Archives
FFFF
FFfThiFFFF
FFFFFF
The first representative of the Ministry of Transport of Uzbekistan, M. Omarov, met with representatives of the European Commission delegation within the framework of the Trans-Caspian International Transport Corridor Coordination Platform. Uzbekistan is seeking a stronger transport infrastructure in the region, which could be helped by the construction of the Kyzylorda (Kazakhstan) – Uchkuduk (Uzbekistan) railway line.
The creation of a modern link between these cities would benefit the whole region in terms of integration and trade relations. However, the construction of the railway would also make a significant contribution to strengthening the idea of the Trans-Caspian International Transport Corridor. The latter is often mentioned when dealing with the current logistical situation in the region in relation to the interests of the European Union and exports from China.
Uzbekistan has applied to the European Bank for Reconstruction and Development and the European Investment Bank for funding for this project as part of the coordination platform. The project is being prepared jointly by the Ministries of Transport of Uzbekistan and Kazakhstan.
At the beginning of 2023, Russia announced the construction of two new transport corridors from China towards Europe, bypassing Kazakhstan. The first is through Kyrgyzstan, Uzbekistan to Turkmenistan, and then through the Caspian Sea to Astrakhan (South transport corridor). The second is the continuation of the new Moscow-Kazan highway to Novosibirsk, and then through the Altai Republic or Mongolia to China. Experts also add to this list the North-South route through Azerbaijan (restoration of railway infrastructure. Russian investments are estimated at $1.3 billion). In recent months these projects have generated a wave of discussions about the allegedly growing tension in Russian-Kazakh relations.
South transport corridor – A memorandum on its formation and development of the southern transport corridor was signed in November 2023 by participants in the first SCO transport forum in Tashkent (Uzbekistan).
The first route is more the interest of Kyrgyzstan. Bishkek intends to create an opportunity to enter the Russian market, bypassing the territory of Kazakhstan. Among the reasons cited is the need to bypass queues at the Kazakh-Kyrgyz border. But it is obvious that it is not the point. Kyrgyz businesses are the transit of Chinese goods to the territory of the EAEU. And not so long ago, Kazakhstan detained a shipment of drones to Russia. Theoretically, there is no customs border between the EAEU countries and transport with drones should not have been stopped. However, the Kazakh side is in control of the situation. Kazakhstan is the only country in the region that has placed exports and re-exports to and from Russia under the control of American structures. It seems that in Kazakhstan the fear of secondary sanctions from the USA significantly outweighs its own interests, primarily economic ones. Kazakhstan’s position raises many questions about its fulfillment of its obligations within the EAEU and the CIS free trade zone.
The project of creating a route through Uzbekistan, Turkmenistan and further by sea has little economic feasibility, since goods will leave the EAEU zone and then cross the border again, which will obviously lead to higher prices for supplies. There is an opinion that the talks about the Southern transport corridor is aimed to put pressure on Kazakhstan to remove restrictions on the border for transit cargo. Real steps to implement this route will challenge Kazakhstan’s participation in the North-South corridor project. It connects Russia and India and passes through Azerbaijan, Iran, Kazakhstan, and Turkmenistan. Many experts note that the removal of restrictions on the Kazakh-Kyrgyz border and the Russian-Kazakh border on the part of Kazakhstan can at least slow down the implementation of this project.
In the transport corridors under consideration, problems on the border of Kyrgyzstan and Tajikistan fade into the background since interaction goes through Uzbekistan. On the other hand, we witnessed some major changes on their 972 km long common border. The work of the intergovernmental commission has continued since last year, and to date the parties have agreed on approximately 889 km of the state border out of 972 km. Even if the corridor is not supposed to lead across their border, it helps stability in the region and, theoretically, this could create an alternative to existing corridors or those under construction.
The implementation of these projects will be significantly influenced by Kazakhstan’s activity in attempts to comply with sanctions and the development of routes bypassing Russia. Now Russia is not very serious about Kazakhstan’s attempts to develop the Kazakhstan-Azerbaijan route, since its capacity is limited.
The transport industry of Kazakhstan provides about 9% of GDP, which is quite a large amount. According to the Ministry of Industry and Infrastructure Development of the Republic of Kazakhstan, 13 international transport corridors pass through the country. Among them, it is worth highlighting the Trans-Asian Railway (TAR), TRACECA and North-South, all of which in one way or another connect Asia with Europe.
As we know, there have been or are attempts to bypass Kazakhstan due to its control of border crossings. However, since Kazakhstan’s dependence on China is high, the likelihood of a deterioration in relations due to the construction of new corridors is low. Kazakhstan will remain a significant transit partner for China.
Generally, it is unlikely that the development of alternative transport projects will cause any serious political tension in the region. In bilateral relations between Russia and Kazakhstan or between Kazakhstan and other Central Asian countries, transport transit issues are significant but not the most important ones. In the context of geopolitical changes, when regionalization processes became more important than globalization, relations with neighboring countries will become more and more important.
Finally, we can add that a major change for Kazakhstan will be the successful construction of the railway China – Kyrgyzstan – Uzbekistan. Kazakhstan could probably suffer significant losses in the event of the combined implementation of projects on the southern transport corridor and the China-Kyrgyzstan-Uzbekistan railway. Until recently, these were hypothetical planes, but in the last days we come to know that the construction of the railway can begin as early as the end of 2024.
There have been several attempts to find a transport corridor that would bypass a certain country. The reasons for bypassing a country in the transportation of goods can vary, from political and security concerns to high fees. In this article we take a look on a route bypassing Kazakhstan – a major player in transport in Central Asia.
The idea of building the railway between China – Kyrgyzstan – Uzbekistan appeared in 1996, when China announced the start of construction of the South Xinjiang railway (Korla-Kashgar section). A year later, participants signed in Tashkent (Uzbekistan) and Bishkek (Kyrgyzstan) a memorandum of cooperation on the construction of the Kashgar-Osh-Andijan railway and the protocol of the first meeting of the joint working commission.
In 2002, the Chinese government allocated a technical grant (20 million yuan) to Kyrgyzstan to study the future highway, after which both sides chose the northern route, although China benefited from the southern option.
In June 2020 opening of railway trade route between China and Uzbekistan took place. The section passing through Kyrgyzstan is unfinished.
Issues causing disagreement among countries include route determination, railway track selection, financing sources, national security, environmental impact, geopolitical considerations, and more. For instance, China and Uzbekistan may prioritise a shorter and more economical transit route to Europe and the Middle East. On the other hand, Kyrgyzstan might advocate for a longer route that fosters connectivity between the northern and southern regions of the country.
In Kyrgyzstan there is a problem of different railway gauge widths (remained from Soviet times), which significantly complicates the project – it is necessary to build a station where wagons will be moved from track to track.
China’s interest in the route through Kyrgyzstan also lies in the presence of a large number of gold deposits in the country. More than ten years ago, the Kyrgyz government offered to pay China for the construction of the railway with gold mining rights. The status of this proposal is currently unclear.
As of 2023, according to the Ministry of Investment, Industry and Trade of Uzbekistan, the parties have previously agreed on a northern 450-kilometer route passing through Kashgar, Torugart, Arpa, Makmal and Jalalabad. The proposed route will pass through rugged mountainous terrain, but if successfully built, it is expected to cut delivery times to Europe by one week or more.
Companies responsible for the implementation of the project are State Enterprise “NC” Kyrgyz Temir Zholu” and JSC “Uzbekistan Temir Yollari”.
The first option of the road after the feasibility study cost $1.5 billion, during the discussion by 2020 the amount increased to $4.5 billion (up $6,5 billion according to different sources). As for the beginning of 2024 the final costs is unknown, but each country should finance at least 30% of its cost.
Kyrgyzstan is not likely to finance the construction of the project on its own. It is not yet clear what could become a source of funding. the growing level of authoritarianism in the country reduces the possibility of receiving investment from Europe. On the other hand, attempts to pull Kyrgyzstan away from Russia from the West may also include investments in transport infrastructure.
In Kyrgyzstan, a limit has been established according to which one creditor can account for no more than 45% of the total external debt. However, the country’s debt to China currently amounts to 39% of its total external debt, which is close to this limit.
According to Beijing, in 2022, Chinese exports to Kyrgyzstan amounted to $15.42 billion, while only $4.07 billion worth of goods were registered in Kyrgyzstan, which indirectly indicates that most of the trade between China and Kyrgyzstan consists of contraband goods.
The main beneficiary is China. The railway will allow increasing the volume of transportation, the dependence of which on weather conditions is minimal. The benefit to Uzbekistan and Kyrgyzstan is not obvious. On the one hand, this should stimulate the development of infrastructure and industrial production along the railway. On the other hand, the frequent changes of politicians and the high level of corruption in the countries will obviously not allow the full potential of the project to be realised.
The implementation of this route is unlikely to have an impact on transit on the territory of Kazakhstan, since the main goal does not bypass Kazakhstan, but the growth of Chinese imports in general. Any transports corridors along the Central Asian route are considered by China as an additional opportunity to supply its goods to Europe.