Eurasia Daily Monitor, DC
The Jamestown Foundation
June 7 2005

TURKEY, GEORGIA, AZERBAIJAN LAUNCH NEW STRATEGIC RAILWAY PROJECT

By Zaal Anjaparidze


While the May 25 opening of the Baku-Tbilisi-Ceyhan (BTC) oil
pipeline garnered considerable media interest, a second initiative
has received less attention. On the sidelines of the BTC ceremony,
the president of Azerbaijan, Ilham Aliev, Georgian President Mikheil
Saakashvili, and Turkey's President Akhmed Nedget Sezer announced the
creation of the Kars international railway corridor, linking
northeast Turkey, Tbilisi, and Baku. The project, roughly valued at
$400-800 million, includes construction costs for the 258-kilometer
long railway line. In Georgia the project needs a new 30-kilometer
line between Kars and Akhalkalaki (in Javakheti region) and must
restore the Akhalkalaki-Tbilisi railway section (Regnum, Media News,
May 25).

Georgia, Azerbaijan, and Turkey had signed a joint statement on the
construction of the railway at the Georgian Ministry of Foreign
Affairs on December 28. Georgian Economic Development Minister Alexi
Alexishvili called the joint venture "an historic project of the
century." He declared, "We have agreed that the
Kars-Akhalkalaki-Tbilisi railway project will be implemented at an
increased pace. A working group will be set up to work on specific
details of the project." All three countries will finance the
project.

The railway project has already been registered for international
tender and will be managed by a Georgian-Azeri-Turkish joint venture.
Some analysts almost equate the importance of the railway project to
the Baku-Tbilisi-Ceyhan oil pipeline and the Baku-Tbilisi-Erzurum gas
pipeline (Regnum, April 8, May, 5, 20; Caucasus Press, December 29,
2004; Georgian Messenger, December 31, 2004).

The idea for the Kars railway was born eight years ago, when (then)
Turkish President Suleiman Demirel arrived in Georgia on July 14,
1997, and talked with (then) Georgian President Eduard Shevardnadze
about building a railway from Kars to Akhalkalaki to "open a third
frontier crossing between the two countries." However, the idea
subsequently stalled mostly for financial reasons.

The Kars-Akhalkalaki route is expected to fully replace the now
inactive Kars-Gyumri-Tbilisi line, which was the only rail route the
USSR used to reach Turkey. Istanbul unilaterally halted traffic on
this route after Armenian-Turkish relations deteriorated due to the
Armenian-Azerbaijani war in Karabakh.

If the new trilateral project goes into effect, any country in the
Caspian region will be able to transport cargo and passengers from
Baku to Europe via Turkey. The Azerbaijani side appears to have
far-reaching strategic goals for the railway. Nazir Azmamedov,
spokesman for the Azerbaijani Transport Ministry, said Baku is
extremely interested in seeing the Kars-Akhalkalaki railroad built.
"There are cases when the Batumi [Ajaria] port does not work and from
this viewpoint Azerbaijan is interested in the construction of an
additional railroad that would help transfer our goods to the Turkish
ports," he said.

Evidently the Georgian political leadership is pursuing its own
strategic goals with regard to the railway. The rail line could boost
economic activity in Javakheti region, develop local infrastructure,
and contribute to the reintegration of the Armenia-oriented Javakheti
region with Georgia. In addition, construction of the railway should
speed up the Russian military pullout from Georgia. The functioning
railway could relieve, to a certain extent, the severe
social-economic problems for the Javakheti Armenian community,
especially after closure of the Russian base. Saakashvili has
underlined several times that full integration of Javakheti into
Georgian state life is a compelling problem. He may consider the new
railway to be a tool to address this problem.

Apart from the local goals, the Kars railway is expected to serve
Georgia's international interests, including strengthening Georgia's
status as a transit country, developing an strategic alliance with
Turkey and Azerbaijan, and likely curbing Armenia's regional
ambitions, which Tbilisi has long considered a dangerous neighbor and
the sole strategic ally of Russia in South Caucasus.

Some Russian and Armenian analysts argue that construction of the
Kars-Tbilisi-Baku railway line plays into the hand of Georgia,
because it actually "takes Armenia out of the international transport
circuit" with all the ensuing economic and political consequences.
Besides, they argue, launching a new railway would fundamentally
change the whole regional transit structure, making Azerbaijan a
major traffic hub (www.turkishpress.com, Turan, February 7;
International Railway Journal; March 1; Novoe vremya, April 14;
www.azg.am July 30, 2004).

According to the Armenian newspaper Hayots Ashkharh, "Armenia should
take a wide range of urgent measures in order to prevent the
construction of the Kars-Akhalkalaki railway that will link Turkey,
Georgia, and Azerbaijan." Furthermore, the paper argues, the "railway
will strengthen Armenia's dependence on Georgia" (Hayots Ashkharh,
October 1, 2004).

The Kars-Akhalkalaki-Baku railway line promises other benefits for
Georgia. According to analysts, the railway has the potential to
attract freight, including oil, from Central Asia en route to Turkey
by offering a further outlet to the sea. Caspian traders, for
example, may want to deliver oil by rail directly to European buyers.
They will obviously save money and time bypassing tanker routes.
Georgia could thus offer two oil routes to Europe, by sea and by
land, making the country an important element of the transport
corridor linking Asia, the Caucasus, and Europe.

Some investments in the Kars-Akhalkalaki Railway are already pending.
In 2002, China, which reportedly prefers this route to the Russian
one to connect to Europe, showed a readiness to invest in the project
and has submitted relevant plans to the Turkish government. Georgia,
Azerbaijan, and Turkey have already applied the European Commission
to include the new railway line in the TRACECA transport corridor.