ITAR-TASS News Agency, Russia
January 12, 2007 Friday 05:41 AM EST

Azerbaijan to inject $200 mln for KATB railway construction

TBILISI, January 12

Azerbaijan will allocate 200 million U.S. dollars to build the
Kars-Akhalkalaki-Tbilisi-Baku railway linking Azerbaijan, Georgia and
Turkey, Azerbaijani Transport Minister Ziya Mamedov said on Friday.

Baku will extend a concessional loan to revamp a 150-kilometre
railway section in Georgia and build a new 30-kilometer section
there, sources close to negotiations that are underway in Tbilisi
said.

“We are in active talks on the KATB railway construction and will
complete them successfully by the end of the day. It is a very
strategic project for us,” Georgian Economic Development Minister
Georgy Arveladze said.

Experts say the construction project will cost 422 million U.S.
dollars. Turkey will allocate another 222 million U.S. dollars to lay
a 75-kilometer railway in its territory.

Georgia, Turkey and Azerbaijan have been in talks to lay the KATB
railway since late 1990-s. But intensive talks are on only over the
past two years. Last November the countries coordinated “all
fundamental issues.”

Two weeks ago Georgian President Mikhail Saakashvili said the railway
construction would be launched in 2007.

“The railway will contribute to stronger cooperation between the
Caucasian and Central Asian countries and will allow Georgia to build
a railway network with Europe,” he said.

The KATB construction began to awaken more interest after U.S.
Congress opposed the financing of the railway construction project by
U.S. banks last year. Experts explain this step is influenced by the
Armenian Diaspora in the U.S., which does not like that the railway
will run bypassing Armenia.

The Georgian authorities repeatedly said in response “there are
other sources to finance such an important project for the region.”