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Feasibility Study on Automation of Business Processes in the Port of Baku in Azerbaijan Government Publications Registration Number 11-1051000-001028-01

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Feasibility Study on Automation of Business Processes in the Port of Baku in Azerbaijan Government Publications Registration Number 11-1051000-001028-01 Presented by the MOEF, Republic of Korea 2019/20 KSP Policy Consultation Report Azerbaijan Feasibility Study on Automation of Business Processes in the Port of Baku in Azerbaijan Government Publications Registration Number 11-1051000-001028-01 2019/20 KSP Policy Consultation Report Azerbaijan Feasibility Study on Automation of Business Processes in the Port of Baku in Azerbaijan 2019/20 KSP Policy Consultation Report Project Title Feasibility Study on Automation of Business Processes in the Port of Baku Prepared for The Government of the Republic of Azerbaijan In Cooperation with Port of Baku Supported by Ministry of Economy and Finance (MOEF), Republic of Korea Korea Development Institute (KDI) Prepared by Korea Maritme Institute (KMI) Total Soft Bank (TSB) Project Director Sanghoon Ahn, Executive Director, Center for International Development (CID), KDI Project Manager Sanghoon Ahn, Executive Director, Center for International Development (CID), KDI Project Officer Bora Nam, Senior Research Associate, Division of Policy Consultation, CID, KDI Gahyun Kim, Research Associate, Port & Logistics Research Division, KMI Senior Advisor Manhee Han, Former Vice Minister for Ministry of Land, Infrastructure and Transport Principal Investigator Chanho Kim, Director of Port investment & Operation Department, Port & Logistics Research Davison, KMI Authors Chapter 1. Chan-ho Kim, Ga-hyun Kim, Sung-a Kim, Sung-ki Kim, Jungyong Seo, Sanghee-Choi, Seo-yoen Oh (KMI) Kuhdayar Hasanli (Baku Port Authority) Chapter 2. Seung-Ho Jung, Myoun-Soo Lee, Hyang-seop Song (SM Line Gyeong-In Terminal) Sang-youl Kim (Pusan National University), Park Ho (Kunsan National University) Hidayat Hamidov (CAT Azerbaijan LLC) Chapter 3. Kyung-Won Kang, Jeong-Hwan Choi, Young-Kwon Lee (TSB) Tural Aliyev (Policy Advisor, Baku Port Authority) English Editor IVYFORCE Government Publications Registration Number 11-1051000-001028-01 ISBN 979-11-5932-562-5 979-11-5932-556-4 (set) Copyright ⓒ 2020 by Ministry of Economy and Finance, Republic of Korea 2019/20 KSP Policy Consultation Report Feasibility Study on Automation of Business Processes in the Port of Baku Preface As we enter the Fourth Industrial Revolution, the importance of knowledge is growing. Knowledge is a key driver of innovation and growth and a key instrument for implementing the Sustainable Development Goals. The Ministry of Economy and Finance has been operating a knowledge sharing program (KSP) to meet the demand for knowledge-based cooperation using Korea’s development experience. Since the KSP was launched in 2004, Korea has conducted the KSP with over 70 countries—serving as a leading source of knowledge sharing and contributing to the construction of common development and sustainable growth in the international community. The 2019/20 KSP project “Baku Port Operation Modernization Feasibility Study", which was promoted with Azerbaijan, examines the possible modernization and automation of the operations of the Port of Baku, the representative port of Azerbaijan. The Korea Development Institute (KDI), Korea Maritime Institute (KMI), and Total Soft Bank (TSB) jointly established the automation strategy. Moreover, the Azerbaijan government is devising a strategy to move away from its high dependence on the oil industry and to grow into a logistics hub in the Eurasian region by utilizing its geographic location. Accordingly, it aims to reduce costs by improving the port automation rate of Baku Port and to attract transshipment cargo between China and Europe by providing high-quality port services. The 2019/20 Azerbaijan KSP project was promoted to review the possibility of automation for the Baku Port and to help establish a strategy to become a Eurasian logistics hub. Therefore, Korean experts in the port management system and the Baku port officials share their experiences of constructing the port management system despite the COVID-19 pandemic, conduct joint research, and establish automation strategies to suit the national growth strategy. Through these efforts, this project has established an automation strategy for the Baku Port based on the development experience of the Busan Port in Korea. Accordingly, we first investigate and analyze the general status and volume of the Baku Port, present the implications for establishing a strategy through information exchange among stakeholders, and examine the cargo handling process by terminal. By comparing and analyzing the operating systems of the Baku Port and the Busan New Port, we identified problems and sought improvement measures. Finally, this study derived a phased implementation strategy and its expected effects to increase efficiency and build an automated terminal. The KSP project is expected to greatly expand the cooperative relationship between Korea and Azerbaijan in establishing an automation system for the port of Baku in the future, and we hope to contribute to advancing Azerbaijan’s Eurasian logistics hub. We would like to express our sincere gratitude to Professor Man-Hee Han, the Senior Advisor who was responsible for the success of the 2019/20 Azerbaijan KSP project. Moreover, we would like to send our appreciation to the three local experts—Kuhdayar Hasanli, Tural Aliyev, and Hidayat Hamidov—who advised on the project implementation in Azerbaijan. We also thank all the researchers at the Center for International Development (KDI) who continued to endeavor towards the successful project execution despite the difficulties of COVID-19. Lastly, we are especially grateful to the Baku Port officials for their interest and support in establishing the automation strategy, and we hope that the cooperative relationship will continue in the future. Young Tae Chang President Korea Maritime Institute (KMI) Contents 2019/20 KSP with Azerbaijan �����������������������������������������������������������������������������������������������������015 Executive Summary ��������������������������������������������������������������������������������������������������������������������025 Chapter 1 Review of the Port of Baku Summary·····································································································································029 1. Introduction ����������������������������������������������������������������������������������������������������������������������������021 2. Status of Partner Country ������������������������������������������������������������������������������������������������������033 2.1. Azerbaijan Policy: Overview and Highlights ������������������������������������������������������������������035 2.2. Status Port Logistics in Azerbaijan ���������������������������������������������������������������������������������036 2.3. Informatization Status at the Port of Baku ��������������������������������������������������������������������066 2.4. Integration Status between the Port of Baku and Stakeholders ���������������������������������081 3. Experience of Korea ���������������������������������������������������������������������������������������������������������������085 3.1. Case study of Korea: Establishment of BPA-NET �����������������������������������������������������������085 3.2. Implications of the Busan Port Case for Application to the Port of Baku ��������������������089 4. Conclusion and Implication ���������������������������������������������������������������������������������������������������090 4.1. Summary of the Study ����������������������������������������������������������������������������������������������������090 4.2. Policy Implications from the Experience of Establishing BPA-NET and Conclusion����092 4.3. Indications for the Follow-up Study and Possibility of Linking it with Other Projects (EDCF, KOICA, International Organizations, etc.) ����������������������������������������������������������093 References ����������������������������������������������������������������������������������������������������������������������������������095 Chapter 2 Port Automation and Feasibility Analysis for the Port of Baku Summary·····································································································································097 1. Introduction ����������������������������������������������������������������������������������������������������������������������������098 1.1. Background ���������������������������������������������������������������������������������������������������������������������098 1.2. Configuration···················································································································099 2. Status of Port of Baku ������������������������������������������������������������������������������������������������������������100 2.1. Infrastructure and Network �������������������������������������������������������������������������������������������100 2.2. Operation Process �����������������������������������������������������������������������������������������������������������101 2.3. Information System ��������������������������������������������������������������������������������������������������������104 2.4. Equipment Status and Comparison �������������������������������������������������������������������������������113 2.5. Annual Cost Analysis �������������������������������������������������������������������������������������������������������120 2.6. Port Automation Necessity and Possibility Review �������������������������������������������������������126 3. Experience of
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