Georgia, Turkey agreed on railway tunnel construction

Business Materials 17 September 2012 16:00 (UTC +04:00)

Georgia, Tbilisi, Sept 17 /Trend N.Kirtzkhalia/

Georgia and Turkey have agreed to sign an agreement on the construction of a railway tunnel on the Akhalkalaki-Kars railway line of the Baku-Tbilisi-Kars route.

According to the Georgian Revenue Service, this is another step taken to improve the competitiveness of the transit corridor of the country.

The meeting between head of the Georgia Revenue Service Jaba Ebanoidze and Minister for Customs Matters of Turkey Ziya Altunialdiz was held in Istanbul.

The agreement allows the simplification of border crossing procedures by individuals, vehicles and cargo with the freeing of imports into Georgia from all customs duties and to create a temporary border checkpoint.

This document is established a legal basis for the purposes that Customs administrations have done everything to ensure that the construction of a railway tunnel was completed in the shortest possible time.

The Baku-Tbilisi-Kars transport corridor project includes the construction of the Kars-Akhalkalaki railway branch with a length of 98 km, of which 68 km is in Turkey, 30 km in Georgia.

A 183-kilometre section of the Akhalkalaki-Marabda- Tbilisi railway will be reconstructed within the project to increase the capacity to 15 million tons of cargo per year. It is planned to construct a centre in Akhalkalaki to transfer trains from the track existing in Georgia to the European one.

Azerbaijan has allocated a soft loan worth $775 million for Georgia to construct and reconstruct the Georgian section of the Baku-Tbilisi-Kars railway.

Tranche A worth $200 million, has been allocated for 25 years at one per cent per annum (includes the work on the project since 2007) whilst tranche B worth $575 million, is for 25 years at five per cent per annum.

The need for allocating tranche 'B' is associated with an increase in the world prices on construction and raw materials, revaluation of the current state of the Marabda-Kartsakhi railway branch, the operations in adverse weather conditions, etc.

It is expected that about 30 million tons of cargo per year will be transported through the Baku-Tbilisi-Kars railway annually. This railway will have a direct link to the European rail network.

The Baku-Tbilisi-Kars railway will increase the flow of container, bulk and other types of cargo from Asia to Europe. The Marmaris project which will see the construction of a tunnel under the Bosporus will be implemented during this period. This will open a railway communication to Europe.