International Logistics Centres for Western NIS and the Caucasus Georgia: Areas in the vicinity of Tbilisi airport

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International Logistics Centres for Western
NIS and the Caucasus Georgia Areas in the
vicinity of Tbilisi airport
Ministry of Economy and Sustainable Development
of Georgia Transport Policy Department 20.05.2011
Georgia, Tbilisi
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International Logistics Centre (ILC)in Georgia

• For the implementation of the project
• Tbilisi Aircraft Manufacturing (TAM) site Veli
  Terminal were proposed near Tbilisi City
• Tbilisi City Advantages
• Major logistic hub in the region
• Important node on TRACECA
• Strategic location between Black and Caspian sea
  ports (Kulevi, Poti, Supsa, Batumi and Baku)
• Main industrial and commercial centre in the
  state and region

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ILC Advantages

• The establishment of an international logistics
  centre integrated into an international network
  along the TRACECA corridor enables the further
  strengthening of the regional logistics sector
  and intermodal transport.
• Located in the eastern outskirts of Tbilisi
  metropolitan area, the ILC will gain adequate
  access to the existing railway line and to the
  major road network, including the road links to
  the Black Sea ports and Turkey, Azerbaijan and
  Armenia.
• The future ILC at TAM-Logistics City Tbilisi
  (LCT)/Veli Terminal, with its logistics
  facilities and services, will mainly support the
  local industrial, agricultural and aviation
  sector as well as further options for
  cross-border intermodal transport.
• In addition it will form a basis and nucleus for
  more efficient and competitive cargo export and
  regional cargo import distribution in Tbilisi
  catchment area

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Logistics Trends and Impacts
Trends Impacts Logistics Potential
Global Intercontinental trade Increasing product complexity Need for cooperation and integration Consistent trend towards direct sale Enhancement and expansion of transport infrastructure Development of regional industrial and logistics nucleus Focus on supra-regional markets New production structures and supply chains Foreign investment and cooperative structures Qualifications requirements Shortened market supply times Demand for modern and efficient logistics solutions and facilities Implementation of new delivery chains for import and export trade incl. distribution Demand of logistics services for distribution of local agricultural products Supply chain management of intermodal border crossing freight transport Increased demand for qualified logistics staff
European TRACECA corridor strengthening and networking Liberalization of competition Promotion of intermodality Enhancement and expansion of transport infrastructure Development of regional industrial and logistics nucleus Focus on supra-regional markets New production structures and supply chains Foreign investment and cooperative structures Qualifications requirements Shortened market supply times Demand for modern and efficient logistics solutions and facilities Implementation of new delivery chains for import and export trade incl. distribution Demand of logistics services for distribution of local agricultural products Supply chain management of intermodal border crossing freight transport Increased demand for qualified logistics staff
Regional Strengthening of the local economy Creating of new business opportunities Enterprise mobility Development of training capabilities Enhancement and expansion of transport infrastructure Development of regional industrial and logistics nucleus Focus on supra-regional markets New production structures and supply chains Foreign investment and cooperative structures Qualifications requirements Shortened market supply times Demand for modern and efficient logistics solutions and facilities Implementation of new delivery chains for import and export trade incl. distribution Demand of logistics services for distribution of local agricultural products Supply chain management of intermodal border crossing freight transport Increased demand for qualified logistics staff
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TAM-Logistics City Tbilisi (LCT)/ Veli Terminal
Land Plot

• Very good conditions and development potential
  for the future establishment of an International
  Logistics Centre (ILC)
• TAM-LCT has a direct connection to the road
  Tbilisi-Rustavi (the largest industrial city in
  the Tbilisi region)
• In addition, the TAM land plot and the envisaged
  cooperation with Veli Railway Container Terminal
  offer an option for the ILC to provide trimodal
  transport access, as well as potential benefits
  from synergy effects
• There are about 63 ha of land available for the
  development of an ILC
• additional expansion areas available for further
  logistics operations

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Functional Areas

• Following three main functional areas for
  logistics centre have been defined
• Logistics Services (land allocation about 55)
• Container Terminal (land allocation about 30)
• Logistics-Intensive Industries and Trade (land
  allocation about 15)

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Access to Urban, Regional and International
Transport Network

• 3km Tbilisi City Airport
• 15km -Tbilisi City Centre
• 300km Poti Port
• 500km Alyat Port
• 300km Yerevan

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Description of Internal Transport Infrastructure

• Road transport infrastructure
• Good connection to the urban, regional and
  supra-regional road network.
• Proper accessibility of all plot of lands with
  truck and passenger car.
• Favourable traffic management and minimization of
  crossings.
• Securing of flowing traffic by appropriate
  standard cross-sections.
• Consideration of stationary traffic.
• Railway transport infrastructure
• Good access possibilities to the long-distance
  traffic nodes and rail freight stations.
• Efficient operation of trains, train units and
  railway cars without expensive shunting
  procedures.
• Reduction and/or avoidance of crossing road and
  railway transport infrastructure.
• Sufficient provision of properties with track
  connection.

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General Alignment of the Functional Areas TAM/Veli
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Stakeholders

• Public Sector Stakeholders
• Georgian Railway
• The State Customs Department
• The Ministry of Economy and Sustainable
  Development of Georgia
• The Ministry of Defence of Georgia
• The Ministry of Regional Development and
  Infrastructure of Georgia
• Tbilisi City Hall
• Private Sector Stakeholders
• Logistics service providers
• Industrial and commercial companies

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Project Identification

• The ILC will comprise the following functional
  areas
• Container terminal, with direct road and rail
  access.
• Container depot.
• Container service centre.
• ILC service centre.
• Logistics service facilities.
• TIR parking.
• Logistics intensive industries and trade.
• An area for future expansion.

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Performance Indicators
Performance Indicators Social Discount Rate (SDR) Social Discount Rate (SDR) Social Discount Rate (SDR) Social Discount Rate (SDR) Social Discount Rate (SDR) Note
5.5 10 12 NA a
EIRR Economic Internal Rate of Return pa 17 b
MIRR Modified Internal Rate of Return pa 8 11 13 c
NPV Net Present Value EUR M 42 18 11 d
Switching values e Switching values e Switching values e Switching values e Switching values e Switching values e Switching values e
Costs could change by 88 44 29
Benefits could change by -47 -31 -23
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Investment Needs

• The first estimation of required total investment
  needs (CAPEX) and for each of the three envisaged
  stages of ILC development has been calculated as
  follows
• Total of Development Stages 1-3 41.3 million
  thereof
• Sum of Development Stage 1 31.7 million
• Sum of Development Stage 2 7.7 million
• Sum of Development Stage 3 1.9 million

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Thank you for your attention