“A ‘gross contract’ system will be implemented in order to establish a sustainable financing mechanism for public transportation,” said Anar Rzayev, Chairman of the Azerbaijan Land Transport Agency, during a briefing dedicated to issues arising from President Ilham Aliyev’s decree on improving the field of regular passenger transportation by automobile transport.
He stated that with the involvement of an international consulting company by the Ministry of Digital Development and Transport, an assessment of the administrative territory of Baku city and the bus route network of Absheron has been carried out. It was determined that the integration of the route network covering Baku and Absheron is weak, there are overlapping routes, and 17% of the city’s population has limited access to the bus network. To optimize the bus route network, the network has been redesigned, and the number of buses and travel intervals on the routes have been evaluated. With the implementation of the new bus network, the demand for buses in the passenger transportation system is expected to be 2,800 units. It is impossible for operators, who operate on a simple business model and lack financial sustainability, to cover the necessary investment for renewing the bus fleet within the next few years. In this regard, in order to continuously maintain the quality of public transportation services at a high level in Baku and Absheron and to establish a sustainable financing mechanism for renewing the bus fleet, a “gross contract” system will be implemented. Under the model, the income received from fare payments will be collected by the regulatory body, and part of the payment for the service provided by the carrier will be covered from these funds, while the shortfall will be covered by funds allocated by the state.
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