Russia Eyes Joining BTK Railway Across South Caucasus

Representatives of Turkish, Azerbaijani and Russian railways inked a cooperation memorandum on May 6, 2019, in Ankara, to leverage the potential of the Baku–Tbilisi–Kars (BTK) railway and increase the volume of freight carried along the route (Azertag.az, May 6). “The tripartite cooperation will boost the operation of the BTK railway and will ensure that cargo from Russia passes through the Caucasus and Anatolia on the way to its destination,” a statement published on the Azerbaijan Railway’s official website noted (Ady.az, May 7). According to Russian Railways, the deal will closely knit the Trans-Siberian Railroad to the BTK, and the latter railway will gain access to Russia’s eastern ports (Rzdtv.ru, Russiabusinesstoday.com, May 8). This is an important development for trans-Eurasian transportation, where several corridor projects are simultaneously being developed by regional states, frequently in competition with each other (see EDM, August 1, 2017). In fact, the BTK was initially meant to facilitate bypassing the Russian Trans-Siberian route for east-west cargo shipments.

Before signing the memorandum in Ankara, Oleg Belozerov, the director general of Russian Railways, visited Baku and met with Azerbaijani President Ilham Aliyev and Azerbaijani Railway’s chairperson, Javid Gurbanov. The two sides discussed implementation of the ongoing International North-South Transport Corridor (which also involves Iran) and the perspective of Russia joining the BTK project. Belozerov noted in Baku that, in the first quarter of 2019, the volume of freight traffic between Azerbaijani and Russian railways increased by 25 percent and that the Russian side is ready to provide relevant transport loads for the BTK to utilize the project’s full capacity (Press.rzd.ru, May 6). He also proposed creating a regular container service from China to Azerbaijan via the Trans-Siberian route and developing a distribution hub in Baku (Report.az, May 6). The Russian and Azerbaijani officials signed a memorandum on cooperation to increase freight traffic along the North-South Corridor and “the Russia–Azerbaijan–Turkey route using the infrastructure of the BTK railway” (Press.rzd.ru, May 6).

The same day, on May 6, Belozerov and Gurbanov flew to Ankara, where they were joined by their Turkish counterpart, Ali İhsan Uygun, to sign the above-mentioned tripartite memorandum. Along with the memorandum, Russian Railways Logistics and Turkey’s Pacific Eurasia Logistics agreed to establish a joint venture to develop logistical capacities for transportation along the BTK route (Caspiannews.com, May 9). In the trilateral meeting, the Russian side also offered to construct a new 76-kilometer-long Russian-standard broad gauge (1,520 millimeter) rail line from the Georgian border to the city of Kars, in Turkey. Presently, the transition from the broad gauge to the standard European gauge (1,435 mm), which is used in Turkey, is done in Ahalkalaki, a Georgian town on the border with Turkey. If realized, the Russian-proposed rail extension would mean that trains would be able to cross the Georgian-Turkish border without stopping and not have to switch out their bogies until reaching the Turkish city of Kars.

Initially, the BTK project, dubbed a “middle corridor,” was developed to receive goods from China via Central Asia and the Caspian Sea and thus rival the Russian-championed Trans-Siberian route. Nevertheless, Russia was quick to use the services of this railway for its own exports to gain access to the Turkish market and the country’s Mediterranean ports. For example, in early 2018, a few months after the BTK’s inauguration, Javid Gurbanov noted that around 70,000 tons of Russian metallurgical products were being shipped from Russia to Turkey, via the BTK, every month. “Russia is also interested in transporting timber using the BTK, as well as shipping food products in the opposite direction,” he stated (Trend.az, February 9, 2018). And that summer, Russian Magnitogorsk plant, one of the world’s largest steel producers, sent a trial batch of rolled coils from Magnitogorsk, Russia, to Iskenderun port, Turkey, via the BTK railway, aiming to establish a new 500,000-ton capacity freight route for delivering its goods (Haqqin.az, August 9, 2018).

Turkey is by far the largest market for Russia’s steel products, with an annual import volume of 5–6 million tons (Metalukraine.com, March 18, 2018). Millions of tons of other goods, particularly Russian coal, cereals and fertilizers, are annually exported to Turkey. So far, the shipment of these goods as well as Russian trade with some other Southeastern European countries passes through the territory of Ukraine. Complicated relations between Ukraine and Russia hampered this traffic flow to a certain extent (Telsgroup.com, May 8, 2017). Thus, Russia is searching for new routes to bypass Ukraine. Another option involves ferries traveling straight to Novorossiysk; but this route is not popular due to infrequent trips and low capacity. Therefore, the BTK might offer new opportunities for Russia to access Turkey and Southeastern European markets.

Yet, not everyone in the region welcomed the recently signed memorandum. Mamuka Bakhtadze, the prime minister of Georgia, one of the three key BTK project partners, criticized the Russian-Azerbaijani-Turkish deal. Based on an intergovernmental agreement between Baku, Tbilisi and Ankara, he argued, the consent of all parties is required before involving any other party in the BTK railway. He also denounced the Russian offer to build a new rail line inside Turkey to the city of Kars, noting that the connecting station to link the standard European gauge to the wide gauge is currently operating on Georgian territory—“No other option is being discussed” (Apsny.ge, May 10). Georgia’s Economy Minister Natia Turnava sounded the same position: “No single party has the right to change something in this project,” adding that the BTK is presently “being carried out in the way we established and agreed on, and it is in line with our sovereign interests” (Gerogiatoday.ge, May 10).

The Georgian reaction does not imply an outright rejection of allowing the transport of Russian goods across its territory. Indeed, the country is already a key transit route for Russia’s trade with Armenia, Moscow’s key ally in the South Caucasus. Tbilisi seems to mainly object to being sidelined in the important decisions regarding the project. It is particularly concerned about discussions over the new gauge connecting station—Tbilisi does not want to give up such an important facility in its territory. In general, Russian freight can help to utilize the maximum capacity of the BTK, which is yet to reach the envisioned 5–6 million tons of annual cargo shipments in the first development phase. It will also allow using BTK and Trans-Siberian routes in a complementary mode for delivering Russian and other transit goods to Turkey and Southeastern Europe.