BACKGROUND: The idea of connecting the rail networks of Azerbaijan, Georgia and Turkey was first discussed during the Joint Transport Commission meeting in July 1993. The initiative was later integrated into the Master Plan on the Trans-European Railway (TER) networks sponsored by the United Nations Economic Commission for Europe (UNECE). In July 2002, the Ministers of Transport of Azerbaijan, Georgia and Turkey signed a protocol confirming the route and at a February 28, 2005 meeting the parties agreed to conduct a feasibility study. UNECE lists this route among Priority 1 projects that could be funded and implemented rapidly by 2010. The realization of this project depends on the construction of a 98 km-long (60 miles) segment of rail from Kars in Turkey to Akhalkalaki in Georgia (68 kilometers in Turkey, 30 kilometers in Georgia, and the rehabilitation of the Akhalkalaki-Tbilisi line). The estimated cost of the project is about $400 million. Today, there are two operational railroads in the South Caucasus, which are part of the EU-sponsored TRACECA initiative that links Azerbaijan’s and Georgia’s transportation networks. These are the Baku-Tbilisi-Poti and the Baku-Tbilisi-Batumi railways. There is, however, no rail link between Georgia and Turkey. The construction of the Kars-Akhalkalaki railroad will connect Georgian and Turkish railroads and facilitate trade in the East-West direction. For example, a cargo from China could be delivered to Aktau (Kazakhstan) and then transported by railway ferries to Baku and shipped directly to Istanbul and onward to Europe via the Baku-Tbilisi-Akhalkalaki-Kars-Istanbul rail system. Likewise, a shipment from Europe could be easily transported to the South Caucasus, Central Asia or China. Hence, Kars-Akhalkalaki serves as a rail connection that will eventually unite railway networks of China-Central Asia-South Caucasus-Turkey and the European Union. The governments of Azerbaijan, Georgia and Kazakhstan have already made some progress in expanding the current TRACECA routes to Central Asia, which will be extended to China. In December, 2005, a container truck from Kazakhstan was sent to Georgia via Azerbaijan as a part of a pilot program. A 3,850-km (2406 miles) long Kazakh rail system from Aktau near the Caspian Sea to the city of Dostlik (Druzhba) near the Kazakh-Chinese border is currently operational. The length of the Baku-Tbilisi-Akhalkalaki-Kars and the Kars-Istanbul sections are 826 km (516 miles) and 1,933 km (1208) respectively.

IMPLICATIONS: One of the major outcomes of the Kars-Akhalkalaki railroad will be the increased continental trade through the East-West Transport Corridor. There are various estimates regarding the volume of potential cargo shipments through this route. Most forecasts suggest that during the initial stage (the first two years of operation), the volume of transport will reach 2 million tons and in the following three years it could increase up to 8-10 million tons. The construction of the Kars-Akhalkalaki railway will also open markets in the Mediterranean region and South-East Europe for Azerbaijan, Georgia and Central Asian states. It will increase the volume of container traffic through the South Caucasus and be a more secure and shorter way of reaching Asia or Europe. Goods and products from these countries could be shipped directly to Mersin, a costal Turkish port at the Mediterranean Sea, from where they could be transported by sea to the United States, Israel, Egypt or other North African and South European states. Turkish rail networks will also create an opportunity for uninterrupted rail shipments to and from Southeastern Europe. In addition, the project has significant geopolitical significance. As was the case with energy projects, inter-state railways will bring along questions regarding common security threats and will require collaborative efforts to address these threats. Azerbaijan, Georgia and Turkey will further integrate their security agendas to accommodate Azerbaijan’s and Georgia’s quest for the North Atlantic Treaty Organization (NATO) membership. The trilateral cooperation between Ankara, Baku and Tbilisi will move the three states into a more integrated transportation and security arrangements, thus cementing their ties with Europe and the United States. Since the Kars-Akhalkalaki railroad is a component of the East-West Transport Corridor, both the United States and the European Union will benefit from the realization of this project. Occasional attempts by some U.S. and European legislators and officials, especially those under the influence of Armenian lobbing groups that oppose the construction of this railroad, could seriously damage American and European national interests and their states’ role in the South Caucasus. Azerbaijan, Georgia and Turkey could finance the construction of the Kars-Akhalkalaki project without external assistance. Yet, U.S. and European political and financial backing will strengthen their commitment to the regional development and increase their presence in the region, as it was during the construction of the BTC and BTE energy pipelines. Armenia’s self-imposed seclusion by continuously rejecting to pull its troops from occupied Azerbaijani territories will further detach it from regional developments. Azerbaijani officials have repeatedly stated that they will not consider the Armenia-backed initiative to use the century-old Kars-Gyumri (Armenia)-Tbilisi railway unless Armenia ends its occupation of Azerbaijani lands. At the same time, Baku does not want to delay strategic and economic projects and wait until Armenia and Azerbaijan come to an overdue agreement in resolving the eighteenth-year old Karabakh conflict. Thus, the construction of the Kars-Akhalkalaki project, which may start in the late 2006 or the early 2007, is likely to advance regardless of developments in the Karabakh peace process.

CONCLUSIONS: The construction of the Kars-Akhalkalaki railroad will address a missing link in the transportation networks connecting Europe and Asia. It will increase the volume of continental trade via Azerbaijan and Georgia and boost these states’ role as transit countries. It will also move Azerbaijan and Georgia closer to the Euro-Atlantic community and create new opportunities for American and European engagement in the region. The project will accommodate the EU-sponsored TRACECA initiative as well as the U.S.-backed East-West Transport Corridor and make the region a crossroads for Trans-European and Trans-Asian continental trade.

AUTHOR’S BIO: Taleh Ziyadov is an independent analyst, who holds an MA form the Georgetown University School of Foreign Service.