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Georgia spends $206 million of Azerbaijani loan allocated to Baku-Tbilisi-Kars project

Business Materials 8 June 2013 22:19 (UTC +04:00)
Georgia has spent $206.387 million of the loan provided by Azerbaijan for construction and reconstruction of a Georgian section of Baku-Tbilisi-Kars railway project, Head of Transport Policy Department of the Georgian Economy and Sustainable Development Ministry Ketevan Salukvadze told Trend
Georgia spends $206 million of Azerbaijani loan allocated to Baku-Tbilisi-Kars project

Azerbaijan, Baku, June 7 / Trend E. Kosolapova/

Georgia has spent $206.387 million of the loan provided by Azerbaijan for construction and reconstruction of a Georgian section of Baku-Tbilisi-Kars railway project, Head of Transport Policy Department of the Georgian Economy and Sustainable Development Ministry Ketevan Salukvadze told Trend by e-mail on Friday.

According to Salukvadze, $517.626 million of Azerbaijan's loan are still available.
The work on construction and rehabilitation of the Georgian section of the project are expected to be completed in 2015, she said.

"In January 2013, new management was appointed to the company operating the project of the new railway connection "Baku-Tbilisi-Kars" on the Georgian territory. The completed and future work implemented within the project was examined. As a result, 2015 was set as a real term for completion of the rehabilitation and construction work (in Georgia)," Salukvadze said.
According to the Head of Transport Policy Department, a number of questions appeared for contract companies following the examination.

"We got answers to some of these questions but still continue negotiating with some Azerbaijani contract companies. We hope that after the completion of the negotiations with Azerbaijani contract companies, the pace of the work will increase and will be able to complete the project within the scheduled time," she said.

According to Salukvadze, Georgia has completed 29 percent of all work within "Baku-Tbilisi-Kars" project. Currently, the rehabilitation and construction work within the project is underway ​​on all the railway segments.
"The test work on each railway segment will be carried individually immediately upon completion of rehabilitation and construction work on this segment," she said.

In particular, a railway bridge over the Kirbulah river has been already successfully tested in 2013.

The procedures established by law, required for commissioning of any railway section, will also be carried out after completion of construction and rehabilitation work on this section.

The project participants (Georgia, Azerbaijan and Turkey) will make a decision concerning an operation of the new railway line, including the tariff policy following the completion of all rehabilitation and construction work, Salukvadze said.

""Baku-Tbilisi-Kars" railway project, also called as "project of the century", is aimed at enhancing and development of trade and economic relations between Europe and Asia. For Georgia, as well as for the whole region, this project will mean intensifying the trade and economic cooperation with neighboring countries and will promote region's economic development," she said.

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 and includes the work on the project since 2007. 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 the construction and raw materials, revaluation of the current state of the Marabda-Kartsakhi railway branch and operations in adverse weather conditions.

It is expected that about 30 million tons of cargo per year will be transported through the Baku-Tbilisi-Kars railway annually. It will become a direct route to the European rail network.
The Baku-Tbilisi-Kars railway will increase the flow of containers, bulk and other types of cargo from Asia to Europe.

In future, following completion of the Marmara project (construction of a tunnel under the Bosporus), access to Europe will be provided using the Baku-Tbilisi-Kars railway.

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