Business

Azerbaijan, Georgia, Turkey to lay gas pipeline shortly
The Azerbaijani, Georgian and Turkish presidents are expected to give the go-ahead to construction of the Baku-Tbilisi-Erzurum gas pipeline within the next few days, reliable sources have advised AssA-Irada.
"This will mark the beginning of the first stage, which will be followed by routine work," Georgian President Eduard Shevarnadze was quoted by Interfax's Tbilisi bureau as saying.
Commenting on his talks with representatives of the International Financial Corporation and the head of the European Bank for Reconstruction and Development, who arrived in Georgia to discuss details on financing the Baku-Tbilisi-Ceyhan oil pipeline, Shevardnadze did not doubt that further funding of the project would be approved.
He said that financial support from these international organizations had helped complete the construction of the Baku-Supsa oil pipeline. "If the first project had not been developed, the oil and gas pipelines might have remained a dream," he said. Representatives of the International Financial Corporation (IFC) and the EBRD inspected the route of the future oil pipeline and confirmed that it's environmentally safe," he said.
The Baku-Tbilisi-Erzurum gas pipeline is expected to be put into service in 2006. Its annual capacity is 30bn cubic meters of gas. Under an intergovernmental agreement, concluded with Azerbaijan, Georgia will receive 5 per cent of the total volume of gas transit for free. During the first 20 years, Georgia will have the right to buy an additional 500m cu m of Azerbaijani gas at lower prices.

Sah-Daniz project to be sanctioned
The first phase of the Sah-Daniz project and the Baku-Tbilisi-Erzurum gas pipeline project will be sanctioned on February 27, BP Azerbaijan has advised AssA-Irada.
At first, a decision developing  the first phase of the Sah-Daniz project will be adopted, then construction bidding will start.
Platform building, expansion of Sangacal terminal, constructing pipeline to connect the platform to the seashore will be carried out within the framework of the construction works. SOCAR president Natiq Aliyev has said that the European Bank of Reconstruction and Development guaranteed to fund SOCAR's 10 per cent stake ($320m) in Sah-Daniz and the bank board will pass an appropriate decision soon. It is planned to hold  ground-breaking ceremony of the Baku-Tbilisi-Erzurum gas pipeline with participation of the Azerbaijani, Georgian and Turkish presidents, including officials from the US Energetics Ministry.
It is envisioned to export 2bn cu m of gas through the Baku-Tbilisi-Erzurum pipeline for the first stage and to bring this figure to 6,6bn cu m in 2008. Participants in the project to develop the project include SOCAR - 10%, BP - 25.5%, Norway's Statoil - 25.5%, Russian- Italian joint venture LUKAgip - 10%, France's TotalFinaElf - 10%, Iran's OIEC - 10% and Turkey's TPAO - 9%.

IFC launches local  business benefit program
The International Finance Corporation, the private sector arm of the World Bank Group, has partnered with BP, Statoil, GTZ (the German agency for technical assistance), and the Baku Enterprise Center to launch a program to help local businesses benefit from investment in the oil industry, including the Baku-Tbilisi-Ceyhan pipeline. The IFC is contributing $250,000 to the program,  IFC press release states: The program is part of the IFC's strategy of working closely with its clients and partners to provide developmental support to major projects. This support is directed at expanding the local supply and distribution chains to create more opportunities for smaller businesses and to assist in sustainable community development efforts.
The program which is linked to IFC's proposed investments in both the Azeri, Ciraq, and Deepwater Gunasli oilfield and the Baku-Tbilisi-Ceyhan pipeline projects, is being launched initially in Azerbaijan and will be expanded to Georgia and Turkey.
The objective of the program is to better equip Azeri businesses to participate in business opportunities related to, but not exclusively,  ongoing oilfield developments. The program focuses on helping companies overcome obstacles preventing them from winning contracts related to the projects. The program centers on three principal areas:
-Technical assistance to targeted Azeri service and supply companies
-The development of local consultancy capacity in the provision of business services
-The development of new financial products aimed at improving access to capital for small and medium enterprises (SMEs) in Azerbaijan.
Up to 30 local companies will take part in the program and will come from subsectors that the project team has already identified as providing long-term opportunities when the oilfield projects come online.
Each company will undergo a "diagnostic" review to establish what sort of technical assistance is needed. The assistance will then be tailored to their needs and provided over a period of one year, addressing issues such as business planning, assistance with access to capital, management training, and the attainment of standards required by the international business community based in Baku.
Also included in the linkage program will be the generation of an "SME map", which will describe the business environment in which local companies operate, including access to enterprise support services and finance.
All of the partners in the program ? BP, Statoil, GTZ, and the Baku Enterprise Center?are providing funds in kind and in cash. GTZ will be responsible for delivery of the program providing expertise to work with local companies. The Baku Enterprise Center will provide data on the industry as well as individual expertise. A full-time SME coordinator will manage the program on behalf of the partners.

IMF mission due
A next International Monetary Fund (IMF) mission headed by John Wakeman-Lin is expected to arrive in Azerbaijan on February 19. The visit aims to discuss a three-year joint program on poverty reduction and economic growth. They will also consider issues relating to Azerbaijan's fulfillment of its commitments to the currency regime and maintenance of currency parity. The Minister of Economic Development Farhad Aliyev has told journalists that a number of measures were taken to address some problems between the government and the IMF. According to Farhad Aliyev, these problems will be discussed during the IMF mission visit. He noted that Azerbaijan could receive the third loan installment worth $16m from IMF in May as a result of the discussions.
Earlier, the IMF had decided to allocate a $100m loan to Azerbaijan for the poverty reduction and economic growth program.

Tax code changes top agenda
The Azerbaijani National Confederation of Entrepreneurial Organizations (ANCEO) hosted a workshop on Friday entitled, Addenda and Changes to the Tax Code, involving representatives of the Tax Ministry and private business. The chairman of the confederation Alakbar Mammadov said that last year the ANCEO had submitted a number of suggestions to parliament, some of which have been taken into consideration, for instance, the profit tax rate being misaligned regionally. Moreover, simplified tax is imposed on businesses whose turnover is above AZM125m quarterly, and a simplified tax rate is defined at two per cent in rural areas and four per cent in Baku. Meanwhile, entrepreneurs are reported to be concerned about the fact that the simplified tax rate in the transport sector is not subject to the volume. Alakbar Mammadov pointed out that entrepreneurs were also dissatisfied by the withdrawal of the finance leasing preference from the Tax Code, non-cash VAT payment by legal entities. In general, changes to the Tax Code favor business.
A Tax Ministry official made a report of the event.

Ministry closes int'l channels of AzEuroTel
The AzEuroTel Company has advised AssA-Irada that the Ministry of Communication closed the company's international channels at 22:58 on February 16. This disconnection lead to unavailability of Internet services and international communication for subscribers, including companies, banks and embassies. Currently, the AzEuroTel management is investigating the reason for the shutdown with the ministry.
In its press release, AzEuroTel considered the ministry's move to be unlawful, saying that it would apply to the courts if the ministry failed to reopen channels soon.
Efforts to find out the ministry's stance on the issue were unsuccessful. The Ministry will announce its position on Tuesday.

New website set up to support Azeri SMEs
The Azerbaijan Ministry of Economic Development presented an Internet site on Monday, www.sahibkar.biz.internet, in an attempt to assist entrepreneurs. The spokesman for the ministry, Agacan Ahmadov told the ceremony that a presidential decree dated September 28, 2002, on preventing interference which hinders the progress of Entrepreneurship, had instructed the Ministry of Economic Development to establish an operative contact system with entrepreneurs and to set up the site, State Patronage to the Entrepreneurship to ensure execution of the decree. In three languages, Azeri, English and Russian, the new site includes such sections as Consultancy, Legislation, Suggestions, Contacts, Operative Line, and Answers.

Azercell increases roaming contracts
Azercell JV, the Azerbaijani mobile communication market leader, has concluded a roaming contract with the leading cellular operator of Belarus, MDC working in GSM 900 standard. The MDC became the 143rd operator of cellular communications to sign a roaming contract with Azercell JV. Azercell JV now has roaming contracts with 143 operators from 70 counties worldwide.
In the CIS, Azercell JV cooperates with Russian, Ukrainian, Moldavian, Georgian, Kazakh, Tajik, Kyrgiz, Turkmen, and Belarus operators. Furthermore, Azercell has signed roaming contracts with European, Asian, American, African and Australian providers of mobile communication services.

President hosts economic meeting
Azerbaijani President Heydar Aliyev held a meeting on Friday to discuss issues relating to economic development, reforms and execution of the state budget.
In his speech, Heydar Aliyev stressed the necessity for increased responsibility by leading officials and a sound recruitment policy to ensure issues discussed are also implemented. He also set forth route-specific tasks and instructions for the Cabinet of Ministers and ministries.

Dutch experts visit Baku Stock Exchange 
A technical assistance project to support the Baku Stock Exchange (BSE) and the State Committee on Securities (SCS) was launched in December last year at the account of an International Finance Corporation grant. The project was intended to last till May. A mission from the Netherlands-based ATOS KPMG consulting has stayed in Baku over February 10-13. During the visit, the mission became acquainted with the BSE infrastructure and technical scope, conducted approbation of simulative location system. A workshop-conference involving specialists of the BSE, SCS and National Depository Center was held on February 12. The visitors shared work experiences and familiarized participants of the conference with the development stages of the Amsterdam Stock Exchange.
The next stage of the project is due to start in March. To finalize the project, a group of specialists from the BSE and SCS will be sent to Amsterdam.

Int'l banking summit due
The Azerbaijani Banks Association has informed AssA-Irada that an international summit on banking and financial issues will be held in Istanbul, Turkey, on February 19-20, with participation of 12 nations from CIS and Caspian region. The summit will highlight issues pertaining to the investment environment and banking, as well as cooperation among financial institutions. Also discussed will be the role of international financial agencies in these countries. Azerbaijani ministers and bank heads are expected to attend the event.

No increase in metro prices
In a news conference at the ruling New Azerbaijan Party's headquarters on Friday Head of the Baku Metro Department, Tagi Ahmadov stated that metro tariffs would not rise.
He told journalists that Baku Subway had transported 108m passengers last year, though expenses for transporting one passenger cost AZM1,690, the government did not plan to increase tariffs. The metro chief dismissed rumors claiming that plastic cards would be applied in the Baku metro, saying that since this system had proven to be inefficient, Azerbaijan had refused it.
Mr. Ahmadov said that this year 25 more wagons would be purchased, while 40 wagons would undergo major repairs. 225 wagons are required to ensure stable traffic on the metro. In total, it will take AZM60bn to make sure that the system functions normally.
As for a problem which emerged between the Baku metro and Barmek, he indicated that the government itself tackled the issue, since the metro operated unprofitably and was subsidized by the government.

First stage of land reforms completed
The State Land and Mapping Committee has advised AssA-Irada that the first stage of land reforms was completed. According to the latest data, 858,142 of 874,565 families to get a land plot have already received official documents on land property. Thus, 1,379,754 hectares of 1,395,000 hectares of land to be transformed to the private sector have been offered to the owners, effctively privatizing 98.4 per cent of the land.