Creation of Perishable Goods Licensing and Certification

The European Union’s TRACECA Programme

for “Partner Country”

Development of Equipment Certification

Centres for the Transportation of

Perishable Goods in Kazakhstan,

Kyrgyz Republic, Tajikistan, Uzbekistan and Turkmenistan in the frame of ATP

Agreement

EuropeAid/123761/C/SER/Multi

nd 2 Project Progress Report – January to June 2008

This project is funded by A project implemented by the Consortium the European Union SAFEGE, RINA Industry and IRD Engineering

Form 1.2. REPORT COVER PAGE

An EU Funded Project under the Consortium Management of the following companies: 1

Project Title: DEVELOPMENT OF EQUIPMENT CERTIFICATION CENTRES FOR THE TRANSPORTATION OF PERISHABLE GOODS IN KAZAKHSTAN, KYRGYZ REPUBLIC, TAJIKISTAN, REPUBLIC OF UZBEKISTAN AND REPUBLIC OF TURKMENISTAN IN THE FRAME OF ATP AGREEMENT. :

Project Number : EUROPEAID/123761/C/SER/Multi Service Contract n. 123

Country : Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan

Project Partner EC Contractor

Name : Designated Partner Consortium Safege, Rina, IRD

Address : Kazakhstan, Kyrgyzstan 15-27 rue du Port – Parc de l’île Tajikistan, Uzbekistan & 92022 Nanterre, France Turkmenistan Tel. number : + 33 1 46 14 71 52

Fax number : + 33 1 47 24 72 02

E-Mail Address: [email protected]

Contact person: Project Partner Mrs Joanna TALLEC Project Director

Signatures : ______

Start Date of the Project: 9th July 2007

Project Duration July 2007 to November 2009

Date of report: 09th July 2008

Reporting period: 9th January 2008 – 9th July 2008

Author of report: SAFEGE Consulting Engineers

Name Signature Date

EC Project Manager EC Delegation Almaty ……………………….. …………………. …………….. Kazakhstan

Published January 2008 This publication has been produced with the assistance of the European Union. The contents of this publication are the sole responsibility of SAFEGE Consulting Engineers and its Consortium Partners and can in no way be taken to reflect the views of the European Union.

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TABLE OF CONTENTS

1 PROJECT SYNOPSIS ...... 5 2 Summary of project progress since the January 2008 ...... 6 3 Summary of project planning for the remainder of the project ...... 7 4 Project progress in reporting period ...... 9 4.1 Achievements in comparison with planned results ...... 9 4.2 Deviations from original planning and reasons ...... 13 4.3 Specific action needed from the local authorities ‐ including the Coordinating Unit concerned ‐ and/or the European Commission ...... 13 5 Project planning for next reporting period...... 14 5.1 Important observations for project success ...... 14 5.2 Proposals for adjustment of overall project planning and their consequences ...... 14 5.3 ATP Project second Seminar and ATP Regional Working Group Meetings – Tashkent 20st to 22nd May 2008 15 6 Tables ...... 16 6.1 FORM 1.6 PLAN OF OPERATION FOR THE NEXT PERIOD (WORK PROGRAMME) ...... 17 6.2 FORM 2.2 PROJECT PROGRESS REPORT ...... 18 6.3 FORM 2.3 RESOURCE UTILISATION REPORT ...... 19 6.4 FORM 2.4 OUTPUT PERFORMANCE REPORT ...... 20 7 ATTACHMENTS ...... 21 7.1 Legal Assessment (Attached as a separate document) ...... 22 7.2 Construction of ATP Laboratories: Business Plans Main Financial Tables ...... 24 7.3 Copy of Memorandum of Understanding for the construction of an ATP laboratory and its extension ...... 33 7.4 Equipment technical specifications ...... 35 7.5 Project Web Site main page ...... 40 7.6 Tashkent seminar and WG, Program of the Seminar and List of Attendees ...... 41 7.7 Study Tour program...... 44 7.8 DRAFT ACTION PLAN DATED 22‐05‐2008 REGIONAL PLAN ...... 45 7.9 Market Assessment (attached as a separate document) ...... 48 7.10 Second Steering Committee & Regional Working Group ...... 49 7.11 Copy of some equipment offers sent by different suppliers ...... 54

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1 PROJECT SYNOPSIS

Project Title : DEVELOPMENT OF EQUIPMENT CERTIFICATION CENTRES FOR THE TRANSPORTATION OF PERISHABLE GOODS IN KAZAKHSTAN, KYRGYZ REPUBLIC, TAJIKISTAN, REPUBLIC OF UZBEKISTAN AND REPUBLIC OF TURKMENISTAN IN THE FRAME OF ATP AGREEMENT

Project Number : EUROPEAID/123761/C/SER/Multi

Country : All Project Designated Countries

Project objective[s] : The overall objective of the project is to facilitate trade and transport in perishable goods in the CA region through improving and harmonising the legal basis, technical standards, licensing and certification systems in the field of perishable goods road transport at both regional and national level. The Specific Project Objectives are: (i) the development and/or strengthening of centres for the testing and certification of transport units and special equipment for transportation of perishable goods in the CA countries in the frame of the ATP Agreement and to improve the performance of road transport of perishable goods at both regional and national level, and (ii) the development of licensing systems of transport operators for transportation of perishable goods in the frame of the ATP Agreement.

Planned outputs : As a result of market research a greater knowledge of international and national transportation of perishable goods in all countries within the CA region is achieved; Recommendations are given and assistance is provided for the improved application, implementation and enforcement of the ATP Agreement. Capability of major stakeholders involved in transportation of perishable goods is strengthened. Testing/Certification Centres are developed/strengthened throughout the CA region. Licensing systems for transport operators organised throughout the CA region. Case study of ATP testing on refrigerated truck upon completion of a test laboratory

Project activities : Project coordination, National Working Groups, Regional Working groups, Training in ATP laboratory procedures within the Working Groups. Market assessment for carriers of perishable products and forecasts, comparative analysis of Central Asian countries legislation for transport of perishable products, identification of non-physical barriers to transport of perishable products, preparation of an ATP Manual for ATP testing centres, preparation of feasibility studies for ATP test laboratories, identification of technical specification of equipment for ATP test laboratories, training of ATP experts.

Project starting date : 9th July 2007

Project duration : July 2007 to November 2009

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2 Summary of project progress since the January 2008

Since January 2008 the Team leader of second nomination also left for personal reasons thus leaving the Project in further troubles. But also this time the Project Staff was able to catch up with all the tasks that were identified during the previous period. Early in May 2008 the new Expatriated Project Staff comprising the Team Leader and the Technical-Coordinator have been approved and now fully operational. On the same occasion the Project period was extended for additional 4 months up to November 9th 2009 to give more time for setting up the laboratories and complete the training of the ATP experts.

The Market study has been finalised by collecting all data relevant to marketing of perishable food stuff in all the countries and putting them into a structured document; the Regional legal framework has been completely assessed and attached to this Report as separated documents. A second seminar, followed by a successful Working Group, was held in Tashkent at the end of May and more significant progresses have been made in the direction of the installation laboratory equipment in the Beneficiary countries. Equipment is going to be delivered by the Project Team to one selected beneficiary in order to set up a training centre for ATP experts. The border custom surveys for the identification of physical and non physical barriers to the transportation of ATP product has delayed (as referred to further) but they are well advanced in Kazakhstan and Kyrgyzstan The local Project offices have been opened in all concerned countries in the cities of Tashkent, Bishkek and Dushanbe. The Project Web Site has been created and completed. Concerning the construction of ATP laboratories the Project has adopted a focused approach: for those countries in which the number of trucks is sufficient to this aim, the Consultant Team has looked for and found private investors (Kazakhstan and Uzbekistan). For Kyrgyzstan and Tajikistan, which have not yet joined the ATP Agreement a range of possible options will be investigated and implemented as feasible. These options include the use of National Experts for assessment of temperature controlled vehicles without setting up of ATP Laboratories, use of laboratories of neighbouring countries or financing of National ATP laboratories through International Financial Institutions and donor organizations.

Therefore the main progress events in the ATP Project for the period January to July 2008 are as follows:

• Project Duration July 2007 to November 2009, extended by the same Addendum n.2 together with the approval of the new Expatriated Project staff • Successful Meetings with Project Partners in the respective countries • Establishing one office in each country. • Preparation and Completion of the Second Seminar/ Project Steering Committee Meeting, Tashkent, May 20-21. 2008 • Preparation and Completion of the Second Regional Working Group Meeting May 22nd. 2008 • Attendance to TRACECA National Secretary Working session, Odessa, Ukraine 25 April 2008 • Contracting additional National Team Members and Short Term Experts • Collection of data and completion of report on National Legislations April 2008 • Collection of data and completion of report on Market Assessment for ATP products, June 2008 • Creation and completion of the ATP Project Web site, April 2008 • Preparation and execution of a survey of different border crossing points in Kazakhstan and Kyrgyzstan, May- June 2008

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• Provision of a new model of liability of carriers for national and international transporters • Preparation of Business Plans for ATP laboratories in Kazakhstan and Uzbekistan • Translation, divulgation, discussion and publication of Italian Laws concerning ATP and HACCP • Definition of a Memorandum of Understanding between private investors for the establishment of an ATP laboratory in Almaty, Kazakhstan • Preparation of the technical specifications for the ATP laboratory equipment • Research and definition of ATP expert equipment for Tajikistan • Organisation of the Study Tour to Northern Italy to be held from 27 July to 6 August 2008 • Preparation of Draft ATP Project 2nd Progress Report for Initial Approval – end June 2008

In Kyrgyzstan upon request of the local Ministry of Transport and Telecommunication the Consultant is completing a special study upon the financial and social impact following the adoption of the ATP standards by the government.

3 Summary of project planning for the remainder of the project

The Project Planning for the remaining period of the ATP Project will remain focused on training of local experts. This activity is going to be carried out both in Europe and in the Region. In order to complete it successfully it is indispensable to establish at least one ATP centre in Central Asia.

Laws and regulations in the different CA countries are incomplete and not adequately enforced. The Project will focus on development of the regulatory environment in the countries that have adopted (are going to adopt) the ATP standards. The regulations will include hygiene standards with the introduction of HACCP practises.

The preparation of an ATP manual, carrying technical and regulatory documents will continue.

The border crossing points survey will be completed in all countries and the Report published on the Project Web Site.

Main activities will concern the following areas:

1. Development – Capabilities of Major Stakeholders – Including Specific ATP Awareness Training and finalisation of the Border Crossing Points survey (September 2008) 2. Creation of Testing Centres in Kazakhstan and Uzbekistan and a Regional ATP Expert Training Centre. Foreseen date of completion: December 2008. 3. Development – Strengthening of Operators Licensing Systems. This will review all Legal and Legislation Documents to ensure that are in line with the International Standards. In particular the Project Team will focus on implementation of ATP standards for the domestic carriers. Completion date: November 2009. 4. Discussion about relevance of participation to the ATP Annual Working Group by a delegation of the four CA states in Geneva, November this year. On this occasion issues relevant to extension of ATP rules to transportation of Fruit and Vegetables could be discussed with the representatives of other countries. 5. Evaluation of new liability models ATP international and National carriers

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6. Case Study – ATP Refrigerated truck Testing in Laboratory 7. Events – National Meetings, Regional Workshops and a Technically Based Study Tour. The Technically Based Study Tour, to be held in Italy from 27 July to 6th of August 2008, will consolidate the Training of Trainers Concept.

Other activities will concern the following areas:

• Deeper study into the relevance and impact of ATP – Tariffs and Trade in each country and in particular Kyrgyzstan (as requested by the Kyrgyz Beneficiary) • Enhanced Awareness of Export/Transit/Import of Fruit and Vegetable regulations • Developing perishable foodstuff (including vegetables) quality standards awareness for export purposes. • Introducing HACCP concepts in transport and distribution of perishable food stuff • Maintenance of the ATP Project web-site Design and Format • Keeping the Market Assessment updated • Organising meetings and keeping good relationship with all the Project Stakeholders to ensure that the Project activities are in line with their expectations and the Project design

Currently, the ATP Project remains focused on quickly establishment of at least one testing centre.

The creation of private laboratories in Kazakhstan and Uzbekistan requires the enforcement of the national laws in order to ensure profitability to the investment. This process could require long delays, which would impede the proper implementation of the training activities.

The proposed option of having a Regional ATP Expert Training Centre quickly established in one of the countries using the equipment donated by the Project would enable the Project Team to complete the training activities of the concerned Experts on time.

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4 Project progress in reporting period

4.1 Achievements in comparison with planned results

4.1.1 Office Mobilization Following the declaration of space unavailability released by the Beneficiaries, the Project has rented one space in each country. This activity, started in August 2007 was completed in June 9th this year with the rental of the office space in Dushanbe, Tajikistan.

The Project offices are located at the following addresses: Main Office: Abaya Av.15, Ap. 7, Almaty, Kazakhstan Kyrgyzstan office: Timiryazeva st. 37, Ap. 42, Bishkek Tajikistan office: Bezkhod st. 2, Ap. 33, Dushanbe Uzbekistan office: Nabyeryezhnaya Ankhora st. 4

4.1.2 Market Assessment

The Draft Market Assessment released at the end of the first period has been completed with the addition of more pertinent information regarding transport of perishable food stuff in Kazakhstan and it is now available. This analysis provides review of the present situation in terms of imported/exported products, number of refrigerated trucks, it lists as well the border crossing points of each country and gives forecast for the next years. This last Report is attached as a separate Annex to the Progress Report 2.

4.1.3 National legislation and international agreements The different regulatory schemes in each country have been analysed separately and they are now available in the attached report (Attachment 7.1 Legal Assessment Abstract; the full version is also attached separately). In brief only two countries have adopted the ATP as part of their legislation (Kazakhstan and Uzbekistan). Tajikistan has started internal procedures, leading to the application to UN for membership. Kyrgyzstan is waiting for the conclusions of the separated study they have required to the Consultant and that will be available approximately in September 2008.

4.1.4 Legislation bottlenecks The ATP tests are either not carried out at all (Uzbekistan) or inadequate (Kazakhstan). In Uzbekistan only a few tests were carried out a few years ago and then the activity stopped for lack of proper equipment. In Kazakhstan there’s only one ATP expert appointed by the Government and operational. This Expert (the local agent of a US manufacturer of mobile refrigerating units Thermo King), works according to the Russian practices. While the rules prescribe that the first trial has to be carried out in an accredited ATP laboratory (6 years validity) and the certificate prolongation can be done by one ATP Expert (3 + 3 Years validity), in Kazakhstan all tests are carried out by an ATP Expert. On the basis of this test report the Ministry of Transport releases a 3 years ATP certificate. In addition to this the testing equipment is not in line with standards and tests are done in the open air.

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4.1.5 Legal status and institutional set up As a general comment the existing laws are not adequately enforced both in Kazakhstan and Uzbekistan where only a fraction of the refrigerators have been tested. The legislation does not appoint any specific control body (customs, veterinary, road police etc.); there’s no definition of prosecutions and fines for the violators and finally no mention to specific hygiene standards to adopt for transportation of perishable products. The acting Italian legislation has been translated and published on our web site for discussion but we think that there’s still a lot to do in order to harmonize the local laws with the International Standards.

4.1.6 Translation of national and international standards, ATP Manual Hand Book During the present period a consistent number of Italian and National laws concerning ATP and HACCP were translated, discussed and published on the project web site. They constitute the basis upon which the ATP handbook will be written.

4.1.7 Identification of non physical barriers In order to identify non physical barriers for transportation of perishable goods, visits to the main Cross Border Points of the region were carried out. Visits to the key CBPs on the borders Kazakhstan – Kyrgyzstan and Kazakhstan – Russia were done during May – June. The survey of the Uzbek CBPs with neighbouring countries has been delayed due to the closure of Uzbek CBPs for export of food products. Project team will be monitoring the development of situation with Uzbek CBPs, and as soon as the borders are reopened, it will complete the monitoring activities on Uzbek CBPs with neighbouring states. All results of Cross Border Point monitoring and transit corridors will be summarized in the report about Non-Physical Barriers for Transportation of Perishable Goods and Attached to the next Progress Report 3.

4.1.8 Assistance to implementation of the ATP agreement Both in the course of the Kick Off meeting and during the seminar held in Tashkent from 20th to 21st May 2008, all relevant issues concerning the adoption of the ATP agreement by Tajikistan and Kyrgyzstan have been discussed. While Tajikistan has already applied to UN, Kyrgyzstan keeps waiting for the outcomes of the feasibility analysis committed to the Project. All other issues concerning the implementation of ATP standards in the other countries, recommendations on standards to adopt, recommendations on how to implement ATP have been released and discussed at the Tashkent seminary and available under form of presentations on our web site.

4.1.9 Harmonization of certification and licensing system The Project staff recommended harmonizing the certification and licensing system with the European model instead of being tighten to the Russian interpretation. As explained before in Russia, one of the eldest members of the ATP community, ATP tests are carried out only by Experts as prolongation of a previous certificate. Full description of the ATP test procedures has been produced by European experts in the course of the Tashkent seminar and is available (as presentations) on the Project web site.

4.1.10 Laboratory accreditation Once the ATP laboratories are established they must be accredited by an appointed body (usually the Ministry of Transport of the country). As a usual practice the Ministry confers this task to a specialized entity. The Project recommends transferring such power to the National GOST Standard Bureaus. That’s why several meetings have been held at the

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4.1.11 Setting up the ATP laboratories As specified earlier in March 2008 it was made definitely clear that no equipment would have been provided by the EU. The project team has been asked to find a solution to this problem. We have checked various alternatives such as: • Applying to International donors like EBRD, USAID, WORLD BANK • Contacting private investors. The first action did not produce any result. Most donors declared they were not interested in such small investments.

The Project Team elaborated two Business Plans (Attach. 7.2 Business Plans, Main Financial Tables for Kazakhstan and Uzbekistan) and started to interview various private companies. As a result two companies (Thermo King Almaty, present ATP Expert and PEAK Almaty, an English-Kazakh construction company) signed a Memorandum of Understanding on March 27th 2008 (Attach. 7.3 Memorandum of Understanding) where they engage themselves in setting up a testing laboratory. Thermo King Almaty will purchase the laboratory equipment and carry out the tests while PEAK will reconvert an existing space and rent it to the partner. The overall investment is estimated in about Euro 150.000 Euros that includes equipment and re-adaptation of an existing building. In Uzbekistan the Project Team has contacted the local agent of Thermo King who also showed interest in opening an ATP laboratory in Tashkent. Both places have been identified and checked by the Project Team for suitability. The investments can be profitable only on condition that the laws are properly enforced. Therefore we plan to call a meeting between investors and the representatives of the Ministry of Transports of the two countries middle of July 2008.

The strategy adopted for Kazakhstan and Uzbekistan does not work in Tajikistan where the number of refrigerated vehicles is limited to 80 units approximately. According to the project team calculation the minimum required number of trucks is approx. 1000, so that the laboratory becomes cost-effective and that the possible ATP certification business becomes of interest for a private company.

For Tajikistan Project Team will investigate a range of options, such as the use of the National Experts assessment of vehicles without setting up a national certification center or use of certification centers of third countries. One more option, where the Project Team can provide support, is the application to the International Financial Institutions and donor organizations for the financing of a set up of the National Certification Centre.

The Project Team found second hand equipment for testing the truck refrigerating efficiency (Expert test). The Project Team is planning to use this equipment for the set up of the Regional Expert Training Center. This equipment will be installed in a proper closed space where the project could carry out all necessary training for the ATP experts of the CA countries. This operation will be defined in details during the month of August 2008.

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4.1.12 Equipment technical specifications During this period were also elaborated the technical specifications for the laboratory equipment and for the tunnel (Attach.4 Equipment technical specifications). Offers from various companies in Kazakhstan and abroad have been collected, translated into Russian and delivered to the Beneficiaries and to the Project Partners. Some of them are annexed as Attachment 10.

4.1.13 Training on ATP and HACCP During the Tashkent Seminar in May proper training on ATP international legislation, ATP vehicle tests, HACCP Procedures (Hazard Analysis of Critical Control Points) was delivered by qualified European experts to representatives of the Ministries of Transport, Ministries of Health and GOST standard offices of the four countries. The presentations were very much appreciated and in the following day the work plan for the next period was approved.

4.1.14 Project Web Site In February 2008 the Project Web Site was created and made available to the public in two languages: Russian and English. It contains information taken from Italian and local legislation suitable for the implementation of ATP in Central Asia. It contains useful information about the Legal Framework, ATP technical Standards, Food Standards, Country information, location of the ATP laboratories and ATP project activities. The Project documents are available for download in a dedicated area. The web site will be updated regularly during the Project lifetime (Attach. 7.5 Project Web Site main page).

4.1.15 Liability model for perishable food carriers An exhaustive insurance model for ATP carriers, taken from the Italian legislation will be published soon on our web site. The document is of huge proportion and in English, therefore we recommend the Russian speaking users to download it directly from our site and in this case to apply to the project team for the translation of required document sections.

4.1.16 Project Seminar and Regional Working Group A second Project Seminar was held in Tashkent, Uzbekistan from 20th to 22nd May 2008. Almost thirty experts attended the Seminar. The first day was dedicated to the Market and Legal Assessment and most presentations were prepared and read by the Consultant’s Long Term Experts. The second day was dedicated to the technical aspects of ATP, including details on International regulation and ATP test performances. One section was completely left to the explanation of the HACCP Standards which we recommend to insert in the National Legislations. These presentations have been prepared and presented by highly qualified European experts. On the third day was held the Regional Working Group where the representatives of the different governments discussed and approved the Action Plan for the next period. We attach the Program of the Seminar and the List of Attendees (Attach. 7.6 Tashkent seminar and WG, Program of the Seminar and List of Attendees).

4.1.17 Study Tour to Northern Italy

In the period May-June 2008 the Project Study Tour to Italy has been organized. It will be held in Northern Italy from July 27 to August 28, 2008. In attachment you find the Study Tour Program and the List of Participants. (Attach. 7.7 Study Tour Program and List of Participants).

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4.2 Deviations from original planning and reasons

There were no major deviations to ATP Project Planning but two minor ones in relation to timing. The Legal Assessment was completed by April 2008 and the Market Assessment was finished in June 2008.

Most beneficiaries have expressed the will of including Fruit and Vegetables within the list of the Perishable Food Stuff. The Project Team Leader has discussed this issue with a representative of the Italian Government at the ATP National Working Group which gathers in November each year in Geneva and it was reported that Italy and Spain would eventually support it. The Project will investigate the opportunity of taking a Central Asian Representation to the next event to discuss this matter directly with other ATP members

We register a slight delay in the Border Crossing Survey activities mostly due to difficulty in getting the proper authorizations. Furthermore the Uzbek borders have been closed to export transportation of goods from the beginning of the year and no certain information is available about when they will be opened again. We expect that this activity will be completed at least in three countries (Kazakhstan, Kyrgyzstan and Tajikistan) by the end of August 2008.

4.3 Specific action needed from the local authorities - including the Coordinating Unit concerned - and/or the European Commission

No Specific Action is needed from the European Commission, unless there exist bureaucratic procedures that could impede import of laboratory equipment for the Regional Expert Training Centre to Central Asian countries and that should be made clear before this operation is completed.

On the contrary from the side of the National Authorities of Kazakhstan and Uzbekistan, it is requested an engagement in implementing the ATP legislation, appointing control bodies and enforcing it. This is the pre-requisite for stimulating private investments in ATP laboratories construction.

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5 Project planning for next reporting period

5.1 Important observations for project success

The Project is on time and most tasks have already been achieved. In order to give the Project a complete success we should be able to set up at least an ATP laboratory in the Region in full compliance with the International Standards.

This task is not far from being achieved since, once the Project brings the available second-hand equipment to the Central Asia, we can quickly establish a Regional ATP Expert Training Centre and carry out routine expert training in Central Asian countries.

Of course the creation of one private ATP laboratory in Kazakhstan (and eventually one in Uzbekistan) would give to the project a greater impact. Though, the achievement of this task depends very much on the enforcement of proper legislation in these countries and this activity could entail longer times.

5.2 Proposals for adjustment of overall project planning and their consequences From this moment on, the project team will concentrate on the activities of opening at least one ATP centre, training the local experts on specific equipment, realizing the ATP manual Handbook per each country, assisting the stakeholders in implementing the relevant legislation. According with the Project ToRs the activities will be implemented as follows:

2.d Identification of non-physical barriers will be extended to the 3rd Quarter 2008

3. Assistance to application, implementation, enforcement of ATP agreement Implemented during the follow period – 4th 2007 to 4rt qtr. 2009

4. Implementation of capability of major stakeholders Implemented during the follow period – 4th 2007 to 4th qtr. 2009

5. Preparation of a study for the creation of Testing Centres: completed

6. Development/Strengthening of licensing systems of operators Implemented during the follow period – 4th 2007 to 2nd qtr. 2009

7. Events and Reporting Implemented during the follow period – 4th 2007 to 4rt qtr. 2009

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An EU Funded Project

5.3 ATP Project second Seminar and ATP Regional Working Group Meetings – Tashkent 20st to 22nd May 2008

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6 Tables

6.1 - PLAN OF OPERATION FOR THE NEXT PERIOD – Form 1.6 6.2 - PROJECT PROGRESS REPORT – Form 2.2 6.3 - RESOURCE UTILISATION REPORT – Form 2.3 6.4 - OUTPUT PERFORMANCE REPORT – Form 2.4

An EU Funded Project under the Consortium Management of the following companies: 16

An EU Funded Project

6.1 FORM 1.6 PLAN OF OPERATION FOR THE NEXT PERIOD (WORK PROGRAMME)

Project title: Development of Equipment Certification Centres for the Project number: Countries: Kazakhstan, Kyrgyz Republic, Page: 1/1 Transportation of Perishable Goods in Kazakhstan, Kyrgyz Republic, Tajikistan, EuropeAid/123761/C/SER/Multi Tajikistan, Uzbekistan and Turkmenistan Uzbekistan and Turkmenistan in the frame of ATP Agreement

Planning period: 09-01-2008 to 08-07-2008 Prepared on: 08-07-2008 Consultant ЕU: SAFEGE Consulting Engineers, RINA Industries, IRD Engineering

Project objectives: The development and/or strengthening of centres for the testing and certification of transport units and special equipment for transportation of perishable goods in the CA countries in the frame of the ATP Agreement. To improve the performance of road transport of perishable goods at both regional and national level. The development of licensing systems of transport operators for transportation of perishable goods in the frame of the ATP Agreement.

TIME FRAME INPUTS

PERSONNEL EQUIPMENT AND OTHER SIX MONTH OPERATION PERIOD MATERIAL

9th JULY 2008 TO 8th JAN 2009 Consultant Local EU, days experts, № ACTIVITIES JUL AUG SEP OCT NOV DEC JAN on days on 1 Office mobilisation

2 Market assessment 20

3 Assistance to application, implementation, XX XX X X X X XXX XXXX X XXXXXXXXXX enforcement of ATP agreement 50 100 4 Implementation of capability of major XX XX X X X X XXX XXXX X XXXXXXXXXX stakeholders 80 300 5 Preparation of a study for the creation of Testing or Training Centres 20 20 6 Development/Strengthening of licensing XX XX X X X X XXX XXXX X XXXXXXXXXX systems of operators 50 65

7 Regional Events and Technical Study Tour X X X X X X X X X X X X X X X X X X X X X X X X X X 12 40

TOTAL 212 525

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6.2 FORM 2.2 PROJECT PROGRESS REPORT

Project title: Development of Equipment Certification Centres Project number : Countries : Kazakhstan, Kyrgyz Republic, Tajikistan, Page : 1/1 for the Transportation of Perishable Goods in Kazakhstan, EuropeAid/123761/C/SER/Multi Uzbekistan and Turkmenistan Kyrgyz Republic, Tajikistan, Uzbekistan and Turkmenistan in the frame of ATP Agreement Planning period : 09-01-2008 to 08-07-09 Prepared on : 08-07-2008 EC Consultant : SAFEGE Consulting Engineers, RINA Industries, IRD Engineering Project objectives: The development and/or strengthening of centres for the testing and certification of transport units and special equipment for transportation of perishable goods in the CA countries in the frame of the ATP Agreement. To improve the performance of road transport of perishable goods at both regional and national level. The development of licensing systems of transport operators for transportation of perishable goods in the frame of the ATP Agreement. No ACTIVITIES IMPLEMENTED TIME FRAME JAN. 2008 – JUL. 2008 INPUTS PERSONNEL COUNTERPART EQUIPMENT AND OTHER Six Months EC CONSULTANT MATERIAL 1 2 3 4 5 6 7 Planned Utilised Planned Utilised Planned Utilised Planned Utilised Jan Feb Mar. Apr May Jun Jul 1. Office mobilisation. xxxx xxxx xxxx xxxx xxxx

2. Market assessment. xxxx xxxx xxxx xxxx xxxx

3. Assistance to application, xxxx xxxx xxxx xxxx xxxx xxxx x implementation, enforcement of ATP agreement.

4. Implementation of capability of xxxx xxxx xxxx xxxx xxxx xxxx x major stakeholders.

5. Preparation of a study for the xxxx xxxx xxxx xxxx xxxx xxxx x creation of Testing or Training Centres.

6. Development/Strengthening of xxxx xxxx xxxx xxxx xxxx x licensing systems of operators.

7. Regional Events and Technical x x Study Tour.

TOTAL

18 Development of Equipment Certification Centres for the Transportation of Perishable Goods in Kazakhstan, Kyrgyz Republic, Tajikistan, Uzbekistan and Turkmenistan in the frame of ATP Agreement. EuropeAid/123761/C/Ser/Multi An EU Funded Project

6.3 FORM 2.3 RESOURCE UTILISATION REPORT

Project title: Development of Equipment Certification Centres for the Project number : Countries : Kazakhstan, Kyrgyz Republic, Tajikistan, Page : 1/1 Transportation of Perishable Goods in Kazakhstan, Kyrgyz Republic, Tajikistan, EuropeAid/123761/C/SER/Mult Uzbekistan and Turkmenistan Uzbekistan and Turkmenistan in the frame of ATP Agreement i

Planning period : 01/2008-07/2008 Prepared on : 08-07-2008 EC Consultant : SAFEGE Consulting Engineers, RINA Industries, IRD Engineering

Team Leader 440 110 44 130 310 Technical Coordinator 440 110 88 201 239 Long term experts 1760 440 429 749 1011 Senior Short term experts 88 50 54 68 20 Junior Short Term Experts 220 45 45 55 165 Sub-total 2948 755 660 1203 1745

Sub-total c/fwd 0 0 0 0 0

OTHER INPUTS 0 0 0 0 0

Sub-total 0 0 0 0 0 TOTAL 2948 755 660 11203 1745

19 Development of Equipment Certification Centres for the Transportation of Perishable Goods in Kazakhstan, Kyrgyz Republic, Tajikistan, Uzbekistan and Turkmenistan in the frame of ATP Agreement. EuropeAid/123761/C/Ser/Multi An EU Funded Project

6.4 FORM 2.4 OUTPUT PERFORMANCE REPORT

Project title : Project title: Development of Equipment Certification Project Number: Countries : Kazakhstan, Kyrgyz Republic, Page : 1/1 Centres for the Transportation of Perishable Goods in Kazakhstan, EuropeAid/123761/C/SER/Multi Tajikistan, Uzbekistan and Turkmenistan Kyrgyz Republic, Tajikistan, Uzbekistan and Turkmenistan in the frame of ATP Agreement

Prepared on : 08-07-2008 EC Consultant: SAFEGE Consulting Engineers, RINA Industries, IRD Engineering

Output results Deviation original plan Reason for deviation Comment on constrains & assumptions + or - %

1. Office mobilisation. Completed

2. Market assessment. Minus 5% Delay in completion of BCP survey Reopening of the Uzbek borders

3. Assistance to application, implementation, Ahead of Target enforcement of ATP agreement.

4. Implementation of capability of major Ahead of Target stakeholders.

5. Preparation of a study for the creation of Completed Testing or Training Centres.

6. Development/Strengthening of licensing On Target systems of operators.

7. Regional Events and Technical Study Tour. On Target

20 Development of Equipment Certification Centres for the Transportation of Perishable Goods in Kazakhstan, Kyrgyz Republic, Tajikistan, Uzbekistan and Turkmenistan in the frame of ATP Agreement. EuropeAid/123761/C/Ser/Multi

An EU Funded Project

7 ATTACHMENTS

Legal Assessment Abstract

Construction of ATP Laboratories: Business Plans Main Financial Tables

Copy of Memorandum of Understanding for the construction of an ATP laboratory and its extension

Equipment technical specifications

Project Web Site main page

Tashkent seminar and WG, Program of the Seminar and List of Attendees

Study Tour program and list of participants

Draft action Plan Dated 22-05-2008. Regional Plan

Market Assessment Abstract

Minutes of Second Steering Committee & Regional Working Group

Copy of some equipment offers sent by different suppliers

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7.1 Legal Assessment (Attached as a separate document)

Abstract

Implementation of the ATP Agreement in Central Asia is a complex process that involves various regulatory processes in different areas. Not only a physical establishment of an equipped laboratory is required for actual testing of the transport units carrying perishable goods, but a transparent and solid regulatory framework needs to be created for supporting and facilitating the implementation.

(i) Certification centres for inspecting vehicles transporting perishable goods must apply ATP set standards in accordance with ISO standards. In order to have certificates issued by such certification centres recognized by other countries, it’s essential that such certification centres are accredited by a recognized accreditation body (international or regional). That requires a fundamental reform of the system of technical regulation (accreditation, certification, standardization, etc.)

(ii) In order to have experts/inspectors for inspecting vehicles on compliance with ATP set standards, they should be trained accordingly and receive licenses or/certificates certifying that they received proper training. This involves first appointing an authorized body for licensing such experts/inspectors, training materials/manuals for trainers in accordance with ATP standards.

(iii) In some countries there are various non physical barriers, such as a prohibitive tariff policy for importing foreign transport, restrictive tax policy for transport operators, which all makes the process of exporting products (perishable goods) more obscure and complicated.

Only Kazakhstan and Uzbekistan so far are signatories to the ATP Agreement in Central Asia. There are no ATP compliant testing laboratories in four countries.

On item (i), out of four Central Asian countries, only Kazakhstan adopted requirements for transport units carrying perishable goods - (SanPiN). However, there is still no ATP compliant laboratory for testing such units and no accredited training centre that would provide training and issue certificates for experts. Although over 120 test certificates were issued so far in Kazakhstan, they can not be considered fully compliant with ATP neither legitimate, as the National ATP Expert - Thermo King Almaty – was appointed by the Ministry of Transport, but never accredited by a recognized accreditation body.

The situation in Uzbekistan is slightly different. There are certain pieces of legislation adopted over the past two years that contain some of the requirements with regards to the transport units carrying perishable goods, however, they are not ATP compliant. There is a need for developing a standard requirement for transport units carrying perishable goods. There is ATP compliant methodology developed by the Agency of River and Automobile Transport with regards to transport units carrying perishable goods, however, it’s not officially adopted as a legal act.

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An EU Funded Project not even subject to licensing, which makes it difficult to monitor the compliance of local transport operators’ vehicles with certain requirements for carrying perishable goods.

Tajikistan is similar in terms of weak private sector initiative plus Tajikistan has adequate legislation relevant to implementation of ATP Agreement.

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7.2 Construction of ATP Laboratories: Business Plans Main Financial Tables

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7.3 Copy of Memorandum of Understanding for the construction of an ATP laboratory and its extension

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7.4 Equipment technical specifications

Location Almaty, date: 04/05/2008

Project: Development of Equipment Certification Centres for the Transportation of Perishable Goods in Kazakhstan, Kyrgyz Republic, Tajikistan, Uzbekistan and Turkmenistan in the frame of ATP Agreement. EuropeAid/123761/C/Ser/Multi

Subject: Equipment for ATP test Laboratories. Air conditioning

Background information remarks and notes . This project is about the implementation of ATP standards (Agreement on Transport of Perishable goods) in the CA countries. Kazakhstan and Uzbekistan have already applied while Kyrgyzstan and Tajikistan haven’t yet. Turkmenistan applied only as observing country. Implementation of ATP standards deals with the establishment of proper mechanism for certification (Laboratories), which should be opened in each country to perform the performance tests. These tests are to be taken to the Ministries of the different countries in order to issue an ATP license to the carriers. The main task of this project is to have this mechanism in place in each of the mentioned countries.

Overall description of the air conditioning equipment The air conditioning equipment and the ventilation system must be suitable to provide the required conditions for the executions of the following tests under all weather conditions: Evaluation of the K factor. This test is carried out at 7,5 C temperatures -+ 2,5 C Evaluation of the refrigeration capacity. In this case the room temperature has to be kept at +15 to +30 C. The air temperature is adjusted through the main computer program by providing a 4-20 mmA or 0-10V signal or independently by means of a local temperature regulation system. The air stream is cooled down by means of a water chiller generator providing refrigerant to one (or more ) heat exchangers. Heating is obtained by means of an electric water boiler. The two circuits are distinct and each of them is provided of a three-way automatic, electrically actuated valve for air temperature regulation.

ITEM 01 N.1 Glycol water generator The glycol water generator has to provide glycol water at +1/+4 C with the following characteristics: Refrigeration capacity: 28 kW Glycol water concentration: 30% Glycol water temperature: +1/+4 C Air condensation (+45 C) with glycol water Complete with holding tank100 lt, circulation pump 8,5 cm/h, head 15 meter water gauge (1,5 atm approx.), water temperature regulation Skid mounted Electric panel Semi-hermetic electric motor Ecologically admitted Freon gas Electric power: 400 V, 50 Hz, 3 ph

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ITEM 02 N. 1 electric water boiler (not needed in case of direct electric heating) This equipment has to be used with glycol water and has the following characteristics: Heating capacity: 23 kW Glycol water concentration: 30% Glycol water temperature: +70C / +60C Complete of expansion tank, circulation pump 2000 lt/h at 1,5 atm head Skid mounted Electric panel Electric power: 220/400 V, 50 Hz.

ITEM 03 N. 1 Air conditioning and ventilation unit (see attached schematic drawing) Composed of: 03.1 N.1 air filter, maximum allowed pressure drop: 100 Pa 03.2 N. 1 Heat exchanger for cold glycol water To be used to cool down the air stream. Thermal Capacity: 28 kW (24.000 Kcal/h) Construction material: Cu/AL Air flow: 40.000 cm/h Estimated total static pressure: 450 Pa Air temperature: +6,5 C / + 8,5 C Glycol water temperature: +1C/+4C Glycol Water flow: 8,8 cm/h Independent command board Maximum allowed pressure drops: 90 Pa Cross section overall dimensions: 2000 mm by 2500 mm height Optional: Frequency variator for fan speed adjustment

03.3 N. 1 Heat exchanger for hot glycol water To be used to cool down the air stream. Capacity: 23 kW (20.000 kcal/h) Construction material: Cu/AL Air flow: 40.000 cm/h Air temperature: +20 C / + 21,7 C Glycol water temperature: +70C/+60C Glycol Water flow: 2,20 cm/h Maximum allowed pressure drops: 60 Pa Cross section overall dimensions: 2000 mm by 2500 mm height In Alternative an electric heat exchanger can be used.

03.4 N.1 Air temperature regulation system for cold water To be used for adjusting the air temperature in the cold stream. Three-way valve, electrically actuated Mixing type Temperature detectors and actuator Main way diameter: 2”1/2 Water flow: 8,8 cm/h Max pressure: 10 Bars Type of liquid: Glycol water at 30% An EU Funded Project under the Consortium Management of the following companies: 36

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Water temperature: +1/+4 C

03.5 N.1 Air temperature regulation valve for hot water To be used for adjusting the air temperature in the cold stream. Three-way valve, electrically actuated Mixing type Temperature detectors and actuator Main way diameter: 1” Water flow: 2,20 cm/h Max pressure: 10 Bars Type of liquid: Glycol water at 30% Water temperature: +70C / +60 C

03.6 N. 1 set of interception valves Interception valves to be mounted on the cold and hot water circuits. Type: full open ball valve N. 4 valves diam: 2”1/2 N. 4 valves diam. 1” N. 1 valve 1”1/2 N. 1 valve ¾”

03.7 N.1 galvanized frame with insulated panel thickness 50 mm

03.8 N. 1 Main electric fan for main air stream To be mounted inside the main casing as shown on the attached scheme Fan type: helicoidal or reverse paddle Remote motor connection Characteristic: air flow 40.000 cm/h each; head 450 Pa Construction material: coated or galvanised steel Speed: 1400 r/m Electric power: 400 V, 50 Hz, 3-ph Optional item: Frequency variator for speed adjustment

ITEM 04

N. 1 Supplementary electric fan(s) for main air stream To be mounted on the top of the main casing as shown on the attached scheme Fan type: helicoidal or reverse paddle Remote motor connection Total fan(s) capacity: air flow 40.000 cm/h; head 250 Pa Construction material: coated or galvanised steel Speed: 1400 r/m Electric power: 400 V, 50 Hz, 3-ph Optional item: Frequency variator for speed adjustment

ITEM 05 N.1 Electric command board for the 2 fans and the temperature regulation system

ITEM 06 N. 1 electric fans for exhausts extraction To be used to provide the suitable air flow. Fan type: centrifugal

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Characteristic: air flow 500 cm/h; head 1000 Pa Construction material: coated or galvanised steel Electric power: 220/400 V, 50 Hz.

In ALTERNATIVE to ITEM 04 please quote one additional ITEM 03.

Location Almaty, date: 30-May-08

Subject: Equipment for ATP test Laboratories Final

Objectives and justifications

According to ATP Handbook and technical procedures road transport means need to undergo a number of test trials carried out by an accredited Laboratory which releases the Certificate that enables them to carry perishable goods inside the country and for export (ATP Certificate). This Certificate has a 6 years validity and can be renewed every 6 years in a Laboratory (3 years at an Expert) up to the limit age of 24 years.

The Project main task is to set up ATP Laboratories in the four Central Asian countries, to provide them adequate technical assistance and to train to local specialists for testing the transport means provided with: Insulated equipment Refrigerated equipment Mechanically refrigerated equipment Heated equipment

Road tankers for milk transport and railway transportation certifications are excluded from the project tasks.

Overall description of the ATP test laboratory

An ATP test laboratory is made up of three main components: 1. Laboratory equipment designed to carry out specific lab tests and to print out the Test Certificate and eventually the ATP certificate depending on the local legislation arrangements 2. Insulated room (tunnel) kept at specific climatic conditions and air speed 3. Air conditioning unit able to provide the required inside conditions (temperature and humidity) and the relevant ventilation

Item 1, Laboratory equipment (instrumentation) is the instrumentation and software required to perform the ATP tests

Item 2, the insulated tunnel, can be manufactured locally according to given specifications and design and its overall dimensions (for one truck at a time) are 20 metres of length by 4,3 meters of width by 4,5 meters of height.

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Item 3, the air conditioning unit, has preferably to be supplied locally according to given specifications.

Description of the laboratory equipment (instrumentation)

The laboratory equipment will serve 1 truck at a time.. A laboratory equipped this way can serve a fleet of up to 1500-2000 trucks in 6 years. The tests to carry out regularly every 6 years are the following: To determine the thermal factor K (W/sm.C) and To determine the efficiency of the cooling unit

Overall technical specifications of the laboratory equipment

The laboratory equipment has to be conformed to the construction standards as provided for in the ATP handbook version 2007 and suitable to carry out the following tests as described in the ATP Handbook, Annex 1, Appendix 2, “Methods and procedures for measuring and checking the insulating capacity of the cooling and heating appliances of special equipment for the carriage of perishable foodstuffs”, Paragraph A, B. The laboratory equipment (instrumentation) has to be suitable to determine the efficiency of thermal appliances of equipment as per Appendix 1, Annex 2, Paragraph C of the ATP manual Handbook. The laboratory equipment has to be complete with computer hardware and software able to produce Test Reports in the format as described in the mentioned ATP Handbook, Appendix 1, Annex 2 and particularly Paragraph D: Models of Test Reports and additional requirements to be specified at a later stage. The laboratory equipment has to be supplied complete of computer, computer software, Spare Part Set , Set of accessories (internal heaters, fans, detector supports and so on) Equipment warranty: 2 years The laboratory equipment supply will include training for local ATP specialists and one year calibration costs Computer software language (screens) has to be Russian and English The Test Reports have to be delivered in Russian and English. The Test Certificate has to be issued in three languages: National Language, Russian, English. The laboratory equipment Instruction Manual has to be delivered in Russian and English

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7.5 Project Web Site main page

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7.6 Tashkent seminar and WG, Program of the Seminar and List of Attendees

Name Country Position Dusupova Gulnara Kazakhstan Project Manager Delegation of European Commission Paly Vera Kazakhstan Research Institute Ministry of transport and communication Buranov Olimjon Uzbekistan National Secretary TRACECA

Hamidov Ahmadzhon Uzbekistan Chairman of association "Uztranssanoat" Karimov Abdukhamid Uzbekistan Director «Uzstandart»

Ganiev Saidakmal Uzbekistan Chairman of «Uztranssanoat» Alimov Bahtiyar Uzbekistan Health Department of state sanitary epidemic supervision Rahmatullaev Ubajdullo Tajikistan Chief specialist of food laboratory Kandakov Ahliddin Tajikistan Leading expert of food hygiene department of state sanitary supervision Halimov Shukur Tajikistan Tajikistan Ministry of Transport Holov Inojat Tajikistan ABBAT association

Gataulin Farid Kyrgyzstan Kyrgyz Short-term ATP expert

Bazarbaev Toktogul Kyrgyzstan Head of Health Department of state sanitary epidemic supervision Nalobina Elena Kyrgyzstan Deputy director on external economic links of the Ministry of Transport Momukulova Atyrkul Kyrgyzstan Accreditation Center Kyrgyzstan Koneva Elena Kazakhstan ATP expert «Termoking Almaty»

Ismagilova Irina Kazakhstan Senior specialist of the Ministry of Transport and communication

Tleubekova Bakydgul Kazakhstan Head of Health Department of state sanitary epidemic supervision Daniel Mertens Italy Guest Speaker Rossi Stefano Italy Guest Speaker Pojarov Anatoly Kazakhstan Termoking

Malossi Ruggero Kazakhstan Project Team Leader Gulyamova Marina Uzbekistan Technical expert GOPA Tashodjaeva Larisa Uzbekistan Deputy coordinator “Europe house”

Umida Khaknazar Short Term Expert

Erbekov Sherbek Project Expert, Uzbekistan

Egimbaev Almaz Project Expert, Kyrgyzstan Rustamova Manzura Project Expert, Tajikistan Samukhin Oleg Project Expert, Kazakhstan Kuandykov Adil Office Manager Tatvaeva Ainash Office Assistant

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Legal Assessment and Analysis of Perishable Product Market in Central 20 May, 2008 Asia in the frame of the ATP Agreement 9:00-9.30 Registration

9:30 – 10:00 Olimjon Boranov, Gulnara Dussupova, Ruggero Malossi Welcome Address and Agenda

10:00 – 10:20 Ruggero Malossi Project activities, results, expectations and risks 10:20 – 10:40 Umida Khaknazar, Legal Expert Gap Analysis of Central Asian legislation about transportation of perishable goods 10:40 – 11:00 Sherbek Erbekov, Project Expert, Uzbekistan Uzbek Market of perishable products and transportation of perishable goods. Development of transport vehicle certification in the frame of ATP Agreement in Uzbekistan 11:00-11:30 Coffee break

11:30 – 12:00 Oleg Samukhin, Project Expert, Kazakhstan and Regional Coordinator Kazakh Market of perishable products and transportation of perishable goods. Development of transport vehicle certification in the frame of ATP Agreement in Kazakhstan

12:00 – 12:30 Manzura Rustamova, Project Expert, Tajikistan Tajik Market of perishable products and transportation of perishable goods. Feasibility assessment for accession on Tajikistan into the ATP Agreement 12:30-14:00 Business Lunch

14:00 – 14:30 Almaz Egimbaev, Project Expert, Kyrgyzstan Kyrgyz Market of perishable products and transportation of perishable goods. Feasibility assessment for accession on Kyrgyzstan into the ATP Agreement 14:30-16:30 Discussion

21 May, 2008 ATP Agreement and other laws regulating transportation of perishable goods in EU countries. ATP certification and enforcement. 9:00-9.30 Registration

9.00-9:20 S. Rossi ATP Expert ATP International regulatory Environment 9:20-9.40 Project Technical Expert ATP test laboratories, equipment specifications

9.40-10:30 S. Rossi ATP expert ATP Testing and Certification 10.30-11.00 Coffee break 11.00-12.30 Ruggero Malossi, Project Team Leader Realisation of ATP laboratories in CA countries 12.30-14.00 Lunch

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14.30-15.00 Daniel Mertens, EU HACCP Expert HACCP Laws and Regulations 15.00-15.30 Daniel Mertens, EU HACCP Expert Application of HACCP for transportation of goods 15.30-16.30 Daniel Mertens, EU HACCP Expert Case Studies and Discussions

Second Steering Committee & Regional Working Group Preliminary Programme May 22nd 2008, Tashkent Uzbekistan Dedeman Silk Road, Amir Timur Str. C 4, N. 7/8 Tashkent 700000 Uzbekistan

09.00-09.30 Registration 09.30 – 9:45 Welcome address and agenda by Ruggero Malossi 9:45 – 11.15 Discussion of the Work Plan (achievements, activities, tasks and risks) 11.15 Coffee Break 11.30 Programme for the next period 12.50 Ruggero Malossi, Project Team Leader, Consortium Safege, Rina, IRD “Conclusions” 13.00 Invitation to Lunch

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7.7 Study Tour program 26 July 2008 Departure to Almaty from Bishkek and Astana 27 July 2008 Departure to Venice from Almaty, Tashkent and Dushanbe Transfer to the Hotel 28 July 2008 Visit to the National Research Center of Padova (30 Km). • Organisation of a ATP test run on measurement of insulation capacity of the truck chassis (K factor). • Follow up of the procedures to complete the laboratory trial • Preparation of the relevant technical documentation in English (Training Course program, technical description of the equipment, description of the test procedures and test findings) 29 July 2008 National Research Center of Padova • Discussion of technical and legal details concerning ATP agreement • Organisation of participation of CA Government representatives to the annual ATP Working Group in Geneve 30 July 2008 Visit to the Laboratory Veneto Agricoltura (CSQA), Thiene, Vicenza (50 Km from Padova) • Presentation on HACCP methodology • EC food regulations • Activities of the laboratory in the field of food quality and safety • Visit of the laboratory and to the plant of production of starter cultures for food and feed Transfer to Hotel in Reggio Emilia (200 Km) 31 July 2008 Visit of the ATP Expert Laboratory MPM, Reggio Emilia (Mainini) • Organisation of a ATP test run on measurement of the cooling capacity of the refrigerator. • Presentation on legal aspects of the ATP agreement 1 August 2008 ATP expert Laboratory MPM (Mainini) • Presentation on technical aspects of the ATP agreement • Discussion of technical and legal details concerning ATP agreement Transfer to the Hotel in Padova (200 km) 2 August 2008 Visit to an ATP expert laboratory in the area of Padova 3 August 2008 Day off 4 August 2008 Visit to the Dairy Plant of Soligo, Padova (HACCP application) 5 August 2008 Visit to the Multimodal Center of Bologna (150 km) Transfer to the Hotel in Venice 6 August 2008 Departure from Venice to Almaty, Tashkent and Dushanbe 7 August 2008 Departure from Almaty to Bishkek and Astana

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7.8 DRAFT ACTION PLAN DATED 22-05-2008 REGIONAL PLAN Page 1 of 2

CONCEPT AND TIMEFRAME ACTION TO BE TAKEN PROGRESS AND RESULTS

1. Support to the ATP Regional 1. Consult other data bases 3. Market Analysis by the time Market Study – Keep the 2. Keep contacts with other the 2nd progress report is Market Analysis updated during Projects ready the project period

Timeframe - June 2008 – November 2009

2. Review of ATP Related 1. Keep the information update 1. Task achieved National Transport and Health 2. Publish results on WEB site Regulations – To identify and 3. Discuss results with Beneficiaries collect all ATP Related during WG and set up plans for regulations that concern National Laws harmonisation Transport and Health aspects of ATP movement in Export/Transit/ Import/ Note: This should include any bi/tri/multi national trade and transport agreements that are currently or will be in force.

Timeframe – May 2008

3. Support improvement of local 1. Organise meeting national and 1. First training course to be laws to meet international regional working groups with the delivered in occasion of the standards – The ATP regulatory MoT and MoH of the different Tashkent Seminar 20-22 May environment in Central Asia has countries 2008 to be adapted to International 2. Help preparing working papers standards. addressed at improvement of Note: HACCP procedures should be transport hygienic conditions of adopted by all countries ATP products 3. Organise training courses on Timeframe – November 2009 HACCP procedures

4. ATP Focused Border Review 1. To collect the needed 1. Most crossing points identified The main regional crossing authorisations from the Ministry points are being inspected in of Finance in every single order to identify non-physical country barriers to the transport and commercialisation of ATP products.

Timeframe - May 2008 - June 2008

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CONCEPT AND TIMEFRAME ACTION TO BE TAKEN PROGRESS AND RESULTS 5. Specific Technical Training in Europe – to carry out the 1. Define the list of candidates 1. List of candidates almost Technical Study Tour in Europe 2. Make arrangements with the ready for 3 to 4 specialists from each European laboratories country. The local experts will be trained in European laboratories

Timeframe – Before 1st September 2008

6. Specific training in Central 1. Organise National Working Asia – to provide training to local groups in each country experts on ATP standards, ATP laboratory tests, HACCP, required documentation for transport in Central Asia

Timeframe – Regularly every 3 months

7. Prepare an ATP Handbook 1. Translate relevant parts of the 1. Part of the manual already adapted to each country – The Italian ATP manual Handbook available on the project site: manual should contain all laws, 2. Discuss changes and as single documents regulations both international and modifications to adapt it to the national governing the CA conditions with the National transportation of perishable food Experts stuff Note: the local legislations in terms of regulation of production, sale and consumption of perishable food stuff have to be harmonised with European laws.

Timeframe – November 2009.

8. ATP Project Test Equipment – 1. Finalise the Feasibility Studies 1. Feasibility studies and Assist the Kazakhstan and 2. Deliver equipment technical equipment technical Uzbekistan in setting up the specifications specifications almost ready laboratories. Define with the 3. Train local experts on specific 2. Memorandum of other countries the actions to be equipment understanding among taken. 4. Enforce the Memorandum of stakeholders signed in Understanding among the Kazakhstan Timeframe – Before end December stakeholders in Kazakhstan 2008 5. Sign a similar agreement in Uzbekistan 9. Fruit and Vegetable Export/Transit/Import – 1. Discuss the matter with 1. Established contacts with Promote inclusion of Fruit and Beneficiaries Italian ATP representatives at Vegetables in the ATP product 2. Organise participation of Central the Geneve WGs that will list. Asian country representatives to facilitate the organisation of Note: This option is going to be the ATP WG that takes place the event supported by other European regularly in Geneve, Switzerland countries like Italy and Spain

Timeframe – Beginning 2009

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10. Case studies – Carry out case studies at the laboratories and 1. Assist the Partners in the verify the accuracy of the ATP realisation of the laboratories tests. 2. Provide technical assistance and training Timeframe – May - November 2009

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7.9 Market Assessment (attached as a separate document)

Abstract

Market analysis of perishable goods transportation in Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan shown that major trade and traffic flows of perishable products have northern direction. Russia continuous to be the main trade partner for all countries of the region both for export and import trade. European Union also plays quite important role in the trade and traffic flows of perishable goods. Traffic flows from EU are predominantly import flows. Trade of perishable goods between the countries of the region plays less important role, except of Kazakhstan and Kyrgyzstan, where both countries can be considered as second most important partners for each other.

Among four countries Kazakhstan and Uzbekistan have the largest fleets of temperature controlled vehicles. These vehicles are primarily used for the transportation of fruits and vegetables, and to the lesser degree for the transportation of perishable goods. The total number of temperature controlled vehicles in the regions can be estimated as 2,300 – 2,400 for articulated vehicles with payload of 20 – 22 tons, and about 11,000 for all temperature controlled vehicles.

The number of vehicles in the region is assumed to grow slightly ahead of the regional GDP growth, for the purpose of the forecast of the number of vehicles project team used a trend line with 10% of year-to-year increase.

According to the current estimates and projections until 2015, it is recommended to install 2-3 equipment certification centres both in Kazakhstan and Uzbekistan. In Kyrgyzstan one centre is sufficient for the existing volume of temperature-controlled vehicles.

The number of temperature-controlled equipment in Tajikistan does not fully justify the set up of a testing station until 2015. For Tajikistan, there is no urgent need to set up testing centres. For several years after accession to the ATP Agreement, Tajikistan can rely on experts’ decisions about compliance of temperature-controlled equipment or apply the results of laboratory tests, carried out by equipment certification centres of Kazakhstan, Uzbekistan and Kyrgyzstan.

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7.10 Second Steering Committee & Regional Working Group 20-22 May 2008, Tashkent Uzbekistan Dedeman Silk Road, Amir Timur Str. C 4, N. 7/8 Tashkent 700000 Uzbekistan

List of Participants

Hamidov Ahmadzhon Uzbekistan Chairman of association "Uztranssanoat" Karimov Abdukhamid Uzbekistan Director «Uzstandart»

Gataulin Farid Kyrgyzstan Kyrgyz Short-term ATP expert

Ismagilova Irina Kazakhstan Senior specialist of the Ministry of Transport and communication

Malossi Ruggero Kazakhstan Project Team Leader Gulyamova Marina Uzbekistan Technical expert GOPA Tashodjaeva Larisa Uzbekistan Deputy coordinator “Europe house”

Umida Khaknazar Short Term Expert

Erbekov Sherbek Project Expert, Uzbekistan

Egimbaev Almaz Project Expert, Kyrgyzstan Rustamova Manzura Project Expert, Tajikistan Samukhin Oleg Project Expert, Kazakhstan Kuandykov Adil Office Manager Tatvaeva Ainash Office Assistant

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Minutes 1st Day 9:30 – 10:00 Olimjon Buranov: Welcome Address, project realization in the frame of ATP agreement

10:00 – 10:20 Ruggero Malossi: Agenda, project activities, results, expectations and risks, preparation of ATP market assessment with forecasts, national legislation review.

10:20 – 10:40 Sherbek Erbekov: Uzbek Market of perishable products and transportation of perishable goods. Development of transport vehicle certification in the frame of ATP Agreement in Uzbekistan.

10:40 – 11:00 Oleg Samukhin: Kazakh Market of perishable products and transportation of perishable goods. Development of transport vehicle certification in the frame of ATP Agreement in Kazakhstan

11:30 – 12:00 Almaz Egimbaev: Kyrgyz Market of perishable products and transportation of perishable goods. Feasibility assessment for accession on Kyrgyzstan into the ATP Agreement

12:00-12:30 Gataulin Farid: Feasibility assessment for accession on Kyrgyzstan into the ATP Agreement. Recommended accession of Kyrgyzstan to ATP agreement.

12:30-13:00 Oleg Samukhin: Cross-border points monitoring in CA countries. Presented results: Karasu( Kazakhstan)-Ak-Tilek (Kyrgyzstan), Korday (Kazakhstan)-Ak-Zhol (Kyrgyzstan). Presented plan for monitoring of cross-border points in CA countries.

14:00 – 14:30 Umida Khaknazar: Gap Analysis of Central Asian legislation about transportation of perishable goods

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2nd Day

09:30-10:00 Manzura Rustamova: Tajik Market of perishable products and transportation of perishable goods. Feasibility assessment for accession on Tajikistan into the ATP Agreement

10:00-10:30 Stefano Rossi: ATP International regulatory Environment. Presentation “ATP, brief introduction” ATP test laboratories, equipment specifications, presentation. ATP Testing and Certification, presentation.

11:00-12:30 Ruggero Malossi: Realisation of ATP laboratories in CA countries

14:30-15:30 Daniel Mertens: HACCP Laws and Regulations. Presentation “HACCP, a synthesis of the methodology of Hazard Analysis and Critical Control Points” Presentation: “Facilitation of the implementation of the HACCP principles in food businesses” Application of HACCP for transportation of goods Case Studies and Discussions

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Second Steering Committee May 22nd 2008, Tashkent Uzbekistan Dedeman Silk Road, Amir Timur Str. C 4, N. 7/8 Tashkent 700000 Uzbekistan

Minutes

Dusupova Gulnara, project director: welcome address.

Ruggero Malossi, team leader: agenda, activities, tasks.

Presentation “PROJECT ACTION PLAN FOR THE NEXT PERIOD” by Ruggero Malossi

Ruggero Malossi, detailed action plan review:

For the updating all project information, materials and presentation of the participants will be published on web-site in English and Russian languages.

Next task: For the support of the ATP Regional Market Study, update information on market analysis of the CA countries will be carried on by the project team.

The ATP regulatory environment in Central Asia has to be adapted to International standards. With this view the meetings of the national and regional working groups with the MoT and MoH representatives will be organised.

Next project task is a review of the regional cross border points.

Samukhin Oleg, consultant: for the obtaining a permit on cross border points monitoring between Russia and Kazakhstan we prepared a letter to Customs Control Committee of the Republic of Kazakhstan and Federal Customs Service of Russian Federation. Cross border points monitoring will be carried out in June 2008.

Ruggero Malossi, discussion about the candidates for study tour in Europe. According to the project requirements 3 or 4 specialists from each country were selected for the Technical Training. During the study tour it is planning to visit 3 ATP laboratories in Italy. Then these specialists will carry out the technical training on ATP standards, HACCP procedures and laboratory tests for the local experts in Central Asia. For this purpose national working groups will be organized in each country.

Momukulova Atyrkul, Accreditation Center, Kyrgyzstan: proposal of candidate for the study tour from Accreditation Center. Questions concerning authority of the ATP experts, differences between certificates issued by laboratory and expert.

Koneva Elena, director Termoking, Kazakhstan: provided short summary about ATP expert authority, test laboratory activity, period of ATP certificates validity.

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Ruggero Malossi: ATP Handbook adapted to each country including amendments and recommendation of the national experts will be prepared. Handbook will include both international and national regulatory norms on transportation of perishable foodstuff.

Regarding to ATP Project Test Equipment it is planning to support Uzbekistan and Kazakhstan in establishing of the ATP laboratories.

For the implementation of this task the following measures will be carried out:

• Finalising the Feasibility Studies

• Delivering of the equipment technical specifications

• Training of the local experts on specific equipment

• Enforcing of the Memorandum of Understanding among the stakeholders in Kazakhstan

• Signing of a similar agreement in Uzbekistan

Participation of Central Asian country representatives to the European ATP WG will be organized for admission of Fruit and Vegetables products in the ATP product list. This meeting takes place regularly in Geneva, Switzerland

Nalobina Elena, Head of department of external economic relations, Kyrgyzstan: proposal of candidate form Kyrgyzstan for participation in regular Working Group in Geneva for promotion of Kyrgyzstan joining to the agreement.

Ruggero Malossi: For verification of the accuracy of the ATP tests the case study will be carried out after laboratory test of the refrigerating unit. It is planning to assist the Partners in the realisation of the laboratories and to provide technical assistance and training.

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7.11 Copy of some equipment offers sent by different suppliers

AGConsulting S.a.s. Viale John F. Kennedy, 49 IT –10042 Nichelino (TO) [email protected] Tel. +39 3355900659 AG Consulting di Guido Ballocca & C. –V.le Kennedy, 49 –I-10042 Nichelino (TO) Italy –REA: 1009971 –C.F. / P.IVA 08916390019

Page 1 of 1 Ref: of09/08GB

Object: Offer for the supply of ATP DARF K certification systems in Russian language. As per previous agreement with Yr. Ing. Malossi, please find our best offer for the equipments hereunder described and the relative accessories: No. 1 System DARF K, able to perform one (1) test , constituted by 1 portable PC, 1 concentrator, 1 internal + 1 external acquiring devices and 3 class B PT100 thermal probes, 1 ventilated heater at 4kW, 2 auxiliary fans, able to drive the building air conditioning system by a PWM 0 to 5V 1Hz signal 19.000 € No. 1 Set of accessories (1 double cart, 3 probe support pedestals) 4.500 € Software for testing & certificate management included in price. User guide on CD support included in price. Tuning of complete system has to be performed yearly by AG Consulting. Periodical calibration of 1 external acquiring device, 1 internal acquiring device and 3 thermal probes (*) 2.300 € (*) Transport costs and risks at customer charge. Terms of supply Delivery: 90 days from order receipt , for lots of max 5 complete systems Delivery terms: Ex-works Payment: 30% at order, 30% at delivery , 40% at 60 days . Warranty: 24 months from delivery date for construction defects as per CE Norms. We wish the offer will be of Your interest, and remain at your disposal for any further information required. Best regards AG Consulting S.a.s. Guido Ballocca Nichelino, 2007 September 14th Attn. SAFEGE Consulting Engineers European Division Gulledelle 92 B-1200 Bruxelles Belgium Ing. Ruggero Malossi

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GIULIANI GIANFRANCO 22/05/08 Address: Via A. Grandi, 1

8 20091 Bresso MILANO ITALY Tel/Fax 0039 2 66500337 M.Phone 0039 349 7557565 e-mail: [email protected]

TO: MALOSSI RUGGERO e-mail: [email protected]

Ciao Ruggero, a seguito tuo e-mail del 21/05 ti invio schema definitivo e offerte preliminari delle unità di trattamento per tua conoscenza relativa alle seguenti soluzioni impiantistiche

Soluzione A)

Installazione nella parte inferiore di:

N° 1 Unità da 40.000 mc/h di aria scheda tecnica 33333505 con batteria raffreddamento 29 KW batteria riscaldamento 23 KW Potenza assorbita motore elettrico 9,16 KW motore 15 KW Dimensioni mm. Lunghezza 4.450 Larghezza 2.650 Altezza 2.800

Installazione nella parte superiore di

N° 1 Unità ventilante da 40.000 mc/h scheda tecnica 33333503 con 2 ventilatori da 20.000 mc/h cad Potenza assorbita motore elettrico 4,23 KW cad. motore 5,5 KW cad. Dimensioni mm. Lunghezza 1.400 Larghezza 2.650 Altezza 1.450

Non si può mettere un solo ventilatore per lo spazio disponibile in altezza

La larghezza di 2.650 mm non può essere ridotta.

Potenza assorbita da motori ventilatori 9,16 + 4,23 + 4,23 = 18,62 KW

Potenza frigorifera a disposizione del tunnel circa 8 / 9 KW

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1.400

40.000 mc/h 1.450

H 4.280 40.000 2.800

4.450

Attacchi batterie 1 o 2 Ventilatori Ventilatore Filtri

2.650 mm

4.280 mm. TUNNEL

LUNGHEZZA UNITA’ DA VERIFICARE IN FASE ESECUTIVA

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AGLI ANGOLARI DELLE UNITA’ POSSONO ESSERE FISSATE LE PARETI E IL SOFFITTO DELLA CANALA DI RIPRESA ARIA

3 ALTERNATIVA

Soluzione B)

Installazione in testa al tunnel di:

N° 2 Unità da 40.000 mc/h di aria scheda tecnica 33333504 Da installare sovrapposte con batteria raffreddamento 14,5 KW cad. Totale 29 KW batteria riscaldamento 11,5 KW cad. Totale 23 KW 2 ventilatori cad.unità Potenza assorbita motori elettrici 4,85 cad motori 7,5 KW cad. Dimensioni mm. Lunghezza 4.450 Larghezza 3..750 Altezza 2.000

Non si può mettere un solo ventilatore per unità

Potenza assorbita da motori ventilatori 4,85 + 4,85 + 4,85 + 4,85 = 19,40 KW

Potenza frigorifera a disposizione del tunnel circa 8 / 9 KW

3.750

4.450

Tettoia di copertura

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2.000

N° 2 Unità Tot. 80.000 mc/h

Le batteria di raffreddamento lavorano solo in raffreddamento sensibile.

Se dovesse formarsi condensa sulla batteria la temperatura in mandata sarà più elevata. di quella indicata sulla scheda tecnica

Con ventilatore di estrazione in funzione durante il periodo estivo sono necessari circa 10 KW/h per il raffreddamento di 500 mc/h di aria.

Ti va bene quanto sopra indicato ??

Modello gruppo refrigeratore YORK YLHA 40 da 29 KW come da catalogo che ti ho inviato.

AGLI ANGOLARI DELLE UNITA’ POSSONO ESSERE FISSATE LE PARETI E IL SOFFITTO DELLA CANALA DI RIPRESA ARIA

La SAIVER sta preparando le quotazione per gli altri componenti richiesti

QUOTAZIONI DI LISTINO UNITA’

SOLUZIONE A) 31.245 + 9.482 EURO 40.727

SOLUZIONE B) 26.689 + 26.689 EURO 53.378

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MARKET ASSESSMENT

JULY 2008

Issued with 2nd Project Progress Report – January to July 2008

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TABLE OF CONTENTS

1 EXECUTIVE SUMMARY 5 2 INTRODUCTION 6 3 OVERVIEW OF PERISHABLE GOODS TRANSPORTATION MARKET IN 8 CENTRAL ASIA 3.1 Overview: Kazakhstan 8 3.2 Overview: Kyrgyzstan 24 3.3 Overview: Uzbekistan 30 3.4 Overview: Tajikistan 36 4 CONCLUSIONS AND RECOMMENDATIONS 42

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1. EXECUTIVE SUMMARY

Market analysis of perishable goods transportation in Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan shown that major trade and traffic flows of perishable products have northern direction. Russia continues to be the main trade partner for all countries of the region both for export and import trade. European Union also plays quite important role in the trade and traffic flows of perishable goods. Traffic flows from EU are predominantly import flows. Trade of perishable goods between the countries of the region plays less important role, except of Kazakhstan and Kyrgyzstan, where both countries can be considered as second most important partners for each other.

The number of vehicles in the region is assumed to grow slightly ahead of the regional GDP growth, for the purpose of the forecast of the number of vehicles, project team used a trend line with 10% of year-to-year increase.

According to the current estimates and projections until 2015, it is recommended to install 2- 3 equipment certification centres both in Kazakhstan and Uzbekistan. In Kyrgyzstan one centre is sufficient for the existing volume of temperature controlled vehicles.

The number of temperature controlled equipment in Tajikistan does not fully justify the set up of a testing station until 2015. For Tajikistan, there is no urgent need to set up testing centres. For several years after accession to the ATP Agreement, Tajikistan can rely on experts’ decisions about compliance of temperature controlled equipment or apply the results of laboratory tests, carried out by equipment certification centres of Kazakhstan, Uzbekistan and Kyrgyzstan.

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2. INTRODUCTION

Road transportation of perishable goods in Central Asia is regulated by a range of national, bilateral and multilateral laws and agreements. ATP Agreement plays the most significant role among these laws and agreements. According to the ATP agreement equipment for transportation of perishable goods should be regularly tested in specialized certification centres, and based on the results of tests road vehicles are certified for transportation of certain classes of perishable products. Normally, over the years, capacity of refrigeration units to generate cold and insulation of trailers degrade. Accordingly, proper laboratory tests are required to be repeated every 6 years. Among Central Asian countries only Kazakhstan and Uzbekistan joined the agreement. Neither of two countries has a capability for proper testing and certification of equipment for transportation of perishable goods. The main purpose of this report is to assess current situation and future development of perishable goods transportation market in Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan. Based on this analysis, recommendations about the number and location of equipment certification laboratories will be made.

Four countries – beneficiaries of the projects have quite significant differences in the level of personal income and food product consumption per capita, production of agricultural products and maturity of road transportation markets. Oil rich Kazakhstan differs significantly from three other countries both by the level of income per capita and share of agricultural production in the economy.

Agricultural sector of Kazakhstan was affected by strong dependence of Kazakh economy on the mineral sector. After collapse of the Soviet Union, many people employed in the agricultural sector either left the country or moved to the cities. Agricultural sector of Kazakhstan did not receive sufficient investments and does not receive proper labour skills for development. It resulted in the considerable loss of agricultural competence of the country and its ability to satisfy internal demand for food products from domestic production. On the other hand Kazakhstan has an ability to import considerable volumes of food from international markets. Road transportation market of Kazakhstan is quite deregulated, Kazakh road carriers actively participate is cargo traffic between Kazakhstan, EU and Russia.

Since independence Kyrgyzstan lost most of its industrial base, but was able to increase agricultural production. Currently Kyrgyzstan is able to export agricultural products to Russia

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Uzbekistan is famous for its agricultural products, primarily fruits and vegetables. A lot of these products are exported to other countries by temperature controlled vehicles. Uzbek transportation market is affected by high duties for import of road vehicles, inefficient currency regulation and protective policy towards road carriers of other countries. As a result, compared to Kyrgyz carriers, Uzbek transportation companies have low presence in the region outside of Uzbek national borders.

Tajikistan is a mountainous country with relatively high share of agricultural production in the economy. Tajikistan depends on import of certain food products from Russia and Middle East countries. Road transportation market of Tajikistan is underdeveloped, compared to Kazakhstan and Kyrgyzstan.

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3. OVERVIEW OF PERISHABLE GOODS TRANSPORTATION MARKET IN CENTRAL ASIA

3.1. Overview: Kazakhstan

Perishable goods traffic flows Kazakhstan is predominantly importing country for perishable food products. Analysis of international trade data for 2004-2006 (Exhibit 1) shows that balance of export to import within 3 years declined from 34% to 25% in weight equivalent. Only one category of perishable products – fish and seafood has steady excess of export over import for the period. This is explained by production and export of fish from Western Kazakhstan (Caspian Sea) and Eastern Kazakhstan (Irtysh and Tobol rivers, Balkhash lake, etc.).

Exhibit 1. Balance of trade, by weight, export to import ratio Source: Consultant, based on data from Customs Control Committee 2004 2005 2006 Processed meat and fish 6% 2% 2% Butters and fat 38% 30% 29% Milk, eggs, etc 3% 4% 3% Meat 1% 2% 1% Fish and sea food 191% 186% 182% Total 34% 30% 25%

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It is interesting to observe the difference in the balance of trade by vehicles (Exhibit 2), compared to balance of trade by weight. In 2006 export/import ratio by weight was 25%, while export/import by vehicles was only 10%. One of the possible explanations is that exporting vehicles load 2.5 times more than the importing vehicles, although there are no obvious reasons for that difference. Another explanation, which looks more realistic, is incorrect data for imported weight. Indeed, importers have an incentive to show lower weigh to avoid customs duties and tariffs, while there are no such incentives for exporters. Additional confirmation for this assumption is the claims of Chinese customs authorities that their records show considerably higher volumes of goods exported into Kyrgyzstan and Kazakhstan, than the statistics of Kazakh and Kyrgyz customs.

Exhibit 2. Balance of trade, by vehicles, export to import ratio Source: Consultant, based on data from Customs Control Committee 2004 2005 2006 Processed meat and fish 2% 2% 1% Butters and fat 24% 42% 54% Milk, eggs, etc 2% 3% 4% Meat 1% 2% 1% Fish and sea food 59% 56% 49% Total 12% 12% 10%

Russia and Kyrgyzstan are the main trading partners of Kazakhstan, both for import and export trade (Exhibits 3 and 4). In 2004 - 2006 more than 90% of processed meat and fish, butters and fat and more that 80% of fish and sea food were imported from Russia. 83.7% of meat was imported from EU (Lithuania, Latvia, Poland, Germany). 40% of milk and milk products was imported from Kyrgyzstan.

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Main importers of Kazakh perishable goods in 2004 – 2006 are Tajikistan – 41.5% and EU (Latvia, Lithuania, Germany) – 47.3%. The main importer of butters and fat is Kyrgyzstan – 91.3%. Russia imports more than 70% of milk and diary products and fish, and 60% of meat.

Exhibit 3. Main exporters of perishable goods to Kazakhstan (average for 2004 – 2006) Source: Consultant, based on data from Customs Control Committee Country % of total weight Cumulative Russia 60.4 60.4

Kyrgyzstan 18.7 79.1

Latvia 6.1 85.2

Lithuania 3.9 89.1

Poland 3.5 92.6

Ukraine 2.2 94.8

Germany 1.4 96.1

USA 1.0 97.1

Exhibit 4. Main importers of perishable goods from Kazakhstan (average for 2004 – 2006) Source: Consultant, based on data from Customs Control Committee Country % of total volume Cumulative Russia 62.7 62.7

Kyrgyzstan 17.2 79.9

Lithuania 5.6 85.5

Ukraine 4.1 89.6

Germany 3.9 93.5

Tajikistan 1.9 95.5

Netherlands 1.2 96.6

Latvia 0.9 97.5

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Significant proportion of perishable goods traffic within Kazakhstan is not transparent. It occurs in small volumes, hauled for short distances within national borders by small market agents. On the other hand these movements do not involve at present and most likely will not use in near future large capacity refrigerated vehicles. Accordingly, within the scope of this study, traffic flows which cross national borders can give quite accurate approximation of the overall flow of perishable goods in Kazakhstan. Exhibit 5 shows relative weight of main origin and destination points of Kazakhstan in the total volume of perishable goods transportation.

Exhibit 5. Terminal points (origins and destinations) for perishable traffic Source: Consultant, based on data from Customs Control Committee Total, ton % of total Almaty city 117,847 24.2% Atyrau obl 40,269 8.3% Karaganda obl 40,169 8.3% Aktyubinsk obl 34,788 7.2% Western Kazakhstan 33,536 6.9% Eastern Kazakhstan 28,876 5.9% Zhambyl obl 28,673 5.9% Kostanay obl 24,155 5.0% Pavlodar obl 18,915 3.9% Almaty obl 13,102 2.7% Astana city 12,788 2.6% North Kazakhstan 11,029 2.3% Akmola obl 9,615 2.0% South Kazakhtan 3,845 0.8% Mangistau obl 3,188 0.7% Kzyl-Orda obl 834 0.2% Total 486,117 100.0%

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Exhibit 6 shows relative weights of Kazakh administrative units by volume of perishable goods received. This distribution is compared to the population of administrative units. Those regions, which receive more goods per capita, do not necessarily consume more goods. In certain cases they may serve as transshipment points for further distribution within Kazakhstan.

Exhibit 6. Destination points for perishable goods traffic Source: Consultant Per capita GDP/capita Population Import, ton % of total (kg) (USD) Almaty city 1,324,739 100,373 26.6% 76 17,830 Aktyubinsk obl 703,660 34,778 9.2% 49 7,380 Karaganda obl 1,342,081 33,091 8.8% 25 6,900 Zhambyl obl 1,018,845 27,426 7.3% 27 1,900 Western Kazakhstan 615,310 27,348 7.3% 44 8,350 Kostanay obl 894,192 23,413 6.2% 26 4,900 Pavlodar obl 746,454 16,295 4.3% 22 6,400 Atyrau obl 490,369 14,765 3.9% 30 21,640 Astana city 602,684 12,231 3.2% 20 19,730 Eastern Kazakhstan 1,417,384 9,817 2.6% 7 4,460 Northern Kazakhstan 653,921 9,466 2.5% 14 3,900 Akmola obl 747,447 9,269 2.5% 12 3,900 Almaty obl 1,643,278 8,926 2.4% 5 2,600 Mangistau obl 407,403 3,188 0.8% 8 15,450 South Kazakhstan 2,331,505 1,517 0.4% 1 1,800 Kzyl-Orda obl 632,234 18 0.0% 0 6,100 Total 15,571,506 377,193 100% 24 6,870

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Main exporting regions of Kazakhstan are Atyrau and Eastern Kazakhstan oblasts, which mostly export fish products and Almaty city (Exhibit 7). Together these 3 regions account for more than a half of the total Kazakh export of perishable products.

Exhibit 7. Origin points for perishable goods traffic Source: Consultant, based on data from Customs Control Committee

Export, ton % of total Atyrau obl 25,504 23.4% Eastern Kazakhstan 19,059 17.5% Almaty city 17,474 16.0% Karaganda obl 7,078 6.5% Western Kazakhstan 6,188 5.7% Almaty obl 4,176 3.8% Pavlodar obl 2,619 2.4% Southern Kazakhstan 2,328 2.1% North Kazakhstan 1,563 1.4% Zhambyl obl 1,247 1.1% Kzyl-Orda obl 816 0.7% Kostanay obl 742 0.7% Astana city 557 0.5% Akmola obl 346 0.3% Aktyubinsk obl 10 0.0% Mangistau obl 0 0.0% Total 108,924 100%

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Perishable goods are imported to and exported from Kazakhstan through a range of Cross Border Points. All major CBPs for transportation of perishable goods are located along the borders with Russia and Kyrgyzstan. Despite high traffic of general merchandise through the border with Peoples Republic of China, traffic of perishable goods is considerably lower there (Exhibit 8).

Exhibit 8. Key Cross Border Points by total volume of perishable goods transportation Source: Consultant, based on data from Customs Control Committee Name Location % of total volume Export to Import Zhana Zhol North Kazakhstan 15.5 0.1 Naiza Pavlodar obl 9.4 114 Karasu Zhambyl obl 6.0 0.26 Kairak Kostanay obl 5.4 0.07 Kosak Pavlodar obl 5.1 3.48 Kurmangazy Atyrau obl 4.6 0.58 Bidaik North Kazakhstan 4.2 1.93 Amankeldy Pavlodar obl 4.1 14 Zhetikara Kostanay obl 4.0 39 Ubagan Kostanay obl 3.7 9 Ayat Kostanay obl 3.5 7.47 Taskala Western Kazakhstan 3.4 0.17 Syrym Western Kazakhstan 3.3 0 Martok Aktobe obl 3.0 0.03 Zhezkent Eastern Kazakhstan 2.8 34.71 Korday Zhambyl obl 2.1 0.16 Birlik Western Kazakhstan 1.9 0 Temir Baba Mangistau obl 1.8 0 B. Konysbaeva South Kazakhstan 1.8 0.05 Urlyutyube Pavlodar obl 1.8 0.21

Some Cross Border Points are actively used for export of perishable products. For example, CBP Naiza and Zhezkent, visited by the Consultant, have very basic infrastructure and roads leading to these CBPs are in extremely poor condition. Despite these constraints those and similar CBPs attract road carriers, because of their location and because it is easier to “deal” with the authorities of these CBPs. Approximate locations of major CBPs and predominant traffic flows are depicted in Exhibit 9.

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Exhibit 9. Key traffic flows of perishable goods to/from Kazakhstan (2004-2006) Source: Consultant

Zhana Zhol Karakoga Kairak Bidaik Ubagan Kosak Syrym Ayat Amangeldy Taskala Naiza Zhetykara Aul Ube Martok Alimbetovka Zhezkent

Kurmangazy

Korday Temir Baba Karasu

Abay B. Konysbaeva

It is essential to take into account that traffic flows have a tendency to change over time. For example, the decision of Federal Customs Service of Russian Federation to close clearance operations in Pavlovka – Naiza CBP diverted a significant share of traffic from Naiza to Kosak CBP in 2008. In 2008 Federal Customs Service plans to close import clearance operations in the range of other CBPs, which will result in diverting traffic volumes from certain CBPs.

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Road vehicles for carriage of perishable products Perishable products to and from Kazakhstan are transported by road vehicles of about 30 countries. The most active carriers operating in Kazakh market are Kazakh and Russian operators. Among Central Asian road transport operators only Kyrgyz have considerable presence, while Uzbek and Tajik operators almost have no presence in the Kazakh road haulage market (Exhibit 10).

Exhibit 10. Road vehicles for carriage of perishable goods by country, % of total weight Source: Consultant, based on data from Customs Control Committee

Vehicle 2005 2006 Registration Import Export Total 2005 Import Export Total 2006 Kazakhstan 69% 53% 66% 70% 50% 66% Kyrgyzstan 1.2% 2.4% 1.5% 2.2% 4.7% 2.7% Uzbekistan 0.0% 0.0% 0.0% 0.1% 0.0% 0.0% Tajikistan 0.0% 0.0% 0.0% 0.0% 0.1% 0.0% Russia 15% 35% 20% 10% 32% 15% Ukraine 1.1% 4.3% 1.9% 2.6% 5.3% 3.2% Byelorussia 0.4% 1.1% 0.6% 0.3% 0.9% 0.4% Latvia 7.7% 0.7% 6.1% 2.9% 0.5% 2.4% Estonia 0.2% 0.0% 0.1% 0.2% 0.0% 0.2% Lithuania 0.5% 0.2% 0.4% 0.5% 0.1% 0.4% Poland 2.8% 0.3% 2.3% 3.5% 0.2% 2.8%

Kazakh carriers control about 2/3 of the international road haulage market. By 2008 IRU affiliated Kazakh Association of International Road Carriers (KazATO) registered 837 specialized vehicles for transportation of perishable goods, which operate under TIR Carnet, which represents approximately 20% of all Kazakh vehicles with TIR Carnet. International and domestic operations are performed not only by TIR trucks. The total volume of vehicles, used for the carriage of perishable goods can be assessed through the number of Sanitary Passports issued by the Ministry of Health. Exhibit 11 shows the total number of road vehicles for transportation of perishable goods and a breakdown by the type of vehicles.

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Exhibit 11. Road vehicles for carriage of perishable goods with sanitary passports Source: Ministry of Health Type Quantity Insulated vehicles 2,386 Mechanically refrigerated 71 Refrigerators 1,478 Heated 524 TOTAL 4,459

Location of specialized vehicles with TIR Carnet and concentration of vehicles by the regions of Kazakhstan is shown in Exhibit 12. It can be seen that TIR vehicles for transportation of perishable goods are highly concentrated in Almaty and South Kazakhstan oblasts.

Exhibit 12. Road vehicles for carriage of perishable goods with TIR Carnet by oblast Source: Consultant based on data of KazATO, 2008 Oblast # of TIR rifer # of Transport Average # of trucks trucks companies per company Almaty 382 47 8.1 South Kazakhstan 269 7 38.4 Karaganda 69 9 7.7 Akmola 57 7 8.1 Aktyubinsk 17 2 8.5 Pavlodar 16 5 3.2 Mangistau 10 2 5.0 East Kazakhstan 5 2 2.5 Kostanay 3 2 1.7 North Kazakhstan 3 2 1.5 Kokshetau 2 2 1.0 Western Kazakhstan 2 1 2.0 TOTAL 837 89 9.4

Accordingly, main Kazakh carriers with TIR vehicles for transportation of perishable goods are primarily located in Almaty oblast and South Kazakhstan oblast (Exhibit 13).

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Exhibit 13. Carriers with largest number of TIR refrigerator vehicles Source: Consultant based on data of KazATO, 2008 Carrier Oblast # of trucks YugVneshTrans South Kazakhstan 119 BostaWan Almaty 77 KAZAVTOTRANS-South South Kazakhstan 44 SHINTRANS South Kazakhstan 41 DALA TRANS South Kazakhstan 30 TERMO TRUCK Almaty 29 TransMegaWest Almaty 28 KAZAVTOTRANS Almaty 24

Forecast of vehicles for transportation of perishable goods until 2015 There are several factors, which can influence the growth of a number of vehicles for transportation of perishable goods in Kazakhstan. Among those factors are the growth of GDP per capita, traffic flow growth, loading per vehicle, cycle turnover of vehicles from dispatch to delivery.

Traffic flow growth can be assumed as one of the key factors to influence the number of vehicles for transportation of perishable goods. Exhibit 14 shows the year to year growth of perishable goods transportation in Kazakhstan.

Exhibit 14. Trend in transportation of perishable goods over the period of 2004 – 2006 Source: Consultant, based on data from Customs Control Committee 2005 2005 to 2004 2006 2006 to 2005 Import, tons 122,147 20% 153,676 26% Export, tons 36,772 7% 37,871 3% Total, tons 158,918 17% 191,548 21% 2005 2005 to 2004 2006 2006 to 2005 Import, vehicles 22,398 59% 33,232 48% Export, vehicles 2,789 59% 3,365 21% Total, vehicles 25,187 60% 36,597 45%

Table above shows that import volume expressed in weight is considerably higher than export and it grows at the higher rate per year. This growth is converted into much higher rate of growth expressed in vehicles. Growth rate looks very significant: it can be explained by a considerable growth of the economy and personal consumption over 2004 – 2006, and An EU Funded Project under the Consortium Management of the following companies: 18

It is more prudent to assume that growth of traffic beyond 2007 will correlate with the long term growth of GDP. Exhibit 15 shows growth of Kazakh GDP over the period of 2000 – 2007 and the forecast until 2015

Exhibit 15. Growth of GDP in the Kazakh economy Source: Consultant Historical data Forecast 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 - 2015 9.6% 13.2% 9.5% 9.2% 9.1% 6.8% 10.6% 8.5% 5 – 7% 6 – 8%

Other factors, which can influence the quantity of temperature controlled vehicles are loading factor, efficient use of backhauls and delivery cycle time for each individual vehicle. Exhibits 16 and 17 show that loading per vehicle depends considerably on a product type, country of the vehicle registration and the type of the movement (import or export).

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Exhibit 16. Loading factor, tons per vehicle by product category Source: Consultant, based on data from Customs Control Committee 2004 2005 2006 Import Export Import Export Import Export Processed meat and fish 7.036 16.546 7.718 7.468 4.475 6.529 Butters and fat 8.735 13.795 11.389 8.185 13.199 7.230 Milk, eggs, etc 5.109 10.323 3.699 4.959 3.552 3.038 Meat 16.280 19.927 11.457 12.448 11.544 11.303 Fish and sea food 7.369 23.952 5.351 17.676 4.824 17.749 Total 7.179 20.165 5.453 13.185 4.624 11.254

Exhibit 17. Loading factor, tons per vehicle by country of registration Source: Consultant, based on data from Customs Control Committee Import Export Total Kazakhstan 4.8 9.3 5.1 Kyrgyzstan 7.6 4.4 6.1 Uzbekistan 7.7 N/A 7.7 Tajikistan N/A 8.0 8.0 Russia 3.8 19.0 5.9 Ukraine 9.5 15.3 10.9 Byelorussia 6.2 19.6 8.9 Latvia 10.5 20.0 10.7 Estonia 19.7 N/A 19.7 Lithuania 14.8 19.9 14.9 Poland 10.3 20.0 10.4

Assuming that traffic flow data are correct, table above shows that load per vehicle was reducing over the period of 2004 – 2006. In future load per vehicle can be influenced by several driving forces – demand of customers for fast deliveries, which may result in lower load per vehicles; on the other hand, carriers and customers will be interested to reduce transportation cost and accordingly will be looking for opportunities either to consolidate shipments or efficiently utilize milk runs. Consolidation (or Groupage) services normally require availability of logistics terminals, where Less than Truck Load shipments (LTL) can be consolidated into regularly dispatched Full Truck Load (FTL) shipments. Such terminals exist in the EU and there plans to develop a network of logistics depots in Russia and Kazakhstan. Successful implementation of these plans can result in increased payload per

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In addition, for all countries and categories of goods loads per vehicle for export shipments looks to be higher that for import shipments.

Next factor to influence the quantity of vehicles is the efficient use of backhauls. Exhibit 18 shows that Kyrgyz carriers are capable to find backhaul volumes, while EU carriers leave Kazakhstan with empty trailers. It is necessary to note that compared to other CIS carriers, Kazakh carriers do not use backhaul opportunities in full.

Exhibit 18. Ratio of exporting to importing vehicle by country per year Source: Consultant, based on data from Customs Control Committee Country 2005 2006 Kazakhstan 10% 9% Kyrgyzstan 54% 92% Uzbekistan 0 0 Tajikistan 0 N/A Russia 23% 16% Ukraine 68% 31% Byelorussia 23% 25% Latvia 1.7% 2.1% Estonia 0.0% 0.0% Lithuania 3.4% 1.9% Poland 1.6% 0.8%

Another factor, which is not quantified in this report, but has an impact on vehicle utilization are delays along the transit corridors. Currently non-physical and physical barriers reduce travel speed and vehicle utilization and accordingly require more vehicles for transportation. Development of transit corridors and reduction of non-physical barriers will lead to increase of vehicle utilization and accordingly will result in the reduced growth of vehicles for transportation of perishable goods.

Given all above factors, it is prudent not to use any particular figure for the growth of perishable goods transportation and fleet of vehicles for such transportation, but rather apply several scenarios in order to get the indicative figures until 2015. Given the expected growth of economy, international trade and logistics industry it is assumed that minimal growth of An EU Funded Project under the Consortium Management of the following companies: 21

Exhibits 19 and 20 show a forecast for TIR vehicles for international transportation of perishable goods and a forecast for all vehicles for transportation of perishable goods.

Exhibit 19. Forecast for TIR vehicles for transportation of perishable goods until 2015 Source: Consultant Scenario Growth 2008 2009 2010 2011 2012 2013 2014 2015 High 15% 837 963 1,107 1,273 1,464 1,684 1,936 2,226 Moderate 10% 837 921 1,013 1,114 1,225 1,348 1,483 1,631 Low 5% 837 879 923 969 1,017 1,068 1,122 1,178

Exhibit 20. Forecast for all vehicles for transportation of perishable goods until 2015 Source: Consultant Scenario Growth 2008 2009 2010 2011 2012 2013 2014 2015 High 15% 4,459 5,128 5,897 6,782 7,799 8,969 10,314 11,861 Moderate 10% 4,459 4,905 5,395 5,935 6,528 7,181 7,899 8,689 Low 5% 4,459 4,682 4,916 5,162 5,420 5,691 5,975 6,274

Based on these forecasts and an assumption that one equipment certification centre for transportation of perishable goods should be installed for every 1,500 – 2,000 vehicles, there is a need for 2-3 equipment certification centres in Kazakhstan. Based on the actual growth until 2015 and proper enforcement of ATP agreement, quantity of equipment certification centres for transportation of perishable goods may need to be increased up to 4 to 6 centres, with the most likely required quantity of 5 stations.

Initial location of these certification centres is determined by the relative traffic flows and geographic distribution of consumption (Exhibits 3 – 8). Consultant recommends considering logistics centres along mail road corridors near Almaty for the first centre and logistics terminals along mail road corridors near Astana and Karaganda for the second centre (Exhibit 21).

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Exhibit 21. Location of first equipment certification centres in Kazakhstan Source: Consultant

Astana

Karaganda Second center

Almaty First center Chimkent

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3.2. Overview: Kyrgyzstan

Perishable goods traffic flows

Kyrgyzstan is a mountainous country, neighbouring Kazakhstan, China, Uzbekistan and Tajikistan. Kyrgyzstan has the population of 5,317,000 people, more than half of which leave in 2 main valleys – Chui and Fergana. 39% of the total population leave in towns, while 61% are rural inhabitants. Main cities of Kyrgyzstan are Bishkek and Osh (Exhibit 22). According to the UN forecast, by 2025 population of Kyrgyzstan will reach 6,100,000, and in 2050 it will increase to 7,400,000.

Exhibit 22. Main population centres of Kyrgyzstan Source: Statistics Committee City Valley Population Bishkek Chui 808,900 Osh Fergana 221,300 Jalal-Abad Fergana 83,400 Karakol Issyk-Kul 62,200 Tokmak Chui 57,000 Uzgen Fergana 44,900 Kyzyk-Kiya Fergana 43,700 Kara-Balta Chui 43,600 Balykchi Issyk-Kul 42,100 Naryn Naryn 41,000

Exhibit 23 depicts the location of main population centres and key Cross Border Points of Kyrgyzstan with neighbouring countries. Normally traffic of perishable products goes across the border with Kazakhstan. Kazakh-Kyrgyz border is a relatively simple for transit, both because of the geographical location in the flat valley region and relatively simple customs and other cross-border procedures. Main cross border points for the transit of perishable goods are Ak-Tilek and Ak-Jol.

Cross Border Points with People’s Republic of China (PRC) – Torugart and Irkeshtam are heavily used for the traffic of consumer products. These Cross Border Points are located in the mountainous regions in the altitude of above 3000 m. Here carriers are subject to severe road and climate conditions and more restrictive cross-border procedures. Cross Border Points with Uzbekistan are intensively utilized for the transportation of fruits and vegetables. An EU Funded Project under the Consortium Management of the following companies: 24

There is a relatively low volume of traffic of perishable goods, regulated by the ATP Agreement. Due to the restrictive practices for transit of road vehicles through Uzbekistan, large volume of goods crosses the border of Uzbekistan in small vehicles and man-powered carts under the simplified customs regime. After crossing the border these goods are consolidated and carried further by Kyrgyz trucks to Kyrgyzstan, Kazakhstan and Russia or by Uzbek trucks to Uzbekistan. Movement of goods through Kyrgyz-Tajik border does not have significant constraints, except of the mountainous geography and poor road conditions.

Exhibit 23. Population density map and main Cross Border Points of Kyrgyzstan Source: Consultant, based on based on Center for International Earth Science Information Network (CIESIN), Columbia University; and Centro Internacional de Agricultura Tropical (CIAT), Gridded Population of the World (GPW), Version 3. Palisades, NY: CIESIN, Columbia University

Ak-Jol Ak-Tilek BISHKEK Balykchi

Jalal-Abad Kara-Suu Torugart Osh Kyzyl-Kiya

Karamyk Irkeshtam

Despite relatively good development of agricultural sector of Kyrgyzstan in overall and fruits and vegetables production in particular, production of perishable goods demonstrates very moderate increase (Exhibit 24). Further analysis of Exhibit 25 shows that in terms of international trade of perishable goods, except milk, Kyrgyzstan in the net importer.

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Exhibit 24. Agricultural production of Kyrgyzstan, thousand tons Source: National Statistics Committee

1990 1994 1998 2002 2003 2004 2005 2006 Meat 254.1 197.2 191.1 200.4 193.6 187.7 181.7 182.6 Milk 1185.0 871.6 972.7 1172.9 1191.8 1184.7 1197.6 1212.1 Eggs (millions) 713.8 201.6 175.8 243.1 267.6 298.7 317.5 328.7 Grains 1503.2 996.3 1619.0 1752.8 1670.5 1746.6 1667.4 1562.2 Sugarbeet 1.7 114.2 429.2 521.5 812.2 642.4 288.8 226.0 Cotton 80.9 53.5 77.8 106.4 105.9 121.7 118.1 117.5 Tobacco 53.9 36.4 28.1 6.1 8.7 13.0 13.4 13.4 Vegetable oil crop 10.3 14.2 43.8 72.4 77.6 93.9 87.6 78.6 Potatoes 365.1 310.9 773.5 1244.0 1308.2 1362.5 1141.5 1254.7 Vegetables 487.3 265.6 555.9 456.2 678.0 742.2 736.6 761.3 Melons 71.4 18.9 46.6 42.2 85.3 88.0 85.8 97.7 Fruits and berries 140.9 79.1 102.6 152.6 141.9 175.8 146.7 186.6 Grapes 43.3 17.6 17.2 15.0 11.7 14.6 11.4 14.7 Wool 39.0 21.2 11.5 11.6 11.6 11.0 10.6 10.6

Exhibit 25. Volume and balance of trade of perishable products, tons Source: Consultant, based on data from State Customs Committee 2006 2007 Export/ Export/ Product group Import Export Import Export Import Import Meat and meat products 19,988 77.32 0.4% 32,524 0.48 0.0% Fish and sea products 3,884.1 10.34 0.3% 5,261 230.3 4.4% Milk, dairy products, etc. 4,731.9 37,423 790.9% 8,530 34,301 402.1% Butters and fats 29,170 6,125.6 21.0% 35,649 6,074 17.0% Processed meat and fish 3,734.2 58.22 1.6% 4,724 43.88 0.9%

Main traffic of perishable goods to and from Kyrgyzstan occurs with its neighbours – Kazakhstan and Russia. For example, Kyrgyzstan exports raw milk to and imports dairy products and butters from Kazakhstan.

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Road vehicles for carriage of perishable products

The total number of road vehicles for cargo transportation in Kyrgyzstan was 41,566 (2008). For comparison in 1997 the quantity of trucks was 66,506. For international transportation operations Kyrgyz carriers are required to obtain a license. Contrary, for domestic transportation operations licenses are not needed. According to the Kyrgyz Transport Inspection, in 2008 3,656 vehicles had licenses for international operations. Among those vehicles, 1,479 vehicles operated with TIR Carnets.

In comparison with Kazakhstan, where share of temperature controlled vehicles among all vehicles with TIR Carnet does not exceed 20%, in Kyrgyzstan temperature controlled vehicles account for more than 50% of all TIR Carnet vehicles (Exhibit 26).

Exhibit 26. Road vehicles with TIR Carnets Source: KyrgyzASMAP Vehicle types Quantity Refrigerators 853 Soft body 186 Auto-transport 409 semitralers Hard body 34 TOTAL 1,479

A lot of Kyrgyz trucks are very old. A lot of them were inherited from Soviet times. Brand new trucks are very rare, Kyrgyz carriers prefer to buy second-hand trucks, which are normally much cheaper than brand-new ones. Exhibit 27 shows the distribution of refrigerator trucks by year of manufacture. As it can be seen from the table, only 2% of vehicles out of the total have age of 6 or les years, thus almost all vehicles, which are used for transportation of perishable goods to the EU should have taken more than one ATP test after the date of manufacture.

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Exhibit 27. Distribution of refrigerator trucks by year of manufacture Source: Kyrgyz Transport Inspection Year of manufacture Share of total (%) 2002 - 2003 2 2001 6 2000 12 1999 16 1998 20 1997 10 1996 14 1995 8 1994 1 1993 1 1992 4 1991 5 1990 1 1989 1 1986 0.8 1984 0.2 1979 0.2

Forecast of vehicles for transportation of perishable goods until 2015

Forecast of the quantity of vehicles for transportation of perishable goods until 2015 is based on the number of factors and sources: - analysis of road transportation industry in Kyrgyzstan, neighbouring countries and trade partner countries - traffic flows along main transit corridors - impact of main projects and activities in the area of road transportation, both in Kyrgyzstan and in the region - impact of the legal regulation of international transportation operations - interviews with road carriers, drivers, regulatory authorities, associations of road carriers about the number of issued permits and general trends in the road transportation market - historical data about the number of issued permits and TIR Carnets - other sources: mass-media, Internet, Reports, etc.

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Exhibit 28. Forecast of the number of refrigerator trucks in Kyrgyzstan until 2015 Source: Consultant Year 2009 2010 2011 2012 2013 2014 2015

Quantity of vehicles 920 990 1,050 1,090 1,140 1,200 1,300

Based on the projected figures and an assumption that one ATP certification centre can service 1,500 – 2,000 trucks, the consultant recommends setting up one station. The most appropriate location of the centre is Bishkek.

As a temporary or constant option, Kyrgyzstan can use ATP certification centres in Kazakhstan and Uzbekistan. The main prerequisite for such arrangement will the acceptance of tests, carried out by the centres of the neighbouring states, by the Kyrgyz Ministry of Transport.

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3.3. Overview: Uzbekistan

Perishable goods traffic flows

Main traffic flows in Uzbekistan have southbound and northbound directions. Most of the traffic comes from and goes to the South. In 2007, export of all agricultural products through main Uzbek Cross Border Points (CBP) exceeded 210,000 ton. Most of the agricultural products are exported to Russia. Main CBPs of Uzbekistan for export of agricultural produce are shown in Exhibit 29, while Exhibit 30 shows the average daily quantity of trucks and average time for border crossing at the main CBPs of Uzbekistan.

Exhibit 29. Export volumes of agricultural products through main Uzbek CBPs Source: State Customs Committee Cross Border Point Export, 000 ton Main trade flows, to S. Najimova 64 Russia Airatom 61 Afghanistan Uchkurgan-1 25 Russia Navoi 22 Russia Alat 15 Middle East, EU

Exhibit 30. Average daily quantity of trucks at CBPs and time for crossing the border Source: Agency of Road and River Transport Cross Border Country Import to Uzbekistan Export from Uzbekistan Point Daily Average time Daily Average time number of to cross the number to cross the trucks border, min of trucks border, min Yallama Kazakhstan 13 27 12 26 Ok-Oltin Kazakhstan 27 30 33 35 Malek Kazakhstan 30 33 31 34 S. Najimov Kazakhstan 20 35 21 25 Alat Turkmenistan 25 25 27 30 Airitom Afghanistan 15 55 17 48 Uchkurgan Tajikistan 17 45 7 52 Kushkent Tajikistan 7 55 10 40 Saryasia Tajikistan 10 40 10 52 Dustlik Kyrgyzstan 16 44 14 59 Madaniat Kyrgyzstan 15 37 15 47

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Exhibits 31 and 32 show the total volume of trade with main trading partners from CIS and other countries.

Exhibit 31. Import to Uzbekistan by road vehicles Source: Agency of Road and River Transport Origin country Number of trucks Weight, ton CIS countries 7,193 67,565.57 Other countries 18,072 215,268.19 TOTAL 25,265 282,833.76

The main exporters to Uzbekistan are Turkey, China, United Arab Emirates, Iran, and Russia.

Exhibit 32. Export from Uzbekistan by road vehicles Source: Agency of Road and River Transport Destination country Number of trucks Weight, ton CIS countries 12,088 220,030.13 Other countries 10,430 284,051.78 TOTAL 22,518 504,081.91

The main importers from Uzbekistan are Turkey, Russia, Iran and Kazakhstan.

Road vehicles for carriage of perishable products

Perishable goods, and fruits and vegetables are transported by road vehicles of Uzbekistan and other countries. Exhibits 33 – 34 show data about import of goods from Uzbekistan with the breakdown by the country of registration of road vehicles

Exhibit 33. Import to Uzbekistan by Uzbek road vehicles Source: Agency of Road and River Transport Origin country Number of trucks Weight, ton CIS countries 2,607 25,875.57 Other countries 4,063 41,121.88 TOTAL 6,670 66,997.45

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Exhibit 34. Import to Uzbekistan by road vehicles of exporting countries Source: Agency of Road and River Transport Origin country Number of trucks Weight, ton CIS countries 2,495 24,159.37 Other countries 9,965 112,782.94 TOTAL 12,460 136,942.30

The largest number of vehicles registered in CIS countries arrive from Russia – 71% and Kazakhstan – 13%, among other foreign countries the largest number of vehicles are registered in China – 27% and Germany – 14%.

Data about export of goods from Uzbekistan is shown in Exhibits 35 – 37

Exhibit 35. Export from Uzbekistan by Uzbek road vehicles Source: Agency of Road and River Transport Destination country Number of trucks Weight, ton CIS countries 5,217 100,324.03 Other countries 6,586 190,403.22 TOTAL 11,803 290,727

Exhibit 36. Export from Uzbekistan by road vehicles of foreign countries Source: Agency of Road and River Transport Destination country Number of trucks Weight, ton CIS countries 4,868 101,476.70 Other countries 6,930 189,231.42 TOTAL 11,798 290,708.12

Exhibit 37. Export from Uzbekistan by road vehicles of importing countries Source: Agency of Road and River Transport Destination country Number of trucks Weight, ton CIS countries 2,527 47,114.22 Other countries 5,849 168,466.40 TOTAL 8,376 215,580.62

The volume of transit by road vehicles through Uzbekistan is quite considerable, mostly from Middle East and South Asia to CIS countries (Exhibits 38 – 40).

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Exhibit 38. Transit through Uzbekistan by road vehicles by country of vehicle registration Source: Agency of Road and River Transport Vehicle registration Number of trucks Weight, ton CIS countries 11,323 200,003.95 Other countries 23,827 342,048.89 TOTAL 35,150 524,052.84

Exhibit 39. Transit through Uzbekistan by road vehicles by country of origin Source: Agency of Road and River Transport Origin country Number of trucks Weight, ton CIS countries 9,521 161,414.89 Other countries 25,710 381,070.12 TOTAL 35,231 542,485.01

Exhibit 40. Transit through Uzbekistan by road vehicles by country of destination Source: Agency of Road and River Transport Destination country Number of trucks Weight, ton CIS countries 29,038 410,917.10 Other countries 6,191 131,531.90 TOTAL 35,229 542,449.01

For the carriage of perishable goods, Uzbekistan has about 6,000 temperature controlled vehicles. Their breakdown by type is shown in Exhibit 41.

Exhibit 41. Road vehicles for carriage of perishable goods Source: Agency of Road and River Transport Type Quantity Insulated vehicles, 22 ton 470 Refrigerators, 22 ton 210 TOTAL, large capacity vehicles 680 Insulated vehicles, small capacity About 5,000 TOTAL, all vehicles About 6,000

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Forecast of vehicles for transportation of perishable goods until 2015

Factors, which determine the growth of the number of vehicles are assumed to be the same as in Kazakhstan and Kyrgyzstan. Among them the growth of GDP and international trade have the biggest impact. Exhibit 42 shows the growth of Uzbek GDP over the period of 2000 – 2007 and the forecast until 2015.

Exhibit 42. Growth of GDP in the Uzbek economy Source: Consultant Historical data Forecast 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 - 2015 3.8% 4.5% 2.5% 2.7% 7.7% 5.5% 7.3% 9.5% 7.9% 8%

Given quite low level of use of specialized equipment for transportation of perishable goods in the past and expected strengthening of regulation in the future it can be assumed that the use of temperature controlled vehicles for transportation of perishable goods will be surpassing the rate of growth of perishable goods traffic (i.e. higher share of perishable goods transportation will be done by appropriate temperature controlled vehicles). Accordingly, the expected rate of growth is expected to be about 10% per year. This is confirmed by estimates of Uzbek transportation experts. Exhibits 43 and 44 show a forecast for large capacity vehicles for international transportation of perishable goods and a forecast for all vehicles for transportation of perishable goods.

Exhibit 43. Forecast for large vehicles for transportation of perishable goods until 2015 Source: Consultant Scenario Growth 2008 2009 2010 2011 2012 2013 2014 2015 High 15% 680 782 899 1,034 1,189 1,368 1,573 1,809 Moderate 10% 680 748 823 905 996 1,095 1,205 1,325 Low 5% 680 714 750 787 827 868 911 957

Exhibit 44. Forecast for all vehicles for transportation of perishable goods until 2015 Source: Consultant Scenario Growth 2008 2009 2010 2011 2012 2013 2014 2015 High 15% 5,680 6,532 7,512 8,639 9,934 11,425 13,138 15,109 Moderate 10% 5,680 6,248 6,873 7,560 8,316 9,148 10,062 11,069 Low 5% 5,680 5,964 6,262 6,575 6,904 7,249 7,612 7,992

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Based on these forecasts and an assumption that one equipment certification centre for transportation of perishable goods should be installed for every 1,500 – 2,000 vehicles, there is a need for 3 equipment certification centres in Uzbekistan. Based on the actual growth until 2015 and proper enforcement of ATP agreement, quantity of equipment certification centres for transportation of perishable goods may need to be increased up to 4 to 8 centres, with most likely required quantity of 6 stations.

Initial location of these certification centres is determined by the relative traffic flows, location of the largest Uzbek carriers and geographic distribution of consumption. Consultant recommends considering logistics centres along main road corridors near Tashkent for the first centre (Exhibit 45)

Exhibit 45. Location of first equipment certification centres in Uzbekistan Source: Consultant

Location of Equipment Certification Centres

TASHKENT Andijan

Bukhara Samarkand

Termez

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3.4. Overview: Tajikistan

Perishable goods traffic flows

Assistance to the international trade and transport is a significant factor for the strengthening of economic development and prosperity of the CA region, particularly Tajikistan. International road transportation has a tendency to grow but unsatisfactory condition of vehicle fleets impedes the national transport operators to enter foreign market. In this connection, improvement of the transport and communications infrastructure and joining Tajikistan to other relative regional activities are the main points in the initiatives supporting the development of international trade. After joining the MLA by Afghanistan in 2005 and completion of construction of a road bridge over the river Pianj (in August 2007) Tajikistan, being a landlocked developing transit country, will represent one of the key links in the international transit chain between China and the deep-sea ports of Bandar Abbas and Karachi.

A number of multilateral and bilateral transit transport agreements were concluded in order to facilitate border crossing, to recognize the mutual access rights and also to simplify visa requirements to transport operators. However due to the unsatisfactory service level provided by customs authorities, transportation time increases essentially. Violation of a number of provisions applied by Conventions and regional agreements, for example Carnet TIR, MLA and etc.) could be observed during the crossing of Uzbek border. Having in mind that 45-50 % of export goods transported by road are perishable products, this issue should be taken into account as one of the most important ones.

Tajikistan (Exhibit 46), being a mountainous double landlocked country exhibits a lot of similarities to its northern neighbour Kyrgyzstan. Logistics activities in this country are affected by complex mountainous terrain, dilapidated road infrastructure and various non- physical barriers.

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Exhibit 46. Population density map and main Cross Border Points of Tajikistan Source: Consultant, based on based on Center for International Earth Science Information Network (CIESIN), Columbia University; and Centro Internacional de Agricultura Tropical (CIAT), Gridded Population of the World (GPW), Version 3. Palisades, NY: CIESIN, Columbia University

Hudjant

Jirgital

DUSHANBE Tursunzade Kulma Kulyab Kurgan-Tyube Horog Nijni Pianj

The agricultural sector is the most developed sector of the economy, with more than 60% of the total population being involved in agricultural production. Exhibit 47 shows a steady growth of the perishable category of the agricultural produce.

Exhibit 47. Agricultural production of Tajikistan, thousand tons Source: National Statistics Committee

2000 2001 2002 2003 2004 2005 2006 2007 Meat 29.6 30.0 35.7 44.7 48.4 53.8 56.1 61.3 Beef and veal 14.8 16.8 19.9 25.0 27.1 26.7 28.9 30.1 Mutton and goat 12.9 13.1 15.7 19.6 21.1 26.9 27.0 29.4 Poultry 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 Milk 309.8 382.6 431.0 459.2 490.2 533.0 544.7 562.8 Eggs (millions) 27.2 41.9 46.0 57.4 77.7 98.7 105.3 118.6

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However in absolute figures, production of these categories of products equals to approximately 1/3rd of the production volumes of Kyrgyzstan, despite the fact that Tajikistan has slightly higher total population than Kyrgyzstan.

Tajikistan traditionally trades quite extensively with its CIS neighbours, but in recent years trade with Afghanistan increased considerably. In the area of perishable goods transportation, Afghanistan is the second most important trading partner for Tajikistan after Russia (Exhibits 48 and 49).

Exhibit 48. Main exporters to Tajikistan (2007) Source: Consultant, based on data from State Customs Committee Country % of total volume Cumulative % Russia 37.6 37.6 Afghanistan 24.7 62.3 Kyrgyzstan 17.4 79.7 Kazakhstan 14.8 94.5 Belarus 1.9 96.4 Uzbekistan 0.7 97.1

Exhibit 49. Main exporters to Tajikistan (2007) Source: Consultant, based on data from State Customs Committee Country % of total volume Cumulative % Russia 47.2 47.2 Afghanistan 34.5 81.7 Turkey 9.1 90.8 India 5.0 95.8 Iran 2.2 98 Brazil 0.7 98.7 USA 0.5 99.2

Perishable goods along with other kinds of products are transported through a number of various Cross Border Points, among which two – Bratstvo, located near Dushanbe and Nijni Pianj, leading to Afghanistan account for more than 60% of the total transportation volume (Exhibit 50).

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Exhibit 50. Key Cross Border Points by total volume of perishable goods transportation Source: Consultant, based on data from State Customs Committee CBP Region % of total Cumulative % Bratstvo Tursunzade region 35.6 35.6 Nizhnij Pjandj Hatlon region 26.1 61.7 Fotehobod Sogdian region 12.8 74.5 Kulma Gorno-Badakhshan Autonomous Region 10.3 84.8 Ovchi Kalacha Sogdian region 6.1 90.9 Batkent Sogdian region 3.6 94.5 Madanijat Sogdian region 1.7 96.2 Dzhirgatal Djiratal region 1.2 97.4 Sarazm Sogdian region 1.1 98.5 Kizil Art Gorno-Badakhshan Autonomous Region 0.8 99.3 Hashtjak Sogdian region 0.4 99.7 Patar Sogdian region -

Tajikistan has a considerable misbalance of international trade. Exhibit 51 shows that perishable goods import is considerably exceeding export volumes.

Exhibit 51. Balance of trade of perishable goods through three main Cross Border Points Source: Consultant, based on data from State Customs Committee CBP Region Import Export Total Fotehobod Sogdian region 103,518.6 5,920.0 109,438 Bratstvo Tursunzade region 72,352.1 3,867.4 76,219.5 Nizhnij Piandj Hatlon region 58,321.1 1,643.5 58,485.4

Road vehicles for carriage of perishable products

The quantity of vehicles for transportation of perishables goods is shown in Exhibit 52. It shows a steep downward trend in the number of vehicles registered and in operation. While there are 20 temperature controlled vehicles in operation, only 4 of them have TIR Carnet and used continuously for international road transportation operations (Exhibit 53).

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Exhibit 52. Number of refrigerator trucks by oblasts Source: National Statistics Committee 2001 2002 2003 2004 2005 2006 2007

Total 488 278 304 117 131 102 80 Including in operational condition 20 Gorno-Badakhshan Autonomous 58 30 20 - - 2 2 Region Including in operational condition 2 Sogdian region 216 98 73 46 45 45 30 Including in operational condition 7 Hatlon region 56 34 132 38 36 36 36 Including in operational condition 6 Dushanbe 68 63 4 11 41 10 2 Including in operational condition 2 Regions of Republican Significance 90 53 75 22 9 9 10 Including in operational condition 3

Exhibit 53. Number of vehicles with TIR Carnet Source: ABBAT № Company Total amount Brand of Including Number of of vehicles vehicles refrigerators drivers 1 «Degertach» LLC 13 12 Volvo 1 x 87 m³ 13 1 DAF 2 «Samand» ООО 10 10 Volvо - 10 3 «Bilkom» ООО 4 4 Volvo - 4 4 «Orien Avto» ООО 5 5 DAF 2 x 87 m³ 5 5 Private entrepreneur- 1 1 Volvo 1 x 87 m³ 1 Shojmardonov I. Total: 33 4 33

Forecast of vehicles for transportation of perishable goods until 2015

Tajik road operators have relatively small number of vehicles for transportation of perishable products in comparison to Kazakh, Kyrgyz and Uzbek operators. Furthermore, there is a distinct downward trend towards reducing the number of specialized vehicles for transportation of perishable goods. On the other hand, recent opening up of Afghan An EU Funded Project under the Consortium Management of the following companies: 40

Development of Equipment Certification Centres for the Transportation of Perishable Goods in Kazakhstan, Kyrgyz Republic, Tajikistan, Uzbekistan and Turkmenistan in the frame of ATP Agreement. EuropeAid/123761/C/Ser/Multi An EU Funded Project transport corridors, leading to the South Asian ports Bander Abbas and Karachi gives Tajikistan excellent opportunities for the development of its transit potential. This was witnessed with an opening of a bridge in Nijni Pyanj, which quickly became the second largest transit corridor of Tajikistan.

With recent turnaround and good prospects for fast development of Tajik road transportation market, it is not possible to apply historical data and predict future trends, like project team did for three other countries. For Tajik market it is more prudent to apply the principles of analogy. Given that Tajik economy and landscape are similar to the Kyrgyz ones, it is possible to expect than in the long run Tajik transportation market can develop along the lines of Kyrgyz transportation market, though is not likely that by 2015 Tajikistan will be any close to Kyrgyzstan in terms of the number of vehicles for transportation of perishable goods.

Given the existing number of road vehicles for transportation of perishable goods in Tajikistan, it will be difficult to justify the construction of a testing station on the financial ground. For Tajikistan, project team recommends to carry out tests by National Experts without set up of the National Certification Laboratory or use certification centres of third countries.

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4. CONCLUSIONS AND RECOMMENDATIONS

Assessment of the market for transportation of perishable goods shows that countries of Central Asia have around 2,400 large capacity vehicles for transportation of perishable goods. These vehicles are primarily used for import of perishable products from EU, Russia and other countries and seasonal export of fruits and vegetables to Russia, Kazakhstan and other countries. Four countries have different patterns of flows of perishable goods, but for all four – Russia plays the role of the major trading partner.

In addition to the large capacity vehicles, Kazakhstan and Uzbekistan have considerable fleets of smaller capacity refrigerated vehicles. The total number of small capacity vehicles exceeds 9,000.

Fleets of Kazakhstan, Uzbekistan and Kyrgyzstan are expected to grow, driven by fast growth of economies of these countries, boosting consumption and increasing transit attractiveness of TRACECA corridors. The Consultant expects the growth to be about 10% per year. Growth potential of Tajik fleet of vehicles for transportation of perishable goods is quite uncertain, although all prerequisites exit for double digit growth until 2015.

Given that Kazakhstan and Uzbekistan have joined to the ATP Agreement and have certain obligations according to above agreement, they should consider opening 2-3 equipment certification centres in each country. Kyrgyzstan upon joining to the ATP Agreement should consider opening one station in Chui valley.

Given small number of vehicles for transportation of perishable goods, Tajikistan can postpone investments into that kind of equipment and outsource laboratory tests to other countries of the region.

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PROJECT LEGAL ASSESSMENT

JULY 2008

Issued with 2nd Project Progress Report – January 2008 to July 2008

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TABLE OF CONTENTS

1 SUMMARY 5 2 CURRENT SITUATION WITH TECHNICAL REGULATION 6 (ACCREDITATION, CERTIFICATION) AND LICENSING IN CA 3 COUNTRY OVERVIEWS 8 A UZBEKISTAN 8 B KAZAKHSTAN 12 C KYRGYZSTAN 15 D TAJIKISTAN 16 4 FINAL CONCLUSION 18

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1. SUMMARY

Only Kazakhstan and Uzbekistan so far are signatories to the ATP Agreement in Central Asia. There are no ATP compliant testing laboratories in four countries.

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Kyrgyzstan and Tajikistan have not yet adopted ATP Agreement. Although Kyrgyz legislation in general is very advanced due to the WTO membership and requirements, but due to a weak private sector initiative and modest export volumes, there seems to be little motivation to pursue ATP Agreement in KG. Besides, local transport operators in KG are not even subject to licensing, which makes it difficult to monitor the compliance of local transport operators’ vehicles with certain requirements for carrying perishable goods.

Tajikistan is similar in terms of weak private sector initiative plus Tajikistan has adequate legislation relevant to implementation of ATP Agreement.

2. CURRENT SITUATION WITH TECHNICAL REGULATION (ACCREDITATION, CERTIFICATION) AND LICENSING IN CA

1. All four Central Asian republics inherited a legacy of soviet system of technical regulation. Under the Soviet system with no market mechanisms, no private sector, very limited local production, the government was the only player on the market and held control for not only safety of goods and services but also quality standards. As a result, all technical requirements were considered mandatory whether or not there were any risks involved. The process of preparation of standards, their adoption and

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Development of Equipment Certification Centres for the Transportation of Perishable Goods in Kazakhstan, Kyrgyz Republic, Tajikistan, Uzbekistan and Turkmenistan in the frame of ATP Agreement. EuropeAid/123761/C/Ser/Multi An EU Funded Project application (conformity assessment including certification) with further inspection on the market were all under government control. After the break up of the Soviet Union, new market mechanisms began to emerge with private businesses competing. The expansion of market access to foreign countries was pronounced as priority in all Central Asian states. The matter of conformity of domestically produced goods with international standards has become most acute and critical. Therefore, it has become obvious that the market economy and development of export potential can’t progress without fundamental institutional and legal reform in the area of technical regulation. The reform should also include separation of functions, so that the government would be responsible only for safety of goods, whereas quality matters should be regulated by the market itself. Businesses must take the most active part in the process of development of new standards. It became apparent that without harmonization of local standards with international it would be impossible to export. The reform also includes application of ISO standards in the fields of accreditation and conformity assessment, i.e. in order to be recognized in foreign markets, certification and accreditation procedures should be conducted according to ISO standards. All four countries declared their intention to join WTO. WTO accession process became a helpful tool for all countries in their attempt to design possible scenarios of development and reforms. Kyrgyzstan was the first to join in 1998, however, most of the institutional and legal reforms are still being conducted.

In the area of technical regulation all four countries are still applying soviet standards and the institutional reform required for adopting international standards is still very slow in application.

However, in the area of legal reform, Kyrgyzstan and Kazakhstan adopted new laws on Technical regulation, whereas Tajikistan and Uzbekistan are still in the process of preparation of new legislation. Kyrgyzstan is probably the most progressive in terms of application of main WTO principles in the area of technical regulation, however, the lack of investments and weak business participation remains a problem, as well as the lack of development in this area from the side of Kyrgyzstan’s main business partners, such as neighbouring countries and Russia.

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2. As for licensing systems in Central Asia, all four countries adopted the respective Laws on licensing, which include transport operators activities, except for Kyrgyzstan, where domestic transport operators are exempt from licensing. With a various degrees of success

3. COUNTRY OVERVIEWS

A. UZBEKISTAN

There have been no institutional reforms in the area of technical regulation in Uzbekistan. “Uzstandard” Agency is responsible for all standards, metrology and accreditation related activities in Uzbekistan except in some areas of construction and health. “UzStandard” also has within its broad structure laboratories and certification bodies. As a result there is a significant conflict of interest which deters the process of harmonization of international standards. Accreditation procedures of certification bodies ( testing centres, laboratories) are not in compliance with ISO 17100 which makes certificates by certification bodies and testing centres not internationally recognizable.

Uzbekistan adopted ATP agreement in December 25, 1998, however, no enforcement of the agreement has been put in place since.

There’s still no specific standards developed/amended that would be contain the requirements of ATP agreement, neither there is any specific legislation setting up the regulatory institutional framework, no institutional entity has been officially appointed and no Experts or Laboratories nominated.

The only piece of legislation that was adopted that introduced at least certain rules for transport vehicles carrying perishable goods is the “Instructions on requirements for realization of meat products on the markets and retail outlets” approved by the Resolution of July 13, 2006 by the Ministry of Agriculture, Ministry of Health and the Agency “Uzstandard” registered with the Ministry of Justice on August 10, 2006, # 1610 (hereinafter – Instructions).

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Paragraphs 14-19 of the Instructions set up general rules of transportation of meat products, yet they do not set up specific minimum/maximum temperature for transport vehicles as required by ATP. According to paragraph 13 of the Instructions, transport vehicles carrying meat products “must be properly equipped and have a sanitary passport issued by an authorized body”. However, there is no legislation that specifically establishes an authorized body for inspecting transport vehicles carrying perishable goods. According to the paragraphs 23-25 of the Instructions, sanitary and sanitary –epidemiological approval letter is issued by the territorial centres of the state sanitary –epidemiological inspection and state veterinary departments. It’s not clear though whether a “sanitary approval letter” is the same as a “sanitary passport” issued for a transport vehicle carrying perishable goods.

According to the “Rules on conducting inspection control over accredited certification bodies and testing laboratories (centres)” issued by the Uzstandard Agency on April 20, 2005 (hereinafter – Rules), “object of the inspection is a Normative Document, where specific standards and requirements are set”. Considering, that there is no such Normative Document for testing centres of the transport units carrying perishable goods neither there is Normative Document for transportation of perishable goods in accordance with ATP standards, currently, no such testing can be carried out. According to the Rules (paragraph 7), inspection of such testing centres is to be carried out by experts-auditors. With regards to inspection of ATP compliant transport vehicles, such experts-auditors must be specially trained, however, no such training is carried out.

According to the “Rules on certification of certain types of homogeneous products, subject to mandatory certification” approved by the Order of the General Director of “Uzstandard” Agency of July 7, 2005 (# 340) (hereinafter – Rules), “Autotransport vehicles” are included into the list of products subject to mandatory certification. Paragraph 18 of Chapter VIII of the Rules, specifies EEC UN requirements on conformity with which certification must be conducted (e.g. EECUN 105 requirements on transportation of hazardous goods, etc.). However, the Rules do

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Recently adopted GOST (State Standard) – Certification system for automobile transport industry of 2008 number O’z Dst 971:2008 replaced previous GOST number 971-2000. The GOST itself does not provide for requirements for transport units, let alone, special transport units for carrying perishable goods. The same applies to the Industry Standard No: KSt 52-059-02:2004 – Procedures of conducting certification of services for transportation of goods and passengers by an automobile transport. Neither of the provisions contains specific requirements for transport units.

Uzbekistan adopted a Resolution of the Cabinet of Ministers on July 14, 2006 that established a “Provision on licensing of city, suburb, intercity and international transportation of passengers and goods by automobile transport” (hereinafter – Provision). According to the Provision, a transport operator must obtain a license and a license card for conducting transportation activities (including transportation of goods). The license is issued by the authorized body- Uzbek Agency of Automobile and River Transport. Among the requirements for obtaining a license are the documents assuring that a transport vehicle went through a technical and maintenance check ups and that it is properly equipped (Paragraph 9, chapter II). However, the Provision does not contain specific requirements for transport units and equipment carrying perishable goods.

(i) Conclusion

Uzbekistan adopted a number of legislative acts over the past few years with regards to licensing of transport operators of goods and certain rules for transport units (vehicles) carrying meat products. At the same time, there are still no testing centres (laboratories) properly equipped and with appropriate staff that would conduct certification of such transport units. There is no normative document (Standard) that would be ATP compliant with regards to transport units transporting perishable goods. Another specific to Uzbekistan non physical barrier is prohibitive tariff policy with regards to imports of transport units for transportation of perishable

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(ii) Recommendations

Short-term:

1. ATP standards for transport units should be adopted as a special Normative Document (SanPiN) whereas the “Instructions on requirements for realization of meat products on the markets and retail outlets” should be amended accordingly. 2. “The Rules on accreditation of certification bodies, testing centres (laboratories), inspection bodies in the area of conformity assessment” adopted by “Uzstandard” of May 10, 2006, must be amended. Accreditation is conducted for a specific area of certification. There is still no normative Document setting up testing of transport units carrying perishable goods as a special area of certification. Such standard must be developed in compliance with ATP and other international standards. 3. “Rules on certification of certain types of homogeneous products, subject to mandatory certification” approved by the Order of the General Director of “Uzstandard” Agency of July 7, 2005 (# 340) must be amended so that ATP standards for transport units carrying perishable goods are included into the Rules as requirements for “road transport vehicles” for transportation of perishable goods. 4. The Agency for Automobile and River Transport is an authorized body for licensing transport operators for transportation of goods. One of the requirements for licensing must be a certification by the testing centre of the transport unit. Until such testing centres are set up, independent expert’s evaluations must be presented. However, such experts should be independent from the licensing authority so that there is no conflict of interest situation. 5. Independent Experts must be properly trained (ATP compliant, etc.) and certified by a recognized body.

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Long – term:

1. Certification body (testing centres) should not be affiliated with “Uzstandard” agency (or body that inspects the certification bodies or in any way involved with preparation of mandatory requirements. 2. Certification body should not be affiliated with Accreditation body. 3. Licensing body should not be involved with certification. 4. Inspection bodies can’t be affiliated with certification bodies.

B. KAZAKHSTAN

Kazakhstan adopted the Law on Technical Regulation in 2004, however, not fully compliant with WTO TBT and SPS Agreements1. Although some significant amendments have been made over the past four years to make it more compliant with WTO, there are still areas that require further reforms. Such areas include, but not limited to, prevention of overlapping and conflicting inspection functions among various government bodies and the lack of private sector initiative in development of independent bodies of certification that would be fully commercial and not affiliated with government agencies. Services are still subject to certification, although the Law on TR clearly defines that certification applies to goods only, whereas services can be subjected to licensing (depending on the type of activity).

With regards to the regulation of transportation of perishable goods, Kazakhstan nowadays is probably on the forefront among four Central Asian countries, in terms of development of the national standard requirements for transport units and equipment carrying perishable goods. Otherwise, there are still gaps in legislature in the area of licensing of transport operators for perishable goods and training of experts/auditors to test such transport units.

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As a normative document (standard) setting temperature and other technical requirements for transport units/equipment carrying perishable goods Kazakhstan adopted SanPin (Sanitary rules and norms) issued by the Order of the Principal State Sanitary Doctor of the Republic of Kazakhstan of August 2002 (#32) On establishing sanitary rules and norms “Sanitary-hygiene requirements for storage and terms of realization of perishable goods”.

The Order of the Ministry of Health of November 14, 2003 (# 841) “On establishing Rules for conducting sanitary – epidemiological expertise” provides that sanitary – epidemiological expertise is conducted for conformity with Sanitary rules and hygiene norms and concluded in the “Sanitary – epidemiological approval” which is equivalent to the certificate in its significance ( paragraph 18). Besides, the expertise shall be conducted by the specialists of state bodies and organizations of the sanitary epidemiological service, with special training and sufficient experience necessary for conducting “sanitary epidemiological expertise” ( paragraph 28)

As for requirement in paragraph 18, there is a SanPin2 (normative document) which sets up standards for transport units, so that the sanitary – epidemiological expertise is conducted for establishing whether there is a conformity or non conformity with this SanPin.

However, it’s not clear as for the requirement in paragraph 28. There are no clear rules of training and attestation of specialists from state bodies.

The only document that sets up certain rules for training and attestation of experts- auditors on standardization, conformity assessment and accreditation was adopted by the Order of the Chairman of the Committee on Technical Regulation and Metrology of the Ministry of Industry and Trade of July 20, 2006 (#305) “On certain questions of attestation of experts-auditors on standardization, conformity assessment and accreditation). Annex 1 to the Order provides for the list of areas and activities on which experts should be trained for. “Autotransport vehicles” are on

2 Sanitary Rules and Norms (Sanitarnie Pravila i Normi – SanPiN). Sanitary rules and norms are considered mandatory. An EU Funded Project under the Consortium Management of the following companies: 13

Licensing of transport operators to carry perishable goods is in domain of the Committee of transport control within the Ministry of Transport and Communications of the Republic of Kazakhstan. The rules and requirements for licensing are set in the Resolution of the Government of the Republic of Kazakhstan of December 25 1996 (#1621) “ On establishment of provision on procedures and conditions of licensing of hazardous goods, international transportation of passengers and goods by automobile transport and qualification requirements to them in KZ”.

Item 9(j) of the Resolution requires for a copy of the sanitary epidemiological statement (certificate) in order to receive a license as a transport operator.

(i) Conclusion

Although Kazakhstan adopted a SanPin (standard) on requirements for transport units carrying perishable goods, it still needs to be brought into conformity with ATP standards.

At the same time, there is a need for development of a new regulation on procedures for training and attestation (or licensing) of experts to inspect and evaluate transport units for their compliance with ATP standards.

Apparently, there are no laboratories as of yet equipped in accordance with ATP standards.

(ii) Recommendations

Short-term:

1. SanPin on requirements for transportation of perishable goods should be brought into conformity with ATP standards.

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2. For a testing centre to issue certificates, it should be accredited. Object of accreditation is a specific area of conformity assessment, i.e. certification. So far, testing of transport units for carrying perishable goods has not been identified as a object of accreditation. Therefore, such document shall be developed in accordance with ATP standards. 3. The Ministry of Transport and Communications is an authorized body for licensing transport operators for transportation of goods. One of the requirements for licensing must be a certification by an accredited testing centre of the transport unit. Until such testing centres are set up, independent experts’ evaluations must be presented. However, such experts should be independent from the licensing authority so that there is no conflict of interest situation. 4. Independent Experts must be properly trained (ATP compliant, etc.) and certified by an accredited testing centre.

Long – term:

1. Certification body (testing centres) should not be affiliated with Technical Committee on Technical Regulation (or body that inspects the certification bodies or in any way involved with preparation of mandatory requirements. 2. Certification body should not be affiliated with Accreditation body. 3. Licensing body should not be involved with certification.

C. KYRGYZSTAN

As the only WTO member in the region, Kyrgyzstan has progressed far ahead in terms of legislative reforms in implementation of WTO TBT and SPS Agreements. This applies not only to the Law on Technical Regulation but most of the normative acts in this area. There have been significant steps made toward institutional reforms. So that the principles of impartiality, independence and competence are in fact being applied with regards to the bodies of certification.

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However, Kyrgyzstan is still not a member of the ATP Agreement.

There is no licensing requirement for domestic transport operators which includes transportation of perishable goods as well. There is a number of SanPins (standards) developed in the area of sanitary –epidemiological inspection of transportation of goods. However, they don’t contain requirements in accordance with ATP.

There is no authorized body for training experts/auditors that would be preparing experts for evaluation of transport units carrying perishable goods.

(i) Recommendations

1. Joining ATP Agreement 2. Appointing an authorized body for training experts 3. Adopting local standard in compliance with ATP on requirements for transport units carrying perishable goods 4. Setting up a testing laboratory for testing transport units in compliance with ATP 5. Identifying certification of transport units carrying perishable goods as an area of accreditation for accreditation body.

D. TAJIKISTAN

Tajikistan is the least developed out of four Central Asian countries in terms of progress in WTO accession process and technical regulation reforms. “Tajikistandard” Agency is a monopoly for all areas of technical regulation, acting as an authorized body for accreditation, certification and standardization activities which represents a major conflict of interest situation. Besides, there is a very weak private sector, low exports and lack of investments into the economy. There is a very modest amount of legislation developed so far in the area of sanitary and epidemiological control, no training for experts neither there are requirements for transport units carrying perishable goods.

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(i) Recommendations

Short and medium term:

Long-term:

1. Certification body (testing centres) should not be affiliated with Tajikstandard Agency (or body that inspects the certification bodies or in any way involved with preparation of mandatory requirements. 2. Certification body should not be affiliated with Accreditation body. 3. Licensing body should not be involved with certification.

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4. FINAL CONCLUSION

Central Asian countries, due to their geographical location and climatic conditions, are major producers of agricultural products, significant portion of which comprise perishable goods, including meat products, fish, poultry, various fruits and vegetables. With the end of the soviet era, Central Asian countries have encountered new challenges in the process of integration with the world economy. Besides political, social and various economic policy reforms that Central Asian states still ought to accomplish, one of the biggest interim challenges is to expand market access for their agricultural exports, considering that most of the population in Central Asian is involved with agricultural production and such exports still comprise a substantial percentage of their revenues. However, issues related to exporting involve a wide range of problems inherited from the soviet times. In order to access foreign markets, it’s important to comply with international quality and safety standards. Achievement of such standards can be accomplished with implementation of fundamental institutional reforms, which are long term.

Transportation cost makes exporting expensive and complicated. That includes obsolete transportation vehicles non compliant with ATP standards and transit delays resulted in corrupt systems of border control and border customs inspection throughout former soviet states.

Out of four Central Asian countries, Kazakhstan and Uzbekistan joined ATP. However, in practice, no major legislative and institutional undertakings have taken place in order to implement the Agreement.

It’s clear by now that it’s in advantage of the economies of Central Asia to adopt international standards in transporting perishable goods, as it will significantly increase export revenues of the population and benefit the economy.

Besides, adoption of international technical regulations is also one of the mandatory requirements for WTO accession, which is on the agenda of Central Asian states with Kyrgyzstan already being a member.

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Integration with the world economy will not be possible without meeting WTO requirements. Therefore, it’s imperative for the governments of Central Asian states to take actions on implementation of their international commitments.

As far as ATP implementation is concerned, before even long term objectives of institutional reforms and growth of private sector will take place, there is still need to facilitate export/import activities that would include facilitation of transportation of perishable goods in compliance with international standards. Therefore, it would be reasonable to meet short term recommendations that could be summarized in the following actions: 1. For Kyrgyzstan and Tajikistan join ATP 2. To all four countries to adopt a mandatory requirement as a normative document that would be compliant with ATP and bring the legislation in conformity 3. To set up as a prerequisite for getting a licence for transport operators of perishable goods compliance with ATP 4. To set up at zero import duties and taxes for import of equipment and transport vehicles for transportation of perishable goods 5. To set up at least one training centre in the region that would be accredited and teach experts/auditors for evaluating equipment/transport vehicles on their compliance with ATP requirements

Implementation of above listed objectives will facilitate trade in and export of perishable goods, expand opportunities for market access and help Central Asian countries integrate into world economy.

As a long term objective for all four countries:

To adopt Technical Regulation legislation that would be compliant with WTO TBT requirements so that certification of testing centres/equipment would be in accordance with international standards and recognized in other countries.

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Published January 2008

This publication has been produced with the assistance of the European Union. The contents of this publication are the sole responsibility of SAFEGE Consulting Engineers and its Consortium Partners and can in no way be taken to reflect the views of the European Union.

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