Issue 6, 2017. December-January



The long-anticipated Baku-Tbilisi-Kars railway is now up and running. Georgian officials believe the new route will be a boost to the economy in terms of transit cargo, tourism and employment.

Inge Snip
Photo by George Surguladze

Travelling and trade may have just become a little bit easier in the Caucasus with the opening of a new railway route from Azerbaijan to Turkey via Georgia.

On October 30, 2017 the Baku-Tbilisi-Kars (BTK) railway opened after over two decades of planning the new trade route.

"New Eurasian Bridge"

The BTK is widely expected to provide an economic boost for all three countries along its route.

Georgian Prime Minister Giorgi Kvirikashvili described the BTK as a "new Eurasian bridge." "The commissioning of the new rail route will strengthen the region's transport and trade status... The project will boost tourism; new jobs will be created," Kvirikashvili said.

The European Union has said that the new rail corridor "coupled with investments, improved infrastructure and logistics coordination, will provide better connectivity, new business opportunities and increased trade."

The 846-kilometer-long trade route can move over one million passengers and 6.5 million tons of cargo per year; an increase to 15-17 million tons is expected with the planning of a parallel track in the upcoming years, according to reports.

Urban planner Giorgi Kankia says the project is important on a "global scale."

"The importance of the project is of global scale, both freight, and passenger transportation," Kankia says, stressing that the international trade resulting from it may lead to further investments in the country's railway system. For Georgia, the BTK is a welcome addition in its wish to become an international hub for trade, and Georgia has been actively pursuing the opening of free industrial zones along its section of the route.

A billion-dollar company

Kvirikashvili and other Georgian officials have praised the project as a harbinger of future economic growth.

"I am convinced that the new railway will drastically change the current economic reality and will put in place brand -new conditions for development both in the region and beyond," he said at BTK's opening ceremony in Baku.

"Once fully commissioned, the new railway route will foster unlocking our countries' transit and logistics potential and further strengthen the region's transport and trade status."

Georgia has been heavily investing in its transportation and trade infrastructure, including the country's state-run railway company.

The Georgian Railway, globally the only state-controlled railway monopoly publicly listed and valued at over $1 billion, according to the Financial Times, has made major improvements over the past few years in its development. In 2016, the organization opened a new rail service with four double-decker trains, each able to carry 530 passengers and reach a maximum speed of 160 km/h. And the opening of an additional terminal in Vale, close to the Turkish border, is said to create the potential for more transit growth in the region, especially in terms of coal.

The company's recent successes have given it a boost following years of falling cargo volumes.

Analyst Vakhtang Charaia told that if the BTK railway attracts new sources of cargo, it will benefit Georgia.

He warned, however that while it is possible, it is "a long and complicated task to achieve."

"Today it is too early to speak about the financial benefits of Baku-Tbilisi-Kars, because it is more of a political project then an economic one. Unfortunately for the Georgian side, in recent years we have observed a decrease in transit cargoes on both the railway and at ports. Therefore the addition of a new railway from today's perspective can't bring any positive outcome for the whole Georgian economy," he said.

"But we should be optimists; if we will work in the right direction we can overcome these problems," Charaia added.

More cargo, more passenger routes?

Urban planner Kankia noted that economic success from BTK could lead to better passenger train services, as well.

"This project will increase the capacity of Georgian Railways' infrastructure to carry more freight. It will also mobilize additional funding for passenger transit service improvements," he said, adding that this could led to more progressive railway development.

"An urban rail transportation system is absent in Georgia right now," explains Kankia, who specializes on the economic benefits of urban transportation.

"Commuter rails provides access to many citizens due to its high capacity, taking thousands of cars off the roads and therefore easing the traffic situation in urban centers, and it has an indirect positive impact on air pollution."