EurasiaNet, NY
June 30 2006

Emil Danielyan 6/30/06

Plans for the construction of a major railway linking Turkey to
Azerbaijan via Georgia are prompting mounting concern in Armenia.
Officials in Yerevan, fearing the completion of the railway would
further isolate Armenia, have pressured Georgia to pull out of the
multimillion-dollar project. The railway also is facing objections
from the United States and the European Union.

Azerbaijan, Georgia and Turkey revealed their intention to pursue the
railway project in May 2005 during the ceremonial opening of the
Baku-Tbilisi-Ceyhan (BTC) oil pipeline. The presidents of the three
nations said the rail link, estimated to cost roughly $400 million,
would promote regional economic integration and create a new
transport corridor between Europe and Central Asia.

The project essentially boils down to laying an almost
100-kilometer-long rail track between the eastern Turkish city of
Kars and the southern Georgian town of Akhalkalaki. Armenian
officials insist that the project makes no economic sense, pointing
to the existing railroad running from Kars to the northern Armenian
city of Gyumri and on to the two other South Caucasus countries. The
Kars-Gyumri link has stood idle for over a decade due to the
continuing Turkish economic blockade of Armenia. [For background see
the Eurasia Insight archive].

The Armenian government argues that that Turkey, Georgia and
Azerbaijan should make use of this Gyumri hub instead of spending
hundreds of millions of dollars on building a new one. As an
incentive, Yerevan has indicated that it would make the Gyumri hub
available without insisting that Turkey lift its economic blockade.
"Armenia is ready to let Turkey, Georgia and Azerbaijan use the
existing railway line on Armenian territory without Armenia's
participation," Armenian Foreign Minister Vartan Oskanian reiterated
during an official visit to Tbilisi on June 27.

The issue was high on the agenda of Oskanian's talks with Georgia's
President Mikheil Saakashvili and Foreign Minister Gela Bezhuashvili.
A statement issued by the Armenian Foreign Ministry said Oskanian
"stressed the economic and political importance of the operation of
the Kars-Gyumri-Tbilisi rail line." Armenian officials took little
comfort in Bezhuashvili's public assurances that the
Turkish-Georgian-Azeri project is "purely commercial." They fear that
the new railway would deepen Armenia's economic isolation. Aggressive
statements made recently by Azerbaijani officials, including
President Ilham Aliyev, have helped fuel worries in Armenia.

The landlocked country has already been left out of regional energy
projects such as the BTC pipeline, due to the unresolved Karabakh
conflict. [For background see the Eurasia Insight archive].

Influential Armenian lobbying groups in the United States have joined
Yerevan in trying to thwart the project. They were instrumental in
securing a US congressional committee's June 15 vote to endorse an
amendment that would prohibit the US Export-Import Bank from funding
the railway's construction. "With this amendment, we are sending a
message to the governments of Turkey and Azerbaijan that continually
excluding Armenia in regional projects fosters instability," said US
Rep. Joseph Crowley, a New York Democrat who is the measure's main

The amendment is expected to be considered by the full House of
Representatives later this year. Similar legislation is pending in
the US Senate, and the Bush administration has not voiced objections
to either bill. The ambassador-designates to Armenia and Azerbaijan
assured pro-Armenian US legislators during recent congressional
hearings that Washington is against the construction of the
Kars-Akhalkalaki-Tbilisi railroad. Without ex-im bank backing, US
companies would likely be reluctant to invest in the project.

The European Union seems to take a similar view. "A railway project
that is not including Armenia will not get our financial support,"
the EU's external relations commissioner, Benita Ferrero-Waldner,
said in Yerevan last February.

Turkey and Azerbaijan appear undaunted by US and EU expressions of
displeasure. Turkish Foreign Minister Abdullah Gul's discussed the
issue with Aliyev during a late June visit to Baku. The Turkish Daily
News newspaper quoted Gul as telling the Azeri leader on June 20 that
"Armenia can also join these projects if it wants." However, the
Turkish Foreign Ministry spokesman, Namik Tan, clarified the next day
that this could happen only after a resolution of the Karabakh
dispute. The Karabakh peace process is currently stalemated. [For
background see the Eurasia Insight archive].

Tan also downplayed the significance of likely US funding
restrictions. "I think the three countries have enough funds. We can
finance [the railway's construction] in one way or another," he said.

Baku had hoped to begin work on the railway later this year and have
it completed by 2008. But with Turkey, Georgia and Azerbaijan having
yet to agree on the sources of funding, this time frame seems
unrealistic. Furthermore, the Georgian government is having what Gul
reportedly described as "serious hesitations." This might explain why
a planned meeting of the transport ministers of the three states,
which had been planned for late June, has been postponed until late

The director general of Georgia's state-run rail network, Irakli
Ezugbaya, publicly questioned earlier in June a feasibility study
that was conducted and released by a Turkish company recently. The
Caucasus Press news agency quoted him as saying that the study failed
to predict the anticipated volume of cargo traffic along the would-be

Editor's Note: Emil Danielyan is a Yerevan-based journalist and
political analyst.