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Weekly economic review

Analysis Materials 12 March 2008 12:02 (UTC +04:00)

Last week the meeting of the Co-ordination Council of the three countries on the Baku-Tbilisi-Kars railway project took place in Baku. The meeting was attended by the representatives of Azerbaijan, Georgia and Turkey.

The meeting focused on the formation of the project governance group, confirmation of technical task on the technical control on the construction.

The Turkish side presented the project documentation of Akhalkalaki project. The construction of 76 km of Turkish section of the Baku-Tbilisi-Kars railway is valued at $250mln, Ahmad Arslan, the head of the Department on Construction of Railway, Ports and Airports of the Transport Ministry of Turkey said in Baku on 6 March.

The funds for construction of the railway section will be allocated by the government, Arslan said. Turkey has issued a tender to select a contractor to carry out the construction works. Some 14 companies are taking part in the tender including the Azerbaijani Azerinshaatservis.

According to Arslan, the construction of Baku-Tbilisi-Kars will be complete by 2011. The construction of the tunnels through the Bosporus strait will be completed by that time as well and the trains from Azerbaijan can directly go to Europe owing to the tunnel.

In addition, the meeting approved the budget of Marabda-Kartzakhi Company which is being involved in the construction and reconstruction works in the territory of Georgia.

The construction of the 26km Georgian section of the Baku-Tbilisi-Kars railway route will commence at the end of April or beginning of May, Ramaz Giorgadze, the Director General of Marabda-Kartzakhi company, said on 6 March. "Now the weather conditions do not allow us to set up the construction (too much snow)," Giorgadze said.

The Azerbaijan Construction Service acts as contractor of the project. The company has allocated $24mln. The total budget of the contracts concluded with Azerbaijan Construction Service is $79mln. Construction is expected to be complete by 1 October 2009, he said.

Azerbaijan finances the construction and project in Georgia, in the amount of $200mln.

The Akhalkalaki-Marabda railway of the third category with the 1,520mm junction will enable to improve the carrying capacity to 15mln tons of cargo per year on both directions. The project also envisages energy supply to this section, establishment of appropriate communications systems, including the construction of fibre-optic cable and its connection to the general fibre-optic system of the Georgina railways, as well as projection of the relevant infrastructure needed for providing passenger and cargo deliveries.

The Baku-Tbilisi-Akhalkalaki-Kars project includes the construction of a 105 km railway road, with 76 km section running via Turkey and 29 km section via Georgia. Moreover, the 183 km section of the Akhalkalaki-Marabda-Tbilisi railway will also be reconstructed to improve the carrying capacity to 15mln tons of cargo per year. There are plans to build in Akhalkalaki a place for the transition of trains from the track existing in Georgia to the European track. The project is estimated at $422mln and taking into consideration the accompanying infrastructure, its cost will total $600mln.

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