GEORGIA CAN ISOLATE ARMENIA WITHOUT THE US HELP

Regnum Agency, Russia
June 17 2006

"If the US companies refuse to finance the project of the
Kars-Akhalkalaki-Tbilisi-Baku railway construction, as the House of
Representatives Committee of the US Congress has advised them to do,
there are other countries and other institutions, such as Eurobank,
the European Bank for Reconstruction and Development, the Black Sea
Trade and Development Bank (BSTDB), IFC, and many others who can take
part in the project," the Georgian Minister of Economic Development
Irakly Chogovadze commented to the press on the decision of the House
of Representatives committee on financial services to ban financing
of the mentioned project with the US moneys.

If the project of construction the Kars-Akhalkalaki-Tbilisi-Baku
railway will be economically sound, it will be implemented, Irakly
Chogovadze declared. Today, the minister noted, the work on the
project is going through its first stage, until the consortium for its
implementation is created and the required funds are found. The project
cost is estimated at $400mln, so the issue of the US participation
in it has not even been discussed yet. Georgia’s state minister on
reform coordination issues Kakha Bendukidze told journalists that the
project was quite interesting and could be economically sound. However,
it could only be realized in the long term, since the calculations
that were submitted on the project hardly look convincing.

Issues of the railway construction, including the one of its technical
and economic assessments prepared by the Turkish Yuksel Domonik Company
are expected to be discussed at the meeting of Azerbaijan, Georgia,
and Turkey representatives that will be held soon in Kazakhstan.

The railway construction project involves building the 98 kilometers
long Kars-Akhalkalaki railroad and renovation of the railway section
of the Akhalkalaki-Tbilisi rout.

The House of Representatives committee on financial assistance has
recently advised not to finance the Kars-Akhalkalaki-Tbilisi-Baku
railway construction by-passing the existing but currently
non-operative due to the closure of the Armenian-Turkish border
Kars-Giumri-Tbilisi-Baku railroad.

Earlier, a pro-Armenian lobby in the US Congress headed by Congressman
Frank Pallone, Jr. (D-NJ) and Joe Knollenberg (R-MI) addressed a letter
to the State Secretary Condoleezza Rice appealing to her to refrain
from financing the project that is conflicting with the long-term
Washington interests in the region.

A number of European politicians also commented on the inexpediency
of this particular project and any other communication project that
would go around Armenia. They contend that Turkey has to normalize
its relations with all neighboring countries, including Armenia,
before it accesses the EU. This normalization should involve opening
the border with Armenia.

Armenian specialists lean to the view that constructing a railway
from Turkey to Georgia and then to Azerbaijan around Armenia will
terminate Armenia’s communication development and make its isolation
complete. Besides, the Kars-Akhalkalaki-Tbilisi railway construction
project is not included in the international TRACECA program. It
stipulates the necessity of involvement of the Kars-Gyumri-Tbilisi
railroad.

Armenian government authorities have also spoken against the project.

Particularly, Armenian Minister of Transport and Communications
Andranik Manukyan announced earlier that Armenia will do the utmost
to resist the Kars-Akhalkalaki railroad construction since it is not
beneficial not only to Armenia but also to the whole region.

Armenian Foreign Minister Vardan Oskanyan said that Azerbaijan
and Georgia have no moral right to allocate funds for the
Kars-Akhalkalaki-Tbilisi-Baku railway construction. Investing in the
construction is senseless, for the countries participating in the
project are already connected by a railway communication through the
Armenian territory, he argued.