Publication: Eurasia Daily Monitor Volume: 1 Issue: 121

The Russian government proposes to create a joint entity of the Russian, Georgian, Armenian, and Azerbaijani railways for operating the South Caucasus Railroad, from the Russian-Georgian border via Abkhazia to Tbilisi, Yerevan, and Baku. If created, such a joint company would give Russia a preponderant role in the operations of the three countries’ main railroad artery.

Visiting the region on November 1-3, Russian Transport Minister Igor Levitin and Russian Railways president Gennady Fadeyev discussed the project with top government officials there. It envisages setting up a joint operating company to manage and upgrade the railroad, and a joint bank to finance restoration and upgrading, particularly of the Abkhaz section in Georgia. The governments of Russia and the three South Caucasus countries would finance part of that work and would also invite private capital investments into the joint company. The whole project hinges on reconstructing that section, which was severely damaged and idled during the 1992-93 Russian military intervention in Georgia. As a result, Armenia and Azerbaijan lost their rail links to Russia. In the intervening decade, Armenia was hardest hit by the loss. The Russian government did not attach high priority to restoring the connection, but does so now as part of an effort to establish a North-South transport corridor and land bridge to Iran.

Levitin and Fadeyev characterized this initiative as part of Russia’s answer to the European Union’s planned West-East transit corridor to Asia via the South Caucasus. Moscow seeks to undercut it through a North-South transit corridor via the South Caucasus and Iran. Levitin and Fadeyev called for urgent action on the railroad, moving ahead of the EU: “If we don’t start dealing with problem, we could lose huge transport flows . . . This project’s defining significance is a geopolitical one.”

In September 2004, the state-owned Russian Railways reopened the Abkhaz section for partial service from the Russia-Georgia border station Vesyolaya to Sukhumi. The “reopening” is in fact a seizure of Georgian state property on Georgian territory without consulting Tbilisi, and indeed over its protests. Fadeyev attended triumphant celebrations of the reopening, and Russian Railways now runs the line as part of its network. The move has also completed the erasing of the Russia-Georgia border in the Abkhaz sector, now Russian-controlled on both sides.

In Yerevan, Fadeyev signed letters of intent with his counterpart, Ararat Khimrian, and with Prime Minister Andranik Margarian on the two countries’ participation in the proposed four-country joint company. Moscow and Yerevan will urgently task an expert group to draw up investment and business plans and will contribute to reconstruction of the railroad’s Abkhaz and Armenian sections. This approach reflects Russia’s proprietary attitude toward the Georgian state railway’s Abkhaz section. Moscow expects Yerevan to continue lobbying with Tbilisi to go along with this. Russia also seems to expect that Armenia can afford to co-finance or borrow for the project.

In Tbilisi, Levitin signed with Prime Minister Zurab Zhvania and Economics Minister Kakha Bendukidze a memorandum of understanding on creating expert groups for the project, focusing on restoration of the railroad’s Abkhaz section. Bendukidze seemed to embrace this initiative. A free-market, free-trade enthusiast, he characteristically downplayed the project’s political and policy implications for Georgia. By contrast, Zhvania called for caution, citing Abkhazia’s unstable political situation. He suggested postponing not only the decision, but even the creation of the expert group, pending clarification of the situation in Abkhazia.

Moscow’s initiative in effect discards the Russian-Georgian March 2003 Sochi agreement, whereby reconstruction of the Abkhaz section was to proceed in accord with the Georgian government and “in a synchronized manner” with the safe return of Georgian refugees to their homes in Abkhazia, beginning with the Gali district. The seizure of the Vesyolaya-Sukhumi railroad stretch canceled a part of the Sochi agreement. The whole agreement would be destroyed if the reconstruction-repatriation linkage were broken.

Minister of Foreign Affairs Salome Zourabishvili insists on maintaining that linkage to promote Georgia’s minimal objectives in Abkhazia: return of refugees, Georgian-language schools, and a Georgian police presence in Gali. Apart from the reconstruction-repatriation linkage, Georgia currently has almost no leverage to achieve those goals. Moreover, the Vesyolaya-Sukhumi link, fully under Russian and Abkhaz control, might become the railway equivalent of the Roki highway tunnel in South Ossetia — that is, an avenue for contraband, unchecked migration, and arms deliveries.

Russia’s apparent sense of urgency — in its perceived geopolitical interests — to rebuild that railroad gives Georgia an opportunity to seek three elementary quid-pro-quos (pending a political settlement in Abkhazia): safe return of refugees, Russian recognition of Georgian ownership of the railroad’s section in Abkhazia, and joint control of the Vesyolaya-Sukhumi line.

(Civil Georgia, Rustavi-2 TV, Interfax, RIA, NTV Mir, November 1-4; Groong, November 2-3).