The initial stage of railway construction in Azerbaijan started as early as in 1878 and was completed on January 20, 1880, when Baku-Sabunchu-Surakhany railroad, which was only 20 km long, was commissioned.  Since then, the Azerbaijan railways have been developing and improving following the growing demand for cargo transportation. At present, the total length of railroad tracks is 2910.1 km, operational tracks are 2079.3 km long, 802.3 km of which are double tracks. 1241.4 km or 59.7% of the total length of the railroad are electrified, 837.9 km, i.e. 40.3% are operated by diesel traction. 1527.7 km of tracks are equipped with the automated signaling system.

The construction of the first railroad and its subsequent development in Azerbaijan were directly linked to the transportation of oil. The existence of oil on the Absheron peninsula has been known since ancient times. The Baku oil had for a long time been extracted in an unsystematic manner and had been used mainly for lightening and treatment purposes in Azerbaijan, the Middle East and Central Asia, Russia and India.

The advent of the first drilling well in 1847, the further development of oil extraction by drilling, as well as abolishment of the buy-out system in the 1870s have contributed to the sharp rise in oil extraction. With rapid increase of oil production improvement of oil transportation has become a topical issue. Transportation of oil from the main oil fields (Sabunchu, Surakhany, Balakhany) to Baku oil refineries and across the Caspian Sea to the central regions of Russia was carried out by very primitive train methods, with the use of wooden vats and water skins, their total amount hardly reaching 10,000.

Such method was quite costly and hindered the future development of oil business. To increase their incomes, the oil producers took a keen interest in the construction of railways and pipelines. So, it may be said without exaggeration that the real cause behind the railway construction in Baku and Azerbaijan was Baku oil and its industrial production. Thus, oil tycoons repeatedly appealed to the Committee of Ministers for the construction of the railway that would connect oil fields to oil refineries. Their perseverance finally bore fruit, as at the session of the Committee of Ministers on June 16, 1878, with the participation of Tsar Aleksandr II, the project on construction of the railways on oil fields was approved. The construction of the railway line about 28 km long was assigned to Poti-Tbilisi Railroad Company. The company undertook to complete the construction within 1.5 years. Construction works were headed by engineer Krubets. Within the shortest possible time all necessary materials and equipment were sent to Baku. In a letter sent on December 1878 to the city administration, Krubets wrote that it was necessary to build additional warehouses for equipment storage in Black City.

One of the main tasks the railway line construction faced was the quickest possible condemnation of lands the Balakhany and Surakhani lanes were supposed to cross. The city administration assigned the assessment of these lands to the public commission headed by philanthropist Haji Zeynalabdin Taghiyev. The Commission conducted research and estimated the cost of land parcels larger than 21 desyatins (22.9 ha) at 34,580 rubles. Overall costs of the railway lines construction amounted to 784,872 rubles. The construction began in 1878 and was completed in 1879. Since December 17, Balakhany, Surakhany and Sabunchu stations started receiving cargoes for transportation. On January 20, 1880, the Railways were officially opened. It was this railway that witnessed the first-ever oil transportation in cisterns.

Party and Soviet organizations of the republic started the reconstruction works on the electrification of the Baku-Sabunchu railway. 21 days after the tramway was put into operation, on 29 February 1924, the Baku City Council decided that it was necessary to start the construction of the BAKI-SABUNCU-MARDAKAN-BUZOVNA electric train (Absheron suburban electric area) to ensure the connection with the districts of the city and its garden areas. In March 1925, the reconstruction and electrification of the Baku-Sabunchu railway began. The work was completed only in 14.5 months. On July 26, 1926, the first electric trains, started running to and from Sabunchu and Surakhani, Absheron's famous oil regions.

Over the course of their history, the Azerbaijan railways were several times integrated into the Transcaucasian Railroad and then subsequently continued functioning as an independent railroad. Let’s have a look at the chronological sequence:

  • On July 6, 1945, the independent Azerbaijan Railways were established by the decision of the USSR State Defense Committee. By the decree No. 674 of the Minister of Roads dated July 28, 1945, the Azerbaijan Railways were established on October 1, 1945.
  • On May 14, 1953, Azerbaijan and Transcaucasia railways were merged under the name of the Transcaucasian Railway, and its central office was moved to Tbilisi.
  • On October 3, 1955, by the Decree No. 1773 of the USSR Council of Ministers the Azerbaijan Railways were declared an independent railway. Azerbaijan Railways continued their activity as independent railways within the Ministry of Roads of the USSR by the Decree No. 717 of the Council of Ministers of the Azerbaijan SSR dated October 13, 1955.
  • By the Decree No. 270 of the USSR Roads Minister dated March 2, 1963, again, structural changes were made in the structure of the Azerbaijan and Transcaucasia railways, and these two structures were merged under the name of the Transcaucasian Railway and Azerbaijan part of the Railways was called the Azerbaijan section.
  • By the Decree No. 15-859 of the Minister of Roads of the USSR dated June 1, 1967, the Azerbaijan Railways were again declared independent and since then have been functioning as independent railways.
  • On May 28, 1980, Azerbaijan Railways were awarded the Order of the October Revolution.
  • By the Decree No. 171 of the Cabinet of Ministers of the Republic of Azerbaijan dated August 8, 1995, the “October Revolutionary Order” Azerbaijan Railways were renamed the Azerbaijan State Railways.
  • By the President Ilham Aliyev's decree dated July 20, 2009, Azerbaijan Railways Closed Joint-Stock Company was established.

Two of 176 stations of Azerbaijan Railways - Bilajari and Shirvan -  are the stations with large automated hump yards. Twelve stations have container platforms equipped with all the necessary machinery and equipment, and three stations (Keshla, Ganja and Khirdalan) carry out operations with large-tonnage containers. Whereas the development of railways in the first decade of their existence was closely linked to the development of oil production and oil refining, starting from the second half of the twentieth century, the railways have not only been successfully servicing a dynamically developing multi-national economy, but also carrying out large-scale transit carriages to neighboring countries.

The recent past of has become a serious test for both the railroad and the economy of the country as a whole. Disruption of economic ties with the former Soviet Union countries had a negative impact on the railway business. This led to a dramatic decline in the volume of transportation and a deterioration of the financial and economic situation of the railroad. Azerbaijan's involvement in the Nagorno-Karabakh conflict has aggravated the situation.

Because of this aggression, which resulted in the occupation of 20% of Azerbaijani territories by Armenian military units and more than one million Azerbaijani refugees, Azerbaijan State Railways suffered a serious damage. Thus, over 240 km of railroads were occupied by Armenia. Because of cessation of the train movement in the Mehri-Karchivan region, the Nakhchivan Autonomous Republic was blockaded and isolated from the rest of the country and has been suffering from this for more than 20 years. Although the entire railway infrastructure and the rolling stock were destroyed, in such a complicated situation, the railroad was able to survive and to meet the demand for transportation.

The Azerbaijan Railways, which have a history of 132 years, have gone through a very great progress. During the time of both the Tsarist Russia and the Soviet period, the Azerbaijan Railways were constantly developing and thanks to the care and attention of National Leader Heydar Aliyev, reached the peak of its progress in the 1970s and 90s of the last century.

Azerbaijan Railways were not neglected by the national leader Heydar Aliyev, the then head of the republic. In the early 80s of the last century, when our National Leader consecutively led both the Republic of Azerbaijan and the government of the Soviet Union, he paid serious attention to the development of transport system, including the railroad of the Soviet Republics.

At that time of the last century, under the leadership of our National Leader, one of the largest sorting stations of the former Soviet Union, Shirvan station, as well as Yevlakh-Balakan, Guzdek-Garadagh railway lines and other railway stations, which played a great role in maintaining activity of the Azerbaijan Railways, were constructed. The implemented works resulted in the rise of the volume of railroad cargo transportation up to 80-90 million tons during that period.

It is impossible to list all innovations introduced at the railways due to the care of the great leader. It is important to note that the fastest and brightest period of the development of the Azerbaijan State Railways coincides with 1969-2003, when the great leader Heydar Aliyev headed Azerbaijan. Thanks to personal activity of Heydar Aliyev, who came to power for the first time in 1969, fundamental changes happened, and powerful development of both the railroad transport and the country economy’s as a whole started.

1969-2003 can be characterized as years of technical progress and thorough development of the Azerbaijan Railways. Over this period, along with major activities, 14300 technical innovative methods covering all aspects of the railways have been applied.

After the collapse of the Soviet Union in the early 90s of the twentieth century, Azerbaijan's railroads also fell into a decline, economic relations with neighboring countries were cut off, freight and passenger transportation was minimized, and some transportation routes were discontinued and as a result the railway infrastructure was almost completely destroyed, qualified personnel was suspended from work which resulted in the paralysis of the railroads.

Because of Armenian aggression, 240.4 km of the Azerbaijan Railways were occupied and railroad facilities  were damaged to the amount of $ 45 million 60 thousand.

On June 15, 1993, the national leader Heydar Aliyev returned to power at the request of the people and managed to stop the fall of the country into a decline. That was a turning point for the Azerbaijan railroads as well, which began to recover.

Over this period, special measures were taken to organize high-level passenger transportation both within and out of the country, the Azerbaijan Railways started to repair passenger wagons at the expense of its internal capabilities, and in the short time, passenger wagons were brought into conformity with high standards and commissioned.

For the first time in the history of the Azerbaijan Railways the "Express" type passenger wagons, which have no analogues in the railways of the CIS countries, were developed and met the great consent of passengers.

At that time, the road administration renewed economic relations with the railways of the neighboring countries, which resulted in the restoration of passenger, cargo and baggage transportation to Moscow, St. Petersburg, Rostov, Makhachkala (Russian Federation), Kiev, Kharkov (Ukraine), Tbilisi (Georgia) and Tabriz (Islamic Republic of Iran). Passenger train going from our country to the Far East Siberian city of Tyumen, where our fellow citizens live, is a vivid example of this.

The economic reforms of the modern times, which have been laid by our great leader Heydar Aliyev and successfully continued by President Ilham Aliyev, have brought great success to our republic and have led to the rapid development of the country's economy. Over our national leader Heydar Aliyev’s stay in power the railroads were under constant concern and care. The transport infrastructure he created has now been going through the intensive development and modernization carried out by President Ilham Aliyev, and our country actively participates in the process of creation of the international and regional transport corridors such as "Baku-Tbilisi-Kars" and "North-South".

Practical measures have been taken to improve the social welfare of railway staff. Together with the Road Administration and the Republican Committee of the Independent Trade Union, many projects aimed at strengthening of the railway staff’s social protection, health protection and recreation organization have been implemented in recent years. On August 1, 2008, Lokomotiv Recreation Center was built and commissioned in Nabran settlement of Khachmaz region.

The head of state, Mr. Ilham Aliyev, made a number of important decisions aimed at developing the country’s railway transportation in compliance with international standards.

On October 7, 2005, the President of the Republic of Azerbaijan, His Excellency Mr. Ilham Aliyev signed a Decree on "Establishment of the Day of Railway Workers".  According to this decree, each year 13th of October , the day when independent Azerbaijan Railways were established, is celebrated as the professional holiday day of the Azerbaijani Railway workers. On July 20, 2009, the President signed a decree regarding the establishment of Azerbaijan Railways Closed Joint-Stock Company. By the decision of the Cabinet of Ministers dated February 15, 2010, Charter and structure of Azerbaijan Railways Closed Joint Stock Company were confirmed.

On July 6, 2010 the President of the Republic of Azerbaijan Ilham Aliyev signed a decree to approve the "State Program on Development of the Railway Transport System in the Republic of Azerbaijan for 2010-2014". This decree is the most important document that will ensure the development of this field. The program outlines all the points that ensure the rapid development of Azerbaijan's railway. Wagon and locomotive fleet renewal, road, power supply, signaling and communication, major overhaul of other industries, transition from alternating to direct current, modernization of technical facilities and other important tasks are reflected in the Action Plan for the implementation of the State Program.The main purpose of the State Program is to ensure the efficient functioning of the transport complex through meeting increasing demands of the population and the economy for railway services and the defense needs of the state, increasing the transit potential of Azerbaijan, improving the level of services in the railway transport, reducing transport costs of passenger and cargo transportation and to improve its socio-economic prosperity.

It was directly linked to the approval of the "State Program on the Development of the Railway Transport System in the Republic of Azerbaijan for 2010-2014". It should be noted that after the State Program was legally approved the processes have accelerated. Bilateral and multilateral relations with international financial institutions that have intensified recently will have a positive impact on railroad reforms, because the process of negotiations with the international financial institutions over the reconstruction of the railway has reached a new stage. You already know that with the support of the President of the Republic of Azerbaijan, the $ 450 million projected by the International Bank for Reconstruction and Development (WB) and the Government of Azerbaijan to finance the Railway Trade and Transportation Support Project, aimed at the development of the railway, management and infrastructure, Project Tender Commission has completed the procedure for opening technical and financial proposals. Received funds will be used for further development of the road sector, overhaul of 317 km of roads and purchase of new road-repair machines, locomotives, roads, power supply, signaling and reconstruction of communication facilities, purchase of new locomotives and application of international financial-computation system.

“The State Program on the Development of the Railway Transport System in the Republic of Azerbaijan for 2010-2014” opens wide opportunities for the development of the railways. As a result of the successful development strategy of President Ilham Aliyev, determined by our national leader Heydar Aliyev, Azerbaijan Railways Closed Joint-Stock Company will take its rightful place among the world's developed railways.