Obstacles for Pioneering the Planned Land Development in Baku During a Decade of Azerbaijan in Transition

1. Obstacles for Pioneering the Planned Land Development in Baku During a Decade of Azerbaijan in Transition By Dr. Steve Kadivar Global Projects Seminar Series Stanford University Oct. 30, 2006

2. Background Desire of the Oil Companies and their Strategy Finding New Hydrocarbon Provinces around the World Desire of the Local Politicians Searching for International Alliance Opportunities for Corruption and become rich Desire of the International Political Power Base Searching for the Opportunities to Influence and Dominance Desire of the Average Adult Local Population Finding a dissent job and living a happy life with their family

3. Purpose of Presentation Sharing the experience of�a California Based Land Development Project Team for Developing a progressive Private- Public Corporation to develop a large scale planned land development program in Baku�� Learning the experience of others in similar situation

4. Azerbaijan History and Geography Azerbaijan is part of the Caucasus Region. Persian name is QAFQHAZ. Caucasus region is a region in Eurasia: South to Turkey and Iran, -West by the Black Sea, -East by the Caspian Sea,- and North by Russia. The Caucasus is known to be the most linguistically and culturally diverse region on earth. Twice it was a unified region 1) Russian Civil war (April 9, 1918-May 26, 1918) and then 2) March 12, 1922- Dec 5, 1936 as Transcaucasian SFSR). Georgia and Armenia are other independent countries of the Caucasus that are considered to be the native areas of wine producing vines and perhaps the birthplace of wine. The region also includes Biblical Mount Ararat where Noath�s Ark is said to have landed.

5. Azerbaijan on World Map

6. Baku � The Capital City Baku was founded 1500 years ago. The City has three distinctive areas known as Old town, Boom Town and Soviet Built Town. Today with a population of about 2 Millions it is the capital of Azerbaijan Republic. It was part of Persia till 1723 when Peter captured the city in 1723 but returned to Persia in 1735. Persia eventually lost to Russia during a war and as the result of 1813 Gulistan Treaty, Persia lost several major cities in the Caucasus region to Russia including Baku. Population of Azerbaijan today is estimated at 8,347,300 with an area of 33,436 Sq meters / 33,591 Sq meters. The GDP of Azerbaijan is $3,400.

7. Baku Peninsula Map

8. Azerbaijan has deep historical roots of Oil Industry 1264 Mining of seep oil in Medieval Persia witnessed by Marco Polo on his travels through Baku 1594 Oil wells are hand dug at Baku, Persia up to 35 meters (115 feet) deep 1815 Oil is produced in United States as an undesirable by product from brine wells in Pennsylvania 1848 First modern oil well is drilled in Asia, on the Apsheron Peninsula north east of Baku by Russian Engineer F.N. Semyenov 1861 First oil well in California is drilled manually in Humboldt Count 1994- 2003 Azerbaijan signed 21 PSA (Profit Sharing Agreements) for oil and gas with international oil companies

9. Baku�s Oil History By the beginning of the 20th century almost half of the oil reserves in the World had been extracted in Baku. Soon after Henry Ford began manufacturing Model T�s in the US (in 1904), he had one shipped to Baku for oil baron, Haji Zeynalabdin Taghiyev, ( first person to own a car in Azerbaijan). By 1911, there were 36 automobiles in Baku. The height of oil boom was during 1880-1920 and Baku had become a sophisticated metropolitan center in the region that had a well urban planning system, municipal infrastructure, parks, streets and public transportation. Today with the rise of land values, the developers are demolishing the old buildings for quick profits on the very limited premium space of downtown. However, during the past 15 years no street was built in the city of Baku. Azerbaijan became an independent state October 18, 1991. Traffic is rapidly turning into daily nightmare in Baku.

10. 1990�s Oil Pipeline Discussion in Baku Options that were available: A straight line across Iran from Caspian Sea to the Persian Gulf-The shortest route. Going through Russia. Turkey�s Mediterranean Coast (South of Turkey). Azerbaijan via either Georgia or Armenia. Selection of BTC by the above first three group�s ( listed in slide 2): Azerbaijan - Georgia- Turkey (Calling it Politically Expedient).

11. BTC- the biggest engineering project of the decade 150,000 individual joints of line pipe each measuring 12 meter (39 ft) in length mostly 42 inches diameter pipe of total weight of about 594,000 Metric tons. Construction duration: from 2002 to 2006 (July) Expect to transport 1 million per day oil by 2008 and to meet 1% of the global demand. A total of 10 millions barrels of crude oil required to fill the 1,768 Km (nearly 1,100 miles) pipeline. The staged filling of the pipeline along its entire route could take more than 6 months. The president of the consortium of the oil companies involved in the project stated that over last decade nearly $10 Billions have been invested in Azerbaijan�s oil and gas developments

12. Comparing the decision making processes How do we compare the decision making processes for building the BTC project compared with our US / European mega projects involving NEPA (in case of California CEQA) processes? I asked the oil companies and the US Ambassador to Azerbaijan during an International Oil and Gas Baku conference: The four areas of 1) Economic 2) Technical, 3) Environmental, and 4) Political feasibility studies

13. Impacts of Rapid Change in Baku UNESCO decided to List Inner City of Baku in 2000 as a World heritage and then in 2003 as a World Heritage in Danger. During 2000-2005, about 500 high rise (15-25 stories) and thousands of new low rise building constructed altering totally the character of the ancient city of Baku. Experts presented the finding of their research 1) The destruction of beautiful, century old buildings dating from Oil Boom, 2) Safety issues : potentially fatal building practices so common to the city situated in a very active seismic zone The experts conclude that the consequence of ignoring growth issues guaranteed formula for disaster. Baku is facing a major crisis due to urban planning disorder causing serious negative consequences related to the safety and welfare of the people. These are due to the actions of officials and the new rich developers.

14. Our Perspective of Master Plan for Land Development Establishing a Progressive Private�Public Land development Consortium with the Local and within a democratic decision making processes Developing an International Team of Engineering, Environmental Planning and Construction and focusing on undeveloped area away from the sensitive old town