During a meeting in Tbilisi on February 7, 2007, the President of the Republic of Azerbaijan Ilham Aliyev, the President of Georgia Mikhail Saakashvili and the Prime-Minister of the Republic of Turkey Rejep Tayyib Erdogan signed several projects, including; Trilateral Agreement "On Baku-Tbilisi-Kars New Railway", bilateral Agreement between the Government of the Republic of Azerbaijan and the Government of Georgia, as well as the Ministry of Transport of the Republic of Azerbaijan and "Marabda Kartsakhi Railway" LLC, on financing, design, rehabilitation-renovation and terms and principles for maintenance of Marabda-border of the Republic of Turkey (Kartsakhi) Railway Section within the new Baku-Tbilisi-Kars Railway implementation project, and Agreement on Credit Financing Terms of "Marabda-Border of the Republic of Turkey" Railway Section (hereinafter referred to as the "Credit Contract") within the framework of a New Railway line "Baku-Tbilisi-Kars" project.
Implementation of an international project across the Baku-Tbilisi-Kars railway line and the construction of a railway line tunnel in Bosporus, along with connecting Trans-Europe and Trans-Asia railway networks and carrying freight and passengers directly through Azerbaijan, Georgia and Turkey territories will not only boost the transit potential of the regional countries, but also accelerate the processes of integration in Europe, develop the cooperation within the framework of European Neighborhood policy, intensify the state independence and national liberation of Azerbaijan, and expand the foreign economic relations of our country.
Execution of this project has a noteworthy significance from the economic efficiency, speed, time, security and reliability standpoint.
Attracting European and Asian freights to this railway line will increase the volume of intermodal and container transportation in both sides.
On May 18, 2011, a Protocol carrying several additions and amendments to the bilateral agreement were signed in Baku. On the basis of these changes, a new Loan Agreement, within the framework of the new conditions, was signed on July 01, 2011, between the Ministry of Transport of Azerbaijan Republic and "Marabda Kartsakhi Railway" LLC.
The total length of Kars-Akhalkalaki railway line is 105 kilometers. Construction of 76 km-long Kars and Akhalkalaki railway line running via Turkey will be implemented at the expense of Turkey. Construction of 26 km long Kars-Akhalkalaki railway line running via Georgia and rehabilitation/reconstruction of 153 km long existing railway line of Akhalkalaki-Marabda will be financed by the Republic of Azerbaijan for USD 200 mln (loan) at an annual rate of 1% with an option of extension allocated for 25 years (on Tranche A) and for USD 575 mln. (loan) at annual rate of 5% with an option of extension given for 25 years (on Tranche B). A Coordination Board has been established in accordance with the bilateral Agreement, having an exclusive power in monitoring the utilization of the credit, and for this particular purpose controlling its execution.
Pursuant to the Decree of the President of the Republic of Azerbaijan No.1974 dated February 21, 2007, State Committee for Supervision of rehabilitation and reconstruction of existing railroad in Marabda-Akhalkalaki, financing of the construction of the line from Akhalkalaki till the Republic of Turkey and other organizational issues was established.
According to the Decree coordination procedures from Azerbaijan government will be implemented by Azerbaijan Railways CSC.
Pursuant to the Decree of the President of the Republic of Azerbaijan No.1974 dated February 21, 2007, funding of "Baku-Tbilisi-Kars new railway line" project is implemented by the State Oil Fund of the Republic of Azerbaijan. In accordance with this Decree, "International Bank of Azerbaijan" Open Joint Stock Company has been appointed as an agent bank for the organization of credit and provision of bank service on behalf of the Government of the Republic of Azerbaijan.
Since the beginning of financing the project until 30.9.2017, USD 640.3 mln., including USD 10.1 mln. during January-September 2017 were allocated from SOFAZ by treasury to the Ministry of Transport, Communications and High Technologies. According to the bilateral agreement between Georgia and Azerbaijan these assets were transferred to the account of Marabda-Kartsaxi Railway LLC through the International Bank of Azerbaijan directed towards the design, construction, rehabilitation, reconstruction and maintenance of the railway section reaching Marabda-border of the Republic of Turkey.
Transportation of first containers via BTK will be carried out by ADY Container LLC.
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