Azerbaijan as crossroads of roads and interests

Which of the South Caucasus countries is a crossroads of roads and interests? Not because of the existence of a project with a beautiful name, but based on the real situation. No one has had a second answer to this question for a long time. It goes without saying that this is Azerbaijan.

Due to the stabilization of the situation around Iran and a significant reduction in the threat of renewed war, the Rasht-Astara railway has returned to the agenda. The track should connect with the railways of Azerbaijan, after which the North-South international transport corridor (ITC) will become seamless all the way to the Persian Gulf.

At the end of last week, the heads of the railway departments of Azerbaijan, Russia and Iran held a meeting in Moscow. Following the discussions, a trilateral protocol was signed and a decision was announced to strengthen the commercial attractiveness of the route.

According to previous agreements, Russian specialists were supposed to start work on the Rasht-Astara project in April, but the war prevented it. Now that the region is returning to peaceful life, according to Russian media, specialists have started working on the project area.  Russian Foreign Ministry spokeswoman Maria Zakharova said that engineering surveys have resumed on the route of the Rasht-Astara railway in Iran. According to her, the credit line for financing the project was not frozen. Moscow is waiting for the signing of the executive contract and the resolution of a number of technical issues to begin practical work on the site as soon as possible.

The 162 km long Rasht-Astara railway line is designed to provide through train traffic on the western branch of the international North-South transport corridor passing through Azerbaijan. The project hung in the air for many years, until in May 2023, Russia and Iran signed an agreement, according to which Russia pledged to provide 1.3 billion dollars out of the required 1.6 billion in the form of a loan. The executive construction contract, as we have already noted, was supposed to be signed on April 1, 2026, but the war forced a change of plans.

Despite the fact that during the deterioration of relations between Baku and Moscow, Russian experts claimed that the western branch of the North-South (passing through Azerbaijan) Russia does not need it and will now focus all its attention on the development of the eastern branch running through Central Asia, the Azerbaijani transit has retained its importance. And this year's data suggests that this importance is only increasing.

At a meeting of the heads of railway departments of the three countries in Moscow, it was noted that 555 containers were transported through Astara in June, which is 3.5 percent more than the same period in 2025. And the volume of transported goods totaled 47.5 thousand tons, which shows a 50 percent increase. In January-June, 65,000 tons of grain were transported from Russia to Iran via Azerbaijan, which is more than 4 times higher than in the same period last year.

However, today there are interesting opinions in the Russian expert community, according to which it would be more expedient to use the already actively under construction Araz corridor rather than the hypothetical expensive Rasht-Astara project for cargo transportation between the Russian Federation and Iran.

We are talking about a communication route from the western borders of Azerbaijan to the Nakhchivan Autonomous Republic through the territory of Iran. On March 11, 2022, within the framework of the 15th meeting of the State Commission for Cooperation between Azerbaijan and Iran in the Economic, Trade and Humanitarian Spheres held in Baku, a Memorandum of Understanding was signed between the governments of the two countries on the creation of new communication links between the East Zangezur Economic Region and Nakhchivan Autonomous Republic through the territory of Iran.

The full Agband-Kalale-Julfa route is estimated at about 107 kilometers, and less than half of the total length will pass through Iran.

A WORD TO THE EXPERT

Alexander Karavaev, Expert at the Caspian Institute for Strategic Studies (Moscow):

"The Rasht-Astara road is, of course, important. The real need for it, if we promote a strategy of large-scale exports through Iran, will be equivalent to the Trans-Siberian Railway. In other words, we are talking about over 100 million tons of cargo per year (the Transsib reached 180 million in 2025). But in such a scenario, it is necessary to seriously modernize the Iranian railway network from Rasht to the Persian Gulf with the possible construction of a line with a gauge of 1,520 millimeters. The project is very expensive. A more budget-friendly option is the Araz Corridor, which is already under construction. In February, the construction of the Agbend-Kelale border road bridge was completed. That is, the process is underway. There is an opinion that the Araz corridor is exclusively an integral part of the East-West route. This is a mistake that has been replicated for a long time. If we are not talking about a political project for new routes in the North-South corridor, but rather a functional route, then obviously we need to proceed from the very fact of the direct connection of the railway lines. And do not forget that such a connection already existed in the Soviet period through sections of the Transcaucasian railway. And the only such connection was through the Nakhchivan Autonomous Region, through Julfa. In the 1970s and 1980s, shipments through the Julfa junction amounted to over 1.5 million tons per year. The sorting unit, which is huge by local standards, has been preserved, and it is possible to restore the wheelset changing stations. It is necessary to build about 60 kilometers of tracks, which is much easier than about 150 kilometers from Astara to Rasht. Yes, the data from 2026 show that the western route of the North-South MTK retains and even strengthens the attraction for both Russian goods and those supplies that go to Russia.: about 70 percent of MTKX shipments (that is, from 8 to 9 million tons per year). But, in these figures, it is extremely important to keep in mind the fact that these are, first of all, cargo transportation on the Azerbaijan-Russia route. Many media outlets make a conceptual mistake, citing these data as general for transit on the western segment. Due to the development of the Azerbaijani economy, the western route of the MTK attracts primarily container shipments (8,300 TEU in 2005), grain supplies and building materials, all of which go by rail and road. But, once again, only a small part of the cargo reaches Iran directly. What does this mean? The fact that the actual current transit through the western segment of the North-South railway is much more modest. Therefore, strategic plans for the expansion of the western segment should take these realities into account and avoid unnecessarily increasing excessive costs for launching new routes and connectors. In this regard, as it seems to me and a number of experts, the Araz corridor may be more competitive at the moment. Another thing is that in the strategic perspective, of course, it would be better to use several approaches to Iranian territory from Azerbaijan, both in Julfa and Astara."

On June 24, President of Azerbaijan Ilham Aliyev received a delegation led by Chairman of the Islamic Council of Iran Mohammad Bagher Ghalibaf. During the conversation, the sides also touched upon the Araz corridor. It was noted that the construction of the Agbend-Kelale bridge has already been completed, and the new corridor will serve to expand transport opportunities in the region.

In February, the construction of the border bridge between Azerbaijan's Agband and Iran's Kelale was completed. Border and customs infrastructure is currently being created on both sides.

The memorandum signed between Azerbaijan and Iran in 2022 came as a big surprise to everyone. The document provides for the construction of a railway line, a multi-lane highway, power transmission lines, digital communications, etc. on the territory of Iran about 5 km south of the Armenian-Iranian border. In a sense, the Araz corridor is a mirror image of the "Trump Route," as the Zangezur Corridor became known after the meeting in Washington on August 8. But the road through Iran is not an alternative to the road through Armenia. Each of the projects has its own characteristics and its own tasks.

After the election of Masoud Pezeshkian as president, Iran began talking about the unique possibilities of the corridor in the face of increasing competition for transport routes. The Iranian media emphasized that the Araz corridor will become part of the Trans-Caspian International Transport Route connecting Russia, China, Central Asia, the Caucasus, Iran and Turkiye with Eastern Europe and England. The commissioning of the Araz transit corridor and the Kalale border terminal will open up new prospects for export growth and strengthening economic activity in the region. In addition, the early construction of a 60-kilometer railway parallel to the Iranian section of the Araz automobile corridor, not only Russian experts, but also Iranian officials are confident, will make it possible to complete the North-South railway without completing the problematic Rasht-Astara road.