HOUSE PANEL BLOCKS U.S. FUNDING FOR ‘ANTI-ARMENIAN’ RAIL LINK
By Emil Danielyan

Radio Liberty, Czech Rep.
June 15 2006

A key committee of the U.S. House of Representatives has voted to
ban any U.S. government funding for plans by Azerbaijan, Georgia and
Turkey to build a regional railway that would bypass Armenia and add
to its economic isolation.

A legal amendment, unanimously approved by the House Financial
Services Committee late Wednesday, makes it impossible for the
U.S. Export-Import Bank to "develop or promote any rail connections or
railway-related connections that traverse or connect Baku, Azerbaijan;
Tbilisi, Georgia; and Kars, Turkey, and that specifically exclude
cities in Armenia." The influential Armenian-American lobbying
organizations were apparently instrumental in its passage.

The $400 million project has yet to get off the drawing board but
has already prompted serious concern from the authorities in Yerevan.

They fear that it would prevent Armenia from becoming a regional
transport hub after a resolution of the Nagorno-Karabakh conflict and
a normalization of its relations with Turkey. Reports from Washington
quoted pro-Armenian members of the congressional panel as echoing
these concerns.

"With this amendment, we are sending a message to the governments
of Turkey and Azerbaijan that continually excluding Armenia in
regional projects fosters instability," said its main sponsor,
Congressman Joseph Crowley of New York. "Bypassing Armenia is just
another attempt to further suffocate this republic, which has made
great strides in democratic and economic reforms notwithstanding its
neighbors’ hostility."

Another New York Democrat, Carolyn Maloney, referred to Armenia as a
victim of Turkish-Azerbaijani "aggression." "Allowing the exclusion
of Armenia from important transportation routes would stymie the
emergence of this region as an important East-West trade corridor,"
she told the House committee.

Not surprisingly, the two main Armenian-American advocacy groups were
quick to welcome the measure. "Passage of this amendment protects
U.S. goals and interests in the region and ensures that attempts by
Turkey and Azerbaijan to isolate Armenia will not go unanswered,"
Bryan Ardouny, executive director of the Armenian Assembly of America,
said in a statement. Aram Hamparian, executive director of the Armenian
National Committee of America, similarly praised the U.S. legislators
for "protecting American taxpayers from subsidizing an ill-advised
and over-priced railroad project."

The measure will most probably be endorsed by the full House later
this year. The U.S. Senate is expected to discuss a similar bill
and may well follow suit. That would be a major blow to efforts
by Ankara, Baku and Tbilisi to attract external financing for the
proposed rail link. The Export-Import Bank could help to raise much
of that funding. Its credit guarantees have already been essential
for the construction of the Baku-Tbilisi-Ceyhan oil pipeline that
was completed earlier this year.

The U.S. administration, which has been pushing for the normalization
of Turkish-Armenian ties, seems to disapprove of the
controversial railway project. The Armenian Assembly quoted the
U.S. ambassador-designate to Azerbaijan, Anne Derse, as telling
congressional hearings last month that it "would not be beneficial
to regional integration."

The European Union also opposes the construction of the Kars-
Tbilisi-Baku railroad. "A railway project that is not including Armenia
will not get our financial support," EU External Relations Commissioner
Benita Ferrero-Waldner said during a visit to Yerevan last February.

Armenian officials argue that there already exists a railroad
connecting Turkey to the South Caucasus via Armenia and that the
regional countries should reactivate it instead of spending hundreds
of millions of dollars on building a new one. The Kars-Gyumri rail
link has stood idle more than a decade as part of the continuing
Turkish economic blockade of Armenia.

That there are geopolitical motives behind the controversial rail
project was admitted by Azerbaijani President Ilham Aliev last year.

"If we succeed with this project, the Armenians will end in complete
isolation, which would create an additional problem for their already
bleak future," Aliev reportedly declared.

Still, Georgia’s Prime Minister Zurab Noghaideli insisted after talks
with Armenian leaders in Yerevan last September that his country is
only looking to further capitalize on its geographical position and
is solely concerned with economic benefits that would stem from the
Kars-Tbilisi-Baku route.

The existence of such benefits was called into question last week
by the director general of Georgia’s state-run rail network, Irakli
Ezugbaya, though. In particular, Ezugbaya cast doubt on the credibility
of a feasibility study on the project that was conducted by Turkish
company recently.

According to Georgian press reports, the study failed to predict the
anticipated volume of traffic and freight along the would-be railway.

The transport ministers of Turkey, Georgia, and Azerbaijan are expected
to discuss the issue when they meet in Tbilisi later this month.