CAUCASUS CLOSER TO LAUNCHING IRON SILK ROAD

Daily Georgian Times
July 25 2008
Georgia

Turkish, Azerbaijani and Georgian leaders gathered in the far eastern
province of Kars on Thursday to launch the construction of the Turkey
section of a railway that will link the three countries and revive the
historic Silk Road trade route that once connected Asia with Europe.

President Abdullah Gul and his Azerbaijani and Georgian counterparts,
Ilham Aliyev and Mikheil Saakashvili, held a groundbreaking ceremony
for the $241 million Turkish leg of the railway in Kars. The three
presidents placed three sections of railway track on a large map of
the region in a symbolic launch of the project amid confetti. "A
new economic cooperation zone which is yet to be defined as such
has emerged in our region," Gul said in an address at the ceremony,
referring to expanding cooperation between Turkey, Azerbaijan and
Georgia in the energy, trade and transportation fields.

The three countries are linked by the Baku-Tbilisi-Ceyhan (BTC) oil
pipeline, which carries crude oil from Azerbaijan’s Shah Deniz oil
fields to world markets through Turkey’s Mediterranean port of Ceyhan,
and the Baku-Tbilisi-Erzurum (BTE) gas line, but trade links between
Turkey and the Caucasus region are limited.

The construction of the railway is planned to be completed by 2011. The
Turkish section of the railway is 76 kilometers long. In Azerbaijan,
a new track will be constructed to be linked to a renewed existing
track. Work on the 29-kilometer stretch in Georgia between the Turkish
border and Akhalkalaki (Ahılkelek) was launched last year. "This
project contributes to the peace and stability in the Caucasus,"
Gul also said. Visibly absent from the project is Armenia, which has
territorial and other disputes with both Turkey and Azerbaijan.

Gul said the project was open to all countries, provided that they also
contribute to the peace and stability in the Caucasus and are willing
to maintain good neighborly relations with other countries in the
region. Turkey closed its border and severed its ties with neighboring
Armenia in protest of Armenian occupation of the Azerbaijani territory
of Nagorno-Karabakh early in the last decade. The landlocked country
is also excluded from regional oil and natural gas transportation
projects through the BTC and BTE pipelines.

The construction of the railway between Turkey, Azerbaijan and Georgia
has long been hampered by Armenian lobbying against the project
in the United States and Russia. Armenian experts have argued in
the past that the project will not be economically viable, and the
Armenian lobby pushed for a bill in the US Congress that blocked US
banks from providing loans to Georgia to be used in the construction
of the railway’s Georgian section. The obstacles were eventually
overcome by Azerbaijan offering a $220 million loan to Georgia.

Armenian leaders say the plan deliberately ignores the old rail
link between Armenia and Turkey, which has been idle since the
two countries cut off diplomatic ties in 1993. In March, Armenian
President Serzh Sarksyan said the project did not target Armenia
because many Armenian nationals were already traveling to Turkey
via Georgia. The construction of the railway, he said, will further
facilitate Armenians’ travel to Turkey.

Gul said there was strong political will behind the project and that
it will not be weakened because it will benefit the peoples of the
region. Mitat Celikpala of the private Turkish Union of Chambers and
Commodity Exchanges (TOBB) Economy and Technology University said
the project had been delayed for three to four years due to Armenian
objections and that construction would never have started if Turkey
had not pressed for it so enthusiastically, as the project had no
backing from the West. According to Celikpala, the railway will boost
Turkish influence in the Caucasus and Central Asia. "The realization
of this project means we will be more influential in the Caucasus,
Central Asia and the Caspian region," he told the Anatolia news
agency. "Turkey has become a sort of center of attraction for the
entire Caucasus," he added.

The railway will also deepen ties between Georgia and Turkey,
Celikpala said, describing Turkey as the main bridge for the former
Soviet Union country to economically integrate with the West.

"Some had called it a dream. It was once shelved. But meetings took
place between the three countries and political will materialized
to build the railway. The three countries also received support from
Kazakhstan and China," Gul said at the ceremony. "Today, we are taking
another step to make the historic Silk Road that people used to cross
on the backs of animals a reality. This link not only connects the
three countries, it also links China with London."

Transportation Minister Binali Yıldırım said the railway links from
the region will extend into Europe with the completion of an ongoing
rail tunnel project linking the European and Asian sides of Turkey’s
biggest city, Ä°stanbul. The rail tunnel project, called Marmaray,
is planned to be completed in 2013. "Thanks to this project, we will
not just be a part of Europe, we will become a solid bridge between
Europe and Asia," Saakashvili said.

Aliyev: Cooperation deepens Azerbaijani President Aliyev said his
country had excellent relations with both Turkey and Georgia. "The
people are also getting closer as their countries launch joint
projects," he said at the ceremony. He called the BTC oil pipeline
a "dream come true" and added that the cooperation will be further
strengthened when the railway becomes operational.

Some 1.5 million people and 6.5 million tons of cargo are expected to
be transported by the railway in the first year following its launch.

Railway project in figures The Baku-Tbilisi-Kars railway project
is built on links forged by natural gas and oil pipelines between
Turkey, Azerbaijan and Georgia. The Turkish stretch will consist
of a 76-kilometer railway. The Ozgun Yapı-Celikler joint venture
won the tender last September for construction of the Turkish leg
with a bid of YTL 289.8 million ($241 million), the lowest among 14
bids. In Azerbaijan, the project involves the laying of new track
and the renewal of existing rails. Work on the 29-kilometer stretch
in Georgia between the Turkish border and Akhalkalaki (Ahılkelek)
began last year. The project is expected to be launched in 2011, with
an initial capacity to carry 1.5 million people and 6.5 million tons
of cargo annually. Its capacity is projected to grow to 3 million
people and 17 million tons of cargo by 2034. The project’s cost is
estimated at $450 million.

Time for Armenia to take action to avoid isolation, says expert

A project to launch a railway between Turkey, Azerbaijan and Georgia
is a strong message to Armenia that it has to take action to avoid
isolation in the region, an expert has said.

"Armenia is about to be pushed into permanent isolation," said Hasan
Kanbolat, an expert at the Ankara-based Center for Eurasian Strategic
Studies (ASAM). He said Turkey was the main outlet for the landlocked
Armenia to reach the West and that Yerevan must take concrete steps
to normalize its relations with Ankara.

Turkey closed its border and severed its diplomatic ties with Armenia
in the ’90s in protest of Armenia’s occupation of Nagorno-Karabakh
in Azerbaijan. Ankara says normalization of ties depends on Armenian
withdrawal from Nagorno-Karabakh, a change of policy in Yerevan on
its claims of "genocide" against Armenians by Ottomans during World
War I and formal recognition of the Turkish-Armenian border by Armenia.

Armenia has recently stepped up calls for normalization of ties with
Turkey. Armenian President Serzh Sarksyan said earlier this month
that he had invited his Turkish counterpart, Abdullah Gul, to visit
Yerevan and watch a football match in September.

Kanbolat, however, said the invitation was not enough and that
more substantial steps were needed for any serious progress in the
direction of normalization to take place. "Armenia should keep its
promises regarding gradual withdrawal from Azerbaijani territory,"
he told Today’s Zaman. Turkish and Armenian officials had secret talks
on July 8 in Switzerland, but the Turkish Foreign Ministry said this
does not indicate a change of a policy.

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