SUPPLY CHAIN MANAGEMENT
COMPANY NEWS
2014, 28 NOV
Russia Plans Railway to Iran via Azerbaijan
Russia and Iran are connecting with each other through a railway. And Azerbaijan intends to be the crucial middle link. The Russian State Railroads Company earlier this week announced plans to build a railway link from Russia, across Azerbaijan, to Iran. An intergovernmental agreement on building the railway is expected to be signed in July next year and the Russian firm said it will foot the bill for the project. Azerbaijan has its reasons to be suspicious of both countries, but, so far, has given no sign of skittishness about the deal. Yet neither is it putting all its eggs in one basket. Also on the horizon is the Baku-Tbilisi-Kars railway to Turkey via Georgia which promises to carry five million tons of cargo and one million people each year. 

Russian Duma Speaker Sergei Narishkin, in Tehran from November 16-17, made no bones about the project being a slapback at the West. As yet, an OSCE-imposed arms embargo is the major Western trade bloc Azerbaijan faces. But in Russian and Iranian officials vowed to cooperate in reversing the bear trend in the world oil market and discussed the overall possibilities of simplifying land and sea transportation links. Shipments between the two countries have been proceeding apace except by rail; the new train-link could help pick up the slack, enthusiastically predicted Russian Parliamentary Committee for Transportation Chairperson Yevgeny Moskvichyev. 

Azerbaijan's own frequently fraught ties with Iran could play a key role here, but, recently, Baku supposedly has made significant efforts with Tehran to put behind them past frictions over mutual irredentist claims, differences over Israel and Azerbaijan’s ties with the West. To cinch the thaw, Iran even proposed to Azerbaijan that the two start producing cars together. But Moscow’s interest in building train tracks in the South Caucasus is not limited to Azerbaijan and its changeable relations with Iran. Georgia is another important link in the region’s railway politics. Russia and its close economic ally, Armenia, are promoting the restoration of a Soviet-era railroad connection across Georgia and breakaway Abkhazia. 

Source: Eurasianet