Cranes on Baku's skyline would normally indicate a construction boom. But the cranes are misleading. Many of the sites they attend are abandoned. Baku is full of half built concrete frames left by builders or developers who ran out of money. Some of the cranes have rusted solid.
Today there is actually a mini-recession in construction activity. Most of the 1997 construction boom, refurbishing oil facilities for the Azerbaijan International Operating Company, has now finished and the other oil consortia are still at the exploration stage. This and a slump in world oil prices has put back a number of projects.
The biggest non-oil related construction job is a pounds60M Hilton hotel contract on the Baku seafront. Signed during President Aliev's recent visit to London, the contract includes construction of a 275 room, five star hotel and 20,000m2 of office accommodation. Scotland's Morrison International is main contractor.
'Piling work should start in January,' says Morrison regional manager David Hook. 'We have western and local firms bidding - a local contractor did the test piles. Once the piling starts we will set up site offices and start to clear the debris out of the water.'
Clearing the debris is not easy. This work will involve moving an abandoned, rusting ship plus concrete and steel dumped in the shallow water.
Construction is expected to take two years and before it can begin Morrison has to decide what to do with the remains of a two storey conference building that previously occupied the site. 'We are hanging on to some of the demolished material,' explains Hook. It may be used on reclamation work later in the project.
But major civil engineering work has to wait until the Azeri government starts earning revenue from the export of oil from fields in the Caspian.
'There are no big civils jobs,' says Morrison International director Ken Tallant. 'The money is not there yet.' Since coming to Azerbaijan four years ago, Morrison's contracts have ranged from a pounds2.5M refurbishment of the AIOC's Villa Petrolia headquarters to a pounds6,000 cargo container/kitchen conversion for a drilling site.
Setting up in Azerbaijan is hard. The Azeri people are generally co- operative, but their country's business environment is hostile by western standards. Everything from the complex tax system to site logistics is an obstacle. Stories of bribes for planning permission, fire safety certificates and even electricity supply are common.
'There is only one way to do it,' says Tallant. 'That is to have a senior guy out there.