ISN, Switzerland
Nov 8 2004

Moscow proposes joint S Caucasus railroad

Russia seeks to revive the South Caucasus Railroad and gain control
over its operations in Georgia, Azerbaijan, and Armenia.

By Vladimir Socor for The Jamestown Foundation (08/11/04)

The Russian government proposes to create a joint entity of the
Russian, Georgian, Armenian, and Azeri railways for operating the
South Caucasus Railroad, from the Russian-Georgian border via
Abkhazia to Tbilisi, Yerevan, and Baku. If created, such a joint
company would give Russia a preponderant role in the operations of
the three countries’ main railroad artery. Visiting the region on 1-3
November, Russian Transport Minister Igor Levitin and Russian
Railways president Gennady Fadeyev discussed the project with top
government officials there. It envisages setting up a joint operating
company to manage and upgrade the railroad, and a joint bank to
finance restoration and upgrading, particularly of the Abkhaz section
in Georgia. The governments of Russia and the three South Caucasus
countries would finance part of that work and would also invite
private capital investments into the joint company. The whole project
hinges on reconstructing that section, which was severely damaged and
idled during the 1992-1993 Russian military intervention in Georgia.
As a result, Armenia and Azerbaijan lost their rail links to Russia.
In the intervening decade, Armenia was hardest hit by the loss. The
Russian government did not attach high priority to restoring the
connection, but does so now as part of an effort to establish a
North-South transport corridor and land bridge to Iran.

A response to EU West-East transit corridor?
Levitin and Fadeyev characterized the initiative as part of Russia’s
answer to the EU’s planned West-East transit corridor to Asia via the
South Caucasus. Moscow seeks to undercut it through a North-South
transit corridor via the South Caucasus and Iran. Levitin and Fadeyev
called for urgent action on the railroad, moving ahead of the EU: “If
we don’t start dealing with problem, we could lose huge transport
flows […] This project’s defining significance is a geopolitical
one.” In September this year, the state-owned Russian Railways
reopened the Abkhaz section for partial service from the
Russia-Georgia border station Vesyolaya to Sokhumi. The “reopening”
is in fact a seizure of Georgian state property on Georgian territory
without consulting Tbilisi, and indeed over its protests. Fadeyev
attended triumphant celebrations of the reopening, and Russian
Railways now runs the line as part of its network. The move has also
completed the erasing of the Russia-Georgia border in the Abkhaz
sector, now Russian-controlled on both sides. In Yerevan, Fadeyev
signed letters of intent with his counterpart, Ararat Khimrian, and
with Prime Minister Andranik Margarian on the two countries’
participation in the proposed four-country joint company. Moscow and
Yerevan will urgently task an expert group to draw up investment and
business plans and will contribute to reconstruction of the
railroad’s Abkhaz and Armenian sections. This approach reflects
Russia’s proprietary attitude toward the Georgian state railway’s
Abkhaz section. Moscow expects Yerevan to continue lobbying with
Tbilisi to go along with this. Russia also seems to expect that
Armenia can afford to co-finance or borrow for the project.

Downplaying the political implications for Georgia
In Tbilisi, Levitin signed with Georgian Prime Minister Zurab Zhvania
and Economics Minister Kakha Bendukidze a memorandum of understanding
on creating expert groups for the project, focusing on restoration of
the railroad’s Abkhaz section. Bendukidze seemed to embrace this
initiative. A free-market, free trade enthusiast, he
characteristically downplayed the project’s political and policy
implications for Georgia. By contrast, Zhvania called for caution,
citing Abkhazia’s unstable political situation. He suggested
postponing not only the decision, but even the creation of the expert
group, pending clarification of the situation in Abkhazia. Moscow’s
initiative in effect discards the Russian-Georgian March 2003 Sochi
agreement, whereby reconstruction of the Abkhaz section was to
proceed in accord with the Georgian government and “in a synchronized
manner” with the safe return of Georgian refugees to their homes in
Abkhazia, beginning with the Gali district. The seizure of the
Vesyolaya-Sokhumi railroad stretch canceled a part of the Sochi
agreement. The whole agreement would be destroyed if the
reconstruction-repatriation linkage were broken. Georgian Foreign
Minister Salome Zourabishvili insists on maintaining that linkage to
promote Georgia’s minimal objectives in Abkhazia: return of refugees,
Georgian-language schools, and a Georgian police presence in Gali.
Apart from the reconstruction-repatriation linkage, Georgia currently
has almost no leverage to achieve those goals. Moreover, the
Vesyolaya-Sokhumi link, fully under Russian and Abkhaz control, might
become the railway equivalent of the Roki highway tunnel in South
Ossetia – that is, an avenue for contraband, unchecked migration, and
arms deliveries. Russia’s apparent sense of urgency – in its
perceived geopolitical interests – to rebuild that railroad gives
Georgia an opportunity to seek three elementary quid-pro-quos
(pending a political settlement in Abkhazia): safe return of
refugees, Russian recognition of Georgian ownership of the railroad’s
section in Abkhazia, and joint control of the Vesyolaya-Sokhumi line.

–Boundary_(ID_fRhIx49mXWT6hu1VKRZNDA)–