At a railway station in the eastern Turkish border town of Kars the presidents of the three countries held a ground breaking ceremony for the 290 million lira ($241.06 million) Turkish section of the railway.

The three are linked by the BP-led (BP.L: Quote, Profile, Research) Baku-Ceyhan oil pipeline and the Baku-Tbilisi-Erzurum gas line but trade links between Turkey and the Caucasus region are limited.

Turkish President Abdullah Gul, Georgia's Mikheil Saakashvili and Azerbaijan's Ilham Aliyev placed three sections of railway track on a large map of the region in a symbolic launch of the project as confetti showered down.

"With this project the historic Silk Road is being reinvigorated," Gul said in a speech.

"The project is open to all countries in the region who want to contribute to good neighbourly relations, peace and prosperity," he said.

Ozgun Yapi-Celikler joint venture won the tender last September for construction of the 76-km (47-mile) Turkish stretch of the railway with a bid of 289.8 million lira, the lowest of 14 bids.

The project involves new track construction and renewal of existing track, and is expected to be completed in 2011. Work on the 29-km (18 miles) stretch in Georgia was launched last year.

The 160-km (99-mile) section of rail in Azerbaijan will be renewed.

"Thanks to this project we will not just be a part of Europe, we will become a solid bridge between Europe and Asia," Saakashvili said.

Turkish Transport Minister Binali Yildirim said the railway links from the region will extend into Europe with completion of an ongoing rail tunnel project linking the European and Asian sides of Turkey's biggest city, Istanbul.

In its first year of operation the Baku-Kars railway will carry one million passengers and 6.5 million tonnes of freight, Yildirim said.

The medium term annual target was three million passengers and 18 million tonnes of freight.

See also:

Caucasus closer to launching Iron Silk Road

Zaman: Jul 27, 2008

From right to left, Presidents Ilham Aliyev of Azerbaijan, Abdullah Gül of Turkey and Mikhail Saakashvili of Georgia applaud during a ceremony for the construction of the Turkish stretch of a railway linking Azerbaijani capital Baku with the eastern Turkish city of Kars via the Georgian capital, Tbilisi.

Turkish, Azerbaijani and Georgian leaders gathered in the far eastern province of Kars on Thursday to launch the construction of the Turkey section of a railway that will link the three countries and revive the historic Silk Road trade route that once connected Asia with Europe.

President Abdullah Gül and his Azerbaijani and Georgian counterparts, Ilham Aliyev and Mikheil Saakashvili, held a groundbreaking ceremony for the $241 million Turkish leg of the railway in Kars. The three presidents placed three sections of railway track on a large map of the region in a symbolic launch of the project amid confetti. "A new economic cooperation zone which is yet to be defined as such has emerged in our region," Gül said in an address at the ceremony, referring to expanding cooperation between Turkey, Azerbaijan and Georgia in the energy, trade and transportation fields.

The three countries are linked by the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, which carries crude oil from Azerbaijan's Shah Deniz oil fields to world markets through Turkey's Mediterranean port of Ceyhan, and the Baku-Tbilisi-Erzurum (BTE) gas line, but trade links between Turkey and the Caucasus region are limited.

The construction of the railway is planned to be completed by 2011. The Turkish section of the railway is 76 kilometers long. In Azerbaijan, a new track will be constructed to be linked to a renewed existing track. Work on the 29-kilometer stretch in Georgia between the Turkish border and Akhalkalaki (Ahılkelek) was launched last year. "This project contributes to the peace and stability in the Caucasus," Gül also said. Visibly absent from the project is Armenia, which has territorial and other disputes with both Turkey and Azerbaijan.

Gül said the project was open to all countries, provided that they also contribute to the peace and stability in the Caucasus and are willing to maintain good neighborly relations with other countries in the region. Turkey closed its border and severed its ties with neighboring Armenia in protest of Armenian occupation of the Azerbaijani territory of Nagorno-Karabakh early in the last decade. The landlocked country is also excluded from regional oil and natural gas transportation projects through the BTC and BTE pipelines.

The construction of the railway between Turkey, Azerbaijan and Georgia has long been hampered by Armenian lobbying against the project in the United States and Russia. Armenian experts have argued in the past that the project will not be economically viable, and the Armenian lobby pushed for a bill in the US Congress that blocked US banks from providing loans to Georgia to be used in the construction of the railway's Georgian section. The obstacles were eventually overcome by Azerbaijan offering a $220 million loan to Georgia.

Armenian leaders say the plan deliberately ignores the old rail link between Armenia and Turkey, which has been idle since the two countries cut off diplomatic ties in 1993. In March, Armenian President Serzh Sarksyan said the project did not target Armenia because many Armenian nationals were already traveling to Turkey via Georgia. The construction of the railway, he said, will further facilitate Armenians' travel to Turkey.

Gül said there was strong political will behind the project and that it will not be weakened because it will benefit the peoples of the region. Mitat Çelikpala of the private Turkish Union of Chambers and Commodity Exchanges (TOBB) Economy and Technology University said the project had been delayed for three to four years due to Armenian objections and that construction would never have started if Turkey had not pressed for it so enthusiastically, as the project had no backing from the West. According to Çelikpala, the railway will boost Turkish influence in the Caucasus and Central Asia. "The realization of this project means we will be more influential in the Caucasus, Central Asia and the Caspian region," he told the Anatolia news agency. "Turkey has become a sort of center of attraction for the entire Caucasus," he added.

The railway will also deepen ties between Georgia and Turkey, Çelikpala said, describing Turkey as the main bridge for the former Soviet Union country to economically integrate with the West.

"Some had called it a dream. It was once shelved. But meetings took place between the three countries and political will materialized to build the railway. The three countries also received support from Kazakhstan and China," Gül said at the ceremony. "Today, we are taking another step to make the historic Silk Road that people used to cross on the backs of animals a reality. This link not only connects the three countries, it also links China with London."

Transportation Minister Binali Yıldırım said the railway links from the region will extend into Europe with the completion of an ongoing rail tunnel project linking the European and Asian sides of Turkey's biggest city, İstanbul. The rail tunnel project, called Marmaray, is planned to be completed in 2013. "Thanks to this project, we will not just be a part of Europe, we will become a solid bridge between Europe and Asia," Saakashvili said.

Aliyev: Cooperation deepens

Azerbaijani President Aliyev said his country had excellent relations with both Turkey and Georgia. "The people are also getting closer as their countries launch joint projects," he said at the ceremony. He called the BTC oil pipeline a "dream come true" and added that the cooperation will be further strengthened when the railway becomes operational.

Some 1.5 million people and 6.5 million tons of cargo are expected to be transported by the railway in the first year following its launch.

Railway project in figures

The Baku-Tbilisi-Kars railway project is built on links forged by natural gas and oil pipelines between Turkey, Azerbaijan and Georgia. The Turkish stretch will consist of a 76-kilometer railway. The Özgün Yapı-Çelikler joint venture won the tender last September for construction of the Turkish leg with a bid of YTL 289.8 million ($241 million), the lowest among 14 bids. In Azerbaijan, the project involves the laying of new track and the renewal of existing rails. Work on the 29-kilometer stretch in Georgia between the Turkish border and Akhalkalaki (Ahılkelek) began last year. The project is expected to be launched in 2011, with an initial capacity to carry 1.5 million people and 6.5 million tons of cargo annually. Its capacity is projected to grow to 3 million people and 17 million tons of cargo by 2034. The project's cost is estimated at $450 million.

Time for Armenia to take action to avoid isolation, says expert

A project to launch a railway between Turkey, Azerbaijan and Georgia is a strong message to Armenia that it has to take action to avoid isolation in the region, an expert has said.

"Armenia is about to be pushed into permanent isolation," said Hasan Kanbolat, an expert at the Ankara-based Center for Eurasian Strategic Studies (ASAM). He said Turkey was the main outlet for the landlocked Armenia to reach the West and that Yerevan must take concrete steps to normalize its relations with Ankara.

Turkey closed its border and severed its diplomatic ties with Armenia in the '90s in protest of Armenia's occupation of Nagorno-Karabakh in Azerbaijan. Ankara says normalization of ties depends on Armenian withdrawal from Nagorno-Karabakh, a change of policy in Yerevan on its claims of "genocide" against Armenians by Ottomans during World War I and formal recognition of the Turkish-Armenian border by Armenia.

Armenia has recently stepped up calls for normalization of ties with Turkey. Armenian President Serzh Sarksyan said earlier this month that he had invited his Turkish counterpart, Abdullah Gül, to visit Yerevan and watch a football match in September.

Kanbolat, however, said the invitation was not enough and that more substantial steps were needed for any serious progress in the direction of normalization to take place. "Armenia should keep its promises regarding gradual withdrawal from Azerbaijani territory," he told Today's Zaman. Turkish and Armenian officials had secret talks on July 8 in Switzerland, but the Turkish Foreign Ministry said this does not indicate a change of a policy.