ADB agrees with Azerbaijan on land purchase plan for highway project
Azerbaijan, Baku, Nov. 16 / Trend I.Khalilova /
The Asian Development Bank continues to discuss with the Azerbaijani government plans to purchase land under a project to reconstruct the Masalli-Astara Highway. The project worth $200 million was signed Jan. 15 in Baku, the government said today.
The need to reorganize the plan arose after procedures changed for establishing a new price on the land, the source added.
The Transport Ministry already held a tender to find a contractor to construct the first 23 kilometers of the road. The tender has closed and company proposals are under evaluation.
Reconstruction is planned for 2010-2011.
The Masalli-Astara Highway is divided into three sections. However, land must be purchased from the public using budget funds before construction may commence. Thirty million manat was previously allocated for the project. However, the costs will reduce under the new procedures as land prices have decreased in Azerbaijan.
The activities to purchase the land require six months.
The ADB Board of Directors approved the project Sept. 28, 2007. Under the agreement, the Asian bank issued loans worth $190 million partially from its common resources for 24 years with a four-year grace period and libor +0.6 interest rate. Loans were also issued at $10 million under preferable conditions for 32 years with an eight-year grace period and one-percent interest rate.
Credit for the Masalli-Astara Highway was allocated within the Multitranche Financing Facility mechanism with a sum total of $500 million to finance three road projects. Two projects worth $255.4 million have been coordinated. The bank has provided up to 2014 to use the remaining funds.
On Nov. 16, the official exchange rate is 0.8028 manat to $1.
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