Chinese bank to lend money to Uzbekistan to buy buses

Business Materials 23 April 2019 13:46 (UTC +04:00)

Baku, Azerbaijan, Apr. 23

By Fakhri Vakilov – Trend:

Uzbekistan intends to purchase a large batch of buses with a total cost of about $19.9 million, Trend reports with reference to the presidential decree.

Among the main goals of such purchase are ensuring the safe passage of the citizens of Uzbekistan to the place of temporary employment outside the country, and the prevention of road accidents along the way.

The supply of buses will be financed by a loan from the State Development Bank of China, which has signed an agreement with the National Bank of Uzbekistan.

Borrowed funds of $19.9 million will be provided to the specialized company Uzautotrans Service for the purchase of passenger buses for international transportation.

The document does not mention the number and country of origin of the buses being purchased, but, most likely, they will be made in China.

The company will operate on the basis of the 7-Bus Saroyi auto-enterprise, all buildings and facilities of which will be transferred to the statutory fund of Uzautotrans Service to increase the state share.

The document provides for the exemption of Uzautotrans Service until January 1, 2023 from the payment of all types of taxes and customs duties.

The developers of the resolution note that in the absence of these benefits, the project’s financial performance indicators are expected to be at the “lower limit” level; in fact, it will be unprofitable during the entire bus operation period, which will adversely affect the coverage of loan obligations, and, as a direct result, will lead to bankruptcy enterprises.

It is also proposed to allow Uzautotrans Service to enter into direct contracts with manufacturing plants (suppliers) or their authorized dealers (distributors).

The auto enterprise will be able to transport more than 818,000 people a year; 30 international routes will be opened.


Follow author on Twitter:@vakilovfaxri