Kazakhstan to guarantee 10 million tons of cargo for transport on key Caucausian railway

"It's possible that a significantly large volume of cargo could be attracted to the (railway), since we are actively working with China ... to open a second gate to the East," Transport and Communications Minister Serik Akhmetov said during a visit to the Georgia capital Tbilisi.

Construction is expected to start in June on the US$600 million (?462 million) rail line linking the eastern Turkish city of Kars with the Azerbaijani capital, Baku, on the Caspian Sea. It will go through the Georgian town of Akhalkalaki and the capital, Tbilisi.

The railroad is one of several projects to link oil-rich Azerbaijan and Central Asia with Turkey and European markets while bypassing Russia. An oil pipeline from Baku through Georgia and on to the Turkish Mediterranean port of Ceyhan was opened last year, and a gas line along a similar route in the works.

At a ceremony last month to sign the final agreements for setting up the rail line, Turkish Prime Minister Recep Tayyip Erdogan likened it to the Silk Road, the trade caravans that long ago linked Asia with Europe.

Kazakhstan has dramatically stepped up investment in Georgia in the past year, investing some US$152 million in Georgia in 2006 — exceeded only by the United States and Britain and substantially more than Russia, according to Georgia's minister of economic development.

Akhmetov said Kazakhstan was also close to signing a deal to invest in upgrading a grain terminal at the Georgian Black Sea port of Poti and Kazakh investors were interested in investing in building a oil refinery in Batumi, also on the Black Sea.

Kazakhstan is a major oil and gas producer with substantial agriculture exports whose trade routes have long been dominated by Russia. In recent years, China, Western nations and other ex-Soviet republics have angled to develop new pipelines and shipping routes to help Kazakhstan and other Central Asian nations to increase exports and avoid Russia. The Associated Press

/The International Herald Tribune/