Nov. 5, Lyuba Pronina - Staff Writer, Moscow Times

The transportation ministries of Russia, Georgia, Armenia and Azerbaijan are entertaining ambitious plans to revive through traffic on the Trans-Caucasus Railway, which was severed by the outbreak of wars in Abkhazia and Nagorno Karabakh.

"The countries' presidents, transportation authorities and business representatives have expressed support for this project, which will revitalize transport links between our countries," Transportation Minister Igor Levitin told reporters in Moscow on Wednesday after visiting Georgia earlier this week.

Levitin said that a company would be set up to restore and operate the Trans-Caucasus Railway, which crosses the territory of Georgia and Armenia and has access to Turkey's railway network.

Russian Railways, or RZD, will participate in the company from the Russian side, Levitin said.

The railway, which stretched more than 2,300 kilometers in Soviet times, connected Black Sea ports with central Russia, operated passenger services to vacation resorts and handled more than 15 million tons of transit cargo per year.

"Since 1992, there has been no through traffic from Sochi to Tbilisi and to Yerevan and Baku. There are no bridges, many parts of the track are mined. ... All of this will have to be restored, about 200 kilometers," Levitin said. He said that Georgia has promised to provide information on the condition of the railway later this month.

"At present, transport systems handling Asia-Europe transit bypass the transport infrastructure of Russia and the Trans-Caucasus. If we don't start dealing with this problem, we could lose huge transport flows," Levitin said.

Russia and Georgia on Monday signed a memorandum to restore rail connections from Russia through Abkhazia to Georgia, severed in 1992.

The sides have agreed to set up a working group between Russia, Armenia and Georgia on resuming rail traffic between Sochi and Tbilisi, the Transportation Ministry said.

Separately, RZD president Gennady Fadeyev signed an agreement with his Armenian counterpart, Ararat Khimryan, in Yerevan on Wednesday to set up a cargo joint venture. The two sides agreed to set up a working group by Nov. 20 that will produce a business plan for the new company.

The company will be open to outside investors and will help rebuild infrastructure on the railway line between Veseloye on the Russia-Abkhaz border, to Sukhumi and on to Yerevan.

Fadeyev and Armenian Prime Minister Andranik Margaryan also discussed a ferry service between Russia's port of Kavkaz on the Kerch Strait and the Georgian port of Poti.

Fadeyev said that the Kavkaz-Poti route would reduce shipping times by seven days and would offer more competitive prices. The cargo turnover between the two ports could reach 500,000 tons per year, the Transportation Ministry said.

RZD on Wednesday posted a net profit of 16.6 billion rubles ($577 million) over the first nine months of this year