Georgian Railway JSC is establishing a joint venture with Azerbaijan Railways CJSC, according to a report from S&P Global Ratings.
The joint venture will operate the Georgian part of the Baku-Tbilisi-Kars (BTK) railway, S&P said.
S&P Global Ratings revised outlook on Georgian Railway JSC to negative from stable, at the same time affirming its long- and short-term ratings at 'B+/B'.
BTK, a direct rail link that will connect Turkey to Georgia and Azerbaijan, is expected to start operations in late 2017.
“The Georgian part of the railway was built by the Georgian government and financed by a loan from the Azerbaijani government,” S&P experts said. “We do not expect that Georgian Railway will own the infrastructure or have any link to the loan provided by Azerbaijan. However, the group will create a joint venture with Azerbaijan Railway to operate the Georgian part of the link.”
The BTK railway is being constructed on the basis of the Georgian-Azerbaijani-Turkish intergovernmental agreement. The peak capacity of the railway will be 17 million tons of cargo per year. At the initial stage, this figure will be one million passengers and 6.5 million tons of cargo.