Tweet
Eurasia Daily Monitor, DC
Feb 9 2007
KARS-TBILISI-BAKU RAILROAD: AZERBAIJAN AS LOCOMOTIVE OF REGIONAL
PROJECTS
By Vladimir Socor
Friday, February 9, 2007
Azerbaijan's President Ilham Aliyev, Georgian President Mikheil
Saakashvili, and Turkish Prime Minister Recep Tayyp Erdohan witnessed
on February 7 in Tbilisi the signing of a tripartite agreement to
launch construction work this year on the railroad connecting their
countries. The presidents signed a declaration on a `Common Vision
for Regional Cooperation' on this occasion.
The three countries' regional cooperation far transcends the South
Caucasus, as it entails projects of intercontinental scope. These
are: the recently inaugurated Baku-Tbilisi-Ceyhan oil pipeline, with
a planned trans-Caspian link to Kazakhstan; the now-operational
Baku-Tbilisi-Erzurum gas pipeline, with a potential link via the
Nabucco project to Central Europe; and the
Kars-Akhalkalaki-Tbilisi-Baku (KATB) railroad, which will link not
only the three countries with each other, but also the South Caucasus
directly with Europe in the near term and potentially with Central
Asia not long thereafter.
Azerbaijan can be said to function as the locomotive of the railroad
project, as well as a path-breaker in initiating the oil and gas
extraction projects with their westbound export routes. The KATB
railroad is now being turned into reality thanks to Azerbaijan's
financing of the project's longest and most challenging sections,
both in Georgia: 30 kilometers to be built from scratch from the
Turkish border to Akhalkalaki and another 160 kilometers to be
repaired and modernized from Akhalkalaki to the Georgia-Azerbaijan
border. Azerbaijan will also modernize the railroad on its territory,
while Turkey will build a 68-kilometer line from Kars to the
Turkish-Georgian border from scratch.
Azerbaijan is providing a $220 million loan, repayable in 25 years,
with an annual interest rate of only 1%, for the construction work on
Georgian territory. Georgia plans to repay the loan by using its
share of the transit revenue, once the railroad becomes operational.
The credit agreement, signed last month, is to be ratified by the two
parliaments and to be followed by a bilateral inter-bank agreement
and a tender to select the construction companies. This railroad has
become vital for Georgia in the wake of Russia's 2006 decision to
impose a blockade on Georgia's transport communications.
Azerbaijan's Transport Minister Zia Mamedov, Georgian Economic
Development Minister Giorgi Arveladze, and Turkish Transport Minister
Binali Ildirim signed in Tbilisi on February 7 the agreement on
construction work. The 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 5 million tons per year initially,
10 to 15 million tons annually after the third year of operation, and
ultimately up to 20 million tons annually. The KATB railroad will
connect Azerbaijan and Georgia via Turkey with the tunnel crossing
under the Bosporus Strait to Europe.
The KATB project was held up for more than a decade by a lack of
funding, mainly on its Georgia section. Azerbaijan is now taking the
lead in this transport project thanks to revenue from oil projects
that Azerbaijan itself had initiated during that past decade. During
the signing ceremonies, Saakashvili paid tribute to the late
Azerbaijani president Heydar Aliyev for laying the foundations of
these integration projects. A section of the Mtkvari River's
embankment in central Tbilisi was renamed after Heydar Aliyev in the
presence of the three state leaders on this occasion. The Georgian
president also called on his nation to `never forget' Azerbaijan's
decisions to supply Georgia with gas during the Russian energy
blockade of January 2006 and again this winter, despite Russian cuts
in gas and electricity supplies to Azerbaijan in retaliation.
The presidents also inaugurated a state-of-the art terminal at
Tbilisi airport, built by a Turkish-Austrian consortium in one year.
Concurrently, Turkey is building on its territory a highway that
should reach the Georgian border near Batumi by the end of 2007,
while Georgia is building a highway from Tbilisi to Batumi.
Cumulatively, these developments are rapidly ushering in what
Saakashvili called a `new era' in the South Caucasus.
Armenia continues to oppose the KATB project. Yerevan insists that
Turkey should instead use the existing Kars-Gyumri (Armenia) railroad
link, which Turkey closed in 1994 after Armenian forces had seized
extensive territories of Azerbaijan. However, KATB and Kars-Gyumri
are in no way comparable. While KATB is a project of transcontinental
scope, Kars-Gyumri is merely a local link.
Armenia's opposition to KATB, against the interests of three
neighboring countries, looks like a replay of Yerevan's long,
ultimately futile resistance to the Baku-Tbilisi-Ceyhan oil pipeline
project. In the case of KATB, however, Armenian lobbying groups have
succeeded in blocking U.S. loans to the railroad project. From
Yerevan's own standpoint, this attitude ignores the interests of the
ethnic Armenian population in the deeply impoverished Akhalkalaki
area, where this railroad brings the only real hope of economic
development. More broadly, Yerevan's opposition to KATB significantly
complicates the U.S. administration's efforts to pull Armenia out of
its quasi-isolation and into regional integration projects.
(Civil Georgia, Georgian Public Television, ANS, Turan, Anatolia News
Agency, February 6, 7; see EDM, January 19)
Feb 9 2007
KARS-TBILISI-BAKU RAILROAD: AZERBAIJAN AS LOCOMOTIVE OF REGIONAL
PROJECTS
By Vladimir Socor
Friday, February 9, 2007
Azerbaijan's President Ilham Aliyev, Georgian President Mikheil
Saakashvili, and Turkish Prime Minister Recep Tayyp Erdohan witnessed
on February 7 in Tbilisi the signing of a tripartite agreement to
launch construction work this year on the railroad connecting their
countries. The presidents signed a declaration on a `Common Vision
for Regional Cooperation' on this occasion.
The three countries' regional cooperation far transcends the South
Caucasus, as it entails projects of intercontinental scope. These
are: the recently inaugurated Baku-Tbilisi-Ceyhan oil pipeline, with
a planned trans-Caspian link to Kazakhstan; the now-operational
Baku-Tbilisi-Erzurum gas pipeline, with a potential link via the
Nabucco project to Central Europe; and the
Kars-Akhalkalaki-Tbilisi-Baku (KATB) railroad, which will link not
only the three countries with each other, but also the South Caucasus
directly with Europe in the near term and potentially with Central
Asia not long thereafter.
Azerbaijan can be said to function as the locomotive of the railroad
project, as well as a path-breaker in initiating the oil and gas
extraction projects with their westbound export routes. The KATB
railroad is now being turned into reality thanks to Azerbaijan's
financing of the project's longest and most challenging sections,
both in Georgia: 30 kilometers to be built from scratch from the
Turkish border to Akhalkalaki and another 160 kilometers to be
repaired and modernized from Akhalkalaki to the Georgia-Azerbaijan
border. Azerbaijan will also modernize the railroad on its territory,
while Turkey will build a 68-kilometer line from Kars to the
Turkish-Georgian border from scratch.
Azerbaijan is providing a $220 million loan, repayable in 25 years,
with an annual interest rate of only 1%, for the construction work on
Georgian territory. Georgia plans to repay the loan by using its
share of the transit revenue, once the railroad becomes operational.
The credit agreement, signed last month, is to be ratified by the two
parliaments and to be followed by a bilateral inter-bank agreement
and a tender to select the construction companies. This railroad has
become vital for Georgia in the wake of Russia's 2006 decision to
impose a blockade on Georgia's transport communications.
Azerbaijan's Transport Minister Zia Mamedov, Georgian Economic
Development Minister Giorgi Arveladze, and Turkish Transport Minister
Binali Ildirim signed in Tbilisi on February 7 the agreement on
construction work. The 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 5 million tons per year initially,
10 to 15 million tons annually after the third year of operation, and
ultimately up to 20 million tons annually. The KATB railroad will
connect Azerbaijan and Georgia via Turkey with the tunnel crossing
under the Bosporus Strait to Europe.
The KATB project was held up for more than a decade by a lack of
funding, mainly on its Georgia section. Azerbaijan is now taking the
lead in this transport project thanks to revenue from oil projects
that Azerbaijan itself had initiated during that past decade. During
the signing ceremonies, Saakashvili paid tribute to the late
Azerbaijani president Heydar Aliyev for laying the foundations of
these integration projects. A section of the Mtkvari River's
embankment in central Tbilisi was renamed after Heydar Aliyev in the
presence of the three state leaders on this occasion. The Georgian
president also called on his nation to `never forget' Azerbaijan's
decisions to supply Georgia with gas during the Russian energy
blockade of January 2006 and again this winter, despite Russian cuts
in gas and electricity supplies to Azerbaijan in retaliation.
The presidents also inaugurated a state-of-the art terminal at
Tbilisi airport, built by a Turkish-Austrian consortium in one year.
Concurrently, Turkey is building on its territory a highway that
should reach the Georgian border near Batumi by the end of 2007,
while Georgia is building a highway from Tbilisi to Batumi.
Cumulatively, these developments are rapidly ushering in what
Saakashvili called a `new era' in the South Caucasus.
Armenia continues to oppose the KATB project. Yerevan insists that
Turkey should instead use the existing Kars-Gyumri (Armenia) railroad
link, which Turkey closed in 1994 after Armenian forces had seized
extensive territories of Azerbaijan. However, KATB and Kars-Gyumri
are in no way comparable. While KATB is a project of transcontinental
scope, Kars-Gyumri is merely a local link.
Armenia's opposition to KATB, against the interests of three
neighboring countries, looks like a replay of Yerevan's long,
ultimately futile resistance to the Baku-Tbilisi-Ceyhan oil pipeline
project. In the case of KATB, however, Armenian lobbying groups have
succeeded in blocking U.S. loans to the railroad project. From
Yerevan's own standpoint, this attitude ignores the interests of the
ethnic Armenian population in the deeply impoverished Akhalkalaki
area, where this railroad brings the only real hope of economic
development. More broadly, Yerevan's opposition to KATB significantly
complicates the U.S. administration's efforts to pull Armenia out of
its quasi-isolation and into regional integration projects.
(Civil Georgia, Georgian Public Television, ANS, Turan, Anatolia News
Agency, February 6, 7; see EDM, January 19)