Dr. Taleh Ziyadov is the Director General of the Baku International Sea Trade Port.

Second-year International Development student Wyn Bellhouse had a chance to speak with Dr. Ziyadov about Azerbaijan's attempts to diversify its economy and to grab a greater share of Eurasian trade via the construction of a new world-class port in the city of Alyat.

WB: What is the role of the Baku International Sea Trade Port in the development plan of Azerbaijan? What is the role of the Port of Baku in terms of regional development?

TZ: The purpose is to diversify the country’s economy, create new businesses and employment opportunities, and maintain a sustainable flow of foreign investment into the country through the establishment of free trade zones. It is expected that these developments will dramatically increase the share of the non-oil sector in the state budget. 

The Port of Baku Authority understands the importance of regional cooperation and has already established strong relationships with almost all of the regional ports – including Aktau, Kazakhstan; Turkmenbashi, Turkmenistan; Batumi, Georgia; Poti, Georgia; and Odessa, Ukraine. There are frequent conferences, visits and meetings where regional countries gather and discuss potential cooperation. As an example, an already-established platform among Ukraine, Georgia, Azerbaijan, and Kazakhstan, called the TransCaspian Transport Route has made faster and smoother transportation of goods from Ukraine to China possible.
WB: To what extent has Azerbaijan been successful in utilizing the Port of Baku as a means of economic diversification? Which steps are coming next in the way of becoming the hub in Eurasia?

TZ: The Baku International Sea Trade Port CJSC was established one year ago, and the port is in the beginning stages of the developments that are expected to diversify the economy of the country.  One early success is that the Azerbaijani government has been successful in promoting a united approach for all state-led transportation organizations –Azerbaijan Railways, the Caspian Shipping Company, the Port of Baku, Azer Road Service, and others – against challenges that may prevent the port from becoming a hub in the region. 

Crucial steps remain that must be taken in order to ensure a larger share for the Port of Baku in the state economy. Construction which will meet the latest international standards requires close cooperation with and learning from the experiences of world-leading ports. The Port of Baku has already started this process by signing agreements with ports in Dubai, Antwerp, and Singapore. Also, the Port of Baku Authority is seeking best practices on free trade zones, which might be beneficial in the creation of a new economic system around the new port at Alyat.  

WB: How can the Port of Baku ensure competitiveness with respect to other trade routes?

TZ: One of the main advantages of the Port of Baku is that the current maritime route from China to Europe takes 30 to 35 days, while Azerbaijan and its regional partners aim to shorten door-to-door delivery of China’s goods to Europe to under 14 days. The Port of Baku will be able to make use of this opportunity and its favorable geographical location.

Locally, the new port at Alyat is linked to existing highways and railways, connecting the port to the inland regions of the country. There are three international rail routes into Azerbaijan, which all converge at Alyat, making it a regional transport hub - to the northwest through Baku to Russia, to the west passing through Georgia to the shores of the Black Sea and Turkey, and to the south to Iran.

WB: What is the current progress of the development of the new port complex at Alyat and the affiliated free trade zone? 

TZ: The first phase, which is 60% completed, includes, among other facilities, a ferry terminal, cargo berths, railway lines, a customs holding area, a container yard, and rail and road access to berths. The location enables a modular expansion of all the facilities once cargo turnover increases.

Currently, if containers are transported to their final destination on a rail platform (without being unloaded and loaded onto a container vessel), they use the ferry terminal in the new port. If they are loaded onto a dedicated container vessel, then they come to the old port in downtown Baku. With the completion of the first phase, all such intermodal operations will be done in the new Port of Baku at Alyat.

The decision on when to start the construction of later phases will depend on cargo volumes. In general, these next phases are likely to follow a PPP model, whereby a private party will likely invest in, construct and operate these expansions.

Currently, about 80% of cargo at Alyat is deemed to be transshipment – that is, 80% of the cargo is not sent from or destined for Azerbaijan. This percentage split is likely to change with the start of the free trade zone, which is envisioned to be similar to the Jebel Ali Free Zone in the United Arab Emirates. After its establishment, the Port of Baku will act as a major logistics hub in Central Eurasia, serving both European and Asian markets.

PHOTO CREDIT: "Cargo Port" by Wendy is licensed under Creative Commons BY-NC-ND 2.0