Azerbaijan, ADB ink paper on large road project

By AzerNews

The initiatives of the Asian Development Bank on allocating a loan for Azerbaijan's railway infrastructure were on the agenda during talks held at the Transport Ministry in Baku on Monday.

The ADB, with its new partnership strategy for Azerbaijan covering the period 2013-2017 to be approved in October, is looking to be involved in the financing of new areas such as solid waste management, alternative and renewable sources of energy, modernization of railway transport and urban public transport.

Xiaohong Yang, a lead transport specialist at the ADB, and chief experts Reddy Batula and Narendra Singru met with Deputy Transport Minister Musa Panahov to discuss the progress in ongoing projects and the possibility of allocating the second tranche under the MFF-2, the second program for multi-tranche financing of the transport sector, as well as the ADB's participation in financing the renovation of railway lines.

The first tranche, worth $250 million, was approved for the construction of a 30-kilometer section of the Masalli-Jalilabad road, which is part of the Masalli-Shorsulu highway. The total project cost is $312 million, of which $62 million is the Azerbaijani government's share in the project.

The Transport Ministry said it is offered to reconstruct the infrastructure of railway stations in the Sangachal and Bilajari stations and create a modern logistics system of rail transport.
The Baku meeting also discussed other issues such as complete reconstruction of Azerbaijan's railways by 2020 aiming to enhance the transit potential of the country.

In March, the Azerbaijani government expressed its interest in cooperation with the ADB in the development of the domestic railway system.

In 2010, the ADB planned to approve the first tranche in the amount of $200 million, with the overall MFF loan totaling $500 million.

Earlier the ADB Board of Directors approved a $1 million grant to be disbursed for the Azerbaijani government within Preparing the Railways Sector Development Program.

Previously the parties agreed that the ADB would work out a project for Azerbaijan Railways' upgrade on the north-south segment -- from the border of Azerbaijan with Russia to the border with Iran. The ADB was also ready to fund any operations within the State Railway Development Program under the MFF scheme.

In 2010, Azerbaijan adopted a state program on the development of the country's railway transport system for 2010-2014. The main goal of the program is to meet the growing needs of the population and the economy for railway transport services; increase the transit potential of the country, raise the maintenance level in railway transport, and provide effective activity of the transport sector by reducing the costs of passenger and cargo transportation.

The program also envisions overhaul of railroads extending to 317 km, purchase of cars and mechanisms for major repair and reconstruction of roads, purchase of 50 new electric trains and purchase of spare parts for locomotives, modernization of 43 maneuver diesel locomotives and 10 electric locomotives, purchase of 300 carriages for transportation of oil and oil products, carriages for transportation of dry cargo, as well as spare parts and equipment for repair of cargo carriages, reconstruction of the depot and a carriage cleaning point in Alyat, near the capital city of Baku.

The Azerbaijani Transport Ministry reported that some 163.8 million manats were invested in the development of railway transport in Azerbaijan in 2012, of which 1.6 million manats were contributed from Azerbaijan Railways equity.