WB Recommends Azerbaijan Government Rescale Restructuring of Railway

Business Materials 25 May 2007 18:41 (UTC +04:00)

Azerbaijan, Baku / corr Trend I.Khalilova, S.Babayeva /The World Bank proposed the Azerbaijan Government rescale its restructuring of the Azerbaijani railway.

Gregory Jedzeychak, head of the Baku office of the WB, announced that the Bank presented Azerbaijan with different options, while the Government should first of all discuss the development plan and make a decision. There are different alternative versions and the Government should select the best foreign expertise," Jedzeychak noted.

Within the framework of restructuring the Azerbaijan State Railway, they offer institutional development and replacement of devices and rail.

The WB's recommendations on restructuring the railway were made as part of the project on assistance to the railway transit and trade.

In its first option the bank offers the purchase of locomotives working on diesel. The second option offers hybrid-electric locomotives with an alternative power system, which was also supported by the Azerbaijani side. Taking into consideration the Government's intentions to increase of speed of the Azerbaijani railway, the first option is considered more practical.

The volume of investments varies depending on the options. The first project is estimated to cost $600mln, the second $760mln. Along with the purchase of locomotives the project envisions the reconstruction and reform of the railway in whole.

According to Transport Ministry representatives, the financing of the project will be combined, which means using public budget capital and ASR funds along with loans from international financial organizations.

In accordance with the WB's partnership strategy with the Azerbaijan Government (2007-2010) on the project regarding assistance to railway and trade, it is planned to allocate $80mln, while the bank does not exclude the probability of increasing the amount of its credit, as the International Bank for Reconstruction and Development (IBRD) funds are limited.