FUNDS APLENTY FOR KARS-AKHALKALAKI-BAKU RAILWAY
By M. Alkhazashvili

The Messenger, Georgia
Oct 16 2006

Construction of the Kars-Akhalkalaki-Baku railway will cost
approximately USD 420 million. Turkey and Azerbaijan have both
committed funding. Azerbaijan has also generously extended a credit
of USD 220 million to Georgia, with no interest and no deadline
for re-payment. Initially, the US expressed interest in investment
in the project, however the Armenian lobby in the US Senate blocked
the initiative, pointing out that were it not for the fact that both
Turkey and Azerbaijan have closed their borders with Armenia over the
Nagorno-Karabakh conflict, the already existing railway from Kars to
Gyumri. The US has now completely withdrawn from negotiations.

Of the two draft proposals for the railway’s construction, the
one which envisages costs of USD 420 million was selected during
the trilateral negotiations currently being held in Baku. Irakli
Chogovadze, Georgian Minister of Economic Development, representing
Georgia in the negotiations, stated that Georgia was very particular
about not allowing the Kars-Akhalkalaki railway to compete with
the Georgian ports of Poti and Batumi for transporting cargo. He
stressed that the Georgian government will control this issue through
implementing a tariff system.

On Georgian territory, the railway will cover 192 kilometres of
existing track in need of rehabilitation, and a 29 kilometre segment,
Marabda-Kartsakhi, which needs to be completely built from scratch.

Unofficially, all three sides expressed their disappointment in US
withdrawal from the project.

Earlier this year US Senators Rick Santorum and Robert Menendez tabled
a bill which prohibits US assistance for the building of railways
traversing the Caucasus that circumvent Armenia.

Most likely, Kazakhstan and China will also join the project.