2011 - Armenia, Intermodal Project, International Logistics Centre (ILC) at Zvarnots international airport

     

    2011 - Armenia, Intermodal, International Logistics Centre (ILC) at Zvarnots international airport

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    Intermodal - The Zvartnots International Airport site of 36 ha is located about 12 km to the south-west of Yerevan city centre, adjacent to the Airport (300 m).


    The nearest city road is 1.5 km away and the direct distance to the main railway line is approximately 1.3 km, providing opportunities for easy connections to the site.

    Technical description

    The proposed ILC at the Zvartnots International Airport will be developed as a competitive logistics site and as an integrative part of the TRACECA network. The site will offer several logistics functions and well developed land plots with excellent infrastructure and facilities for logistics service providers and logistics intensive industries. The potential for the ILC in Yerevan lies in the development of more diversified export products (including food processing based on domestic agriculture) and the development of foreign trade relations with Georgia, Turkey and Iran. The identified needs and site requirements of potential private sector stakeholder and partners are the following:

    • New capable and well accessible road access from/to main TRACECA road M4 (Yerevan - Sevan - Dilijan - Ijevan - Tbilisi).
    • New accessible road access from/to highways M2 (Yerevan - Angarak) to Iranian border and M1 (Yerevan - Ashtarak - Gyumri) to Turkish and Georgian border.
    • Direct railway access to TRACECA railway line.

    Synergies can be created with the development of an integrated Free Economic Zone. New market opportunities depends mainly on the opening of international borders that are now closed to trade, and the completion of transport infrastructure projects linking the South Caucasus region with Turkey and Iran. The time horizon for these developments is uncertain (also in view of the current economic decline in Armenia), and Georgia and Azerbaijan are to some extent better placed to exploit them.

     

    There is an urgent need to improve transport and logistics infrastructure and systems in order to:

    • promote and diversify exports, which remain dominated by bulk mineral products despite recent growth of the value of food exports,
    • allow more efficient sourcing and movement of imports, saving foreign exchange and reducing the costs for the industry and its consumers.

     

    An efficient tri-modal logistics facility at Yerevan would facilitate containerization of suitable cargo (particularly food exports and a wide range of consumer and intermediate imports) and allow block trains to operate to Georgian ports and to Russia via Georgia (provided the plans of the Russian railway currently operating in Armenia include block train operations). When the borders with Azerbaijan and Turkey are opened to trade there will be an increased potential for more efficient transportation.

     

    The proposed ILC at ZIA will be developed and upgraded to become a highly productive and competitive logistics site as a part of the TRACECA network. The different warehouses and areas for logistics services will be developed under consideration of the requirements of regional and international stakeholders. Three functional areas for "logistics services", "container terminal" and "logistics-intensive industries and trade" have been delineated.

     

    The functional "logistics services" area will be developed with a focus on transport, handling and storage facilities for logistics providers and operators (like warehousing, distribution centers, etc.). The functional "container terminal" area will include a combined transshipment module for the rail-road handling of containers, semi-trailers and swap bodies as well as project cargo. A container service center with container depot, customs clearance, container packing, container repair and cleaning will be established. Finally the functional "logistics intensive industries and trade" area will be developed with its focus on the settlement of logistics intensive industrial companies (like food processing companies or agricultural machinery, aviation and automotive industries) and commercial enterprises (such as distribution centers for retailers).

    Investment amount

    24.4 mln EUR.

    Implementation schedule

    The Government of Armenia has included the project into the list of priority projects in the transport sector. A PPP scheme is being implemented where the Government of Armenia will take care of land acquisition for new transport access links (road and rail), the construction of a new access road to the airport area and for the extension of the land plot.

     

    The new road access to the area was designed and coordinated with on-going road ADB-financed infrastructure projects in and around Yerevan (North-South corridor project and Yerevan city centre by-pass). This was supported by the LOGMOS project. The Concessionaire of Zvartnots airport, Armenia International Airports CJSC, has finalised a design study for new railway access linking the ILC, the Free Economic Zone, the fuel farm of the airport and the new passenger terminal to Masis railway station and the city center.

     

    Currently, discussions are under way between the airport concessionaire, South Caucasus Railways and the Government about their respective shares in the investment needed and operational issues. The progress has been slowed down by the recent regional economic decline, and some drop in cargo flows of the ILC capture zone.

    Status

    On November 3rd, 2011, the Government of the Republic of Armenia considered the project as Priority Project. First steps towards implementation are taken.

    Expected impacts on transport, environment, social, other

    The project would significantly improve the efficiency of Armenia's crucial transport links to the north and south, offering intermodal facilities and range of logistics services that are largely lacking at present. These advantages will also apply to transport links to the east and west, if and when there is a resumption of direct trade with Azerbaijan and Turkey. The resultant benefits would be spread throughout the Armenian economy and population.

     

    The proposed project should have a positive impact because:

    • Its location on the urban periphery allows transfer of loads from heavy mulit-axle trucks, suited to long-haul routes, to smaller vehicles for local distribution.
    • Rationalization of regional distribution/collection will improve vehicle utilization and hence reduce the ratio of vehicle-kilometers to freight tonnage.
    • With improved vehicle utilization the average age of the fleet is likely to be reduced, with consequently improved fuel efficiency and emission standards.
    • External costs born by the local community will be reduced, especially with regard to the provision and maintenance of infrastructure, accidents and environmental damage.
    • Being an inter-modal facility, the proposed ILC will promote the use of rail as a long-haul transport mode.

     

    Environmental impacts: According to the plan only a part of the residential areas in the investigation area is impacted by the projected ILC. The impacts caused by the ILC development are due to noise (traffic and logistics activities) and pollution (mostly by traffic). The noise from the airport will cover the noise from the ILC operation. It is unlikely that the effect would be additional.

     

    The reclaiming of land is the greatest impact of the projected ILC, because that reduces the biomass production. Potential land for biological processes will be lost. It is not likely that the groundwater will be influenced by the ILC project, if state-of-the-art technical measures are built in (for example oil separators for all water collecting on traffic areas, collecting of waste water and recycling of water in the container washing plants).

     

    It will be necessary to protect the river against pollution from traffic and spoiling, therefore it will be necessary to clean the waste water before leading it into the river. Most of the planned area is in use or anthropogenic overbuilt, therefore no compensation is considered necessary. Nor is there any wild life in the vicinity which is likely to be adversely affected by the proposed use of the land, to the extent that remedial action is needed.

     

    Socio-economic impacts: There is still widespread poverty, especially in rural areas, and a strong need for improved agricultural labor productivity which is only 17% of labor productivity in the industrial sector. While the most direct impact of the project would be to reduce the cost of supplying the urban population of Yerevan, and consequently reducing living costs, it is intended that the project would also improve rural producers' access to domestic and export markets. This would be achieved mainly through providing a reliable cold chain and the possibility for intermodal transshipment of containerized cargoes.


    It is intended that the proposed project would generate new or improved opportunities for the poor. It may do this in several ways:

    • By making urban and export markets more accessible to rural producers.
    • By enhancing the viability of industries that add value to rural products, providing a more reliable market for those products as well as jobs in the vicinity of the ILC.
    • By providing a platform for increased transit traffic, with the possibility of providing services.
    • By reducing living costs through improved transport/distribution efficiency.

    Source of funding

    IFIs. Some considerations for funding are investigated with the global private investors and banks

    References

     

     

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