International bids will be invited for the construction of a $700 million railway between the northeastern town of Kars and the Georgian capital Tblisi following a government-to-government protocol signed on 10 November. The protocol was signed in Tblisi by Transport & Communications Minister Necdet Menzir and his Georgian counterpart Merab Aoleisvili, in a ceremony presided over by Georgian President Eduard Shevardnadze.

The railway will take three years to build after a construction start planned in 1998. A 92-kilometre section will run through Turkey, and the remaining 35 kilometres through Georgia to Tblisi. An existing 160-kilometre route from Ahilkelek via Marabda to Tblisi will also be rehabilitated as part of the project.

Turkey will cover $350 million of the total cost, and Georgia the remainder. Georgia will also purchase 100 locomotives and 8,000 wagons and carriages for the line. The project was previously planned on a build-operate-transfer (BOT) basis, but has now been changed to conventional bidding.

On completion, the line is expected to boost bilateral trade, and also link Turkey more effectively with Central Asian republics. The project will also expand Georgia's trade with Europe.