Baku-Tbilisi-Kars railway project goes up two times

Amendments were made in agreement between Azerbaijan and Georgia on realization of Baku-Tbilisi-Kars Railway project.

According to Azerbaijan Ministry of Transport, as the results of discussions between Georgian delegation and Transport Ministry, the sides have signed a protocol on amendments and annexes in agreements between Azerbaijan and Georgia on financing, projection, construction, rehabilitation, reconstruction and exploitation of railway area up to Marabda-Turkey border within the realization of Baku-Tbilisi-Kars railway line.

According to protocol, the sum to be allocated by Azerbaijani side for projection, construction, rehabilitation-reconstruction works, including financing of construction of relevant infrastructure objects has been increased to $775 mln. This sum will be allocated via authorized bank and paid in two tranches. First tranche will make $ 200 mln for 25 years with 1%-annual rate, the second - $575 mln for 25 years with 5%-annual rate.

The sum within the first tranche covered conducted works on this project from 2007 so far. Allocation of second tranche is related to rising of prices of goods-materials in the world market, revaluation of all details of current situation of Marabda-Kartsakhi railway, conduction of works in a severe climatic condition. Ministry says, Azerbaijani and Georgia sides decided to establish joint venture for conduction of works more quickly and qualitative, increase of effectiveness  of cargo transportation.

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Reason of allocation of additional financial funds to Baku-Tbilisi-Kars railway project is sharp price rise of the project. And it is, in turn, is related to amendments made in railway project, as well as bad situation of a part of road considered for repair from the expected factual situation.

Department chief of Azerbaijani Transport Ministry Sadraddin Mammadov said that need for additional financial funds to implementation of the project is connected with changing of the route. This change occurred in part of railway from Akhalkalaki (Georgia) until Turkish border. That is, during geological research in this territory it was revealed that the territory enters the slip zone and due to it, it will be impossible to repair the road as it was planned. Taking the safety of railway into account, it has been decided to substitute this part with the tunnel to be constructed under the mountain. Length of the tunnel to be constructed under the mountain located on Turkish-Georgian border will be 4 km.

Besides, it has been considered to reconstruct 160km-part of this railway from Marabda till Akhalkalaki. But then, on the eve of these works, it was revealed that this road is absolutely destroyed. Experts think that the road was in such bad situation that the movement was implemented there not by traditional navigation system, but by simple radio contact. Investigations determined that this road was not used for many years, the trains moved by this part only some times in a week. In other words, analyzes show that this part of road is not ready for transportation. Consequently, it was decided not to repair it, but to rebuild completely. “Though it was considered to repair it, but it will impossible to be satisfied only with simple repair. Here must be established electric lines, communication, road management system and etc. All of these have impacted on project’s budget. The funds considered formerly was not enough for the works”, said Mammadov.

Consequently, there occurred need for allocation of additional funds, Azerbaijan allocated additional $575 mln funds to Georgia. Transport Ministry told most part of the allocated funds will be especially spent to rebuild of Marabda-Akhalkalaki part.

Additional funding does not include previously dedicated loan in the amount of $ 200 million. The Azerbaijani government has provided Georgia’s $ 200 million as a loan for 25 years at an annual rate of 1%. Of these, 90 million dollars have already been used. At this time, credit conditions will be higher - 575 million dollars in 25 years at an annual rate of 5%. Agreement on this issue was reached during Baku visit of the Minister of Regional Development and Infrastructure of Georgia Mr. Ramaz Nikolaishvili and CEO of Kartsakhi-Marabda Railway Company Bidzina Bregadze.

This loan will be repaid from profits from the project, after undertaking the railroad. Mammadov says the railway will be managed by a joint venture by Azerbaijani and Georgian sides. The railroad goes into the complete management of Georgia’s only 25 years later, after full repayment of the loan.


/APA/