|Project Rationale and Linkage to Country/Regional Strategy
Armenia has a relatively small population (3.24 million), but is the most urbanized country in the Caucasus. Urban areas, with 2.1 million people or 64% of the total population, already account for most of the country's economic activity and employment. Armenian urban areas fall into four categories (i) Yerevan, the capital city with 1.12 million people; (ii) mid-sized secondary cities such as Gyumri, Kapan, and Vanadzor; (iii) small and medium size cities with important industrial and agro-processing complexes such as Armavir, Artashat, Ashtarak and Ararat; and (iv) cities with high tourism potential such as Dilijan, Jermuk, Sevan, and Tsakhkadzor. These 12 cities account for almost 90% of the nation's gross domestic product, with Yerevan alone accounting for 60%.
Shifting urban landscape. Unbalanced economic growth among regions, posing serious development challenges to planners and policy makers. Some cities are growing fast, others are not. Some house only one industry at best; others struggle to attract one. Even Yerevan has seen change. A gradual collapse of its heavy industry, in the early 1990s, then located in its southern ring, created a rapid shift in the location of commercial and residential centers, and corresponding changes in the demand for metro, tramway, trolleybus and bus network services. These changes have increased motorization, but also led to poor air quality, noise, traffic congestion, loss of green areas, and degraded historical buildings. Many secondary cities have also grown since the 1990s and now share most of Yerevan's problems.
Traffic and road safety concerns. Growth has brought widespread vehicle ownership, which has grown by 40% since 2004. The number of accidents in Yerevan has risen in parallel, from 260 fatalities in 2004 to more than 400 in 2008, with the number of injured more than doubling from 1,500 in 2004 to 3,125 in 2008. This has put road safety on the agenda. Despite improvements in major arteries in the capital, the traffic signal system is outdated and inadequate. Environmental protection is now another priority. Located in Ararat Valley, Yerevan has little natural ventilation, and congestion results in concentration of hazardous substances. Urban transport generated 90% of air pollution in 2009, with carbon dioxide emissions expected to increase by 160% by 2020. The limited number of bridges in Yerevan over the Hrazdan River creates bottlenecks and massive congestion during peak hours. In addition, a city bypass remains uncompleted, disallowing any diversion of passing traffic. Illegal and double parking and poorly enforced traffic laws further constrain mobility. In 2009, traffic exceeded design capacity on more than 20% of the road network, and a further 35% was about to reach its limit. Most of these problems are replicated in other cities.
Inadequate public transport services. The Yerevan public transport system comprises microbuses, buses, trolleybuses, and metro routes. Its public transport infrastructure is aged, and vehicle fleet old and poorly maintained, travelling an average speed of 16 kilometers per hour. The metro network has a single 12.1 km line with 10 stations and a fleet of 70 old carriages. Metro ridership accounts for only 8.2% of total public transport ridership, which stood at 207 million passenger trips in 2009. Today, 85% of the passengers are carried by unsubsidized private microbuses, despite their expensive fares. While minibuses spared Yerevan a severe transport crisis in the 1990s, they now contribute to a chaotic situation that has seen big and medium-sized buses pushed out. Service quality is poor due to overloading and congestion. This shift has severely compromised the financial sustainability of other public transport services and caused investment backlogs for trolleybus and metro, as fares are too low to cover operating and renewal costs. In other Armenian cities, the urban transport issues are similar albeit less dire. They have deteriorating urban road networks with inefficient or nonexistent systems of traffic management and poor public transport that relies far too heavily on microbuses. The transport network needs restructuring, as routes often duplicate others. Service quality is poor and the level of comfort minimal. In tourist centers, urban transport infrastructure is unable to cope with the inflows at peak periods. These limitations are accompanied by rising gaps in the quality of municipal planning, finance and monitoring.
Sector strategy, roadmap, and institutional reform. The national government and Yerevan municipality have invested more than $185 million during 2005-2010 in upgrading urban infrastructure. But these investments are only patching up immediate problems. More investments are needed to make the system viable. Secondary cities are in a similar situation. A strategic framework for urban renewal has been agreed to correct this, and to adopt a systematic approach. This is backed by a roadmap, policy framework and investment plan split into shorter (immediate), medium (2011-2016) and long term (2017-2025) interventions, covering both physical and non physical requirements. The overall investment runs into $960 million for the period 2011 to 2025 -an average capital and recurrent expenditure outlay of around $70 million a year.