Azerbaijan, Baku, Jan. 16 / Trend . I.Khalilova/
The Asian Development Bank (ADB) is prepared to issue multitranche financing to restore water supply and sewage systems in Azerbaijan, the Baku Office of the bank said.
"It will enable to cover increasing demand for extra financing through reserves of the fund as in the case of road projects when the ADB issued first multitranche package to the country," the office said.
At present the Asian Bank is discussing with the Azerbaijani government opportunities to expand coverage zones on improving water supply and sanitary service systems in three more regions through extra financing. [This project is currently being implemented in Agdash, Goychay regions and Nakhchivan city of the country] It is not excluded that their number may be increased in future.
It is offered to include Agjabadi, Beylagan and Balakan regions in the list at this stage.
Representatives of the office could not publicize amount of additional investments in six regions or multitranche package, because it will require a new feasibility study. Azersu Joint Stock Company (JSC) has been involved in discussions on this issue. It is necessary to re-assess cost of the project due to price rise for construction materials.
Earlier it is planned to cover cost rise of the project through increasing the Azerbaijani government's share in the project's capital.
The current design of the project was developed in 2004, whilst prices for construction materials considerably increased in this period and basically, rise of expenses is observed on sewage. Price rise of the project was assessed at $5-6 million, but the government said that expenses will be high subject to the current scale of prices. Azerbaijan offered to install contemporary equipments at sewage system of regions covered by the project and it also affected cost of the project. At the same time, the ADB's project envisages full restoring water supply and sewage in the chosen regions.
Preliminary cost of the project made up $39.9 million. The Asian Bank initially issued $30 million loan to finance the project and $9.9 million fell on the Azerbaijani government.
Realization of the project was activated in 2008, whilst construction work has not yet begun. Results of the first tender on finding contractor for construction of water supply system will be held within few days. The ADB mission is expected to visit Baku in February and it will focus on issuing additional financing or the water supply project will be realized under the multitranche package.
AICO Consulting Ltd/European Consultans Organization is a consultant of Azersu JSC on water project. The consultant developed a report on details of work planned for three years.
It is planned to hold structural reforms to develop water supply systems and infrastructure in Agdash, Goychay and Nakhchivan by 2010 and in Agjabadi, Beylagan and Balakan - in the case expanding coverage zones.
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