Geographic Focus: Republic of Armenia, Azerbaijan Republic and Georgia

Project Budget : EURO 2,000,000

Contractor : TEWET

Implementation timetable : July 1996 through July 1997

Background and Objectives. During a visit to the Caucasus in October 1995, Commissioner H. van den Broek agreed with the three Republics to make an audit of the concerned railways and the ferry boat connection between Baku-Turkmenbashi. The objectives of this project were : (i) to promote mutual co-operation between the Republics of the region and the use of the TRACECA rail corridor by the establishment of a Joint Venture involving the three Republics; (ii) to improve the efficiency of regional operations; and (iii) to consider the possibilities of a multi-modal service based on a restructured railway network and ferry-boat services.

Key Issues and Achievements. The potential trade and the framework for development under different political and social scenarios was examined, including the assessment of the traffic potential and forecasts, an inventory of present assets, the identification of investments required, and legal and institutional considerations. Possible management and implementation strategies were identified, involving local and outside participants. The economic and financial aspects of alternative recommended strategies were evaluated and formed the basis of agreements for joint-ventures. The proposals and ideas for possible joint ventures generated include: (i) the management of the Pilot Train ; (ii) the establishment of a railway sleeper factory; (iii) a rail locomotive repair workshop ; (iv) a telecommunication company.

The EBRD have used details contained in the project reports to prepare an USD 20 million loan to the Azeri Government. The pilot train was revived and extended by the Intermodal Services and Training project.