Constructing a water pipeline from Oguz-Gabala region to Baku project is designed to use underground water sources located in Oguz-Gabala region and to transport this water to Baku by gravity feed at the flow rate of 5 cubic meters per second, provide people with high quality water supply, to ensure Baku with reliable and sustainable water supply system. As a result a well field facility consisting of 78 wells ­­­­­­at a depth of 150 meters was built.

In compliance with the Ordinance of the Cabinet of Ministers of the Republic of Azerbaijan No. 42 s, dated February 24, 2006 management and executing functions of the project of "Constructing a water pipeline from Oguz-Gabala region to Baku" are entrusted to "Azersu" JSC.

Financing of the project started in 2006 and completed in 2011.

Thus, a total of 779.6 mln. manats were allocated by SOFAZ for the financing of the oguz-gabala-baku water pipeline project, and financing of the project is completed.

On December 28, 2010 with the participation of the President of the Republic of Azerbaijan Mr. Ilham Aliyev, Oguz-Gabala-Baku water pipeline was put into operation.

Execution of this project was implemented within the framework of the following contracts according to the orders of "Azersu" JSC:

1. Project's feasibility study and consulting services

1.1. Project's feasibility study. The contract on development of the Oguz-Qabala-Baku water pipeline project's technical feasibility study amounted to Euro 2.1 mln. was signed between "Azersu" JSC and CES Consulting Engineers, Germany on January 6, 2006 and this amount was completely used.

1.2. Consulting services. In the result of open tender carried out by "Azersu" JSC on consulting services for project management and engineering supervision the contract dated November 24, 2006 amounted to Euro 12 mln. was signed with CES Consulting Engineers, Germany. Amendment No.1 to the contract was signed on March 2, 2009 and the contract amount was increased and determined as Euro 19.9 mln. Under this contract total 21.8 mln. manats were spent. However, later on the contract got terminated due to the unsatisfactory activity of "CES Consulting Engineers" and price of works done by the company till the date of termination of the company activity was paid to the "Azersu" JSC as the last payment by the end of the year of 2011, according to the final agreement between "Azersu" JSC and "CES Consulting Engineers". After the investigation of specialized companies, for the continuation of the mentioned works, contract amounted to 420 000 manats was signed with the Caspian Management Consulting LLC on June 9, 2011. Under this contract total of 420.0 thousand manats were used in the year of 2011, including 98.4 thousand manats were paid to the "Azersu" JSC as the remaining amount by the end of the year of 2011. For the necessity to continue consulting services of the project management and technical consulting in 2012, 400.0 thousand manats for the extension of the contract were paid to the "Azersu" JSC by the end of the year of 2011.

2. GRP pipes and pipe materials supply

2.1. GRP pipes and pipe materials supply. In the result of open tender "Azersu" JSC and Azkompozit signed a contract on Procurement of GRP pipes, 266 km length and pipe materials amounted to 229.4 mln. manats. In case of need to substitute steel pipes for GRP pipes on some parts of the pipeline, in the result of excluding of GRP pipes, 53.2 km length and pipe materials the cost of the contract was reduced to 188.8 mln. manats. Besides, in accordance with the increase of the energy prices the contract amount was increased by 42.3 mln. manats. 18.9 mln. manats were allocated by the amendment № 2 on November 11, 2008 and 23.4 mln. manats by the amendment № 4 on March 16, 2010 to the total price of contract. Total amount of this contract is 230.6 mln. manats. Total allocations under this contract are 230.6 mln. manats, including the remaining amount of 709.5 thousand manats were paid to the "Azersu" JSC by the end of the year of 2011 as the last payment.

2.2. Glass-fibre pipe and pipe materials supply for well fields. In accordance with the Procurement procedures on production of GRP pipes, bend and tees for well field facility the contract amounted to 15.8 mln. manats was signed with Azkompozit on August 5, 2009. Subsequently in the necessity of making amendments to the volume of contract work, the Amendment № 1 to the contract was signed on July 8, 2010, stating that the amount of contract has increased to 22.2 mln. manats and this amount were fully spent.

3. Designing, construction and steel pipe supply

3.1. Designing, construction and steel pipe supply. In accordance with the Procurement procedures on Designing and construction of water pipeline the contract amounted to USD 167.7 mln. was signed with Turkish "Turan Hazinadaroglu Inshaat and Ticaret" Anonym Company. In case of need to substitute steel pipes for GRP pipes on some parts of the pipeline, steel pipe supply, 20.2 km length by "Turan Hazinadaroglu Inshaat and Ticaret" Anonym Company and construction of steel pipes, total length 47.7 km included to the cost of the contract and contract amount increased and determined as USD 264.9 mln. Besides this, in accordance with the increase of the energy carriers prices and for the amendments in the volume of contract works the contract amount was increased and determined as USD 291.4 mln and USD 362.1 mln. Total allocations under this contract are 295.7 mln. manats, including the remaining amount of 16.8 mln. manats were paid to the "Azersu" JSC by the end of the year of 2011 as the last payment.

3.2. Steel pipe and pipe materials supply. In the result of open tender carried out on steel pipes supply with the length of 28 km the contract amounted to USD 91.9 mln. was signed with Han. Teknolojik İmalat Montaj Taahhut San. Ve Tic." Anonym Company. USD 91.9 mln., under this contract and additional 0.4 mln. manats as extra charges related to the revaluation of foreign exchange accrued for bank commission expenses and custom registration fees were used.

4. Drilling and building wells

In the result of open tender carried out on drilling and building wells within the framework of Oguz-Gabala-Baku water pipeline project the contract amounted to USD 44.9 mln. was signed with "Arsan Aritma" Company. Under this contract total 24.3 mln. manats were used. Since the termination of this contract, drilling and building wells are realized by three new contractors.

4.1. Procurement procedures carried out according to the legislation and contract amounted to 10.6 mln. manats was signed with "Transvell Naxchıvan" MMC on June 25, 2010. According to the amendment to the contract, the contract cost was decreased to 3.7 mln. manats. Total allocations under this contract are 3.7 mln. manats, including the remaining amount of 528.2 thousand manats were paid to the "Azersu" JSC by the end of the year of 2011 as the last payment.

4.2. In accordance with the Procurement procedures the contract amounted to 7.6 mln. manats was signed with "Qalf Drillinq Saplay Fze" company on June 25, 2010. According to the amendment to the contract, the contract cost was increased to 9.2 mln. manats. Under this contract total 9.0 mln. manats were allocated by the end of the year of 2011, including 450.7 thousand manats remaining amount was paid to the "Azersu" JSC by the end of the year of 2011 as the last payment.

4.3. In accordance with the Procurement procedures the contract amounted to 1.3 mln. manat was signed with "A+B Oil Services" MMC on December 17, 2010. Under this contract total 1.3 mln. manats were allocated by the end of the year of 2011, including 61.6 thousand manats remaining amount was paid to the "Azersu" JSC by the end of the year of 2011 as the last payment.

5. Electricity

5.1. Construction of electricity. In accordance with the Procurement procedures on construction of electricity for the project the contract amounted to 22.2 mln. manats was signed with "Sumgayit Electro Completion" Joint-Stock Company of Open Tupe on July 15, 2009. Subsequently in the necessity of making amendments to the volume of contract work the Procurement procedures carried out and Amendment № 1 to the contract was signed on May 18, 2010. Under this contract total 22.1 mln. manats were allocated. Total allocations under this contract were 23.2 mln. manats, including 1.1 mln. manats remaining amount was paid to the "Azersu" JSC by the end of the year of 2011 as the last payment.

5.2. Installation of connection cells. In accordance with the Procurement procedures on installation of 3 new connection cells for the project the contract amounted to 1.8 mln. manats was signed with "Azenko" JSC on June 14, 2010. Under this contract total 1.7 mln. manats were allocated, including 88.2 mln. manats remaining amount was paid to the "Azersu" JSC by the end of the year of 2011 as the last payment.

6. Construction of well field infrastructure.

In accordance with the Procurement procedures on construction of well field infrastructure for the project the contract amounted to 68 mln. manats was signed with "T.T.Sh." LLC on August 05, 2009, all works under the contract were completed and all assets allocated for contract were fully paid.