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Economical news
Bulletine Economics 

2017 October 24 ( Tuesday )  17:03:00
Print version
Русский Azərbaycan


Passengers from Baku to Travel to Istanbul by Train

The railway administration answered questions about the new Baku-Tbilisi-Kars railroad

On October 30, a solemn launch of the railway communication on the new Baku-Tbilisi-Kars route (Azerbaijan-Georgia-Turkey) will take place. The Azerbaijan State Railway Administration (ASR) has reported that BTK was built on the basis of the Azerbaijani-Georgian-Turkish interstate agreement.

Turan"s questions were answered by the head of the ASR public relations department Sevinj Gadirova.

- On October 30, transportation will begin on the Baku-Tbilisi-Kars railroad. Which train will go first - passenger or cargo? How many cars or passengers will there be on the first train?

- First, cargoes will be transported along the BTK route. Forecasts show that in the first years about five million tons of cargo will be transported, and then cargo transportation will reach 15 million tons per year. Azerbaijan"s participation in any projects that bring economic development, stability and peace to the region, in any case, is extremely necessary. Having joined this transport artery, Azerbaijan will receive and send cargoes in the giant region from China to Europe.

After achieving full-fledged operation of this line, it is envisaged to start a passenger communication. CJSC Azerbaijan Demir Yollari (ASR) and the Swiss company Stadler Rail Group signed an agreement on the acquisition of 30 wagons to transport passengers on the specified route. After the cars are delivered to Azerbaijan, two passenger trains on the BTK route are planned. In Kars, passengers will be able to get off the train and change for other trains, including those going to Istanbul.

- Is there a train schedule? How much will passenger tickets cost? What will be the time duration of the journey from Baku to Istanbul?

- These questions can be answered closer to the time when the passenger trains begin to operate.

- Will there be checks of passengers on the Georgian and Turkish borders?

- Of course, border guards of the two countries will carry out passenger checks.

- Will the car wheels be replaced, and at what points will this happen?

- In Akhalkalaki, tests have been successfully carried out for the replacement of wagon wheels for others (from the standard 1,520 mm to the standard 1,435 mm). Installations have been also tested to shift large containers from one car to another.

In 2007, the implementation of the BTK project began in the form of restoring the existing railroad and building the missing sections. Originally it was planned to launch the road in 2010, but due to numerous problems in the construction, the work was completed in 2017.

ASR earlier reported the maximum volume of cargo transportation along the BTK corridor is projected at 17 million tons of cargo per year. At the initial stage, about one million passengers and 6.5 million tons of cargo will be transported annually. The website of the State Oil Fund of Azerbaijan, which is the direct investor of the project, reports that until April 2017, the Ministry of Transport of Azerbaijan as a whole was allocated 630.9 million US dollars for the project, including 730,000 dollars in the first quarter of 2017. -0-

Electric Power Distribution Company Awards Contracts Exceeding 17 Million Manat to Retro Holding LLC

Baku / 24.10.17 / Turan: The State Electricity Distribution Company Azerishig OJSC awarded three contracts for the reconstruction of four substations located in the regions to Retro Holding LLC on October 23. The total value of the contracts exceeds 17 million manat.

OJSC Azerishig officially released information about the signed contracts through the register of state purchases. These agreements provide for the reconstruction of 110/35/10-kW substations in the Agjabadi, Agdash, Gabala and Ismayilli districts.

Retro Holding LLC has received 18 contracts from Azerishig for the purchase of equipment and construction and erection works for a total of 74.3 million manat in 2017.

Modernization and reconstruction of the electricity distribution network began in 2015. The family of the President of Azerishig OJSC Baba Rzayev owns several production and trading companies, which indirectly but actively participate in these works. ----08D--

White Gold Does Not Bring Dividends - Expert

According to official data, Azerbaijan spends hundreds of millions of dollars on the development of cotton production, but cotton imports are growing. "The question arises what the government spends money on," the expert on agrarian issues Vahid Maharramov said.

"By the way, following the results of 9 months of this year, the positions on the import of livestock products sharply increased. In comparison with the same period last year, imports of meat, milk and animals as a whole increased by 35%. So, while in January-September last year Azerbaijan imported these products amounting to 123 million dollars, this year the figure was $ 185 million. Dairy products imports rose by 69%, butter imports rose by 27%, and meat imports rose by 91%. Meanwhile the population"s purchasing power is falling, and the increase in import positions means reduction in the local production. In connection with this factor, the cost of this group of goods increased by 40-50%. The main reason for the decline in production is the problems caused by government intervention in the process. Unfortunately, there is also a problem with the preparation of feed. Despite the fact that it was scheduled to increase this figure to 2 million tons per year in the state program on agriculture development that started in 2008, only 12 thousand tons of fodder was harvested, according to the expert"s note in his Facebook profile.

Maharramov leads official data, according to which Azerbaijan has 2,700,000 head of cattle, 8,600,000 head of small cattle, and more than 100,000 horses and donkeys. The specialist wonders how they can possibly feed such a livestock with 12,000 tons of feed. In addition, over the last 2 to 3 years, more than 150 thousand hectares of land intended for grazing have been selected for arable needs, while already pasture land was twice less than the stipulated rate. Moreover, 20 thousand hectares intended for perennial forage crops are allocated for cotton growing. So it turns out that following the results of 9 months of this year the government gained from the export of cotton $ 23 million more than last year, and it was forced to spend an additional $ 62 million to import livestock products. So from cotton growing, in the aggregate, the government earned 41 million dollars, and it spent 185 million dollars on livestock products. So it turns out that so-called "white gold" did not bring any special dividends to the country."

"I must also note that the attempts of high-ranking government officials to please the President in the cotton epic led to additional negative consequences. In particular, in August, prices for butter rose sharply. The cost of imported butter rose by $ 1.5, or 30%, although world prices for cotton fell by 20%. Thus, all of the above in aggregate threatens food security," the expert said.

According to him, in the first nine months of this year imports of cotton also rose - whereas by October 1 of last year "white gold" amounting to 3 million 424 thousand dollars was imported, this year, this figure amounted to 3 million 466 thousand dollars. -0-

Painting of Road Lanes to Cost AZN Five Million

Baku / 24.10.17 / Turan: The Baku Transport Agency (BTA) under the Cabinet of Ministers signed two contracts for the painting of road lanes with a total cost of 4 million 844 thousand manat.

According to the state procurement register, the contract was received by the private company Yol Khatt, the main activity of which is the sale of road signs. In accordance with the agreement, the work totaling about 1 million manat will be done manually. The nature of the work is not reported.

BTA was established in December 2015. Its main function is the regulation of public transport in the capital. Prior to this, road police were involved in road painting. -----08D--

Cost Price of Travel in New Buses Exceeds Tariffs More than Twofold

Baku / 23.10.17 / Turan: Baku Bus LLC established by the government on the eve of the First European Games in 2015 has lost a total of about 150 million manat for its work year (2015-2016). About 28 million manat is direct losses of the company for passenger transportation.

The company announced its financial statements for 2016, according to which losses for last year alone amounted to 54.6 million manat. Of these, 15.7 million manat accounted for the share of operating losses. For the year, Baku Bus LLC benefited from passenger transportation only 12.6 million manat, while the prime cost exceeded 28 million manat.

With a base fare of 0.20 manat, the prime cost of the ticket is 0.45 manat (1 manat is 100 gapik).

Without taking into account the formation of the authorized capital, the government invested about 182 million manat in the development of LLC Baku Bus in 2015-2016. These funds were spent on the purchase of 506 buses and the creation of administrative buildings, garages and service centers. The government took several loans from the French bank Societe Generale, for which it owes about 178 million manat. The loans are to be fully repaid before November 2021. -----08B--

Food Prices Went Up by 5.4% in September

Baku / 24.10.17 / Turan: In September, the average price of the consumer basket for 30 types of basic food products of domestic production, compiled by the news agency Turan, increased by 5.4% in Baku.

The prices went up for tomatoes - 157%, cucumbers - 100%, eggs - 44.4%, potatoes - 40%, cabbages - 30.7%, butter - 22.9%, chicken giblets - 14.8%, salt-12 , 5%, cheese - 7.5%, and beef - 4.5%,

The prices fell for onions - 12.5% and apples - 34.7.

The prices for other products remained unchanged.

The rise in prices for vegetable products is associated with the end of the summer season. Rising prices for products such as butter, cheese and eggs are speculative in nature, caused by monopoly. There is also a factor of low purchasing power of the population and a decline in the standard of living as a result of the crisis.

Experts associate increase in the prices for meat with reduction of the areas of pastures which this year are taken away under cotton plantations. There is a tendency to decrease the number of livestock due to the lack of food.

We should expect further growth in food prices due to the lack of cheap seasonal food products and the growth of protein food of animal origin in the diet.

FoodsPrices by Agust 1, 2017Prices by October 1, 2017Change
Beef11.011.50+ 0.50
Chicken giblets2.703.10+ 0.40
Sturgeon 35.035.00
Butter12.6515.55+ 2.90
Corn oil (1 liter)3.803.800
Eggs (10)0.901.30+ 0.40
Granulated sugar1.201.200
Lump sugar1.701.700
Salt0.400.45+ 0.05
Flour (Sort I)0.480.480
Milk (1 liter)1.401.400
Sour cream (100 grams)0.600.600
Sour milk (1 liter)1.751.750
White cheese6.06.45+ 0.45
Local biscuits 2.102.100
Potatoes0.500.70+ 0.20
Onions0.400.35- 0.05
Cucumbers0.501.0+ 0.50
Tomatoes0.701.80+ 1.10
Cabbages0.650.85 +0.20
Apples1.150.75- 0.40
Green vegetables (1 bunch)0.200.200
114.13120.38+ 6.25

USD Rate at Latest Auction

Baku / 24.10.17 / Turan: Following the results of the latest currency auction held by the Central Bank with the participation of the State Oil Fund of Azerbaijan on October 24, the average rate of USD to AZN was determined at the level of AZN 1.7002 per USD 1. --0-

Mugan Banks Loss Exceeds AZN Four Million

Baku / 24.10.17 / Turan: In the third quarter of 2017, the assets of Mugan Bank decreased by 60 million 802 thousand manat or 12.5% ​​compared to the same period of the previous year, amounting to 423 million 923 thousand manat.

During the reporting period, the bank"s liabilities amounted to 365 million 265 thousand manat (a decrease by 61 million 673 thousand manat or 14.4%).

The bank"s capital in annual terms increased by 871 thousand manat or 1.5% and is 58 million 658 thousand manat.

For the three quarters of 2017 the bank received AZN 804,000 as income from foreign currency operations.

The bank completed three quarters of this year with a loss of 4 million 626 thousand manat. -71D-

Depositors of Eleven Bankrupt Banks Paid AZN 747 Million 938 Thousand

Baku / 24.10.17 / Turan: The Deposit Insurance Fund has paid AZN 747 million 938 thousand to the depositors of 11 bankrupt banks. The specified data are as follows: United Credit Bank - AZN 1 million 837 thousand (87.5%), Bank of Azerbaijan - AZN 24 million 191 thousand (97%), Gandja Bank - AZN 976,441 (94%), Tekhnika Bank - AZN 120 million 408 thousand (98.2%), Para Bank - AZN 43 million 222 thousand (98.5%), Zamin Bank - AZN 72 million 196 thousand (99.3%), Credo Bank - AZN 27 million 914 thousand (99.6%), Deka Bank - AZN 3 million 88 thousand (98.8%), Atra Bank - AZN 14 million 352 thousand (98.2%), Gafgaz Inkishaf Bank - AZN 2 million 4 thousand (95.9%), and Bank Standard - AZN 437 million 745 thousand (99.2%). -71D-

Foreign currencies rates fixed by Central Bank

1 ABŞ dollarıUSD1.7001
1 AvroEUR1.9997
1 Avstraliya dollarıAUD1.3293
1 Argentina pesosuARS0.0976
1 Belarus rubluBYN0.8702
1 Braziliya rialıBRL0.5251
1 BƏƏ dirhəmiAED0.4629
1 Cənubi Afrika randıZAR0.1242
100 Cənubi Korea vonuKRW0.1507
1 Çexiya kronuCZK0.0779
100 Çili pesosuCLP0.2683
1 Çin yuanıCNY0.2565
1 Danimarka kronuDKK0.2686
1 Gürcü larisiGEL0.6798
1 Honq Konq dollarıHKD0.2179
1 Hindistan rupisiINR0.0262
1 İngilis funt sterlinqiGBP2.2482
100 İndoneziya rupiasıIDR0.0126
100 İran rialıIRR0.0045
1 İsveç kronuSEK0.2074
1 İsveçrə frankıCHF1.7264
1 İsrail şekeliILS0.4871
1 Kanada dollarıCAD1.3464
1 Küveyt dinarıKWD5.6257
1 Qazaxıstan tengəsiKZT0.0051
1 Qırğız somuKGS0.0248
100 Livan funtuLBP0.1121
1 Malayziya rinqqitiMYR0.4015
1 Meksika pesosuMXN0.0892
1 Moldova leyiMDL0.098
1 Misir funtuEGP0.0964
1 Norveç kronuNOK0.2126
100 Özbək somuUZS0.0211
1 Polşa zlotasıPLN0.473
1 Rusiya rubluRUB0.0296
1 Sinqapur dollarıSGD1.2507
1 Səudiyyə Ərəbistanı rialıSAR0.4534
1 SDR (BVF-nun xüsusi borcalma hüquqları)SDR2.3931
1 Türk lirəsiTRY0.4587
1 Tayvan dollarıTWD0.0562
1 Tacik somonisiTJS0.1931
1 Yeni türkmən manatıTMT0.4858
1 Ukrayna qrivnasıUAH0.064
100 Yapon yeniJPY1.4995
1 Yeni Zelandiya dollarıNZD1.1794