Armenia has unveiled plans to begin construction work on the north-south highway project in April this year, two years behind schedule.

It estimated to cost $1bn and will shorten the route between Yerevan and the Georgian port of Batumi from 640km to 190km.

The aim of the project is to build a road from the Armenian-Iranian border to the Armenian-Georgian one and will enhance transport connections with the neighbouring countries.

Construction was originally scheduled to start in 2010, but the project has been delayed because the nation’s ministry of transport and communication could not find a foreign firm offering a reasonable contract value in a bidding contest.

Last year, the government revealed it would call another international tender and six companies have submitted an interest in the construction work. The government will sign with the contractor following approval by the project’s main lender, the Asian Development Bank (ADB).

Currently, the government is carrying out the land acquisition and is undertaking land assessments. Manuk Vartanian, the minister for transport and communication, was quoted by as saying that initially, upgrades will begin at two highways running south and north of Yerevan.

Though the funding sources have not been specified, the project is expected to be financed by the Armenian Government, the ADB and other development partners, with funds to be released periodically through a multi-tranche financing facility.

In 2009, the ADB has extended a loan of $500m towards the construction of the north-south transport corridor to improve connectivity and trade, as well as livelihood opportunities in the Caucasus and Central Asia sub-regions.

In the first phase of the north-south project, an 18.4km section of the corridor between the capital Yerevan and Ashtarak to the north will be expanded to four lanes in a bid to improve safety of Yerevan to Ararat road in the south.

The second phase includes the upgrade of an 88km road from Ashtarak to Gyumri while the third phase will see the construction of a new road from Goris to Kapan.