PRIMARY COMPONENT

For two years now, Azerbaijan has been implementing a large-scale programme to revive the liberated territories of Garabagh. Local construction companies, as well as contractors from Turkey and several other countries are involved in the construction of many hundreds of kilometres of roads and the restoration of energy, utilities and social infrastructure in towns and villages destroyed by the Armenian invaders. A new airport has recently been opened in the district of Zangilan thanks to extensive international cooperation. These projects considerably boost the domestic construction industry attracting foreign contractors as well.     

Principal direction: Infrastructure

Numerous infrastructure projects that Azerbaijan has been implementing over the past two years as part of the reconstruction and development of the Garabagh and East Zangezur economic regions are transforming the liberated lands at an unprecedented rate. In addition to the ongoing demining process, the works include the construction of power lines and substations in these territories, restoration of other energy and communal infrastructure, construction of residential and administrative buildings and hotels, and the establishment of first industrial and agricultural clusters in Shusha, Aghdam, Jabrayil, Zangilan and Fuzuli. In two years, the state budget provided ₼4.4 billion for these purposes, while additional ₼1.5 billion was allocated in June mainly for road construction projects, following a review of the budget revenues.

The latter is not surprising, since the bulk of funding has been directed towards rebuilding the region's devastated road and transport infrastructure. The construction of roads, bridges and tunnels and other road infrastructure in Garabagh is unprecedented in scale and the concentration of financial resources, with a total length of roads over 700 km. To assess the magnitude of works carried out in difficult mountainous terrain it is worth recalling that the length of 33 tunnels exceeds 50 km and the length of 84 bridges under construction in the region is more than 12 km. A little less than half of the roads and engineering structures, as well as a considerable part of the railway line have already been completed, while active works are underway on a dozen other sections. Together with Azerbaijani construction companies, a number of Turkish, Italian, German, Israeli and other contractors are involved in road, power and other infrastructure projects.

Equally important, capital-intensive transport infrastructure rehabilitation projects are aimed at developing the region's transit potential as part of the diversification of the Middle Corridor's destinations and strengthening its most important component, such as the Zangezur route.

Also, the construction of international-level airports continues in Garabagh. In October 2021, the Fizuli airport was put into operation, and on October 21, 2022, the presidents of Azerbaijan and Turkey attended the opening ceremony of another international airport in Zangilan dedicated to the two-year anniversary of the liberation of the district from the Armenian occupation.

"A year ago together with my dear brother we opened an airport in Fuzuli. Today we do the same in Zangilan. This shows that we are together on all joyous days," President Ilham Aliyev said at the opening ceremony of the airport.

"The Zangilan international airport opened today indicates that Azerbaijan, which has demonstrated heroism to liberate these lands, is now demonstrating its commitment to develop Garabagh. The involvement of Turkish companies in this important project is a source of particular pride for us," Turkish President Recep Tayyip Erdogan said in his inaugural address. He added that the construction of the Zangilan airport was a strategic step to restore and strengthen Garabagh links with the world.

At the same ceremony President of Azerbaijan Airlines Jahangir Askerov said that the runway length and width at the Zangilan International Airport is 3,000 m and 60 m. Therefore, the airport will accommodate all types of aircraft, including heavy wide-body transport aircraft.

The apron has an area of 60,000 sq. m. The airport will make it possible to conduct flights in accordance with the ICAO and IATA standards.

The terminal of the Zangilan airport meets modern world standards and can handle 200 passengers per hour. The air traffic control tower is equipped with automated control systems.

In order to ensure flight safety in accordance with ICAO requirements, the airport uses modern support aeronautical systems from leading Italian and German manufacturers. It is also equipped with the ILS/DME instrument landing systems, VOR/DME aircraft navigation systems, automated aeronautical and meteorological surveillance systems, as well as primary and secondary radar systems. All of these facilities have been registered in the respective ICAO and Eurocontrol catalogues.

There are a number of objective factors behind the government's focus on the development of an extensive aviation infrastructure in Garabagh. The large-scale construction works in the region attract many thousands of professionals, businesses, international community and the media. Several international airports in Garabagh make it possible to ensure convenient and rapid communication with the rest of the world. In the longer term, the presence of modern airports will be a vital transit element that will complement the land communications of the Zangezur corridor. The difficult political and military situation in the region should not be overlooked either, which makes the presence of airfields capable of receiving heavy military transport aircraft when necessary. At last, without developed air communication it is simply impossible to ensure a mass inflow of tourists to the region, which is considered a key element of the recreational potential of Garabagh and Eastern Zangezur. Cumulative factors necessitate the operation of other airports in the liberated territories. Thus, preparatory works have been accelerated for the early construction of an international airport in Lachin, while in the longer term it may be possible to explore the prospects for another airport in the industrial heart of the region, Aghdam.

Growing interest

All the above works to create primary infrastructure in the liberated territories have been completely funded by the state budget. At the same time, Azerbaijan is extremely interested in attracting foreign contractors, private investors and donor organisations to these projects. Moreover, local and especially foreign companies are seen not only as drivers of capitalisation in the future economy of Garabagh. They should also be sources of modern technology and know-how, to create a competitive environment, to reduce financial and technical costs, to create new jobs and to ensure the production of export-oriented products.

Remarkably, the interest is mutual - numerous companies from Turkey, as well as other neighbouring countries, Europe and Asia, are interested in participating in contract works in the liberated territories.

Moreover, the number of investors willing to invest funds in the development of industry, agriculture, green energy, tourism and other business areas in Garabagh is growing dynamically.

This consistent trend was also confirmed at the 2nd Azerbaijan International Rebuild, Reconstruction and Development Exhibition: Rebuild Garabagh 2022 held on October 19-21. The main focus of discussions during respective conferences held in the course of the exhibition were investment opportunities and demand for contractors in the Garabagh and East Zangezur economic regions.

Today the process is accelerating. The number of proposals from businesses to participate in the reconstruction of Garabagh has increased to 1,300, with 460 of them from foreign companies. The lead belongs to Turkish companies planning to develop the mineral resources of the region. These include gold and copper mines, as well as the development of tourism, agricultural processing, production of clothing and consumer goods, construction materials, construction services, etc. There are applications from Kazakh companies, as well as a number of proposals from various entrepreneurs from Hungary, Uzbekistan, Britain, Israel, Pakistan, Russia (a total of 40 countries).

With the demining and primary infrastructure construction works close to completion, the number of local and foreign residents in the Aghdam Industrial Park and the Araz Valley Economic Zone in Jabrayil is expected to multiply. There is an investment component in agriculture clusters being created in Zangilan (for example, the Azerbaijani-Turkish JV Dost Aqropark and smart village Aghaly), projects focused on tourist zones in Shusha and Kalbajar and a number of other liberated regions. According to experts, over time, private investments can reach multi billion dollars, and this process is not far away. By the end of this year, the total volume of private investment in Garabagh is estimated to reach ₼300 million.

The ongoing infrastructure and construction works also have an equally important multiplier effect, supporting the development of the domestic construction industry. According to the State Statistical Committee, in January-September 2022, the production of construction materials in Azerbaijan increased by 17%, which amounts to ₼808.9 million. In other words, the "big construction" in Garabagh is also the key catalyst for the development of leading components of Azerbaijan's non-oil sector, bringing closer the government's goal to make it the dominant factor of the state budget revenues.