Tajikistan: Regional Customs Modernization and Infrastructure Development Project (TAJ)

Industry and trade - Trade and services

Since independence in 1991, Tajikistan has been in transition to private sector-led and market-oriented economy. Development of an outward-oriented trading environment is an integral part of the transition strategy as this country is highly dependent on international trade. Significant progress has been made in trade liberalization and trade-related policy reforms as evidenced by Tajikistan's accession to the World Trade Organization (WTO) in 1998.

Progress in trade facilitation is equally significant and has effectively complemented trade policy reforms. Among all the agencies relevant to trade facilitation and border controls, the customs administration is commonly recognized as one of the most important because of its control functions, revenue collection, and prevention of smuggling and drug-trafficking.

The Customs Administration of Tajikistan is relatively young and have suffered from weak institutional capacity, low efficiency, and poor governance. Recognizing these weaknesses, this country launched comprehensive modernization programs in 2002 to address this most critical bottleneck of trade facilitation.

Significant progress has been made since the inception of the reform programs, particularly in legal and institutional reforms, and strengthening of cooperation with customs administrations of neighboring countries. However, the benefits of customs legal and institutional reforms and regional customs cooperation initiatives cannot be fully realized, unless there is commensurate development and modernization of customs physical infrastructure to improve efficiency and transparency of customs services. This country do not have adequate information and communications technology (ICT) infrastructure to support automated customs services. The border post conditions are poor because of inadequate budget support.

The Project is directly relevant to ADB's strategic objectives for the two countries. Regional cooperation with an emphasis on trade and transport infrastructure is a priority area in support of private sector-led development. ADB's Country Strategy and Program for Tajikistan (2004-2008) focuses on promoting economic growth through (i) rural development and (ii) regional cooperation.

Trade facilitation is a strategic pillar of ADB's Regional Cooperation Strategy and Program for 2005-2007 and the Project is a priority. ADB adopts a three-pronged strategy for trade facilitation to help (i) modernize customs infrastructure, including customs legal and physical infrastructure; (ii) develop customs-supporting infrastructure by fostering customs intermediaries and their associations, such as brokers' associations; and (iii) support regional customs cooperation to address issues of common concern and complement country-specific support.

Development of a unified automated information system (UAIS)

Border-post infrastructure development

Human resource development, public awareness campaign, and border interagency cooperation (to support implementation of components 1 and 2)

The project progress is 100% as of 31 October 2011.

(i) Development of UAIS. The UAIS contract was awarded on 30 June 2009. Development of UAIS system included 11 subsystems. Working Group was created by the Customs Service to oversee the UAIS component implementation. On 28 August 2009 the Project Plan with the detailed schedule on UAIS development was agreed between EA and the Contractor. Software Requirements Specification was approved on 4 December 2009. The UAIS pilot testing started in October 2010 and was rolled out to 72 border posts. The system has been successfully completed.

(ii) Border-Post Infrastructure Development. Rehabilitation of eight customs border posts located in Isfara, Zafarabad, Spitamen, Dushanbe, Murgab, Ishkoshim and Farkhor rayons, for which contracts were signed in May 2009, is completed. Construction of 3 customs border posts: Karamyk in Jirgital rayon, Kushtegirmon in Spitamen rayon, and Aivaj in Shaartuz rayon is also completed. The civil works at Kulma border post were completed in October 2011.

To ensure uninterrupted power supply in the most remote project sites, the contract for procurement of wind turbines and solar panels for Kulma and Kizilart border posts was awarded on 28 March 2011. The equipment was supplied at the border posts in October 2011.

The EA also procured anti-smuggling equipment to improve customs services. The contract for procurement of twelve X-ray machines and three electronic scales was awarded on 4 February 2010. The equipment was delivered at the border posts.

(iii) Human Resource Development. The training of customs officers on UAIS system was completed in October 2011. At the first stage, the customs officers were trained on basic and advanced computer skills. At the second and third stage, they were trained on operation of the UAIS subsystems and its practical use. The EA is recommended to undertake measures to sustain acquired skills and knowledge.

All services, supplies and equipment to be financed by ADB will be procured in accordance with ADB's Guidelines for Procurement. Equipment and materials for packages valued at $500,000 or more will be procured through international competitive bidding procedures. Some supply contracts and certain items estimated to cost less than $500,000 will be procured using international shopping procedures. Minor items of equipment and materials costing at $100,000 or less will be procured through direct purchase.

Civil work contracts estimated at $1 million equivalent or more will be carried out among pre-qualified contractors using international competitive bidding procedures, while those valued below $1 million equivalent will be carried out using local competitive bidding procedures acceptable to ADB. Force account will be applied to border-post infrastructure development. The upper limit for a force account works package will be $50,000.