TBILISI: Azeri, Georgian Officials Discuss Railway Project

Civil Georgia, Georgia
Jan 12 2007

Azeri, Georgian Officials Discuss Railway Project

Top officials from Azerbaijan and Georgia gathered in Tbilisi on
January 12 in an attempt to finalize a deal on the construction of
the Baku-Akhalkalaki-Kars railway, which will link Azerbaijan to
Turkey via Georgia.

Azerbaijani Transport Minister Zia Mamedov and head of Azerbaijani
Railways Arif Askerov are leading the Azerbaijani delegation, which
has already met with Georgian Prime Minister Zurab Nogaideli.

`This is a strategic project for us,’ Georgian Economy Minister
Giorgi Arveladze, the who is also participating in the talks, told
reporters on January 12.

`I think we will have no problems and the results [of talks] will be
known by the end of the day. I do not think there will be problems
with financing [the project] – the Azerbaijani side is ready to
finance it,’ Zia Mamedov, the Azerbaijani Transport Minister, told
reporters.

Georgian officials say that current talks will focus on the terms of
USD 220 million credit that Azerbaijan is ready to give Georgia for
25 years.

Reports about the total cost of the project vary from USD 400 million
to USD 600 million.

The presidents of Azerbaijan, Georgia and Turkey signed a joint
declaration on May 25, 2005 in Baku over the construction of railway.

The project involves the construction of a railway link between the
Turkish town of Kars and Akhalkalaki in southern Georgia. In
addition, the rehabilitation of a portion of the railway on Georgian
territory will also be need to be completed.

Armenia is against the Baku-Akhalkalaki-Kars railway, claiming that
the project will further isolate the landlocked country. As an
alternative, Yerevan is pushing for reopening the already existing
Kars-Gyumri-Tbilisi railway. The Kars-Gyumri railway is currently not
operational because of trade blockades imposed on Armenia by Turkey
and Azerbaijan.

U.S. President George W. Bush signed into law on December 20 the
Export-Import Bank Reauthorization Act of 2006, which bans the U.S.
Ex-Im Bank from financing the construction of the
Baku-Akhalkalaki-Kars railway.

`The Bank shall not guarantee, insure, or extend (or participate in
the extension of) credit in connection with the export of any good or
service relating to the development or promotion of any railway
connection or railway-related connection that does not traverse or
connect with Armenia and does traverse or connect Baku, Azerbaijan,
Tbilisi, Georgia, and Kars, Turkey,’ the Act reads.