Tbilisi Railway Bypass Takes a Time-out
12 December, 2013
Tbilisi Railway Bypass Takes a Time-out
The Tbilisi Railway Bypass project, budgeted at 350 million USD, is taking a 3-year time-out. Meanwhile, Georgian Railway JSC, the state-owned enterprise that initiated the project in 2010, has to find a way to increase the competitive power of the South Caucasian railway corridor.
According to a recent feasibility study, the Project is expected to decrease both the speed and the volume of the cargo turnover in this corridor. But if a solution is not found, GR management may try
to find a way to save the project. The Project was initiated by the former government to reroute rail traffic outside Tbilisi, for the sake of efficiency, safety, and the environment, and to free up about 83 hectares of land for urban renewal. It was scheduled to be completed by June of this year, but the contracted construction company Joint Venture (JV) – including a JSC group of 23 bureaus of the Chinese Railway and JSC Khidmsheni - failed to meet the deadline. According to the new management of GR, which took office early this year, only 80% of the planned works and 60% of the Project are implemented, while USD 213 million has been spent. The Project was funded by a loan GR got after issuing Eurobonds, but new management revealed that this was undertaken without a feasibility study. So, before spending the USD 137 million remaining in the budget, they hired the Austrian MC Mobility Consultants GmbH to make the study this past spring.
The study revealed that the Project is something of a failure; if completed it will decrease railway capacity by 24%, while GR’s expenses go up 57%. Nor will environmental and safety risks be diminished by rerouting the tracks from the capital, and the 83 hectares made available are expected to earn only USD 30 million, twelve times less than the cost of construction of the project as emphasized by Ernst and Young.
On 4 December, the Economic Council set up by the Prime Minister of Georgia last week discussed the Project and the revelations of the feasibility study, and decided to halt the Project for 3 years, until a reasonable solution is found, one that will make the Project maximally profitable at a minimum expense.
“If the Project comes true, total expenses of GR increase by 57%; that equals an extra USD 70 million to be spent within nearly 10 years,” Konstantine Guntsadze, Chairperson of Supervisory Council of GR, reported to media on 6 December. “Railway maintenance, operational and infrastructure related costs will increase by 51% each year. But the most negative aspect is a 24% drop in railway cargo turnover, which is the most important factor to improve in the South Caucasian railway corridor.”
The speed of railway transportation also is reduced, since the Bypass makes the route 60 kilometers longer, and on more difficult terrain, requiring more locomotives and more maneuvering.
“As a result, instead of 213 trains that pass through Georgian Railway per 24-hour period, we can handle only 167, or have a 24% drop,” Guntsadze said in an interview with Georgian Journal. However, he acknowledged that even if a financial and engineering solution is not found, the Project will be conserved.

Print
Other Stories
The World Digital Mining Summit to be held in Georgia
The summit is scheduled to take place between 21st-23rd September in the Hualing Hotel, Tbilisi, Georgia.
Galt and Taggart - Tourism Boom Continues in Georgia
Tourism has become one of the key drivers for the Georgian economy. Galt and Taggart has recently published research about the Georgian tourism sector in the first half of 2018.
"The worst dream for Putin is that Russians want to live in Georgia"
This year, visitors to the Adjara region would notice that there is a boom in construction in and around Batumi.
Underground gas storage facility to be built in Georgia
KfW, a German government-owned development bank signed a EUR 150 million promotional loan with the state-owned Georgian Oil and Gas Corporation (GOGC) for the construction of the first underground gas storage facility in Georgia.
New gambling rules for Georgia
Georgian lawmakers are preparing a new draft law relating to online-casinos and gambling that will seek to curb gambling addiction in Georgia.
How expensive is it to visit Georgia?
The Georgian Lari (GEL) is the official currency of Georgia and is the only legal means of payment in the entire territory of Georgia.
Trade with the EU and the Commonwealth of Independent States (CIS) has grown significantly
Trade with the EU and the CIS has grown by 26% and 33.5 % respectively, says GeoStat, the Georgian National Statistics Office.
The unemployment rate decreases in Georgia
The unemployment rate decreased in Georgia by 1,9% and amounted to 12.1% in the 2nd quarter of 2018 compared with the previous quarter,
Memorandum of Understanding to be signed between Georgia and Malaysia
According to the Georgian Ambassador to Malaysia Nikoloz Apkhazava, Georgia plans to sign a Memorandum of Understanding (MoU) with Malaysia.
“Blauenstein Georgia” due to expand in Georgia
“Blauenstein Georgia” is planning to open more shops in Georgia. It is an agriculture company that sells meat products, meat and convenience food.
The amount of Direct Foreign Investment rises in Georgia
According to the information of the National Statistics Office of Georgia, the amount of direct foreign investment in Georgia has risen
It’s going to get  harder for foreigners to get residence permit in Georgia
It’s going to get harder for foreigners to get permit of residence in Georgia.
Mziuri Park in Tbilisi to be renovated soon
It was the dream of prominent Georgian writer Nodar Dumbadze that when the original Mziuri park was constructed and opened in 1892 that it should be a park for children,
Winemakers to produce Kvanchkara in its place of origin - Racha
Khvanchakara is a semi-sweet Georgian red wine which originates from Racha, in the western part of Georgia. Kvanchkara is made of two types of grape Mujuretuli and Aleksandrouli.
The level of Georgian wine and Chacha exported has increased
The National Wine Agency of Georgia has recently published statistical information about the level of Georgian wine and Chacha exported between January and July, 2018.
New fire engines to be Manufactured in Georgia
The Acting Head of the Emergency Management Agency Shalva Khutsishvili said that the old Zili fire engines (which were made in the USSR) will be phased out and replaced with new ones, manufactured in Georgia.
Georgia witnesses a record number of tourists
The Georgian National Tourism Administration publishes statistical information about international visits to Georgia.
Canadian businessman plans to build a hotel in Bakhmaro
Canadian businessman Vadim Malishev plans to build a hotel in Bakhmaro resort, Guria, in the western part of Georgia.
Coffee Factory will open in Tbilisi in October
The first coffee factory (which will be located on the Kakheti highway) in Tbilisi will open in October.
Places in Georgia where real estate is the most expensive
The real estate market in Georgia is growing annually. In Tbilisi as well as other regions of Georgia new developments are increasingly taking place.
How much does a vacation cost in Tbilisi?
It is the middle of summer and those who have not yet taken a vacation are looking for an appropriate place for sure!
The price for extreme sports in Georgia
Georgia offers a variety of options to extreme sport lovers.
The number of Georgians who own property abroad increases
The number of foreign properties owned by Georgians is increasing.
How much does Taxi cost in Tbilisi?
Stories how Taxi drivers try to deceive passengers and charge them with more money than they should pay are known for everybody all over the world.
What are the highest paid areas in Georgia
According to the data collected by the National Statistics Office of Georgia in the first quarter of 2018 the highest paid jobs in Georgia are found in the financial and insurance fields.
PHOTO OF THE DAY
Exchange Rates
GEL Exchange Rate
Convertor
21.09.2018
22.09.2018
USD
1
USD
2.6193
2.6216
EUR
1
EUR
3.0693
3.0854
GBP
1
GBP
3.4651
3.4584
RUB
100
RUB
3.9538
3.9340
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
USD
1
USD
2.6216
EUR
1
EUR
3.0854
GBP
1
GBP
3.4584
RUB
100
RUB
3.9340