ADB specialist to review road projects in Azerbaijan

Business Materials 15 October 2010 18:25 (UTC +04:00)

Azerbaijan, Baku, Oct. 15 / Trend N. Ismayilova /

Dong-Soo Pyo, Chief Specialist of Asian Development Bank (ADB) for the transport sector, will visit Baku, the Baku Office of the bank said.

He will visit Azerbaijan on October 18-20.

"The purpose of the visit is to review ADB projects in the transport sector, including familiarization with the process of evaluating proposals for the construction work on the first section of the road Masalli-Astara," the office said

JSC Azeryolservis under the Azerbaijani Transport Ministry announced a tender for construction works on the first section of the Masalli-Astara road with length of 22.15 kilometers. The project is funded by the Asian Development Bank (ADB) jointly with the Azerbaijani government. The contractor must construct a two-lane road, two road crossings, 10 bridges, drainage system and one underpass.

The following criteria are determined for applicants: minimum annual turnover of construction work over the past three years must be at least $100 million, assets - not less than $23 million, the existence of a contract on at least three contracts during the last five years at the minimum cost of each - $85 million.

Applicants must also have work experience within five years.

The Asian Development Bank (ADB) extended the terms of a loan to Azerbaijan to reconstruct the Masalli-Astara Highway this week. The loan will be extended until Dec. 31, 2013. Since the loan agreement entered into force in January 2008, the loan resources have remained nearly unused. Earlier the loan period was set to expire June 30.

The road will be constructed using a $200-million ADB loan. The government's share is $49 million.

According to the terms of the loan agreement, the issue of land acquisition must be resolved by June 2010. The government said that this process is almost completed on the first section (the length is 22.15 kilometers) of Masalli-Astara road. It was the main requirement of the bank.

The Masalli-Astara Highway is divided into three sections. A contractor is being found to construct the first plot of the road.

The ADB Board of Directors approved the project Sept. 28, 2007. Under the agreement, the ADB 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.

The credit for the highway was allocated within the Multitranche Financing Facility Mechanism with a sum total of $500 million to finance three road projects. The bank has provided up to 2014 to use the remaining funds.