On November 7, 2024, Azerbaijani President Ilham Aliyev signed a decree establishing a new state holding company — “Azərbaycan Nəqliyyat və Kommunikasiya Holdinqi” (AZCON). The primary goal of AZCON is to consolidate the management of major transportation and communications companies in Azerbaijan to enhance their competitiveness, financial sustainability, and economic efficiency. This article will explore the rationale behind the creation of AZCON, the changes it will bring to the state management system, and the opportunities it opens for Azerbaijan.
The decision to establish AZCON reflects Azerbaijan’s aim to improve the governance of state-owned enterprises in strategically important sectors — transport and communications. In practice, this involves unifying management principles and concentrating resources, which, according to the government, should help improve financial performance and reduce reliance on the state budget.
Operating as a public legal entity, AZCON will manage 13 major enterprises and organizations, including airlines, railways, maritime and ground transportation, and telecommunications companies. Among them are “Azerbaijan Airlines” (AZAL), “Azerbaijan Railways,” “Caspian Shipping Company,” and “Baku Metro,” among others. The communications group under AZCON’s control includes “Aztelekom,” “AzInTelecom,” “Azərpoçt,” as well as the space agency “Azərkosmos.”
AZCON’s authorized capital is 10 million manats, equivalent to 5.9 million USD, sourced from the budget and initial assets transferred to the holding. Strategic oversight of AZCON is entrusted to a Supervisory Board of seven members, chaired by Rashad Nabiyev, Azerbaijan’s Minister of Digital Development and Transport. The board’s primary functions include approving the budgets of subsidiary enterprises, overseeing their performance, and appointing leadership.
The holding’s activities will be funded through contributions from the managed enterprises, as stipulated by the President of Azerbaijan, as well as other sources permitted by law. This setup is intended to enable AZCON to cover its operating expenses independently without requiring additional budgetary support.
What Will Be AZCON’s Role?
The creation of AZCON marks a step toward modernizing state governance in Azerbaijan. By consolidating the management of major transport and communication enterprises, AZCON establishes a unified system to standardize management practices, ensure transparency, and increase efficiency. Such a structure allows the government to manage its assets more flexibly, which opens up opportunities for attracting investments, introducing new technologies, and enhancing service quality for the public.
Centralizing management through AZCON will help reduce costs and eliminate duplicate functions, leading to more efficient resource use. Furthermore, AZCON will monitor income and expenses and assess the performance of all accountable enterprises. This should contribute to improved service quality as well as increased state revenue.
Against a backdrop of global economic challenges and the growing importance of transport and communication networks, Azerbaijan is making a strategic move by establishing AZCON to boost the competitiveness of its state assets. AZCON’s success will depend on effective management and its ability to adapt to market changes.
One potential challenge could be the transitional period and the adjustment of subsidiary companies to new management standards. However, the unification and standardization of processes may also create a new dynamic, increasing the attractiveness of these companies to investors.
