Framework agreement of Kars-Tbilisi-Bakü Railway Project, labeled as ‘Iron Silk Road’ was signed on February 7, 2007, at Tbilisi in the Georgian Parliament. Turkish Prime Minister Recep Tayyip Erdo?an, Georgian President Mikhail Saakashvili and Azeri President ?lham Aliyev participated the signature ceremony and made speeches on the contributions of the project to the economies of these three states as well as to the regional stability. The agreement was signed by Turkish Minister of Transportation Binali Y?ld?rm, Georgian Minister of Economic Development Giorgi Arveladze and Azeri Minister of Transportation Ziya Memedov.
As to remind the background of the project, Kars-Tbilisi-Bakü Railway Project was first discussed in 1993 in a meeting held in Ankara by Joint Transportation Commission of Turkey and Georgia. With this project, a railway connection between Caucasia and Central Asia was aimed via establishing a direct railway line between Turkey and Georgia. Therefore, it was agreed to construct a railway between Kars and Tbilisi. Although after this meeting technical committees from both sides had come together and discussed the construction process, for a long time there was no significant more for the realization of the project. Finally, on September 19, 2005, Turkish and Azeri Transportation Ministers and Georgian Minister of Economic Development came together and took the final decision for the construction of the railway.
In the signature ceremony taking place two days ago, as stipulated by the political leaders, this project would have significant repercussions for the political and economic structure of the region. Particularly, in a period in which Russia exerted economic embargo on Georgia, Azeri declaration of financial support for the railway construction in Georgia demonstrated that these three states presented a strong political will for the realization of the railway project.
Kars-Tbilisi-Bakü Railway is significant for its geographical location being on the transportation routes between Asia and Europe. After the completion of the project it is estimated that within 20 years total amount of transportation along this line will reach 30 million tons. In other words, this railway will play a significant role within the transportation from China to Europe via Kazakhstan, Azerbaijan, Georgia and Turkey, and vice-versa. Therefore, the Silk Road Transportation Corridor will be linked from Turkey to Caucasia and then to Far East. Since the project will realize one of the most economic and secure transportation lines between east and west, Caucasia and Turkey will be a significant route linking Europe and Far East.
Until today, there has been lots of comments on the cost and financing of the project. Armenian lobby in the United States worked hard for preventing American firms’ investment to the project, whose cost has been estimated approximately 400 million dollars. Within this framework, some resolutions, demanding prevention of American firms’ investment to the project, were presented to the US Senate Finance Committee, in which it was stipulated that the US has worked for increasing cooperation in Southern Caucasia and Kars-Tbilisi-Bakü Railway Project would impede stabilization of the region and the solution of the Karabagh problem since it had excluded Armenia. What is more, US Congress adopted a resolution that hampered the American Export-Import Bank to give credit to the project.
What is interesting at this point is that neither Turkey, nor Azerbaijan or Georgia demanded any investment or any credit from American firms or banks. Plans regarding the financing of the project have been concluded long before. Accordingly, 220 million dollars for the Turkish part of the project would be financed by Turkish self-resources, while remaining 200 million dollars for the construction and renewal of the railway between Akhalkelek and Tbilisi would be financed by the long term credit given to Georgia by Azeri government.
Russia tried to impede the realization of this project, which has been contradicting with Russian strategy of preserving the dependency of former Soviet Republics which it had convened under the rubric of Commonwealth of Independent States (CIS). However, it failed and reversed its strategy by signing an agreement on the construction of an alternative pipeline route with Bulgaria and Georgia at the same day with the signature of the agreement on Kars-Tbilisi-Bakü Railway, which is quite striking.
All in all, it was expected that on August the construction will start and will conclude in a short time. Kars-Tbilisi-Bakü Railway became a project of prestige for Turkey, Azerbaijan and Georgia. Besides the economic contributions, it will increase the geopolitical importance of these three states and will contribute to the enhancement of regional cooperation in Caucasus.