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Russia/Georgia: Opening Of Ferry Link Expected To Impact Regional Trade

Russia and Georgia signed an agreement today on opening a direct railway ferry between the Black Sea ports of Poti and Kavkaz. Direct railway connections between the two countries have been halted since 1992 amid a dispute over the secessionist region of Abkhazia. The Poti-Kavkaz ferry is not only important for Russia and Georgia. Armenia, Azerbaijan and Central Asian countries are expected to benefit from the new link.

Prague, 10 January 2005 (RFE/RL) -- Addressing reporters upon his arrival in Tbilisi early today, Russian Transportation Minister Igor Levitin said he would sign three documents during his two-day visit to the Georgian capital.

"We will today sign three documents -- an agreement on the ferry crossing, a regulation covering the transport of goods, and a temporary exploitation regulation. This temporary regulation will be effective until all countries that take part in the railway transportation [process] meet in February," Levitin said.

The ferry connection stretches between the Georgian port of Poti and Russia's industrial terminal of Kavkaz. Georgian Economic Development Minister Aleksi Aleksishvili said today the line would officially come into service in 10 days.

Kavkaz is a main export outlet for crude oil, oil products, and fertilizers. Its location on the Kerch Strait that links the Black Sea to the Sea of Azov makes it a major hub for goods meant to countries of the Mediterranean Sea basin.
Russia sees the Poti-Kavkaz agreement as part of a long-term, larger project to resume railway transportation throughout the South Caucasus region.

Talking to reporters after the signing ceremony, Georgian Prime Minister Zurab Zhvania said the new link would open new commercial prospects for his country, which currently ferries goods only to Ukraine, Romania, and Bulgaria. "This is in fact a totally new railway which will connect Georgia and Russia," he said. "We hope it will create a positive trend for the development of trade relations between our two countries."

The agreement signed today will give a major impetus to direct Russian-Georgian trade. It is also expected to boost transit of goods from Armenia, Azerbaijan, and Central Asian countries -- in particular Kazakhstan and Turkmenistan, which trade with Russia through the Caucasus region.

Armenian Transportation Minister Andranik Manukian, who is also in Tbilisi, said yesterday that his country expects direct economic benefit from the Poti-Kavkaz ferry link. "Economically, it is very profitable," he said. "This link is very short. Today we are using the [Ukrainian] port of Illichivsk, [south of Odesa]. But, the distance between Illichivsk and Poti is very long. [By contrast], the distance between Kavkaz and Poti is very short. Secondly, Armenia, Georgia, and Azerbaijan will now have a direct link with Russia."

In a phone interview with RFE/RL's Armenian Service today, Manukian elaborated further on the impact Yerevan expects from the Russian-Georgian deal. "It will reduce by 30 percent the costs of transportation [of Armenian goods]," he said. "In addition, it will de facto establish a direct link with Russia and, consequently, help increase the volume of trade with Russia and other CIS countries."

Russia sees the Poti-Kavkaz agreement as part of a long-term, larger project to resume railway transportation throughout the South Caucasus region.

Russian Transportation Minister Levitin unveiled the plan in late November during a tour of the South Caucasus capitals. Addressing journalists in Tbilisi after signing a memorandum with the Georgian government, Levitin said the project will revive a major north-south railway corridor that has been idle since the 1992-93 war in Georgia's separatist republic of Abkhazia.

"Prior to my visit to Georgia I was in Armenia and Azerbaijan, where I received the support of my colleagues transportation ministers, as well as that of the presidents. I am happy to announce that Georgia equally supports the idea of having a trans-regional railway connection. [The Georgians] believe renovating the former Transcaucasus railway link will seriously help revive long distance traffic across our [respective] countries. I am really happy to say that we have reached a mutual understanding with Georgia," Levitin said.

Plans to revive overland traffic between eastern Turkey and southern Russia through Georgia and Abkhazia have been thwarted by the unsettled separatist conflict. For more than a decade, Tbilisi has been insisting that all ethnic Georgians who have been displaced by the 1992-93 war be allowed to return to Abkhazia before any deal is signed.

Georgian Economic Development Minister Aleksishvili said today that no agreement has been reached yet. "No concrete decision is expected [soon]," he said. "We must still assess the technical feasibility of the project and there is also a political aspect to that issue. Consequently, we do not expect any breakthrough."

Levitin said today that although no substantial progress had been noted recently, the reopening of a direct railway link between Georgia and Abkhazia was still on the agenda. "In the memorandum we signed [with Georgia] on 1 November, there were two issues," he said. "One was the opening of a ferry connection, which we will be signing today. The second was the resumption of through traffic. We're still examining the railway section that links [the Abkhaz capital] Sukhum to the [Georgian-Abkhaz] border on the Inguri River, where there is no bridge."

Georgian government officials have so far given conflicting signals on Tbilisi’s readiness to resume traffic through Abkhazia.

Georgian Railways head Davit Onoprishvili today cited technical and financial problems as being the main obstacles to the resumption of through traffic. But State Minister Kakha Bendukidze said the transit of goods through Abkhazia will not resume until Georgia restores its authority over the separatist republic.

(RFE/RL Armenian Service correspondent Ruzanna Stepanian contributed to this report)

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