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Civil Georgia, Georgia
Jan 13 2007
Tbilisi, Baku Agree on Funding of Regional Railway Link
Azerbaijan will loan USD 200 million to Georgia to finance
construction of its portion of a railway which will link Azerbaijan
with Turkey, according to the agreement signed in Tbilisi on January
13.
Georgia will have to repay the loan with 1% annual interest within 25
years. Georgian officials said they plan to use the revenues from
operation of the Baku-Akhalkalaki-Kars railway to cover the loan.
USD 200 million is an initial sum and the loan may increase depending
on results of assessment which will fix an exact cost of the project,
Irakli Ezugbaia, chief of the state-run Georgian Railway said on
January 13. The project assessment paper is expected to be ready by
this February.
`We are very satisfied with the results [of talks]; this [agreement]
is a guarantee that the project will be launched,' Giorgi Arveladze,
the Georgian Economy Minister said, after signing of the agreement.
`This is a huge project, which will mean an investment of USD 300
million in the Akhalkalaki district. It means new jobs, new economic
opportunities and new links for Georgia,' he added.
`This project is important both from the political and economic point
of view,' Zia Mamedov, the Azerbaijani Transport Minister, who led
the Azeri delegation, said after the agreement was signed.
Officials said that the both sides want the construction to be
launched as soon as possible. Irakli Ezugbaia initially said that
Tbilisi wanted to launch construction no later than mid-2007.
But it became clear on January 13 that the project requires
time-consuming procedures which may delay the construction until the
end of 2007.
The procedures involve discussion of the agreement at the national
legislative bodies, as well as announcement of the tender to select a
company which will carry out construction works, Ezugbaia stated.
Georgia's ex-Economy Minister Irakli Chogovadze, who participated in
talks as a consultant to the government, said despite some formal
details which remain to be clarified the agreement signed on January
13 means that the project received a go-ahead.
`Now there is nothing hindering to launch this project,' Chogovadze
told Civil Georgia.
A 29-kilometer portion of the new railway on the Georgian territory
from Akhalkalaki to the Turkish border will be constructed and
192-kilometer portion of already existing poor railway infrastructure
be rehabilitated in frames of the project.
Officials say that project implementation will take about two and
half years.
The railway will have a capacity to transport 15 million tons of
cargo annually, chief of the Georgian Railway Irakli Ezugbaia said.
There were fears in Georgia that launch of the Baku-Akhalkalaki-Kars
railway will redirect flow of cargo from the Georgia's Black Sea
ports of Batumi and Poti. But Georgian Economy Minister Giorgi
Arveladze downplayed these concerns.
`Additional transport routes are of special importance for us,
against of continuing economic blockade by Russia,' he added.
Armenia is against the Baku-Akhalkalaki-Kars railway, claiming that
the project will further isolate the landlocked country.
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 Act was passed by the House and Senate as a result of intensive
lobbying by the Armenian diaspora groups in the United States.
As an alternative to Baku-Akhalkalaki-Kars, Yerevan is pushing for
reopening the already existing Kars-Gyumri-Tbilisi railway. The
railway between Turkish town of Kars and Armenia's Gyumri is
currently not operational because of trade blockades imposed on
Armenia by Turkey and Azerbaijan.
Jan 13 2007
Tbilisi, Baku Agree on Funding of Regional Railway Link
Azerbaijan will loan USD 200 million to Georgia to finance
construction of its portion of a railway which will link Azerbaijan
with Turkey, according to the agreement signed in Tbilisi on January
13.
Georgia will have to repay the loan with 1% annual interest within 25
years. Georgian officials said they plan to use the revenues from
operation of the Baku-Akhalkalaki-Kars railway to cover the loan.
USD 200 million is an initial sum and the loan may increase depending
on results of assessment which will fix an exact cost of the project,
Irakli Ezugbaia, chief of the state-run Georgian Railway said on
January 13. The project assessment paper is expected to be ready by
this February.
`We are very satisfied with the results [of talks]; this [agreement]
is a guarantee that the project will be launched,' Giorgi Arveladze,
the Georgian Economy Minister said, after signing of the agreement.
`This is a huge project, which will mean an investment of USD 300
million in the Akhalkalaki district. It means new jobs, new economic
opportunities and new links for Georgia,' he added.
`This project is important both from the political and economic point
of view,' Zia Mamedov, the Azerbaijani Transport Minister, who led
the Azeri delegation, said after the agreement was signed.
Officials said that the both sides want the construction to be
launched as soon as possible. Irakli Ezugbaia initially said that
Tbilisi wanted to launch construction no later than mid-2007.
But it became clear on January 13 that the project requires
time-consuming procedures which may delay the construction until the
end of 2007.
The procedures involve discussion of the agreement at the national
legislative bodies, as well as announcement of the tender to select a
company which will carry out construction works, Ezugbaia stated.
Georgia's ex-Economy Minister Irakli Chogovadze, who participated in
talks as a consultant to the government, said despite some formal
details which remain to be clarified the agreement signed on January
13 means that the project received a go-ahead.
`Now there is nothing hindering to launch this project,' Chogovadze
told Civil Georgia.
A 29-kilometer portion of the new railway on the Georgian territory
from Akhalkalaki to the Turkish border will be constructed and
192-kilometer portion of already existing poor railway infrastructure
be rehabilitated in frames of the project.
Officials say that project implementation will take about two and
half years.
The railway will have a capacity to transport 15 million tons of
cargo annually, chief of the Georgian Railway Irakli Ezugbaia said.
There were fears in Georgia that launch of the Baku-Akhalkalaki-Kars
railway will redirect flow of cargo from the Georgia's Black Sea
ports of Batumi and Poti. But Georgian Economy Minister Giorgi
Arveladze downplayed these concerns.
`Additional transport routes are of special importance for us,
against of continuing economic blockade by Russia,' he added.
Armenia is against the Baku-Akhalkalaki-Kars railway, claiming that
the project will further isolate the landlocked country.
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 Act was passed by the House and Senate as a result of intensive
lobbying by the Armenian diaspora groups in the United States.
As an alternative to Baku-Akhalkalaki-Kars, Yerevan is pushing for
reopening the already existing Kars-Gyumri-Tbilisi railway. The
railway between Turkish town of Kars and Armenia's Gyumri is
currently not operational because of trade blockades imposed on
Armenia by Turkey and Azerbaijan.