Geographic Focus : Azerbaijan Republic and Georgia

Project Budget : EURO 1,200,000

Contractor : TEWET

Implementation timetable: January 1996 through March 1997

Background and Objectives. The economic and political situation in the Caucasus has had a detrimental effect on the financial viability and the technical condition of the rail networks, which hampers fluent transport in the region. Therefore, a project was designed to foster co-operation, revive traffic and stimulate revenues in the Caucasus region railway networks, and thus to support their operational and financial situation. The objective of this project was to carry out a pre-investment study for the rehabilitation of the main Trans-Caucasian rail route between Baku, Azerbaijan and Batumi / Poti, Georgia and to provide technical assistance to streamline commercial freight traffic on this route.

Key Issues and Achievements. A pre-investment study covered the requirements for rehabilitation of the main rail route between Azerbaijan and Georgia, examined the institutional and organisational situation, established traffic volume potential and revenue forecasts, and carried out a detailed survey of the existing situation of infrastructure, rolling stock, repair and maintenance facilities. Priority technical repair, upgrading and reconstruction work for likely traffic levels were defined. The pre-investment study provided the EBRD with an inventory of the major elements in the rehabilitation of rail infrastructure, and their priority and costs broken down into the component parts. TRACECA is proceeding with grant assistance for urgent needs for telecommunications and signalling in Armenia, Azerbaijan and Georgia as a result of the findings of the study.

A pilot freight train service provided technical assistance to Azeri and Georgian railways in preparing and putting into operation a high-quality international freight train service on the main Trans-Caucasian rail route, and monitored the operation of this service during a period of three months. As container traffic between the ports of Baku and Poti was growing, the express freight trains service proved successful and continued to run under local management for a while. Fixed departure and arrival times were respected, and security of merchandise was well assured. Realistic price levels were set, operational capacity was made available and terminal, transport and border crossing delays were minimised. Rail operators were assisted to prove that they can provide services of international standard.

With the Intermodal Services and Training project, TRACECA is now attempting to extend the service into Central Asia to establish a regular link for intermodal traffic to and from the EU, that would enable all participating states to benefit from this initiative.