GEOGRAPHICAL LOCATION:

Georgia is situated on the Black Sea at the junction of Eastern Europe and Asia. Georgia borders Russia to the North, Turkey and Armenia to the south-west, Azerbaijan to the south-east, and the Black Sea to the West.  Georgia’s population was estimated to be around 5.4 million in 1993.  In the past Georgia’s favourable climate conditions with prosperous agriculture and tourism sectors enabled the population to enjoy a better standard of living and education.

GENERAL TRANSPORT AND ECONOMIC PROSPECTUS:

Development of transhipment and transport infrastructure plays a crucial role in Georgia’s development. Georgia is situated along the shortest commodity, electrical, oil and gas trade and transit corridor to the West from Azerbaijan, Armenia and the Central Asian republics and also forms a north-south bridge between Russia & Turkey.   

Increasing regional trade has resulted in much increased inter-country road and rail traffic to Armenia and to Azerbaijan as well as cargo in and out of the container port of Poti, including deliveries of pipeline sections to Baku, and exports of Uzbek cotton and other produces of Central Asia.  

The European Commission has recognised Transcaucasia’s strategic geographical significance in relation to links with central Asia and the east with its Transport Corridor Europe and Central ASIA Initiative (TRACECA) which was launched in 1993. Ideally, this corridor will connect Almaty, Bishkek, Ashgabat, Baku, and Tbilisi to Japan and China to the east, and Germany, France, the UK and Spain to the west.  The EU estimates that annual freight turnover via this new Silk Road will rise to over 45 million tonnes by the end of 2010.  

The improved economic situation in the country and the increase in the foreign investment flow have contributed to the rise in volume of transport activity, especially by road, rail and Sea. Tbilisi, the Georgian capital, recently hosted a two-day conference for the inter-governmental commission on TRACECA project.  Representatives from 14 countries were in attendance at the conference, which served to adopt a specific outline for the further development of the Eurasian corridor.  The conference requested that the EU provide financing for the project. This financing has been realised in the sum of 88m Euro, of which 48m Euro have been made in direct investments and grants.

Construction plans for the railway and ferry boat terminal in Aktau (Kazakhstan) as well as the railway crossings to European lines in Poti and Batumi (Georgia), were outlined at the conference.  The elected secretary general of the TRACECA is currently secretary of the Georgian bureau of the inter-governmental commission, Zviad Kvachantiradze.    

Of particular importance to Georgia is the rehabilitation of the Caucasian railway track and rolling stock, for which an initial 5 million euro has been invested. A new line is being built between Tbilisi and Ordzhonikidze.  A tender was recently announced for a US$600 million railway between Georgia and Turkey.   The EBRD has provided a loan of US$20 million to Georgian Railways alongside US$ 7 million from TACIS to finance an upgrade of the main int’l rail transit route from Baku to the Georgian ports.

TRACEA has built a new ferry terminal at the port of Poti, so linking the Caucasus with Odessa and on to eastern and central Europe. The Construction of the 225-km-long early oil pipeline (the so-called western route) and the oil terminal in Supsa is completed.  The cost of the project was US$400m. The next project  is the construction of a new oil refinery at Supsa, and also the main export pipeline (MEP) from Baku to Ceyhan in Turkey via Tbilisi. The route is agreed by the major participating countries. The estimated cost of construction is from $2.4bn-$3bn.

TRANSPORT DELTA - THE EURASIAN GATEWAY

Georgia is poised to create a transport delta of sorts along the entire perimeter of the Black Sea’s eastern coast.  It will be composed of the port of Poti together with the future ports of Anakliya, Batumi, Supsa, and also Ochamchire and Sukhumi.  

Georgia’s first deepwater seaport will be built at Anakliya, 25 kilometres from Poti. Officials in the Georgian Ministry of Transport and Communications believe it will become Georgia’s reloading hub for transporting hydrocarbons from Caspian countries to Europe and other world markets.  The new port will be able to accommodate ships of 100,000 dead-weight tons and handle up to 5 million tons of oil and refined products per year at its initial stage. Tbilisi says five foreign companies have already filed applications to participate in this $480-million project.  

A nearby project involves the construction of a large oil terminal in Kulevi (between Poti and Anakliya), which was launched by the Georgian-Austrian company Terminal 2000 last April. The throughput capacity of the Kulevi terminal will be around 6 million tons of fluid hydrocarbons and will rise to 10 million tons following the second stage of construction.  This project also envisions constructing rail-receiving and loading racks, an oil-storage facility with its own tank farm, and two 250-meter piers, and laying pipelines with pumping stations.  

The first stage of the Kulevi terminal should be completed by the end of 2001 at a cost $70 million, to be financed by the European Bank for Reconstruction and Development (EBRD).  The future terminal will handle mostly oil and refined product exports from Turkmenistan and Kazakhstan.  

Apart from building new ports and terminals, Georgia also intends to boost its existing transport facilities.  By revamping the Batumi port, its annual cargo turnover will grow from the current 7 million tons to 35 million by 2010.  Oil and refined products will make up more than half of this new reloading capacity.  Similarly, a programme to upgrade and expand Poti port calls for boosting its throughput capacity from the current 5 million to 12 million tons of cargo over the next 3-4 years. Its capacity will rise to 40 million tons by 2010, with fluid hydrocarbons accounting for no less than half of the cargo turnover. Conoco (US) is planning to invest US$250 million in a project to supply liquefied gas from the Caspian region through Georgia to Turkey and other states on the Black Sea.

The Japanese Fund for Economic Co-operation with Foreign Countries has expressed its readiness to finance the construction of new facilities at Poti.  It intends to invest $220 million on port upgrade projects there, including $155 million to build a new pier and container terminal and $65 million to construct a new berth with a universal terminal.  Foreign investors are also showing interest in projects to rehabilitate the port’s operating facilities.  The EBRD plans to issue a $20 million credit to cover some of the port’s modernisation, and Japan’s Mitsubishi and the Turkish company Chukurova are currently holding talks on participating in this project.  

Next Page