Geographic Focus: Azerbaijan Republic and states dependent on the Port of Baku

Project Budget : EURO 1,350,000

Contractor : HPTI

Implementation timetable: December 1995 through November 1997

Background and Objectives. The management of the Port of Baku is facing challenges for which new policies and working methods must be devised and implemented. The areas of assistance targeted for urgent action included the development of strategic planning and a marketing strategy, institution building, tariff structure and related cost management covering Port activities, Port operations management, costing and accounting systems and the development of a human resources policy. The EBRD being attracted to the port as an area for investment, the TRACECA technical assistance was expanded to cover eventual rehabilitation and capital improvement work. The extension to this project was granted to enable investment to be planned for the Dry Cargo facilities, and eventually other port facilities that could merit further investment. The project was carried out in tandem with the TA project "Ferry Terminals : Baku and Turkmenbashi". The objectives were :

(i) To provide management assistance by the secondment of EU experts to work alongside Port Authority counterparts including: the General Manager for advice on strategic planning, medium and long term planning etc., the Financial Director for advice on planning of financing investments at medium and long term, preparation of yearly budgets etc., the Port Operations Director for advice on daily port planning, control and maintenance, preparation of investment requirements in equipment and construction etc. and to the Management Training Adviser for setting up and implementing management training and developing management training schemes;

(ii) To produce a Masterplan for the port that would include an analysis of present port facilities and equipment, conduct an environmental assessment. The development of feasibility studies corresponding to the EBRD investment approval system and the production of tender documents for new work to be done.

Key Issues and Achievements. The management training was completed and a framework study on the establishment of Baku as a "Free Port" was completed and is under review with the government. A new MIS system has been designed and adopted, which incorporated a complete restructuring of the accounting system. All operational procedures have been reviewed and a new organisational structure has been suggested that will be implemented shortly. Traffic forecasts and a master plan have been produced, the results of which show the need for rehabilitation of the general cargo terminal and the redeployment of redundant capacity that now exists. The general cargo operations were found to be profitable, and the potential for container handling even more so, given the traffic-forecast projections on the TRACECA route. The EBRD has invested USD 18 million in the port. The project has developed detailed designs for the production of tender documents to the standard required by EBRD.