48386-004: Railway Sector Development Program | Asian Development Bank

Azerbaijan: Railway Sector Development Program

Sovereign (Public) Project | 48386-004 Status: Proposed

The Railway Sector Development Program (RSDP) will provide project financing for the rehabilitation of the track and structure of the Sumgayit -Yalama rail line a key link in the North South Railway Corridor within the CAREC network to improve rail network serviceability (the project loan); and support to railway sector development reforms in management autonomy and governance, financial restructuring, reporting and control, operational efficiency, and corporate restructuring (policy-based loan).

Project Details

Project Officer
Wu, Zheng Central and West Asia Department Request for information
Country
  • Azerbaijan
Sector
  • Transport
 
Project Name Railway Sector Development Program
Project Number 48386-004
Country Azerbaijan
Project Status Proposed
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan: Railway Sector Development Program
Ordinary capital resources US$ 250.00 million
Ordinary capital resources US$ 150.00 million
TA: Railway Sector Development Program
Technical Assistance Special Fund US$ 1.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Partnerships
Sector / Subsector

Transport - Rail transport (non-urban)

Gender Equity and Mainstreaming No gender elements
Description The Railway Sector Development Program (RSDP) will provide project financing for the rehabilitation of the track and structure of the Sumgayit -Yalama rail line a key link in the North South Railway Corridor within the CAREC network to improve rail network serviceability (the project loan); and support to railway sector development reforms in management autonomy and governance, financial restructuring, reporting and control, operational efficiency, and corporate restructuring (policy-based loan).
Project Rationale and Linkage to Country/Regional Strategy

A sustained policy implementation effort to engineer a transition towards a less oil-dependent economy is urgent, and railway development can be a crucial enabler of this alternative economic development path. With the modern railway infrastructure in strategic locations of Azerbaijan (border cross points, the ports, the oil production and the agricultural regions), railways competitiveness can be essential to the country''s production, trade, and distribution of bulk materials such as oil-related and agricultural products. But challenges in the sector are stark and urgent.

These challenges require a comprehensive policy and financial response from the government that (i) promotes institutional, corporate, financial management and control, labor and debt restructuring reforms, and (ii) makes the necessary financing available to upgrade ADY's service capacity and/or competitiveness. The properly sequenced institutional and corporate reform actions are key, so that a financially sustainable outlook for investment financing can help tackle the overall prospects of the freight and passenger businesses at ADY. ADB's Sector Development Program modality enables multi-year assistance to such a sector-focused reform and investment financing agenda.

The RSDP will be ADB's first intervention in Azerbaijan''s railway sector. The RSDP''s concept paper was approved in July 2016 and technical assistance has supported the preparation of reforms and project design across all outputs. Key aspects of the RSDP have also benefited from past advisory support from various railway sector stakeholders and recent project implementation by the World Bank. This has ensured that the proposed RSDP reforms complement related technical assistance initiatives by concerned development partners in the sector (and in some cases providing critical leverage), and that synergies between East-West Rail Line project and North-South Rail Line project are achieved wherever feasible. In addition, given ADY's significantly stretched capacity by the wide range of immediate challenges, ADB will allocate TA to facilitate policy dialogue and support implementing further change.

Impact Railway development for Azerbaijan economically sustained
Outcome Efficiency and financial viability of railway operations improved
Outputs

Governance, and management and financial autonomy of ADY enhanced

Financial restructuring of ADY's debt liabilities implemented

Financial and management control, efficiency and reporting at ADY enhanced

Operational efficiency enhanced and corporate restructuring implemented

Infrastructure of the Sumgayit Yalama rail line improved

Geographical Location
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Stakeholders including ADY, government agencies, development partners and local residents were consulted throughout project preparation to minimize adverse impacts and ensure social acceptance. The views and concerns of all stakeholders will be taken into consideration during project implementation.
During Project Implementation Consultation with stakeholders as needed will be conducted during implementation.
Business Opportunities
Consulting Services Consulting services to be financed under the ADB loan will be recruited in accordance with ADB's Guidelines on the use of Consultants (2013, as amended from time to time) and ADB''s prior review.
Procurement All procurement financed under the ADB loan including ADB-administered loan will follow international competitive bidding procedures pursuant to ADB's Procurement Guidelines (2015, as amended from time to time) and ADB''s prior review.
Responsible ADB Officer Wu, Zheng
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Transport and Communications Division, CWRD
Executing Agencies
Azerbaijan Railways Closed Joint Stock Company
Dilara Aliyeva Str. 230, Baku, AZ1010
Ministry of Finance
83, Same Vurgun Street AZ1022 Baku, Azerbaijan
Timetable
Concept Clearance 04 Jul 2016
Fact Finding 28 Aug 2017 to 08 Sep 2017
MRM 02 Oct 2017
Approval -
Last Review Mission -
Last PDS Update 24 Sep 2017

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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