Islamic Development Bank Stands Ready to Cover Price Increase for Large Road Project in Azerbaijan
Azerbaijan, Baku /corr. Trend I.Khalilova / The Islamic Development Bank (IDB) expressed its readiness to provide an additional $15-20mln for the construction of the Ujar-Yevlakh road due to the increase in prices for construction materials as a result of inflation, a source stated at the Transport Ministry of Azerbaijan. In addition, the Ministry does not exclude the probability that the additional expenses can be covered by the budget in order not to make additional borrowings. However, the concluding decision has not been made by the Government.
Earlier the construction of the road at a length of 42km was assessed at $31mln. In February 2004 the IDB approved a $22mln loan for the Government of Azerbaijan over a period of 5 years with an annual interest rate of 6%. In addition, $6mln over 20 years with a 5 year grace period with a 1.5% interest rate was presented by the International Fund for Economic Development. The remaining part of the finance will be covered by the Government of Azerbaijan.
The contractor of the road construction is the Turkish company Polad. The construction work is supposed to be finished by the end of 2008.
Control of the road construction will be implemented by the Azerbaijani company ASPI Consulting Engineers Inc in cooperation with the Bangladeshi company Consulting Limited (BCL). The cost of the four year contract is $2mln.