WB views railway construction in Azerbaijan

The mission of the World Bank (WB) headed by manager of transport program for Azerbaijan Ben Gericke conducted a meeting at Azerbaijan Railways JSC to get acquainted with the progress achieved within in the Rail Trade and Transport Facilitation Project in the country, the official site of the JSC reported.

The WB mission worked in the country from Sept. 27 to Oct. 1.

"About 8.5 kilometers of way on the Tatli-Agstafa stretch have been repaired within the reconstruction of the Baku-Boyuk Kesik railway (the border with Georgia)," the deputy chairman of the company Gurban Nazirov said during the meeting.

Earlier, a loan agreement worth 215 million euros was signed with the Czech ExIm-Bank for the implementation of State Program on development of railway transport system in the Republic of Azerbaijan for 2010-2014 approved by President of Azerbaijan Ilham Aliyev on 6 July 2010 and as part of the Rail Trade and Transport Facilitation Project funded by the Government of Azerbaijan and the World Bank.

During the meeting, Nazirov briefed the mission of the work done in the areas such as the purchase of new locomotives, switching to a system of alternating current on the Baku-Boyuk Kesik stretch, introduction of a new accounting system based on international financial reporting systems, creation of capacity to prevent oil spills on the railway, conducting an international audit of the project as a result of 2010 and conducting audit for 2011.

According to Gericke, the mission visited the Boyuk-Kesik station and locomotive depot in Ganja.

Loan agreement between the Azerbaijani Government and the World Bank was signed in December 2009. Of the total investments, $450 million (along with Azerbaijan's participation share, the project is estimated at $673.8 million) was allocated as a credit to Rail Trade and Transport Facilitation Project in Azerbaijan.

The credit resources are allocated by the International Bank for Reconstruction and Development (IBRD) for a term of 23 years with a grace period of eight years at a cost - a six-month libor plus spread is changing. Commission on the loan, which will be paid by the borrower, was determined at the level of 0.25 percent. Payments on the loan will be made twice a year - June 15 and Dec.15.

The railway line along the Baku-Boyuk-Kesik section is planned to be reconstructed within the loan. The 300-kilometer railway section requires immediate repair and this will be completed in the first phase.

In general, the project envisages overhauling the 503-kilometer railway. The investments will be directed to a shift from direct to alternating current toward Baku-Boyuk-Kesik, and buying 50 new locomotives for operation on the alternating current. The WB office in Baku said the project envisages increasing the railway speed for passengers to 100 kilometers per hour and cargo to 80 kilometers per hour.


/Trend/