Georgian experts urge government to revamp railway sector

Experts in Georgia are calling on the government to restructure the nation's railway industry as the volume of railroad transportation passing through the country has witnessed a sharp decline in recent years.

In 2012, some 20 million tons of cargo were transported by railroad in Georgia. The figure had fallen to 11 million by the end of last year, according to statistics published on the website of Georgian Railways.

Some local experts say inefficient management is to blame for the decline, urging the government to radically reorganize the industry.

"One of the reasons is that, in recent years, countries in the region have redirected much of their oil through pipelines," according to the head of Corridor Research Center in Tbilisi, Paata Tsagareishvili.

However, that only explained 20-25 percent of the reduced transit, he said, adding that the second reason is that Azerbaijan and Georgia have failed to agree on a unified tariff policy.

Meanwhile, the Tsagareishvili said Georgia's insufficient contribution to expanding infrastructure has slowed its development overall.

"As a result, the transit corridor passing through Georgia is becoming less and less attractive," Tsagareishvili said.

Some say the main way out is a radical reorganization of the sector because the country's railway management is still working under Soviet models with ongoing corruption risks.

"Georgia has pledged to modernize its railway system," said Tsagareishvili. "That implies the commercialization of the industry where passenger and freight transportation is provided by separate entities."

He said the development of infrastructure should involve "the creation of a supervisory body to regulate tariff policies."

According to David Gochava, the founder of the Club of Professional Railroaders in Tbilisi, the development of the Georgian railways depends largely on the government.

He said the industry's management should be divided into independent business structures to make "operations more flexible and results-oriented," suggesting that in the future, it is theoretically possible to partially privatize the sector by selling some stakes to investors who have experience in management. Endi