TBILISI (Armenpress)–Leaders of Azerbaijan, Georgia and Turkey signed an agreement Thursday on the construction of a railroad linking the three countries, news reports from Tbilisi, Georgia said. The railway, which will link Baku, Tbilisi and the Turkish city of Kars, is to cost an estimated 420 million U.S. dollars and expected to be completed by 2010. The agreement was signed in Tbilisi, Georgia’s capital, by Azerbaijani President Ilham Aliyev, Georgian President Mikhail Saakashvili and Turkish Prime Minister Recep Tayyip Erdogan. "The construction of the railway and the Baku-Tbilisi-Ceyhan oil pipeline and Baku-Tbilisi-Erzurum gas pipeline projects will bring stability and cooperation to the area," Azerbaijani president Ilham Aliyev was quoted by Interfax as saying at the signing ceremony. An additional agreement was signed between Azerbaijan and Turkey envisaging allocation of $200 million to the Georgian side for construction and rehabilitation of its section of Kars-Akhalkalak-Baku railway. Georgia will have to repay the loan with one percent annual interest within 25 years. Georgia plans to use the revenues from the railway to cover the loan. Armenia is against the Kars-Akhalkalak-Baku railway, saying it is a political scheme designed to isolate Armenia and is not substantiated economically. As an alternative to the route, Yerevan is pushing for reopening of the already existing Kars-Gumri-Tbilisi railway. The railway between the Turkish town of Kars and Armenia’s Gumri is currently not operational because of transport blockades imposed on Armenia by Turkey and Azerbaijan. In his remarks at the news conference Georgian president Mikhail Saakashvili underlined that he does not want "any of the country of the region to be left outside regional cooperation. "We want to have equal, transparent and friendly relations with each of the neighboring countries. It is very important for us to prevent isolation of any of the country of our region Of course we want equal and new neighborly relations with Armenia," Saakashvili said. He said that the South Caucasian countries have no other alternative rather than to establish "friendly relations among each other."I am sure that we have a clear future and today we will sign this future. We will do our best to launch this grand construction of regional railway this year and end it in shortest period of time," Saakashvili said.