The World Bank has proposed establishing a joint asset-light company involving the largest state-owned transport companies of Azerbaijan, Georgia, Kazakhstan, and Türkiye to coordinate container transportation along the Trans-Caspian International Transport Route (TITR), or the Middle Corridor, stated in the World Bank’s report titled “Integrating the Middle Corridor: High-Quality Trade Logistics along the Trans-Caspian Transport Route,” APA-Economics reports.
According to the report, such an operator should be owned by the main national railway carriers and shipping companies but should operate as a single logistics provider.
The main functions of the proposed operator would include setting through tariffs, optimizing routes, organizing dispatch management, responding promptly to incidents arising during operations, as well as ensuring integration with international logistics companies operating at cargo origin and destination points in China and the European Union.
According to the World Bank’s assessment, in the near term, the main constraint on the development of the Middle Corridor will not be a lack of infrastructure capacity, but rather low service levels and institutional barriers characteristic of state-owned transport enterprises (SOEs).
The report states that the region’s railway operators are at different stages of development.
Kazakhstan’s Kazakhstan Temir Zholy operates the largest railway network, with a length of 16,000 kilometers. The company’s freight turnover amounts to 303 million tons. The World Bank notes that the operator stands out for its high level of asset utilization and steps toward transitioning to commercial financing models.
Georgian Railway, despite its smaller scale of operations, is assessed as a more mature operator in terms of corporate governance and financial practices. The network operated by the company is 1,400 kilometers long, while its freight turnover amounts to 13.7 million tons.
The report notes that the railways of Uzbekistan and Azerbaijan serve as key transit links of the Middle Corridor.
Uzbekistan’s railway network is 6,100 kilometers long, with freight turnover of 103 million tons. Azerbaijan’s railway network is 2,100 kilometers long, with freight turnover at 18.5 million tons.
The World Bank stated that systemic changes in tariff policy and management are being implemented in Azerbaijan and Uzbekistan.
Türkiye’s TCDD has an extensive railway network of 13,000 kilometers. As the company’s operations are mainly focused on passenger transportation, its freight transportation volume amounts to 26 million tons.
The World Bank also recommended reforms to tariff systems to improve the efficiency of the Middle Corridor.
The institution considers it important to transition to a pricing model based on actual service costs (cost-to-serve), introduce long-term contracts for the implementation of public service obligations (PSOs), and attract commercial financing to ensure the bankability of transport enterprises.
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