AT THE INTERSECTION OF TRANSPORT CORRIDORS AZERBAIJAN STRONGLY DEVELOPS THE TRANSPORT INFRASTRUCTURE

The Minister of Transport of the Republic of Azerbaijan, Mr. Ziya Mammadov.

Caspian Energy: Mr. Mammadov, the Ministry has recently developed two strategy programs for development of transport field of Azerbaijan, could you please inform us about the major principles and projects of the documents?

The Minister of Transport of RA Ziya Mammadov: - Yes, it is true our Ministry elaborated and submitted for consideration to Government of the Republic two State programs. The first regarding upgrading and development of auto network roads and the second is the development of transport system of Azerbaijan.

According to the first program there is considered the construction, reconstruction and restoration of auto roads, and the second defines the priority directions and strategy goals of the Republic's transport system development. Both programs are planned for the period till 2014.

The first stage of State program realization on development of transport system is provided for restructurization of transport sector. It means, the division of management and guiding functions of State from the commercial functions and solving of important tasks by infrastructure development of international transport corridors with the aim of the Republic's transit potential increasing.

At the second stage there is planned the solving of issues of transport system development directed for realization of strategy goals that connected with the long-term social-economy and geopolitical priorities of our Republic.

At present, under the control of the Ministry is fulfilled the operation by all fields of road transport complex for improvement and development of transport infrastructure. Among the operations are reconstruction of Baladjary steaming station for cleaning of tank truck, there are begun the works by completely repairing of Baku Railway Station of the Azerbaijan State Railway, reconstruction and full repairing of railway lines, full repairing of Baku International Marine Trade Port's cargo bridge of ferry crossing and marine passenger station, construction of Baku international depot complex.

Within the frame of State program there was commissioned in Baku international airport named after Heydar Aliyev the cargo terminal, begun the operations for reconstruction of Gandja airport and getting by airlines of new cargo and passenger airplanes for replenishment of aircraft park.

New complexes will be operated in large transport corridors of Eurasia area as the realization of the East-Western (TRACECA) and North-Southern projects through the territory of Azerbaijan. What will the projects be fulfilled within the frame of stated programs?

As you right mentioned, Azerbaijan geographical location allow it to be at the intersection of the two largest transport corridors and it obliges us to use it. State's participation in the projects of international transport corridors renders the supporting to political and economy independence of the Republic by increasing of its entrance opportunities into European and international markets through alternative transport routes, contribute to further regional cooperation among countries - programs and transit potential realization participants through the development of transport infrastructure, integration into international transport system's acceleration.

TRACECA is one of the shortest routes from Europe to Asia. The main multilateral Agreement about international transport for development of Europe-Caucasus-Asia corridor contributed to sense growth volume of shipments via corridor, including the transit shipments.

In 2004 the 41% from the total volume of deliveries by all types of transport is a share of TRACECA international corridor and the share of transit made 15,2%. In comparison with 1996 the volume of deliveries via TRACECA corridor increased to 1,7 times and transit to 2,4 times.

Azerbaijan participation in International Transport Corridor (ITC) "North-South" will create new possibilities for cooperation with countries of Persian Gulf and Indian Ocean in the sphere of transit supplies and international trade.

Azerbaijan officially appealed to the Ministry of Foreign Affairs of Iran in December 2001 - the countries depositaries for receiving of membership in the North-Southern corridor. In February 2005, Azerbaijan received the parties' assent regarding the Agreement about Azerbaijan joining into given corridor that reduce the time of cargoes' transportation from the North Europe to the South Asia for 10 days (sea route via Suez canal takes 35 days and via ITC "North-South" only 20-25 days). Presently, the supplies within the frame of the ITC make 5 mln. tons of freight for a year though ITC was designed for supplying of 15-20 mln. tons of freight for a year. However, optimists affirm that its turnover of goods can be reached up to 50 mln. tons.

Exploitation of railway area of international transport corridor "North-South" passing in the Azerbaijan territory will permit to reduce the time of freight transportation for 5-7 days in comparison with transportation through the Caspian. There is expected that the first year of the area operating will be supplied 5 mln. tons and in further up to 20 mln. tons for a year.

In the aims of promoting to international supplies Azerbaijan should provide to other countries - participants of transport corridor with the right for transit of international transportation means, cargoes and passengers via its territory, also with more effectiveness assistance to international transit supplies via its territory.

For rendering of effectiveness operating of ITC passing via Azerbaijan is necessary to be implemented several important operations. There had already been elaborated the Transit Strategy project which realization will promote to upgrading of transport infrastructure, improving of standard-right base, its reaching to international standards, borders intersection's and custom declaration's simplification, increasing the corridor's profitability.

We should note that for increasing of TRACECA profitability there are used the rate discounts - to railway and marine supplies from 20% to 50% in the Azerbaijan part of corridor to transit freight deliveries.

What operations are fulfilled with the goals of transport infrastructure quality improvement?

We should note that there will be needed in the nearest 4 years $1,5 bn of investments for realization of projects provided in State program of regions' social-economy development (for 2004-2008) on development of road-transport complex.

According to elaborated by the Ministry of Transport project of State program "Development and upgrading of auto roads network of the Republic of Azerbaijan" there was defined the priority directions of road-transport complex development, the priorities are in the nearest 4 years during which planned the completion of rehabilitation, reconstruction and construction of main auto transport transit corridors.

Within the frame of ITC passing through Azerbaijan there are fulfilled the operations for reconstruction of auto roads in several directions - in Baku - Alaty and Gandja - Gazakh, auto roads Baku-Alaty-Gazakh - Georgian border, in the area of Baku-Sumgayit the auto road Baku-Khudat - Russian border, in the road to Bilasuvar. The completion of majority part of operation is planned in the current year.

In result of 2004, there was launched the part of road Alaty-Hajigabul (Gazimahammad) with extension 45 km. due to credits of Kuwait Fund, Islamic Bank of Development and share participation of the Azerbaijan Government. In accordance to signed Credit Agreement with the World Bank there are implemented the operations in the auto road Gandja-Gazakh with extension 94 km., and at the same time the first area of Gandja-Shamkir with extension 21 km. was launched in February 2005. The completion of works according to credit agreement is planned this year. this year will also be completed the works on reconstruction of auto road Baku-Alaty (47 km) due to financing from the Republic's budget. In the nearest time there will be begun the works on reconstruction of auto road Hajigabul-Kurdamir (85 km) due to credits of the European Bank for Reconstruction and Development.

For meet to international standards of auto transport corridor "North-South" including the rehabilitation, reconstruction and building of road's area Baku-Russian border (208 km) was elaborated the technique-economy substitution (TES) and the project's elaborating. TES prepares regarding the area Baku-Astara-Iranian border due to grant of Iranian side.

At present, the credits proposals for financing of works on rehabilitation and reconstruction of auto roads corridor "North-South" on behalf of European Bank for Reconstruction and Development, Czech Export Bank, Iranian Bank for Development and Export, World Bank, Asian Development Bank and the banks of Iran, France, Germany and so on are under discussion of the Ministry.

In case of passage non-admission to Baku City of transit auto transport the "Pan Arab Consulting Ingineers" elaborated TES rehabilitation, reconstruction and building of "Baku circular auto roads". Presently the operation is carried out in the direction of working project creation. After coordination with the interested parties and fulfillment of required expertise, there is planned to begin the operation by the end of 2005. The project's financing will be executed within the frame of credit agreement with Kuwait Fund and Fund Abu-Dabi with participation of country's government.

Is there planned by the Ministry of Transport the possibility of turnpike models' introduction?

Presently, there is not turnpike in the Republic of Azerbaijan. The question is under the stage of study. At present, there operates the tax in the Republic for utilizing of auto roads of general using by all owners of transport means, and for foreign owners there set the tax for entrance and trip on the roads of the Republic.

Could you please inform us about privatization of transport units?

In accordance to adopted Programs about privatization of State property in the Republic of Azerbaijan the Ministry of Transport submitted for privatization of several structural subdivisions of road-transport complex. By measure of advisability to the level of market relations' development in the market of transport services the process of privatization in road-transport complex will be continued.

At that time, many parts in auto transport have already been privatized. There was launched the plant for processing of road signs that fully meet to requirements of international standards.

Mr. Minister, unstability of supplies via neighbour countries has a negative influence to corridor's operation. How the last events in Georgia and in Azerbaijan-Georgia border did reflect to oil and mineral oils transit via Azerbaijan?

The events in Georgia took place at the end of 2003 and beginning of 2004 and fulfilled checking regarding the discrepancies in shipping papers had negatively influence to figure of freight supplies in Georgia direction. However, the management of the Ministry of Transport and Azerbaijan State Railway (ASR) realized the required operations with the main freight forwarders by increasing of supplies volume via Asia-Europe. At present, there is fulfilled the accelerated route supplies of petroleum products from main terminals of Azerbaijan to the border of Georgia for 16-18 hours, also provided with discounts for supplies under big volumes and taking additional measures on safety and freight's storage.

In result of stated and other measures the volume of deliveries on March of present year increased and daily make 44.000 tons of which 33,5.000 tons of petroleum products that for 7.000 and 4.000 tons more than in 2004.

We should note that by the order of the Caspian State Steamship (KASPAR) at shipbuilding plant "Krasnoye Sormovo" of RF is realized the construction of tanker with tonnage 13,4.000 tons which completion is planned by September 2005. There was signed the contract for construction of two more tankers with deadweight 13,4.000 tons.

Generally, since 1996 there is observed in transport sector of Azerbaijan the increasing of freight's deliveries by all types of transport (auto, railway, water and air). Average annual growth of volume made 14,9 %. In 2004 was transported 99,5 mln. tons of goods. On forecast for 2005 the figure increased up to 104,2 mln. tons or for 4,8%. Thus the figures are quite good and with further development of transport infrastructure they will continue their growth.

Thanks for your interview.