Funding set for Baku-Tbilisi-Kars Railway

Business Materials 5 July 2011 17:29 (UTC +04:00)

Georgia, Tbilisi, July 5 / Trend N.Kirtzkhalia /

The construction of the Akhalkalaki Railway Station, which is an integral part of the Baku-Tbilisi-Kars Railway project, will begin in three weeks, the Georgian Regional Development and Infrastructure Ministry said on Tuesday.

The station will be built by German architect Jurgen Mayer.

A loan agreement was signed in Baku by Azerbaijan and Georgia last week on the allocation of $575 million to the project, designed to connect the Azerbaijani, Georgian and Turkish railway systems.

Azerbaijan has allocated $575 million to Georgia for 25 years at an interest rate of five percent to construct the Georgian section of the railway.

The decision to allocate additional $ 575 million was taken in May, 2011. The two countries also held meeting of the Bilateral Coordinating Council, which approved the construction budget amounting to $ 316 million for 2011.

The Georgian ministry reported that the allocated funds also will be spent to construct and rehabilitate the railway section of Tetritskaro-Akhalkalaki to construct the railway station in Akhalkalaki and another railway infrastructure. The first tranche, worth $200 million, has also been allocated to the Georgian side for 25 years at an annual rate of one percent.>

The total loan amount is $775 million including a new loan. The loanwill be repaid with funds received from the operation of the railway.

The construction of the railway is carried out by international agreement between Georgia, Azerbaijan and Turkey. The new railway line will increase the turnover and speed of delivery of goods from Asia to Europe.

A new 105-kilometer railroad branch will be constructed as part of the Baku-Tbilisi-Kars Railway. About 76 kilometers will stretch via Turkey and 29 kilometers through Georgia.