Azerbaijan, Baku, July 1 /Trend I. Khalilova, E. Ismayilov/
Asian Development Bank (ADB) chief specialist for the transport sector Dong-Soo Pyo will begin visiting Baku on July 8 to define Azerbaijan government's position on the project of reconstruction of Masalli-Astara highway, on the realization of which the ADB has provided $200 million, ADB Baku Office said on July 1. The mission of the bank will continue until July 13.
"June 30 was the deadline by which the loan resources could be used in accordance with the loan agreement. During the visit, the mission of the bank plans to review the condition with the project realization, and discuss the need for the extension of the credit term," said the office.
Credit still remains practically unused, and the government must appeal to the bank for the extension of this period.
One of the main issues for the beginning of the project is to implement the plan on purchase of lands along with the Masalli-Astara highway. Under the terms of the loan agreement, the issue with the purchase of the lands was to be resolved by June 2010.
"Currently, this process is almost in the stage of completion," said the country's Transport Ministry. And the construction work is scheduled to begin in October 2010."
The contractor for the construction of the road has not been determined, since the result of the tender may be announced after the final decision on a purchase of lands, the ministry said.
The road will be constructed with a $200-million loan provided by the ADB. The government's participant share will total $49 million.
The Masalli-Astara Highway is divided into three sections. A contractor is now being found to construct the first 23 kilometers of the road.
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.
Official exchange rate on July 1 is 0.8039 AZN/USD.