Contract with EBRD on purchase of cargo ships may give Azerbaijan upper hand in Middle Corridor

Azerbaijan continues to strengthen its commercial fleet in the Caspian basin and outside. Having the biggest commercial fleet in the Caspian Sea, Azerbaijan has taken strict measures to protect its upper hand in the region by launching new ports and ship-building plants. Presently the main shipping company in the country is Azerbaijan Caspian Sea Shipping (ASCO), and its history traces back to 1858.

Today ASCO has 367 ships, boats, vessels, and so on. However, following the laws of business, ASCO does not limit itself to these ships and tries to increase the number of ships. For this purpose, the company signed a contract with the European Bank for Reconstruction and Development (EBRD) to get $60m to purchase two dry cargo ships. The company noted that this project will allow the state-owned company to strengthen its regional ties as part of the Trans-Caspian International Transport Route (Middle Corridor) and increase the number of merchant fleet operations outside the Caspian Sea in international waters.

Speaking to Azernews on the issue, expert on transport issues Rauf Agamirzayev said that Azerbaijan's merchant navy has an experience of 165 years, and having a shipping tradition, Azerbaijan is known for its shipping activities with a shipping tradition in the Caspian basin.

“Also, Azerbaijan currently has a kind of monopolistic position in the Caspian Sea. In other words, we have the biggest fleet and this is an advantage for Azerbaijan. We have done a number of things to further strengthen this advantage and implemented many projects to reduce risks and increase maneuvers. One of them is that Azerbaijan has its shipyard, which reduces the dependence on foreign countries. It also leads to the currency remaining in the country. It allows to reduce the age of the ship fleet, that is, to increase the number of more modern and new ships. This, in turn, will lead to effective operation, competitive operations. Also, Azerbaijan is increasing its position outside the Caspian Sea. In this regard, the two newly ordered ships are increasing Azerbaijan's position outside the Caspian Sea. Of course, this also makes us proud. The number of our ships sailing under the flag of Azerbaijan is increasing,” Rauf Agamirzayev said.

The expert pointed out that to date, Zangezur, Garabagh, and Shusha afromax type ships which are the latest, modern, and larger-volume oil and oil products carriers with 115,000 tons have been put into operation. It was also announced earlier that Azerbaijan will increase the number of dry cargo ships in the Black Sea to increase its position along the Middle Corridor.

“This will enable Azerbaijan not only to make money from transit along this corridor but also increase profits through its freight companies. As a matter of course, it will make an important contribution to this corridor. Therefore, I think that these are very important projects for Azerbaijan. In addition, to make the corridor competitive and better developed, a part of the port inside the city of Baku was transferred to Alat in 2014, and the second part was transferred in 2018. In the last five years, we have been observing the growth dynamics of the load. ASCO has an exceptional role here. Because it is the ships of the company that ensure the multimodal transportation of the increased cargo across the Caspian Sea. Here are different types of loads,” Rauf Agamirzayev noted.

He stressed that the main of them are traditional oil cargoes, which according to the agreement signed with Kazakhstan, ASCO is showing its support for the transportation of 1.5 million tons of cargo. Agamirzayev noted that on the other hand, it witnessed an increase in recent years in the transportation of different cargoes - containerized cargoes, fertilizer cargoes, then railway cargoes transported by ferry, wheeled machinery on Ro-ro ships.

“The fleet that carries all of these is the fleet of the Caspian shipping, which is an important link of the corridor. Here, in a combined version, we can mention the Azerbaijan and Zarifa Aliyeva ro-pax type ships, which is a type of ship that can transport both railway, wheeled equipment and passengers, put into operation. The uniqueness of these ships is that previously such kind of ships were manufactured outside the Caspian Sea and therefore the dimensions of the Volga-Don canal should have been taken into account. However, the presence of Azerbaijan's shipyard will lead to more effective operation of this Ropax-type corridor, which was built taking into account the maximum cargo transportation in the Caspian basin. Besides, the increase of additional cargo ships in the Black Sea will lead to the fact that it will take its rightful place in the purely marine segment of this corridor and will have a significant share in the corridor,” the expert concluded.