"Azerbaijan Construction Materials Manufacturers Association believe that after Baku-Tbilisi-Kars starts to operate, corresponding organizations of our government will revise the tariffs for railway transportation of the construction materials and specify more suitable tariffs that will contribute to the growth of our production potential."
Baku-Tbilisi-Kars railway will give to us new prospects for the entrepreneurship development.
"Marja" reports that the chairman of Azerbaijan Construction Materials Manufacturers Association, the head of "Matanat A" company, PhD on equipment Elkhan Bashirov said this in an article published in "Azerbaijan" newspaper.
Elkhan Bashirov wrote as follows: "It happens that the South Caucasus, which cut by Baku-Tbilisi-Kars railway, is located in the centre of Eurasia, where 65 percent of the Earth population lives, 75 percent of the world's energy resources are concentrated and 40 percent of the world's gross domestic product is manufactured, as well great markets are formed. Reliable, profitable and fast transport will give great opportunities to Azerbaijani businessmen to benefit from these markets, as well to expand economic and trade relations. In particular, “Matanat A”, Akkord, Holcim and other companies, which is main construction material manufacturers in Azerbaijan, associate the future success of many projects related to foreign markets namely with this project".
The businessman's article says that any experienced businessman in modern world understands very well the importance and necessity of the logistics opportunities in business. Not for nothing is logistics departments operate in the Accord largest companies of the world:
"In common, main task of manufacturing company is not only to manufacture high-quality and competitive products. Since before the product reaches the consumer, it goes through long process that experts can see. Important part of this process and business value chain is related to its transportation.
Anyone who engaged in business, especially the companies engaged in the production, often has to face such the questions: "How to reduce the cost of the cargo delivery?" or "How to simplify the ways of the product delivery?" "How to choose the shortest route that requires minimal costs and less time?" Thus, the logistics helps to solve many other problems. E.g., to optimize the trade and production processes, save the time spent on the services, conduct the transport monitoring, reduce production and transportation costs. Of course, all these issues play very serious role in the forming the product price.
It must be admitted that the tariff for the railway line transportation is very high nowadays. E.g., the railway transport costs for 1 ton of the construction materials from Baku to Tbilisi is 25-30 manats. This is 30 percent of the cost price of the construction materials. Azerbaijan Construction Materials Manufacturers Association, which set the recommendation of head of state to increase the volume and range of export-oriented products, as a task, believe that after Baku-Tbilisi-Kars starts to operate, corresponding organizations of our government will revise the tariffs for railway transportation of the construction materials and specify more suitable tariffs that will contribute to the growth of our production potential. In such a case, differential tariffs are also able to be applied, i.e., the railway tariffs will vary depended on the product types (the tariffs for the construction materials with 30 percent share in the cost price of the railway costs may be reduced and left unchanged for the products with 3-5 percent share in the cost price of the railway).
Imagine that the companies like “Matanat A”, Akkord, Holcim are to send their products to India or Pakistan. There are various ways of transportation - the container cargoes are able to be transported by railway, by car, by water transport. Here we have to choose more rapid and cheaper transportation variant. Of course, it is important to take into consideration the risks of the cargo transportation, the countries passed by the cargo and internal political conditions in these countries. However, tariffs and transportation costs are of more importance.
Based on these parameters, we can say that Baku-Tbilisi-Kars railway will play important role in the development of regional political significance, interstate cooperation and friendly relations, as well will greatly contribute to deepening of trade and economic relations of the region countries, development of private companies and business organizations. In particular, the role and importance of this railway will be great in the development of export-oriented entrepreneurship in Azerbaijan.
From the first day of its operation, the statement of European Union on the opening of the Baku-Tbilisi-Kars railway also reflects exclusive contribution of this railway to the development of business and commercial sectors. The statement issued by the organization says: "European Union supports new railway corridor. These investments will help to improve infrastructure and coordinate logistics, better regulate the communications, create new opportunities for the business and increase the trade." It is clear that the bulk of the cargo to be transported by this railway will be owned by private companies, manufacturing enterprises and commercial organizations. And their amount is quietly big."
