Located along the eastern shore of the Caspian Sea, Turkmenistan is bordered by Iran, Afghanistan, Uzbekistan, and Kazakhstan. It is a fairly large country (488,000 sq. km) but sparsely populated (est. pop. 5 million), with the Karakum desert covering over 80 percent of its land area. Less than half of its population lives in urban areas. The capital, Ashgabat (est. pop. 1 million) is situated in the south near the border with Iran, while Turkmenbashi, the country’s main port and trade link to the world, is located in the Caspian across from Baku, Azerbaijan. Since independence in 1991, Turkmenistan has adopted a gradual approach to the transition to a market economy, and the state continues to play a dominant role in most sectors of the economy. Agriculture accounts for about 12 percent of the country’s gross domestic product, but employs a large share of the labor force, while the industrial and the services sectors comprise about 54 and 34 percent of GDP respectively. In 2009, Turkmenistan’s gross national income per capita was estimated at US$3,420. Turkmenistan has the fourth largest gas reserves in the world, and prospects for future economic growth depend to a very large extent on its tremendous hydrocarbon endowment. Foreign trade has expanded rapidly in recent years, with exports reaching a peak of US$9.08 billion in 2008 (including oil and petroleum products) and US$4.7 billion in imports, resulting in a sizeable trade surplus. However, the undiversified economy remains vulnerable to commodity price fluctuations, with natural gas accounting for 52 percent, petroleum products for 24 percent and crude oil for 14 percent of total exports. As in many other natural-resource dependent countries, inflation and currency appreciation remain longer-term risks to competitiveness. To make the growth prospects more sustainable and to reduce dependence on commodity exports, the Government of Turkmenistan aims to diversify the economy’s production and export base, as well as to promote private sector development and increase its share of GDP. Major obstacles to economic development and diversification remain, including limited agricultural liberalization, barriers to private sector development, and infrastructure bottlenecks. Promoting sustainable development and modernizing selected transport infrastructure are key challenges that need to be addressed in order to support economic development and raise living standards.
In addition, the investment will help to bring the Port’s environmental and safety practices in line with international and regional standards. The proposed project components include the following:
A: Environmental and Safety Compliance. This component aims at bringing the port safety, security and environmental practices in line with international and regional standards. The component includes the
acquisition of oil spill response equipment, response vessel and waste water collection vessel as well as consultants’ services to achieve International Ship and Port Security (ISPS) certification.
B: Port Modernization. This component aims at improving port infrastructure, expediting the loading and discharging of rail wagons, and supporting improvements in port planning and management. The
component includes the reconstruction of the ferry terminal (left ramp and major access), consultants’ service for the design and supervision of the reconstruction, acquisition of shunting locomotives and
consultants’ services to advice on port planning and port management model.
C: Port implementation support. This component includes project implementation support, such as audits, consultants, training, etc.
Project interventions will include civil works for reconstruction of the rail ferry terminal as well as acquisition of new tugboats and vessels needed to improve collection of waste water and solid waste from ships as well as the provision of oil-spill response equipment. The project design does not include investment in waste treatment facility. Ferry terminal reconstruction will carry moderate and manageable environmental risks typical for this type of civil works. Increased capacity for collecting wastewater, solid waste, and spilled oil will necessitate work on on-shore facilities needed manage such waste. OP 4.01, on Environmental Assessment, is triggered. An Environmental Assessment will be carried out; an Environmental Management Plan will be prepared before appraisal. Comprehensive upgrade of the Turkmenbashi Port is a broad task outlined in the existing long term plan for its development. The plan is of a general nature, though, without explicitly formulated priorities, implementation arrangements and financing sources. Therefore possibility of placing and analyzing the expected environmental risks of the proposed project in the context of cumulative impacts of the Port development is pretty restricted. This issue may be revisited at the later stages of the project preparation and during implementation as made possible upon refinement of the Port development plan. The Project will be implemented in an international port on the Caspian Sea, which is surrounded by five riparian countries. Turkmenistan is a party to the MARPOL Convention for the Prevention of Pollution from Ships. Consultation is ongoing with respect to communicating information on the proposed project to the relevant parties.
The financing will be as follows:
Source: ($m.)
Borrower TBD
International Bank for Reconstruction and Development 62.00
Total 62.75