Aghdam industrial park to be created considering successful experience of 4 parks operating in Azerbaijan

The once vibrant and prosperous Azerbaijani city of Aghdam has been named ‘Caucasian Hiroshima’ by Lonely Planet magazine. At the same time, the expression ‘ghost town’ was assigned to Aghdam. Before the Armenian occupation, heavy, light, food industries and agriculture were well developed in the city, and combines a railway station and an airport, a drama theater, and a music school operated there. Today almost everything is in ruins.

However, after the 44-day Patriotic War, Aghdam began to revive from smoke and ash with the return of the occupied lands.

“We will build such a city, such Aghdam, which will become an example for the whole world,” President Ilham Aliyev said during his visit to Aghdam on Republic Day, May 28, 2021.

The pace of construction and restoration of the liberated territories largely depends on the speed of their clearance of mines. Signs driven into the ground warn of the danger of mines and shells. In areas that have already been cleared, construction work is in full swing. Currently, a four-lane Barda-Aghdam highway is being built at an accelerated pace cover more than 20 settlements in the region, including the cities of Barda and Aghdam. The ‘Road of Life’ will give a new breath to the Karabakh land and lay the foundations for a speedy economic recovery in the region.

Considering the historical heritage and potential of the liberated territories, there are plans to create four regional centers there. An industrial center will be built in Aghdam, a logistics and trade center in Jabrayil, a culture and tourism center in Shusha, and a mining and tourism center in Kalbajar.

To create the necessary infrastructure in the region for future production sites, on May 28, Ilham Aliyev laid the foundation for the Aghdam industrial park. It will become the fifth industrial park on the territory of Azerbaijan, and the agency is creating it for the Development of Economic Zones under the Ministry of Economy.

The site allocated for the industrial cluster was used for industrial production even before the occupation. The park will be built in the suburbs of Aghdam on an area of ​​190 hectares and is located at the intersection of the main highway and railway communications, which are planned to stretch until Aghdam.

At this stage, work is underway on the master plan of the Aghdam Industrial Park, and the demining process is in full swing on the territory. Obtaining a map of the minefields of the Aghdam region facilitates the work of sappers. Still, it doesn’t simplify the demining process itself, which requires a deep and thorough cleaning of the territory from mines and shells.

The development of the park will be carried out in stages. At the first stage, the agency plans to develop 76 hectares of the park’s territory, which will house an administrative building and accommodation for employees and residents of the park. To ensure the full functioning of the park, conditions will be created for personnel to live on its territory.

After clearing mines, the first construction work on 76 hectares of the park is scheduled to begin in 2022, which means that the appearance of the first residents in Aghdam Park is not far off.

The creation of the Aghdam Industrial Park will be carried out, taking into account the successful experience of four parks already functioning in Azerbaijan, as well as international practice.

The government will provide residents with a land plot and the necessary infrastructure, including transport and utilities. An additional incentive for residents of industrial parks is low rents, exemption from income and property taxes for ten years, as well as payment of VAT and import duties on the import of equipment and technologies for production purposes for ten and seven years respectively.

The industrialization process will take place in stages. Since the primary task is to improve the city of Aghdam and adjacent settlements, naturally, at the first stage, companies producing construction materials will become residents of the park. In addition, an area of ​​5 hectares will be allocated for the organization of trade in building materials. Moreover, trading places for the sale of building materials, first of all, will be provided to those companies that have created their production in the park.

The second direction is the food and processing industry. As people return to the liberated territories, facilities for processing agricultural products will be established here. In Soviet times, viticulture, fruit growing, vegetable growing, grain growing, cotton growing, and other areas of agriculture thrived. If there is a raw material base, it will be easy to develop winemaking, establish fruit and vegetable conservation, and other processing industry areas. With the development of the agriculture and food industry, the park will have areas for storage and packaging of products. Thus, a complete production cycle will be provided on principle ‘from field to counter,’ including crops’ cultivation, processing, and the receipt of the finished product. This will reduce transportation costs and increase the profitability of the ultimate product. An area for a fleet of trucks will also be allocated in the park.

The placement of enterprises in industrial parks depends on the type of production and considers all building norms and regulations. In the Karabakh region, which has been declared an ecologically clean zone, environmental issues will be a top priority. Light and food industries will be located in areas close to settlements. At a distance of 500 meters from the settlement, enterprises for building materials will be located, and at a distance of 1,000 meters there will be enterprises of heavy industry.

The agency has already begun accepting applications from business people of Azerbaijan expressing a desire to organize production in the Aghdam industrial park. Among those wishing to become residents of the park, the majority are companies producing building materials, which have expressed their intention to create a concrete plant, start production and collection of metal structures for further use in civil engineering, or organize furniture production.

To date, 12 potential residents have already been selected for the Aghdam Industrial Park, according to the Working Group on Economic Issues of the Intergovernmental Center operating under the Coordination Headquarters to resolve issues in the Azerbaijani territories liberated from occupation.

According to the information, in connection with the implementation of entrepreneurial activity in the liberated territories, by the beginning of August, 676 appeals were received. The priority of investment projects is analyzed, potential projects are identified and included in the information base. Also, there are plans to organize trips of business people to the liberated areas according to the agreed schedule and route.

Industrial parks are a successful public-private partnership model. State investments in the infrastructure of the Aghdam Industrial Park will play the role of a catalyst in Karabakh and create a basis for private investment.

At almost all official meetings, investors from foreign countries are invited to participate in restoring the lands liberated from the occupation in implementing the Smart City, Smart Village, and Green Energy projects. In particular, investors from Turkey, Israel, China, Italy, and other countries are invited to become residents of the industrial park in Aghdam, which is conveniently located at the crossroads of transport routes. The park is an ideal location for joint ventures and business projects.