OREANDA-NEWS. February 25, 2010. Well-informed sources say that works on the project were ceased as minimum until April.

“The cause is not only 10-day red-letter days in Azerbaijan in March, but also situation with repurchase of lands under the new highway. ADB still does not see that the reasons for public’s protest expressed earlier were removed,” a source notes.

Besides repurchase of lands for reconstruction of highway Masalli-Astara, there is a question of selection of contractor for construction works.

Earlier the government was not inclined to dramatize the situation around the project of Alat-Astara highway reconstruction in the country, financed jointly by the country’s government, the World Bank (WB) and the ADB and in fact halted because of numerous protests of the public.

In government’s opinion the problem was easily solvable and did not demand any additional efforts. But in reality all turned out otherwise.

The Baku-based ADB office indicated initially that in order to clarify the situation an ADB mission was sent to the country in answer to the received complaints addressed to ADB president and the Bank’s special department on violations in the process of repurchase of taken over land plots.

The government considers that it will make no difficulty to make such a document as all the country’s norms during land plot repurchase are observed.

The subject of the request is not repurchasing prices, procedural accuracy and lack of violations upon repurchasing.

Until the government does not answer to the request the Bank will hardly finance the construction in its section of the highway.

At the same time, financing cannot be opened, as ADB still has not the chosen contractor.

The Ministry of Transport conducted a contest on works in the first segment of ADB highway section. But the Bank is still unaware of the winner.

Earlier Azerbaijani deputy transport minister Musa Panakhov stated of solution of the issue of complaints. Because of the complaints, World Bank that was conducting work in its sections (Alat-Masalli), was forced to stop work. ADB has not started work in its sections (Masalli-Astara).

Originally ADB offered the government to pass a land repurchase program conforming to international practice, but the Transport Ministry did not agree on that. In its hand, WB pays compensations for take-over of land plots.

Alat-Astara highway is part of highway via route Baku – the border with Iran, length of which is 313 km. Total cost of the Alat-Astara road reconstruction is US400 million. In fiscal year 2008, WB funded US 120 million for its reconstruction out of the US 200 million credit for development of country’s main highways.

ADB allocated US 200 million for financing a 59 km Masalli-Astara segment to run via new route, local roads in the region of project coverage, organization of motor parking along the highway, support and increase of potential of highway network management.

The bank finances US 190 million of its ordinary capital resources (OCR) and US 10 million from the ADF concessional resources.