SPOE Notes-Azerbaijan Contracting

● 49.6% of labor force is involved with services

○ 12.1% involved with labor
○ Total labor force is 4.961 million
● There is a signed Acquisition and Cross-Servicing Agreement
○ Signed 30OCT2013
○ Bilateral agreement
● Access to local vendor bases within Azerbaijan may be difficult to non-existent
● Contracted services include port operations (stevedore and security), airfield
operations (air traffic control, cargo handling and storage, and passenger
processing), and general unskilled labor
○ Port of Baku has:
■ 13 container cranes (11 operational)
■ 5 wharf cranes
■ The port has limited MHE; however, cranes, tractors, trailers and
any other MHE can be leased as needed
● 14/16 portable Jib cranes [20-40 STON]
● 1 floating crane (used by oil companies) [25 STON]
● 2 Reach Stackers [50 STON]
● 2 portable ramps
● 6 tugs
■ There is no Stevedoring & Related Terminal Services contract in
place. The Main Cargo Terminal is operated by Baku Port
Authority, which would acquire any services or equipment
necessary. The port normally operates in daylight hours only.
■ Stevedoring Company can contract any equipment needed for
operations
■ Port gates were secured by port personnel. No cameras and
personnel screenings were informal
■ No fire or medical services on-site
○ None of the berths at Baku are considered useful for U.S. military vessels
other than Logistics Support Vessel (LSV), Landing Craft Utility (LCU) or
Landing Craft Mechanized, (LCM) due to vessel draft restrictions.
Additionally, the limited access to the Caspian Sea via the Volga-Don
Canal, Russia prohibits deep draft vessels from transiting the canal.
LSV’s, LCU’s, and LCM’s could transit the Canal; however, this would not
be timely or economically feasible. This transit would also require
permission from Russia. Military equipment or containerized cargo would
use the Caspian Sea vessels available by contract for shipment just as
current OEF cargo is moved from Poti, Georgia to Baku, Azerbaijan and
onward east
● The constitution provides for the right to form labor unions
○ In practice this right is limited and unions are generally not effective in
wage negotiations
○ Collective bargaining is at a rudimentary level; wages are still set by
government ministries for organizations within the budget
○ Most major industries are state-owned and the government runs the
largest industrial and white-collar unions
● Rampant corruption in state and private sectors
○ Foreign investment is focused on energy sector and non-energy sectors
are neglected
● Conversion from command economy of Soviet-era to market economy of today
has created challenges for private sector services
○ Long-term contracts may be impossible for private companies to maintain
● Energy sector is highly developed by the state; telecommunications are being
developed by private sector
○ Both are possible supply and services that can be contracted
○ State subsidies have created poor electricity infrastructure
■ Electricity rationing occurs during peak hours of winter months
○ Pervasive public and private sector corruption and structural economic
inefficiencies remain a drag on long-term growth, particularly in non-
energy sectors
● Telephones
○ General assessment: requires considerable expansion and modernization;
fixed-line telephone and a broad range of other telecom services are
controlled by a state-owned telecommunications monopoly and growth
has been stagnant; more competition exists in the mobile-cellular market
with four providers in 2009
○ Domestic: teledensity of 17 fixed lines per 100 persons; mobile-cellular
teledensity has increased and now exceeds 100 telephones per 100
persons; satellite service connects Baku to a modern switch in its exclave
of Naxcivan (Nakhichevan)
● Water
○ Due to infrastructure problems, water shortages occur often; even around
Baku
○ Chlorinated tap water is not safe to drink
○ Bottled water may be necessary
● Host Nation Support
○ Language requirements will be met through contracted support from the
civilian labor pool
○ Acquisition of equipment will be done through the American Embassy.
Equipment leased for long duration will be limited to material handling
equipment necessary for operating the SPODs and APODs
○ Petroleum, oils, and lubricant (POL) support is limited to equipment owned
and operated by local nationals who are in direct support of JTF Caspian
○ The hiring of local unemployed workers as civilian labor, as available and
as cleared for access through biometrics or other standard processes
○ Contracted use of rail cars and locomotives for non-combat supplies and
equipment, based on availability of commercial equipment