December 20 - InterRail Holding - the Switzerland-headquartered provider of rail-based freight services in the Euro-Asian corridor - is set to acquire 50 percent of the shares in Azerbaijan-based railway services provider, AzerRail Baku.

Azerbaijan Railways (AYD) will hold the remaining 50 percent of the shares.

Through the acquisition InterRail is positioning itself to take advantage of the new railway from Europe via Turkey to Georgia and Baku that is in the latter stages of its construction.

With the railway tunnel underneath the Bosphorus - also known as the Istanbul Strait - set to enter service in 2013, coupled with the Kars-Akhalkalaki-Tblisi-Baku railway project nearing completion, there will for the first time be a normal gauge, end-to-end railroad linking Turkey and Azerbaijan. This in turn opens up opportunities to improve onward connections to Central Asia.

At the Turkish-Georgian border - where both normal and broad gauge railroad systems meet - Georgian Railways will establish a logistics centre with the necessary capacity to handle both gauges.

According to Hans Reinhard, chairman of InterRail Holding AG: "Once the entire route can be run, which is foreseen for 2014 at the latest, the expected amount of goods will reach 6 million tons. By 2030 it will be two and a half times as much.

"When it comes to results of this major rail project, Azerbaijan will anyhow play an increasing role in the Eurasian railway goods traffic," he added

Reinhard also drew attention to other chances to grow railway traffic in the Caucasus region: "Not only is the East-West railway corridor being developed, there is also a new North-South corridor Russia-Azerbaijan-Iran/Persian Gulf being created along the West bank of the Caspian Sea."

Igbal Huseynov, vice chairman of ADY believes that the modernisation of the rail network, Azerbaijan will develop into an important hub for East-West and North-South traffic.