The Baku-Tbilisi-Kars (BTK) rail line connecting Azerbaijan, Turkey and Georgia was launched this week, establishing a freight and passenger link between Europe and China that bypasses Russia.
The 826km rail link can transport 5 million tonnes of freight, with the promise to boost trade between countries in the region.
The project, which was estimated to cost around US$400mn ultimately reached a total cost of over US$1bn. The bulk of the financing was provided by Azerbaijan’s state oil fund.
BTK is part of China’s One Road One Belt (OBOR) project, which aims to revive the old Silk Road trade routes. China first mooted its ambitious OBOR initiative in 2013. Consisting of a land and a maritime branch, China says OBOR is a development strategy and framework that will boost connectivity and co-operation between it and the rest of Eurasia by encompassing around 60 countries through a network of port, rail, road and pipeline infrastructure.
The Chinese government estimates projects will take 30 to 35 years to complete and require significant funding, but aspires to achieve annual trade worth US$2.5tn between the countries located along OBOR within 10 years.
Trains from China to Europe actually started running in 2012. Since then, some 39 routes connecting 16 Chinese cities with 12 cities in and along the European route have been developed. While this may appear impressive, the flow of trade so far has been heavily in one direction, as European exporters are yet to embrace this new service.
However, in a statement, the European Union said it “welcomes the new rail corridor which, coupled with investments, improved infrastructure and logistics co-ordination. will provide better connectivity, new business opportunities and increased trade”.
The new freight train routes have been marketed as faster than shipping and cheaper than air. According to Chinese container cargo operator OneTwoThree Logistics, the cost of rail freight is half that of air, and transport times are twice as fast as via the sea.
The BTK link is expected to reduce journey times between China and Europe by around 15 days. Trains will depart from cities in China, cross into Kazakhstan at the Khorgos Gateway, before being transported across the Caspian Sea by ferry to Baku and then loaded directly onto the BTK to head to Europe.
Turkish President Tayyip Erdogan, Azeri President Ilham Aliyev and Georgian Prime Minister Giorgi Kvirikashvili were all present at the opening ceremony.