© International Road Transport Union (IRU) 2012 Page 1 Coordinated development of road transport auxiliary infrastructure – a pragmatic approach, the Model Highway Initiative November 28, 2012, Izmir, Turkey Igor Rounov, IRU Under Secretary General International Conference on Prospects of Trade and International Road Transport Development in the Black Sea, Central Asia and Middle East Regions

© International Road Transport Union (IRU) 2012 Page 2 IRU Truck Caravans

© International Road Transport Union (IRU) 2012 IRU New Eurasian Land Transport Initiative – NELTI Launched in September 2008 Commercial road transport deliveries performed by road transport companies from the Eurasian continent Commercial road transport deliveries performed by road transport companies from the Eurasian continent 5 routes 5 routes In cooperation with the Asian Development Bank In cooperation with the Asian Development Bank Page 3

© International Road Transport Union (IRU) 2012 Page 4 4. Sum of unjustified levies paid USD NELTI: Problems are Procedural! 1. Time spent en route by all vehicles5 041 days 2. Distance covered km 4. Sum of unjustified levies paid USD 3. Amount of official levies paid USD 5. Number of stops en route Number of state border crossings Length of downtime en route1 880 days 8. Cargo carried4 200 tonnes 1. Time spent en route by all vehicles5 041 days 7. Length of downtime en route1 880 days 3. Amount of official levies paid USD 40% of time lost at border crossings! Bakshish at the border accounts for 30% of additional costs!

© International Road Transport Union (IRU) 2012 Page 5 Model Highway Initiative (MHI)

© International Road Transport Union (IRU) 2012 Page 6 MHI Letters of Support

© International Road Transport Union (IRU) 2012 Decision of the Ministers of Transport of BSEC Member States … 8. Assist to the implementation of transport, auxiliary and logistic infrastructure development projects in the BSEC region in cooperation with other international organizations and financial institutions and by involvement of the business community, particularly on the basis of the public-private partnership, notably by inclusion of the IRU Model Highway Initiative (MHI) into the future project of the BSRH Master Plan and cooperation in preparation of required feasibility studies. …

© International Road Transport Union (IRU) 2012 Page 8 Model Highway Definition “Model Highway is a chosen section (2-3 stretches) of an internationally rated trunk road of 1500 – 2000 km in length, crossing the territories of several Eurasian countries and of strategic importance for interconnecting and promoting Eurasian trade and transit by road to major world markets.”

© International Road Transport Union (IRU) 2012 Page 9 1st key aspect of the MHI Creation of modern ancillary roadside infrastructure Border crossing points (BCP) and facilities Maintenance and repair centers for cars, trucks and buses Dry ports and multimodal logistics centres Rest areas (RA) Safe parking lots for trucks and buses / coaches Roadside hotels, motels and campings Service areas (catering, shops, gaz stations, parkings, etc)

© International Road Transport Union (IRU) 2012 Page 10 2nd key aspect of the MHI Institutional reforms and implementation of best practices in the road transport sector Liberalisation of international road transportation Accession to and effective implementation of international agreements and conventions on trade and road transport facilitation Harmonisation and facilitation of border crossing procedures

© International Road Transport Union (IRU) 2012 Page 11 3d key aspect of the MHI Multilateral Investment Mechanism (Regional Infrastructure Fund - RIF MHI) Public-private partnership Model highway functioning management Involve business community (international, national and local businesses) into the process of creation, and modernisation of ancillary roadside infrastructure Allocate funds for MHI infrastructure projects Other measures (Including ancillary MHI infrastructure clause into long term credit lines, etc.)

© International Road Transport Union (IRU) 2012 Page 12 MHI Group of Experts 1. The First meeting of the Group of experts on ancillary infrastructure development (September 14, 2011, Yalta, Ukraine, organised jointly with the Ministry of infrastructure of Ukraine); 2. The Second meeting of the Group of experts on ancillary infrastructure development (October 10-11, Batumi, Georgia, organised jointly with GUAM and the Ministry of Economy and Sustainable Development of Georgia); 3. The Third meeting of the Group of experts on ancillary infrastructure development (February 16, Astana, Kazakhstan, organised jointly with the Ministry of Transport and Communication of the Republic of Kazakhstan). 4. The Workshop on investment, financial and technological issues of the MHI implementation(March 6-8, 2012, Thessaloniki, Greece, jointly with BSEC and Black Sea Trade and Development Bank) 4. The Workshop on investment, financial and technological issues of the MHI implementation (March 6-8, 2012, Thessaloniki, Greece, jointly with BSEC and Black Sea Trade and Development Bank)

© International Road Transport Union (IRU) 2012 Page 13 MHI sections MHI South Caucasus (BTBT) section: Trabzon - Sarpi (Georgia/Turkey BCP) – Batumi – Tbilisi – Krasny Most (Georgia/Azerbaijan BCP) - Baku Future extension (under negotiation): Baku port (BCP) - Turkmenbashi port (BCP) - Ashgabat MHI Central Asia section: Pol-eXomri - Nizhniy Panj (Afghanistan/ Tajikistan BCP) – Dushanbe – Karamyk (Tajikistan/ Kyrgyzstan BCP) – Bishkek – Kordai (Kyryzstan/Kazakhstan BCP) - Shimkent – Kzyl-Orda Branches : -Kordai – Almaty – Khorgos (Kazakhsatn/China BCP) -Sarytash -Irkeshtam (Kyrgyzstan/China BCP)

© International Road Transport Union (IRU) 2012 Page 14 Multilateral Cooperation and Respective Responsibilities National Governments International Finance Institutes and development banks International Professional Organisations Local and transnational businesses act as main contructors Institutional reforms in the road transport sector Regional Infrastructure Fund MHI (RIF MHI) Coordination governments and business activities Ancillary roadside infrastructure creation and operation

© International Road Transport Union (IRU) 2012 Page 15 Prefeasibility Study on the development of Model Highway Pre-Feasibility Study presentations: 1. Baku, Republic of Azerbaijan, October 30, Tbilisi, Georgia, November 1, Ankara, Turkey, November November 14, 2012

© International Road Transport Union (IRU) 2012 Page 16 © International Road Transport Union (IRU) 2011 MHI - what’s next? Feasibility study (Master Plan) 1 2 Negotiations on Regional Infrastructure Fund creation(RIF MHI) Negotiations on Regional Infrastructure Fund creation (RIF MHI) 4 Implementation study 5 Involving contractors (creation of the contractors pool Involving contractors (creation of the contractors pool) 3 Creation of the MHI coordination committee

© International Road Transport Union (IRU) 2012 Page 17