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 Program Resume - ARRA Program Description (ARRA)

 Duration: 31.05.1999 - 29.11.2002
 Location: Agdam
 Sectors: Other
Water and sanitation

For the Implementing Agency
Azerbaijan Agency on Reconstruction and Rehabilitation of Areas (ARRA)
For the Commission of European Union (EC)


The following Overall Work Plan (OWP) is structured according to thebasic format of the Logical Framework Matrix (LFM) and is outlined in Annex 1. The LFM isinvaluable in providing an opportunity to synthesize the various expectations of allinterested parties.

This search for an agreed purpose highlights the importance to theprogramme of clearly defining goals within the framework of cooperation between theCommission of the European Union (CEU) and the Government of Azerbaijan Republic as setout in the Financing Agreement (FA). The basic format will be applied after the initialphase (First Implementation Plan, covering the preparatory period up to the award ofcontracts) and used to the direct the commencement of project implementation and allsubsequent monitoring and evaluation.

The key elements of this Overall Work Plan are as follows:


This heading covers a description of the general context in which theRehabilitation of the Region of Agdam Programme will be carried out. It also includes thepopulation, geography, climate, economic activities, land use patterns, social andphysical infrastructure of the Agdam region.


The general objectives, purpose, results and activities are establishedunder this section. For the initial phase of the programme, emphasis is placed on therequirements to establish an appropriate operational framework to facilitate thefulfillment of particular objectives of the projects.


This section considers the preconditions required in order to effect theimplementation of the proposed activities.


The organization of the implementation procedure during the initialphase is dealt with under this heading.


This section takes into account those factors upon which the programme'ssustainability rests.

Monitoring and Evaluation

This heading covers the requirement to establish accurate and effectiveindicators as soon as possible, so as to facilitate an ongoing comparison of actualachievement at various levels against the objectives.

2. Background

2.1 Financing Agreement

The Financing Agreement, Project number EUR/B7-6410/IB/97/0825 for theRehabilitation of the Region of Agdam was signed on 27th February 1998. The programme has a duration of 18 months and is funded by theEU. The total cost of the programme is 5 MECU and EU contribution is 4 MECU, as grant. TheGovernment of Azerbaijan Republic contribution, in kind, will be to the value of 1 MECU.

2.2 Background to Implementation Area (Agdam)

2.2.1 Population

The total population of Agdam Region, before occupation, was more than120,000. The territory was 1094 sq. km. in size.

At present, 70% of the territories of the region are under occupation byArmenian armed units. Only18 settlements have been liberated, where previously 17.800people lived. Currently, about 24000 IDP's live in camps within the Region.

2.2.2 Geography, Vegetation, Climate

Agdam Region is situated in the north-east of part of the Karabakhmountains. The relief of the region is mainly steep, gradually transient to the foothillsof the mountains. The climate is temperate-subtropical. The average temperature in year is+14,7deg.?. The average annual precipitation is 409 mm.

2.2.3 Economic Activity

The agro-industrial sector was predominant within the Region. A meatprocessing factory, creamery, wine and carpet factories, silk-yarn factory, quarry andmetal hardware production plant functioned. Cotton, viticulture, wine-making and livestockcomprised the predominant agricultural activities.

The region is rich in deposits of limestone and other constructionmaterials, such as cement, road metal, sand etc.

2.2.4 Land Use Patterns

The soil is structured as follows: Loams - yellow - grey, sandy loamsand clays. Soil water lays at a depth of 1-1,8 m, medium aggressive against the concrete,the soils are group II and III.

Agriculture uses 91.300 ha of the land, of which 33.900 ha is arable,13.200 ha perennial plantations and 39.000 ha pasture.

2.2.5 Social and Physical Infrastructure

Prior to occupation, there were 40 kindergartens, more than 100secondary schools, 7 professional technical schools, 71 libraries, 15 palaces of culture,27 cinemas and 20 hospitals in the region. The minimum available housing was 2,1 millionsq. m (35000 apartments) in total, including 1,9 million. sq. m. of individual housing.

Since 1967 the railway Yevlakh - Agdam was in operation, the main roadsYevlakh - Lachin - Nakhichevan and Mardakert - Fizuli pass through the Region.

Electricity was supplied by a 110/35/10 KW substation at"Agjabedi" with its 2 lines HVL-110 KW from the 330/220/110 KW"Agdam"substation.

Water supply of the region comprised bore-hole wells and artesiansystems for drinking and irrigation supply.

It is necessary to note, that the whole social and technicalinfrastructure of the region was destroyed by military operations.

The consumers of Agdam and Agjabedi regions having no power, have beenpartially supplied by a temporary scheme from "Imishli" substation.

The disabled artesian bore-holes and the rivers of Khachin and Gargarcontribute only a small amount of water and are not able to provide the population of theregion with a water supply.

All the schools are partially destroyed and because of this there are noopportunities of for normal studies by the children of returnees.

3. Intervention

3.1 Objectives

The general objective of this programme is to contribute to therehabilitation of the basic infrastructure in the region of Agdam in Azerbaijan. Theregion borders occupied territory and has been damaged during military actions. Therehabilitation activity will improve the living conditions of local population andinternally displaced peoples (IDP's) and will create conditions to re-start economicactivity in the region.

3.2 Purpose

The purpose of this programme is the improvement of basic physical andsocial infrastructure damaged during the Nagorno Karabakh conflict through rehabilitationof the electricity, drinking and irrigation water supply systems and the schools.

3.3 Results

It is expected that after completion of the rehabilitation workselectricity will be supplied, on a regular basis, from the circular network of Azerbaijanvia the new electrical transmission line. Through the rehabilitation of water bore-holes,both drinking and irrigation water, supply will be improved. The repair of the schoolswill provide conditions for the return of internally displaced people (IDP's) to theirnative places.

3.4 Activities

The programme activities comprise the implementation of the followingworks:

3.4.1 Rehabilitation of Electricity

  • Construction of 80 km of 110 KW electrical transmission line (ETL) from Imishli to Agcebedi;
  • Extension of no.10 division of 110 kV Agcebedi ETL in 330/110/35/10 KW sub-station.

3.4.2 Rehabilitation of Drinking Water SupplySystem

  • Overhaul and cleaning of the existing 40 bore-holes, including installation of rising mains, submersible pumps, pipes and valves;
  • Installation of 63 –100 kVA KTP (transformers) 10/0.4 KW ETL, poles and automatic control system CASCAD.

3.4.3 Rehabilitation of Irrigation Water Supply

  • Repair of the existing 40 wells, over-haul and cleaning of the bore-holes, including installation of rising mains, submersible pumps, pipes and valves;
  • Installation 63 –100 kVA KTP (transformers) 10/0.4 KW ETL, poles and automatic control system CASCAD.

3.4.4 Rehabilitation of Schools

To rebuild and repair the roofs of 11 secondary / high schools atChemenli, Sarichali, Afetli, Hajiturali, Ahmadagali, Garadagli, Evoglu, Rizalar,Zengishali, Mahrizli and Hindiristan villages. In addition, the works will includerenovation of 10 classrooms and 5 small administration / teacher's rooms, corridors,entrances and external work in each of the schools.

  • Rebuilding and repair of the roofing;
  • Renovation of the 10 classrooms in each school;
  • Renovation of the 5 small rooms, corridors, entrances and the external Work;
  • Rehabilitation of electricity and water supply systems of the schools.

4. Assumptions

The implementation of the projects and their long-term sustainabilitydepends on the following factors and assumptions. (Additional assumptions have beengenerated in Annex 1. LFM)

  • The Government of Azerbaijan (GoA) will ensure that the local population and the IDP's will be used extensively in the implementation of works;
  • The GoA will provide for free movement of personnel and contractors and will create the necessary security conditions;
  • Involvement by the beneficiaries is sufficiently high throughout all stages of the project cycle – active participation is the key to long term sustain ability;
  • The regional GoA Departments, Ministries and other organizations provide support to the programme;
  • The cooperation procedures and relationships of relevant organizations to the programme are positively defined.

The major risk to the programme is the violation of the peace at thefrontline, therefore the programme must remain flexible in approach due to Diaspora needsand the nature of the work involved.

5. Implementation

5.1 Organization and Procedures

5.1.1 Institutional structure and Responsibilities

The projects will be implemented on behalf of the Commission of theEuropean Union and Government of Azerbaijan, through the State Commission on Restorationand Reconstruction, headed by a deputy Prime Minister.

The Government of Azerbaijan appointed the Azerbaijan Agency forRehabilitation and Reconstruction (ARRA), which is responsible for the operationalmanagement of the project (Implementing Authority)

Technical assistance for the management and supervision of the projectwill be provided by the EC under the TACIS programme.

The works/supply contracts will be implemented by local/ internationalcompanies, contracts being awarded on the basis of an open tender.

The Government of Azerbaijan will create all necessary conditions forthe proper implementation of this project with respect to the Financing Agreement (FA).

The Implementing authority (ARRA) is responsible for the operationalmanagement of the project. The Implementing Authority have prepared technicalspecifications, tender dossiers, issue invitations to tender and will conclude contractsaccording to the rules set out in the annex of the FA Technical and Administrativeconditions

The Implementing authority will ensure proper performance of the worksby the contractors: they will be responsible for supervision of works and for theprovisional and final acceptance. Payments to contractors, in local currency, will beeffected by the Implementing authority. The Implementing authority will establishappropriate accounting and book keeping as per the provisions of the Financing Agreement.

5.1.2 Management of Impress Accounts

The Implementing Authority with the International Bank of Azerbaijan.Payments to contractors in local currency will be effected from this account.

Transfer of funds for local expenditures will be carried out at the rateof exchange applied by the bank at the date of the transaction.

For reimbursements, conversion from one foreign currency into ECU willbe carried out at the rate of exchange published in the "Official Supplement of theEuropean Communities" after the 10th day of the month in which the expense isincurred

All expenses covered by the EC grant will be supported by records suchas invoices, receipts, bank accounts and statements. Such documents, as well as theaccounts books shall be kept for at least five years from the last payment. The project'saccounts books shall employ double entry book keeping and shall include the registrationof each receipt and each expense. The accounting results of these books must appear in ageneral book of the project, including account of interest received.

The EC may request the application of minimum criteria of analyticalaccounting, according to the nature and the needs of the project.

5.2 Work Plans and Timetable

The project will be implemented on the basis of an overall work plan(OWP) (see ANNEX 2) and successive implementation plans prepared on a regular basis, dulyapproved by the CEU.

The attached Time Schedule of the OWP and the 1st Implementation plan(IP) is herewith being presented to the CEU. The OWP indicates all the project activities,time schedule/implementation calendars, estimation of financing requirements, etc. The 1stIP is covering the preparatory period up to award of contracts and based on two weeksapproval period each for (OWP, tender documents, evaluation report and the recommendationfor the awards), by the CEU.

Tender periods for works (5 lots) and supplies (3 lots) contracts shouldbe preferably one month, maximum six weeks. The tender documents and the technicalspecification for all 8 lots have been prepared and are now being presented to CEU forapproval.

The OWPl will be updated after awarding the contracts for theimplementation of the works and will contain the final technical and financial data, asper the awarded contracts. Subsequent implementation plans will be presented on athree-month basis starting after the award of contracts. The plans will contain detailsfor each individual project component, including the implementation of the componentfinanced by the GoA.

6. Financing and Budget

The Total project cost is 5 MECU, of which EC Contribution is 4 MECU.The GoA contribution in kind will be the provision of 302 tons of aluminum-steel wireAC-300 for the 110 kV ETL between Imishli and Agcebedi, the value of which will be aminimum of 1 MECU.

Budget Breakdown in MECU will be as follows:

Works/ Supplies EC (%) GoA. Total
1. Rehabilitation of Electricity 2 (66.7) 1 (33.3) 3
2. Rehabilitation of Drinking Water 0.7 (100) 0 0.7
3. Rehabilitation of Irrigation Water 0.7 (100) 0 0.7
4. Rehabilitation of Schools 0.6 (100) 0 0.6
Total 4 (80) 1 (20) 5

7. Factors Ensuring Sustainability

Any guarantee of sustainability comes with correctly following theintervention practice throughout all stages of the project cycle. The tender documents andcontracts must also demonstrate a commitment to these ideal systems, methods andprocesses. In addition devolution of responsibility from ARRA to beneficiaries and to theinstitutions responsible for the operation of the infrastructure is essential becauseactive participation is the key to project success.

8. Monitoring and Evaluation

The implementation of the projects will be permanently supervised byARRA. EC will appoint a technical assistant to monitor and supervise the programme. ECreserves the right to appoint an independent audit during the implementation of theproject and before effecting the final payment of project funds and commission an externalevaluation at the end of the programme.

8.1 Reporting

The Implementing Authority will present, to the Commission, progressreports on a three-monthly basis. The reporting period will correspond to the preparatoryperiod and to the three-month period covered by the implementation plans. The progressreports will contain:

  • The information about general activities implemented in the framework of the project, and executed works:
  • The budgetary execution, broken down according to financial sources:
  • The budgetary provisions for the next three-month period and until completion of the project;
  • The problems encountered, solutions found;
  • The recommendations related to the implementation of the project;
  • The details about each individual project component and about the implementation of the component financed by the beneficiary.

The final report will be prepared after completion of works and theirprovisional acceptance.

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