Azerbaijan, Baku, Dec. 19 / Trend N. Ismayilova /
Azerbaijan launched the construction operations within the first phase of the project to restore water and sewerage systems in the cities of Ganja and Sheki. It is being implemented jointly with the German development bank KfW and the Swiss State Secretariat for Economic Affairs (SECO), SECO Representative in Azerbaijan, Phillip Keller, told Trend.
"The project was officially launched and construction operations began in Sheki last week," Keller said.
He said that the project is one of two infrastructure projects financed by SECO in Azerbaijan. The State Secretariat does not plan to finance such infrastructure projects in Azerbaijan in the future.
The project will be implemented in 3,5 years. The first phase envisages the measures to provide Sheki with water by 100 percent, and Ganja - by 50 percent. The further development of water supply system of Ganja is envisaged within the second phase. KfW has not put the issue of increasing water tariffs to ensure the effectiveness of the project, although this proposal was submitted to the government at an early stage. The current tariff (0,22 manat per cubic meter of water) is quite acceptable. The fee for using the water is expected to be increased in the future.
The first phase of the project envisages improving the quality and reliability of water supply and sewerage system in the cities of Ganja and Sheki with a budget of 55 million euros. KfW will give loans worth 37 million euros, and Seco - 10 million euros in the form of a grant to realize the project in accordance with the agreements signed in Bern in October 2006. The share of the Azerbaijani government in the project is eight million euros.
Consulting services and a partial restoration of infrastructure in Sheki, in particular the purchase of equipment are planned to be implemented owing to Seco's funds.
"The German government has already approved additional funds worth 63 million euros to Azerbaijan to continue operation on full restoration of water supply and sewerage systems in Ganja and Sheki.
He said additional funding will be allocated for full coverage of the regions in terms of improving water supply system, installation of modern cleansing facilities for sewage systems. Earlier, it was reported that KfW will allocate 23 million euros for this purpose, and the remaining costs felt to the Azerbaijani Government.
KfW plans to allocate 23 million euros with the total cost of the project worth 30 million euro to fully restore the water supply system in Ganja, Abdullayev said.
At the third stage, the bank expects to allocate 40 million euros for the installation of modern sewage treatment plants.
The decision to provide additional funding from the bank will be made after the promotions in the first phase of the project.
Seco's financing of the second phase of the project depends on real results of realization of the first phase of the project.
A consultant of the bank on the first phase of the project is a Swiss consulting company Colenco. Besides preparing the technical conditions of the tender, its task includes the institutional improvement of Ganja and Sheki water systems. Activities to improve the structure of water systems and construction work will be conducted in parallel.