Baku: Azerbaijan is set to implement a ‘gross contract’ system to ensure a sustainable financing mechanism for public transportation, as announced by Anar Rzayev, Chairman of the Azerbaijan Land Transport Agency. The announcement came during a briefing addressing issues highlighted by President Ilham Aliyev’s decree aimed at improving regular passenger transportation by automobile transport.
According to Azeri-Press News Agency, an international consulting company, engaged by the Ministry of Digital Development and Transport, assessed the administrative territory of Baku city and the bus route network of Absheron. The assessment revealed weak integration of the route network covering Baku and Absheron, overlapping routes, and limited bus network access for 17% of the city’s population. To address these issues, the bus route network has been redesigned, evaluating the number of buses and travel intervals on the routes. The new bus network anticipates a demand for 2,800 bus units in the passenger transportation system.
Currently, operators working on a simple business model and lacking financial sustainability face challenges in securing the necessary investment to renew the bus fleet in the upcoming years. To maintain high-quality public transportation services in Baku and Absheron continuously, and to establish a sustainable financing framework for renewing the bus fleet, the ‘gross contract’ system will be introduced. Under this model, fare payments will be collected by a regulatory body, which will cover part of the service payment to carriers. Any shortfall will be supplemented by state-allocated funds.