KARSI-AKHALKALAKI RAILWAY CONSTRUCTION MIGHT START THIS YEAR

The Messenger, Georgia
May 15 2006

Baku-Tbilisi-Akhalkalaki-Karsi railway construction might start in
2006. The President of Azerbaijan Ilham Aliyev said this issue was
on the agenda on his current meeting with Turkish president.

President Aliyev highlighted Azerbaijan’s commitment for the financial
liabilities of the project. According to him, this route will connect
Europe and Asia and it will contribute into the national interests of
Azerbaijan. Turkey on its side took the commitment to assist Georgia
in finding the investor.

Baku-Tbilisi-Akhalkalaki-Karsi railway project envisages building
of 98 km railway line between Akhalkalaki and Karsi. 27 km of this
segment are on the Georgian territory and 72 km in the Turkish side.

The project also envisages rehabilitation of the old obsolete
Tbilisi-Akhalkalaki segment of the existing railway.

The realization of the project might need USD 350-450 million. The
project is envisaged to be carried out in two stages. At the initial
stage only one track will be built and trains will start running on
it and only later second track will be constructed.

Some of Georgian experts demand from the government to carry out
better assessment of the pluses and minuses of the project. On one
hand, the project could be beneficial as it is yet another access into
the Turkish direction. On the other hand, it could become a kind of
competitor to the cargo transiting through Poti and Batumi ports.

This will be discouraging for turnover into these ports.

But the most actively opposing to this project is Armenia, which
puts forward its vision of activating already existing Karsi- Giumri
(Armenia) railway. Armenian-origin Georgian population of Akhalkalaki
region is also against this railway because in fact they repeat the
ideas implemented from Yerevan.

Economically, however, it should be mentioned that this project very
much contribute to the welfare of Akhalkalaki region in particular and
it will create many additional jobs not only during the construction,
but later as well. It will revive infrastructure, business, etc.