The Turkish government is moving quickly to capitalise on new economic opportunities created by US President Donald Trump’s peace plan for Armenia and Azerbaijan. 

Turkish officials held a groundbreaking ceremony on August 22 for a new 224-kilometre (139-mile) rail line stretching from the eastern Turkish hub of Kars to Dilucu at the frontier with Azerbaijan’s Nakhchivan exclave. The Kars-Dilucu rail line is envisioned as the largest section of a new transit corridor that is the centrepiece of the Trump peace plan. The new route would be initially capable of handling up to 15mn tonnes of freight and 5.5mn passengers per year.

The possibilities opened up by the Trump plan “will increase economic cooperation in the South Caucasus and accelerate the opening of borders and the normalization of diplomatic relations,” Turkey’s minister for transport and infrastructure, Abdulkadir Uraloglu, said at the groundbreaking festivities, reading a message from Turkish leader Recep Tayyip Erdogan.

Uraloglu also described the rail link as “an international bond of steel that will further strengthen the socio-economic relations between Asia and Europe, extending from China to Europe.”

Provided the Azerbaijan-Armenia peace process is finalised, the Kars-Dilucu railway will connect to an existing rail line in Nakhchivan, which, in turn, will link up with the planned “Trump Route for International Peace and Prosperity” (TRIPP), an envisioned transit corridor connecting Azerbaijan proper and the exclave, traversing Armenian territory. Once completed, TRIPP would become perhaps the prime route in the developing Middle Corridor network of transit routes connecting East Asia and Europe.

(Credit: Turkish Ministry of Transport and Infrastructure)

Many questions remaining

While Turkey may have officially broken ground on the Kars-Dilucu segment, much remains unclear, including a construction timeline. Uraloglu in his speech hinted the project would take four to five years, but political analysts in Turkey are wondering whether the groundbreaking ceremony actually marked the start of construction or was merely a symbolic gesture tied to Turkey’s domestic political agenda.

Ankara did conduct tenders for consultancy work on the Kars-Dilucu route in late 2024, but according to Turkey’s state tendering and contract database, contracts have yet to be awarded. And there is no sign yet of a tender for actual construction work on the line.

The project does officially exist. It has been listed in Turkey’s investment programme since 2022 at an estimated cost of $3.4bn, of which $2.7bn is expected to come from external credit. But of those totals, only $61mn has so far been allocated, of which $50mn is designated as external credit.

A significant amount of external credit appears to have been lined up.  In late July, Ankara announced that the project had secured a €2.4bn external financing package led by Japan’s Mitsubishi UFJ Financial Group, MUFG Bank, in partnership with Sweden’s EKN Export Credit Agency and the OeKB export credit agency of Austria and the Islamic Development Bank. The international financial institutions have not yet confirmed the deals separately.

Existing rail lines to be reopened?

Also unclear is what will happen to the existing rail links between Turkey, Armenia and Azerbaijan? 

Prior to the Soviet collapse and the outbreak of the Armenian-Azerbaijani conflict in the late 1980s, there was a direct rail link from Kars to the Armenian capital Yerevan and from Yerevan to the Azerbaijani capital Baku. The bulk of those lines are believed to be still operational requiring only border sections to be refurbished and reopened.

According to the Joint Declaration on August 8 signed by Azerbaijani leader Ilham Aliyev, Armenian Prime Minister Nikol Pashinyan and Trump, Azerbaijan recognised Armenia’s right to reopen all transportation routes. Accordingly, these existing rail routes could be revived, but the declaration does not indicate whether they will play a significant role within the Middle Corridor context.

Questions are already being raised over the role of an existing Middle Corridor route through Georgia, which only began operating in 2017, following the construction of a new rail line from Kars to the Georgian border. The Baku-Tbilisi-Kars line (BTK), as it is known, has not proved to be as popular a freight transit route as originally projected, and is expected to lose much of its Middle Corridor traffic to TRIPP.

BTK was designed to have a freight transit capacity of up to 6.5mn tonnes per year, with the possibility of expanding annual volume to 17mn tonnes if the route proved profitable. However, by May 2023, the railway had handled a total of only 1.47mn tonnes. A combination of factors has contributed to the underwhelming results, including the poor condition of the Georgian rail network and the mountainous Georgian terrain through which the line passes.

The line was closed to freight traffic for a year until May 2024 to allow for urgent maintenance work and the reconstruction of some sections to ease transit. 

The future of the route was discussed in a meeting August 8 between Erdogan and Georgian President Mikheil Kavelashvili with Erdogan noting the importance of the BTK line and the need for it to operate at full capacity. But the Turkish leader did not offer any ideas on how BTK could realise its potential.

This article first appeared on Eurasianet here.