inche Burun (Iran).
Currently, these routes are mainly destined for Russia's export cargo to Azerbaijan and Iran.
The main advantage of the North-South corridor over other routes is a reduction of two or more times the distance of transportation, as well as a reduction in the cost of transporting containers compared to the cost of transportation along the sea route.
Rasht-Astara (Iran) - Astara railway (Azerbaijan) has great importance for the project, which is the last link of the direct railway route along the western branch of the North-South.