Armenia to save$13 mln in Adler-Yerevan-Tehran railway reopening

May 15, 2012 - 19:23 AMT

The main transit line of the region – Adler- Sukhumi-Tbilisi- Kutaisi- Yerevan-Tehran railway has been out of operation since 1992. No statements on possible restoration of the railway have been issued prior to unilateral announcement by President of Abkhazia Aleksandr Ankvab on technical opening of the borders.

Will Armenia benefit from Georgia’s good will? If Yerevan-Moscow train launches operation within the South Caucasus Railways, the annual profit may total about AMD 5 bln. (about USD 13 mln. at 396 AMD / $ 1 rate), according to head of SCR passenger transportation department Gagik Movsisyan.

As for the cargo transportation, cut in transport expenditures is anticipated in this respect. Currently the transportation of cargo wagon 1 from Poti Sea Port (Georgia) to Caucasus Port (Russian Federation) costs about USD 3600; while in case of the railway restoration it will be decreased to only USD 600. According to some estimates, Russia’s annual loss over the non-operation of the route total minimum USD 300 mln. on yearly basis.

Georgia will also economically benefit from the project.

The resumption of Iran-Armenia direct railway, the restoration of the main trans-Caucasian corridor will open the shortest route to the Middle East and Persian Gulf for Russia, all countries of the former USSR Western region, Scandinavia and Western Europe. For this reason, the transit line also favors the interests of the countries of the Asian region. Multilateral consultations on the resumption of Russia - Abkhazia – Georgia route have been periodically conducted since 2005. The investment of the reconstruction of the Abkhaz-Georgian line sections is estimated at USD 150-170 mln.

It is noteworthy that the European Union also urges Georgia for technical opening of borders. Meanwhile contemplates possible ways to issue refusal.