RIA Novosti
November 03, 2004

RUSSIA, TRANSCAUCASIAN COUNTRIES WANT TO RESTORE RAILROAD OPERATION IN
CAUCASUS


MOSCOW, Nov 3 (RIA Novosti's Yelena Fyodorova) - Russia, Georgia,
Armenia and Azerbaijan intend to establish an operator company to
restore and service the Transcaucasian railroad, Russian Transportation
Minister Igor Levitin said at a Wednesday press conference in Moscow.

In his words, this decision was made after the talks with the
leadership of three Transcaucasian countries. "Three presidents
confirmed their wish that transportation bodies should suggest a scheme
of an operator company's establishment," said Mr. Levitin.

He explained that the political decision on the restoration of a
through railway movement in the Caucasus was difficult to make now,
that's why it was decided to start from economic issues.

"A scheme of establishing an operator company which will take up the
functions of controlling traffic was proposed," said Mr. Levitin. He
added that open joint-stock company Russian Railways would join the new
company on the Russian part.

Mr. Levitin said that in many respects, the consent of the
Transcaucasian republics' presidents to restoration of the through
railway movement was defined by the very important geopolitical
significance of this project. The case is that a project codenamed
Silky Way - the construction of a railway via China, Kazakhstan finally
reaching Turkey - is being realized now.

Mr. Levitin said the volume of transit on the Transcaucasian railroad
in Soviet times was up to 15 million tons of cargoes annually.

Mr. Levitin recalled that movement on the Transcaucasian railroad was
suspended in 1990 due to events in Abkhazia (a self-proclaimed republic
on Georgian territory). As a result of warfare, many sections of the
railroad were damaged, and many sections of the railway bed were not
demined.

"Georgia is to give the Russian side documents on the state of the
railroad on its territory and assess the volume of necessary investment
until the end of November," said the Transportation minister. Only
after that will Russia make the decision to participate in the
restoration of the railroad, he emphasized.

In the minister's opinion, the consortium which is being created will
also address the issues of restoration of destroyed sections of the
Transcaucasian railroad. The four states will support this project with
loans. Besides, a banking consortium will be created to finance the
project, said Mr. Levitin.

He said Georgia was interested in integration of a Georgian airline
with a Russian one.

The minister recalled that Aeroflot was considering the issue on the
integration with the Georgian airline.

Mr. Levitin said this issue was complicated with Georgian airlines'
debt for aeronavigation servicing in Russia's airspace.