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Transport needs

A battered Lada suddenly swerved into the oncoming traffic to avoid an overhead tram power line that had dropped into the road. It is an everyday occurrence in Baku, and drivers are used to it.

But these incidents highlight the decay that has hit Azerbaijan's transport. Lack of investment in the past 20 years has caused a once well developed network to fall into ruin. The country's roads are full of potholes, the railway system is uncompetitive and ports are full of rusting sunken vessels and crumbling piers. Billions of pounds are thought to be needed to bring the transport system up to 21st century standards.

After oil, Azerbaijan's strongest selling point is its location. It sits on the crossroads between Europe, Asia, Russia and the Middle East. Baku is the hub of the Caspian's oil and gas production. Given the importance of its location and the condition of its communications it is not surprising that the country is targeting spending on transport infrastructure.

Baku's airport is undergoing a pounds50M upgrade to handle an expected increase in international traffic associated with the country's oil sector. The Azeris believe the airport could rival traditional Middle Eastern transit points for long haul flights between Europe and the Pacific Rim. The first phase of the upgrade, which comprises two international passenger terminals and a control tower, is currently under way by Turkish joint venture Burc- Enka.

The other major development in the region is the European Union- sponsored Transport Corridor Europe Caucasus Asia project to develop a transport link between the Caucuses, central Asia and Europe. The project has already drawn over pounds120M of investment to the region. Part of that project involves upgrading the country's railways.

'The railway network is developed - much of it is electrified - but it needs modernisation,' says Gibb Rail general manager Daniel Giblin. 'The aim is to assist railway managers to be more competitive and to develop more effective systems.' Gibb is advising the Azeri state railway company on how it can restructure its organisation to support loan applications under the TRACECA project.

Redeveloping Baku's international port is also a high priority. The port is an important part of Azerbaijan's links with its neighbouring Caspian countries but has decayed. It faces added pressure from a Caspian Sea level that has risen 2.33m in the last few years. 'The port has a great priority,' says Deputy Prime Minister Abid Sharifov. 'It is part of the European Union TRACECA 'Silk Route' project. We have been negotiating with the EBRD to attract investment.'

Sharifov sees roads as another top priority. He views international funding as essential. 'One of our priorities is new roads,' he explains. 'We have signed a pounds22M contract with (development banks) the Kuwait Bank and Islamic Bank and we are negotiating with the EBRD and World Bank to attract investment for road rebuilding in the next three to four years.'

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