Interests of the countries involved in the Zangezur Corridor project

After the transition of the Armenian-Azerbaijani confrontation to a peaceful phase, Azerbaijan and Turkey began to activate the Zangezur Corridor and intensively connect it to international transport networks.

With the implementation of the project, the Pan-Turkic countries will connect with their closest ally – Turkey – via a direct transport artery through Azerbaijan.

A new transport “arc” connecting with Europe is being created, which will lead to a new distribution of traffic flows in the region.

In the formation of the new corridor and the expansion of trade and transport ties with the European space, in addition to Georgia, almost all neighboring states – Armenia, Russia, Azerbaijan, Turkey, Iran, the Central Asian “five” – are interested to a certain extent.

From this perspective, naturally, there are questions:

Is a new alternative transport corridor connecting Asia with Europe, bypassing Georgia, being formed?

Will it lead to the diversion of certain cargo flows from the Georgian railways, ports, and Baku-Tbilisi-Kars branches to the Zangezuri corridor?

Will the launch of the Zangezuri corridor affect the new distribution of cargo flows in the region, and what role will Georgia play in such a distribution?

The “Transport Corridor Research Center” offers its own analytics on all these and other questions.

Despite the aspirations of neighboring Azerbaijan and Turkey to develop the Zangezur corridor, there are a number of obstacles that may hinder the formation of a unified framework for the corridor, which is primarily related to the violation of the synchronization of the project implementation and the delay in time.

The Zangezur corridor (see diagram) consists of five independent sections, on which preparatory work and construction work on a number of sections are underway at different intensities.

The Kars-Igdir-Diluj (area of ​​connection with Nakhichevan) railway is the main part of the Zangezur corridor and connects Turkey with Azerbaijan. The project is at the implementation stage (marked with yellow dots on the diagram).

Within the framework of the project, Turkey plans to build five new stations – Digori, Tuzluca, Igdir, Aralik and Dilucu – along the 200 km of the railway line. The main part of the works is currently underway in Igdir.

The double-track railway line will be fully electrified, and the project is expected to be completed in five years.

The continuation of the Kars-Igdir-Dilucu project in the territory of Nakhichevan involves the reconstruction of the existing 177 km railway line between Velidag and Ordubad (marked with red dots on the diagram).

With the financial resources of Azerbaijan, it is planned to convert the railway section in the territory of Nakhichevan from single-track to double-track.

The next – 45 km section of Zangezur is located in the territory of Armenia. This section is the most problematic and requires construction from scratch (marked with a blue dot along the territory of Armenia on the diagram).

The most problematic part of the Zangezur corridor is the 45-kilometer section of the railway from Azerbaijan to Nakhichevan via Syunik in Armenia.

This section of the corridor is located on the territory of Armenia, which is currently in a state of disrepair and requires reconstruction based on the agreement of the parties.

Despite the fact that Azerbaijan is intensively carrying out construction work in neighboring areas, Armenia has not yet taken any steps in this direction. First of all, the uncertainty of the completion of this section is considered to be a violation of synchronization.

Of the 110-km section of the Aghben-Fizuli-Horadiz section adjacent to Armenia, 85 km have already been completed. Azerbaijan is intensively engaged in construction (marked with a blue dot along the territory of Azerbaijan on the diagram).

As for the next section of the Zangezur corridor, which ends in Horadiz-Baku on the territory of Azerbaijan, the railway is already operational here, which ensures the full integration of the new corridor into the main transport network of Azerbaijan (marked with a blue dot along the territory of Azerbaijan on the diagram).

The Karabakh war, which ended with the victory of Azerbaijan, obliges the Armenian side to ensure the unhindered passage of transport and cargo through the territory of Nakhichevan. In fact, Armenia is obliged to lift the transport and economic blockade on Nakhichevan.

The Zangezur Corridor is given additional dynamism by Azerbaijan's aspiration to develop a highway on its territory, in parallel with the railway infrastructure. In the future, both the railway and the highway sections will become an integral part of the new corridor.

It is important to note that the most profitable country is Azerbaijan, since in such a case, it is given the opportunity to diversify any cargo flow through Nakhichevan, namely, it will be able to use tariff instruments acceptable to it to direct cargo flow through its territory either through the Middle Corridor or the Zangezur Corridor.

Therefore, Azerbaijan considers the new corridor not as an alternative to the Middle Corridor, but as a complementary corridor.

The launch of the Zangezur Corridor is no less important for Turkey, because in the event of the commissioning of both the Baku-Tbilisi-Kars branch of the Middle Corridor and the Zangezur Corridor, the final collection of cargo will take place at the Kars station. After which Turkey will be able to direct the consolidated flow in Kars towards Europe.

With the concentration of cargo flows in Kars, the attractiveness of Kars as a collecting and distributing transport and logistics center in the region is increasing, which will help balance the economic imbalance of the eastern regions of Turkey.

The commissioning of the Zangezur route fully meets the geo-economic interests of the Central Asian "five". By launching the new route, they are creating an alternative transport "arc" of the Pan-Turkic countries connecting with the European space through Turkey.

Despite many unresolved obstacles, the launch of the Zangezur route is also beneficial for Armenia, since Armenia will turn from a transit state into a transit state.

The opening of the Zangezur corridor promises significant benefits for Armenia. The country will have a chance to become part of international transit, establish rail connections with Iran, and also acquire a secure land connection to Russia via Azerbaijan.

The latter is critically important for Armenia, given the high volume of trade turnover with Russia, Armenia, along with the Georgian route, will have an alternative connecting it to Russia.

Georgia, in turn, will lose the main transit of oil products from Russia to Armenia using our ports and railways.

In addition, the alternative of transporting the automobile flow from Russia to Armenia via Azerbaijan will make the Georgia-Russia connecting highway and the Kazbegi-Larsi tunnel project financed by Georgia worth $1.2 billion less financially attractive.

For Russia, the Zangezur corridor is not only an opportunity to connect with Armenia in the shortest way, bypassing Georgia, but also a convenient access to the markets of Turkey and Iran, as well as to the Middle East via the Azerbaijani railway. This is fully consistent with Russia’s desire to develop the North-South transport axis using various corridors.

Despite the fact that the Zangezur corridor causes opposition from Iran, Iran is indirectly interested in the implementation of the corridor.

As for the opposition, Iran clearly sees the political tandem of Turkey and Azerbaijan, and in the conditions of integration of pro-Turkish states with them, Iran will find itself facing the threat of isolation from transport processes.

Iran clearly does not want Turkey to weaken its role in the region by launching various transport initiatives. By strengthening the Turkish factor in the region (Turkey) it will easily "absorb" Armenia, Iran's strategic ally in the South Caucasus.

It is also worth noting the economic interests of Iran, which will suffer as a result of the unblocking of transport links with Nakhichevan.

Iran receives income from the supply of gas to Nakhichevan through the SWOP (redirection) system. In particular, gas is supplied from Azerbaijan to Iran, and Iran transfers the same volumes to Nakhichevan. As a service fee, Tehran takes 15% of Azerbaijani transit.

With the opening of the Zangezur corridor, Iran will be at risk of losing this profit. Since Azerbaijan will have the opportunity to create the appropriate infrastructure and directly, much cheaper, transport gas first to Nakhichevan and then to Turkey and Europe.

Over the past 30 years, Turkey has been buying gas from Iran at a price 45% higher than from Azerbaijan. In the event of the opening of the Zangezur route, Ankara will be able to receive blue fuel from Azerbaijan instead of Iran without intermediaries. In this case, Iran will face a large commercial loss.

When we mentioned that Iran is indirectly interested in the launch of a new corridor, we meant the decision reached as a result of negotiations between Turkey and Azerbaijan in October 2023, which implies the possibility of transferring the transport corridor to Nakhichevan, bypassing Armenia.

It is unknown under what conditions it was possible to persuade Tehran to such a deal. Most likely, it was promised to maintain a privileged status in the transit of goods and energy resources in the Turkish-European direction.

It is clear that Azerbaijan decided to compromise with Iran on the Zangezur issue due to Armenia’s continued reluctance to use Iranian territory for communication with Nakhichevan.

In the list of states presented above, except for Georgia, everyone has a certain economic dividend. The launch of the Zangezur corridor will only harm Georgia economically.

Georgia is the only state for which the launch of the Zangezur corridor will lead to a switch of cargo flows from the Georgian railway, ports and Baku-Tbilisi-Kars branches to a new direction.

In conclusion, Georgia is not at risk of losing cargo flows as a result of the launch of the Zangezur corridor in the next 5 years. Therefore, at the current stage, the country’s first priority task should be to establish a sustainable and safe transport infrastructure on the Georgian section.

Source: transcor.ge