Five railway companies have decided to develop a railway corridor to ensure the transport of freight between India and Europe, as trade between the two has constantly increased over the past months and rail estimates show that there is significant potential to attract flows to rail transport.
India is a country that has experienced a rapid economic growth over the past years and a strategic trade partner for the European Union, representing a market of 1.25 billion citizens. Under the concluded agreements, the two parties plan to increase bilateral trade. At present, UE is the biggest trade partner of India, with a 13,5% share of India’s general trade, way ahead of China, the US or the United Arab Emirates. The value of EU exports to India increased from EUR 24 billion (in 2006) to EUR 37,8 billion in 2016 with cargo including engineering products, chemicals and others. Also, the value of EU imports in India has increased in the past decade from EUR 22.6 billion (in 2006) to over EUR 39 billion, with cargo including textiles, chemicals and engineering products. Under these circumstances, transport services are vital, requiring the development and optimization of transport routes. Maritime transport is dominant, but cargo travel time (over 30 days) is an important feature of the “end customer”, while rail transport has the advantage of being much faster.
The past decade has been a success for rail as transport provider between Europe and Asia, as more and more services were launched. For example, over 12 rail connections have been launched since 2008, including private and state-owned rail operators. India is another important Asian market for continental trade for which several European and Asian countries have decided to establish a corridor that would ensure efficient, seamless and fast services. Next to the Trans-Caspian and the North-South Corridor, the South-West Corridor will begin to play an important part for India-Europe connection.
To develop transport services and attract freight flows to railways on India-Europe axis, in June, railway companies from Azerbaijan, Iran, Georgia, Poland and Ukraine signed a cooperation agreement involving the establishment of a corridor on the South-West axis.
India-Europe rail corridor will have over 7,500 km and competes maritime transport which, on the route with the same destinations, ensures the transport of freight in 30-40 days compared to railways which will significantly reduce travel time to 15 days. The main points on the corridor are the Port of Mumbai (India), Bandar Abbas (Iran), Astara (Azerbaijan), Batumi and Poti ports (Georgia), Chornomorsk – former Ilyichevsk (Ukraine), Slavkov (Poland, a city connected to Central Europe).
The main objective of the project is to promote railway transport and to establish a new logistics service with increased attractiveness compared to existing ones. “The corridor will cover states and regions such as India, Pakistan, South-East Asia and the Persian Gulf and will have a length of around 7,650 km. Our goal is to make it much more attractive and to increase traffic volumes”, explained Javid Gurbanov, President of Azerbaijan Railways.
In the initial phase, the parties plan to carry a volume of 10 million tonnes of freight, while the next traffic development phases estimate a significant increase, but figures have not been announced yet.
According to the signed document, Azerbaijan Railways will deal with traffic coordination between the five countries and works will be carried out to eliminate obstacles, consolidate services and increase traffic. Moreover, railway managers will discuss the possibility to implement a single tariff system of transport services.
“The railway corridor will promote the increase of transit capacity and, apart from its development, railway companies will have to discuss the tariff policy and consider the establishment of a single tariff system, this being an important element for this route”, said Mamuka Bakhtadze, General Manager of Georgian Railways.
by Pamela Luica
Share on:
