Eurasia Daily Monitor, DC
Jan 19 2007
KARS-AKHALKALAKI-TBILISI-BAKU RAIL PROJECT SOON TO ROLL FORWARD
By Vladimir Socor
Friday, January 19, 2007
Thanks in large measure to Azerbaijan’s rapidly growing economic
strength, the Kars-Akhalkalaki-Tbilisi-Baku (KATB) railroad-building
project can soon become a reality. The project had stalled for more
than a decade, due to a lack of funding for the Georgian stretch of
the line. Now Azerbaijan is able to finance that part of the project.
On January 13 in Tbilisi, Georgian Economic Development Minister
Giorgi Arveladze and Azerbaijan’s Transport Minister Zia Mamedov
signed the relevant credit agreement on highly preferential terms.
Azerbaijan is providing a $220 million loan, repayable in 25 years,
with an annual interest rate of only 1%. This agreement will be
followed by an inter-bank agreement between the two countries and
then a tender to select the construction companies.
The line’s overall length is 258 kilometers (about 160 miles), of
which the Georgian section is the most challenging. There, 30
kilometers from the Turkish border to Akhalkalaki must be built from
scratch and another 120 kilometers of existing tracks need full
rehabilitation. Turkey will build a 68-kilometer line from Kars to
the Georgian border from scratch, at a cost of more than $200
million. KATB’s overall cost is estimated at up to $600 million.
Construction work in Georgia is expected to start in the third
quarter of 2007 and to require two-and-a-half years. The railroad’s
anticipated capacity is 10 to 15 million tons annually by the third
year of operation and up to 20 million tons annually afterward.
KATB has been conceived as a linchpin in the projected trans-Eurasian
railroad that would connect the European railroad network, via Turkey
and Georgia, to the Caspian Sea at Baku, continuing with ferryboat
lines to the eastern Caspian shore. There, the KATB line can connect
in the future with the proposed China-Kazakhstan-Europe railroad.
Even before the trans-Kazakhstan railroad from China becomes a
reality, the KATB itself with a trans-Caspian connection will be the
first major project that implements the European Union’s vision of a
Transport Corridor Europe-Caucasus-Central Asia (TRACECA), popularly
known as the `new Silk Road’ from Europe to China. The EU had
launched TRACECA in the South Caucasus in the mid-1990s amid great
expectations, but practically abandoned it afterward. The EU is not
investing in KATB, although it is aware of its potential benefits,
according to a statement issued by the German embassy in Baku on
behalf of the EU’s German presidency (Az.day, January 17).
Absent EU involvement, the United Nations Economic Commission for
Europe (UNECE) had considered supporting the KATB project in the
1990s, but eventually opted out as well. Ultimately, in May 2005
Presidents Ilham Aliyev of Azerbaijan, Mikheil Saakashvili of
Georgia, and Ahmed Necdet Sezer of Turkey signed a declaration of
intent to build the KATB railroad.
The United States is officially taking a bystander’s attitude toward
this project, `neither opposing it nor actively promoting it.’ In the
latter part of 2006, Armenian lobbying organizations succeeded in
amending the U.S. Export-Import Bank Reauthorization Act to prohibit
Eximbank funding to the KATB project, on the grounds that it
`isolates’ Armenia. In Moscow, empire-rebuilding advocate Andranik
Migranian applauded the Congressional vote: `This is a
well-thought-out step on the part of the American authorities’
(Rustavi-2 Television, December 8, 2006). President George W. Bush
signed the Act into law in December 2006 after both chambers of
Congress had passed it in that form.
Yerevan and its supporters call for reopening and overhauling the
existing railroad from Kars to Gyumri in Armenia and using it instead
of KATB. Turkey had closed the Kars-Gyumri line in response to
Armenia’s seizure of territories in Azerbaijan in 1994. The United
States and the EU are urging Turkey to reopen the border with
Armenia, including the Kars-Gyumri railroad, as part of efforts to
promote a settlement of the Armenia-Azerbaijan conflict.
Irrespective of this political context, however, Kars-Gyumri is
essentially a local line, in no sense a substitute for the KATB
project of transcontinental relevance. From the standpoint of Turkey,
Georgia, and Azerbaijan, KATB provides their most direct as well as
politically safest link to the EU on one side and to Central Asia on
the other, as well as an inter-connector among the three
Western-oriented countries.
KATB has special significance to Georgia. The railroad can bring
economic development to the deeply impoverished, Armenian-inhabited
Javakheti region and ensure political stability there. It will also
provide Georgia with a reliable outlet to the outside world,
following Russia’s decision in 2006 to shut off transport
communications with Georgia.
With U.S. leadership faltering on this issue and EU leadership
absent, Azerbaijan is now demonstrating that it can take the
initiative in making the KATB railroad possible.
(Turan, Today.Az, Messenger, Civil Georgia, Turkish Daily News,
PanArmaniaNet, January 14-17; see EDM, November 9, 2006)