Steep road ahead for new Uzbek railway project

TASHKENT, December 18 (TCA) — By 2020 Uzbekistan is planning to build a railroad to the Ferghana Valley through the Kamchik pass. However, the high cost and complexity of the construction brings into question the project’s prospects for success.

Uzbekiston Temir Yullari (Uzbekistan Railways) State Railway Company has begun designing the railway line, which would connect the Uzbek part of the Fergana Valley (which includes Andijan, Namangan and Ferghana regions in the country’s east) with Uzbekistan’s mainland. The new 129-kilometer electrified railway line, Angren-Pap, will go through the Kamchik pass and involves the construction of two tunnels.

Today the cost of the railroad is estimated at US $1.9 billion.

The feasibility study of the project will be completed in late 2013, and the construction work would start in early 2014. The construction period could take from four to five years.


New railroads to boost Uzbek economy

The project would be financed through the state budget, Uzbekistan Railways’ own funds, and loans from international financial institutions.

“The new railway will establish year-round railway service with the Ferghana Valley, where the residents and businesses are experiencing transportation difficulties, especially in winter,” said Elbek Kashiev, a representative of Uzbekistan Railways. “The new line will also reduce the cost of transporting goods.”

The Kamchik pass is situated at over 1,200 meters above sea level. The only highway between the Tashkent region and Pap district of the Namangan region goes across the pass. In winter, because of the threat of avalanches, this section of the highway is regularly closed.

However, the government decided that the international center for logistics at Angren and the Angren free industrial zone (FIZ) in the Tashkent region combined with the development of the raw material base of the Ferghana Valley will be the impetus for the new railway construction. “It is remarkable that the new railway line is created on the basis of the transport hub,” said the analyst Anvar Jumayev. “This increases the logistics potential of enterprises created here.”

In March 2010, the international logistics center based at the Ablyk railway station was opened in Angren. Its main goal is receiving and processing all categories of goods, as well as their delivery by truck throughout the Fergana Valley. In order to develop the center, the government decided to stop the transportation of all goods to the Fergana Valley from Uzbekistan’s other regions on the railway through neighboring Tajikistan.

In April 2012 Uzbekistan’s President, Islam Karimov, signed a decree to the establishment of the Angren FIZ. It was established for 30 years with the possibility of extension. Presently, eight projects worth approximately $200 million in the food industry, petroleum products, textiles and pharmaceuticals have been launched in the Angren FIZ.

However, many experts believe that the high cost and complexity of construction bring the completion of the railroad project by 2020 into question.

About 60% of the freight turnover in Uzbekistan and almost 80% of the total volume of export and import cargo is carried on railways, which have a total length is 4,200 kilometers.

“Any new railroad will increase freight and will contribute to the economic growth,” said Jumayev.

“Until today, the Angren Logistic Center project has been unprofitable,” believes Ilkhat Tushev, the analyst at Central Asia Investments. “Transportation by road is 20% more expensive than by rail.” Surely, it would be possible to leave the railway through Tajikistan open and spend money on the reconstruction of this road section, but Tashkent, which opposes the construction of the Rogun hydro power plant in neighboring Tajikistan, gave way to political ambitions, the expert believes.

US $1.9 billion, as Tashkent claims, is now just the preliminary cost; it will increase. “It is not a plain. I think that the construction of the railroad in difficult mountain conditions will take no less than five years,” said an experienced railroad designer Gennady Vakhrushev.

Uzbekistan Railways has already started negotiations with a number of design institutes, including some from Russia, that have experience with this type of terrain. One of the key elements of the project is the two tunnels in the pass, the construction of which promises to be very expensive.

Additionally, Uzbekistan is located in a zone of high seismic activity. “Accidents may occur during the construction of the tunnels and their ongoing operation,” believes analyst Jumayev.

In any event, Uzbekistan will not be able to implement this huge project on its own. “In order to borrow the required amount, and it is not less than 50% of the project cost, it will be necessary to be more flexible and more compliant,” believes a local analyst, Dilmurad Kholmatov.

This is the reason why Tashkent has supported the construction of the Uzbekistan-Kyrgyzstan-China railway. The project was initiated by Beijing, which has recently become one of the major donors into the Uzbek economy.

“Probably, Tashkent considered this project profitable,” said Kholmatov. “The combination of two railway projects will increase not only the transit of Chinese goods, but also the transportation of goods from Uzbekistan.” Perhaps, this will ensure the return of funds spent on the construction of the Angren-Pap railroad. However, the implementation of the project may take long time.