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KARS-AKHALKALAKI-TBILISI-BAKU RAIL PROJECT SOON TO ROLL FORWARD
by Vladimir Socor
Eurasia Daily Monitor -- The Jamestown Foundation
January 19, 2007 -- Volume 4, Issue 14
Thanks in large measure to Azerbaijan's rapidly growing economic
strength, the Kars (Turkey)-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's parliamentary
ratification 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, 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 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.
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.
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. The real impetus came in May 2005
when 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 and the border 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
part of the 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, Day.Az, Messenger, Civil Georgia, Turkish Daily News,
PanArmeniaNet, January 14-18; see EDM, November 9, 2006)
--Vladimir Socor
by Vladimir Socor
Eurasia Daily Monitor -- The Jamestown Foundation
January 19, 2007 -- Volume 4, Issue 14
Thanks in large measure to Azerbaijan's rapidly growing economic
strength, the Kars (Turkey)-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's parliamentary
ratification 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, 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 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.
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.
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. The real impetus came in May 2005
when 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 and the border 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
part of the 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, Day.Az, Messenger, Civil Georgia, Turkish Daily News,
PanArmeniaNet, January 14-18; see EDM, November 9, 2006)
--Vladimir Socor