PROTOCOL OF THE WORKING GROUP MEETING for Establishing an International Consortium for Through Train Traffic Rehabilitation on the Veseloe-Ingiri Section

Moscow, 3-4 May 2006

The meeting of the Working Group for establishing an international consortium for through train traffic rehabilitation on the Veseloe-Ingiri section was attended by representatives of the Armenian side, Georgian side, Abkhazian side, Russian side. A list of the meeting participants is enclosed (Annex 1).

The meeting participants informed each other on representatives to the Working Group from the Armenia, Georgian, Abkhazian, Russian sides (Annex 2).

The following agenda was agreed at the Working Group meeting:

1. Principles of establishing the international consortium;

2. Organizational and legal form of the international consortium;

3. Development of a business plan for the international consortium;

4. Long-term perspectives for developing railway connections in the Transcaucasus region;

5. Next meeting of the Working Group.

Having considered the items of the agenda, the sides decide as follows:

Concerning Agenda Item 1:

1. The sides agree that the working name of the International Consortium shall be the ‘Black Sea Railway Consortium’.

2. The main objective of the International Consortium (hereinafter Company) is to organize rehabilitation and further operation of infrastructure on the Veseloe-Ingiri section.

Transfer of railway infrastructure on the Veseloe-Ingiri section to the joint stock company is a necessary precondition for successful project implementation. The infrastructure transfer shall be provisioned by a separate agreement. The Company shall receive investment return guarantees for the project implementation.

3. The project funding shall be provided by the Company.

4. The sides agree to give the functions of the Working Group Secretariat to the Department of Foreign Relations of the joint-stock company.

Concerning Agenda Item 2:

1. The sides agree that the International consortium shall have the form of a joint-stock company.

2. The initial capital will be shared by the Company founders.

3. The sides agree to consider Company’s constituent instruments prepared by Russian Railways JSC (Annex 3 and 4), and to forward their comments and proposals concerning these documents to the Working Group Secretariat by June 1 2006 to be agreed at the next regular Working Group meeting.

Concerning Agenda Item 3:

The sides agree that the Company shall cover costs for involving a consultant to develop the Company’s business plan, if necessary.

Concerning Agenda Item 4:

The sides agree to prepare proposals for mutual freight transportations by railway in the Caucasus region for the nearest future as well as for medium-term perspective, and to present them at the next regular Working Group meeting.

Concerning Agenda Item 5:

As proposed by the Georgian side, the next regular Working Group meeting shall be held in Tbilisi. The date of the regular Working Group meeting shall be identified additionally.

This protocol was signed by May 4 2006 in Moscow in four authentic copies in the Russian language.

On behalf of the Armenian Railways А. V. Khrimyan

On behalf of the Georgian Railways I. O. Ezugbaia

On behalf of the Abkhazian Railway Section A. Y. Turukin

On behalf of the Russian Railways M. P. Akulov

(www.abkhazia.org)