Azerbaijan, Baku, Sept.27 / Trend, I.Khalilova /
The World Bank (WB) mission led by head of transport program on Azerbaijan Ben Gericke will today arrive in Baku, WB Baku Office told Trend. The mission will stay in the country by Oct.1, it aims at reviewing a project of assistance to railway transit and trade in the country.
"The main goal of the mission is to assist and give recommendations to the CJSC "Azerbaijan Railways" within works to implement the project. At present, preparation of specifications to announce a tender to purchase locomotives, signal system, as well as work on electrification is underway," the office said.
Due to the fact that the fulfillment of basic work has not yet begun, serious disbursement of credit funds can be expected not earlier than 2012-2013, as purchase of locomotives will take some time.
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.
The project consists of three components. The first envisages rehabilitating the railway sector, namely the plot from Baku to the Georgian border, the transition from 3.3 kV DC to 25 kV AC, and replacing the signal system due to the transition to an electric power system.
The second component envisages the purchase of 50 electric locomotives and the third - aligning the railway department's activity with the requirements of a market economy.