GEORGIAN, ARMENIAN MINISTERS COMMENT ON BAKU-KARS RAILWAY

Civil Georgia, Georgia
June 27 2006

Georgian Foreign Minister Gela Bezhuashvili said after talks with
his visiting Armenian counterpart Vardan Oskanian on June 27 that
feasibility study of the Baku-Tbilisi-Kars railway project is currently
underway to find out whether the project is financially profitable
or not.

The Armenian side is against construction of this railway route
which will link Azerbaijan with Turkish city of Kars via Georgia,
as a railway between Kars and Gyumri, Armenia, already exists. But
currently the Kars-Gyumri railway is not operational because of the
trade blockade imposed on Armenia by Turkey and Azerbaijan.

"Armenia’s position over this issue is clear: Armenia is ready to let
Turkey, Georgia and Azerbaijan use this railway [passing via Armenia],
without Armenia’s participation," Vardan Oskanian said at the press
conference after talks with his Georgian counterpart.

The U.S. House of Representatives Financial Services Committee
supported on June 14 a proposal to ban the U.S. Export-Import Bank to
develop or promote any rail connections or railway-related connections
that traverse or connect Baku, Tbilisi and Kars and that specifically
exclude cities in Armenia.

"We are interested in diversification of our transit routes… if
this will be a commercially profitable project, the U.S. Congress
may allocate funds, if not, other sources of financing will appear,"
the Georgian Foreign Minister said.

Some experts in Georgia say that the project needs a very detailed
consideration because new railway route linking Azerbaijan with Turkey
might hit Georgian ports on the Black Sea as cargo can be redirected
on railway.