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Railway Economics

Opinion: China-Kyrgyzstan-Uzbekistan Railway: Turning Transit Into Local Benefits

At the eighth Consultative Meeting of the Heads of State of Central Asia and Azerbaijan on October 8, 2026, Azerbaijan joined the forum as a full member after three years of participation as a guest of honor. President Ilham Aliyev stated that “Transport is one of the primary areas of cooperation between Central Asia and Azerbaijan”. Uzbekistan’s President Shavkat Mirziyoyev called for comprehensive infrastructure along the routes, with logistics hubs and service centers supporting production facilities and industrial zones to generate economic activity around the transport corridors. Construction of the China-Kyrgyzstan-Uzbekistan railway is among Uzbekistan’s transport priorities and is important for Kyrgyzstan, making this “integrated transport corridor development” approach particularly relevant. Construction of the China-Kyrgyzstan-Uzbekistan railway (also known as the Kashgar-Torugart-Makmal-Jalal-Abad-Andijan railway) has been underway since December 2024. Public discussion of the project focuses mainly on shorter routes linking China and Central Asia with the Middle East and Europe, and on the line’s design carrying capacity. However, growth in transit traffic does not in itself guarantee economic benefits for the Naryn and Jalal-Abad regions of Kyrgyzstan or the Andijan region of Uzbekistan. Local economic impact depends on whether freight services and tariff policy allow small shippers to use the railway’s stations. Border delays can limit those benefits, as can a lack of storage and processing infrastructure nearby. What the Project Involves The intergovernmental agreement on the implementation of the project was signed by China, Kyrgyzstan, and Uzbekistan on June 6, 2024. The joint project company was registered in July 2024, the investment agreement was signed on December 20, 2024, and construction officially began on December 27, 2024, in Jalal-Abad. According to the Ministry of Transport of Uzbekistan, the total length of the line is 532.53 km; 20 stations are planned, including two border stations, one transshipment station, four intermediate stations, and 13 passing loops. The Makmal transshipment station will be the transfer point between China’s 1,435 mm track gauge and the 1,520 mm gauge used in Kyrgyzstan and Uzbekistan. From Torugart to Makmal, the 165.5 km section will use the Chinese gauge. The 146.26 km section from Makmal to Jalal-Abad will use the wider gauge, connecting to the existing network toward Andijan. At Makmal, containers will be sorted and transferred between trains. Wagons can instead have their wheel assemblies changed to run on the other gauge. Freight trains will be assembled or split up at the station, which will also have facilities to weigh wagons and cargo. The parties estimate the cost of the project at USD 4.7 billion. Under the loan agreement signed on December 16, 2025, about USD 2.3 billion is provided by a syndicate of Chinese banks as a 35-year loan to the project company. Another USD 2.3 billion or so forms the project company’s charter capital. China holds 51% of the shares, while Kyrgyzstan and Uzbekistan each hold 24.5%. As of October 2026, construction is underway along the entire length of the route. In September 2026, the project company reported the completion of the first tunnel...

Logistics Infrastructure

Landlocked Kazakhstan Builds a Logistics Network from China to the Black Sea

Although Kazakhstan is landlocked, companies based in the country already hold stakes in logistics terminals at Lianyungang on China’s Yellow Sea coast and in Poti on the Black Sea. Projects farther west are at various stages of development. The strategy allows Kazakhstan-based operators to remain involved as freight travels between Asian ports and European markets, including beyond Kazakhstan’s borders. One of the main facilities is at the Chinese port of Lianyungang. The China-Kazakhstan Logistics Cooperation Base began operating in May 2014. It was jointly developed by Lianyungang Port and Kazakhstan Temir Zholy (KTZ), Kazakhstan’s national railway operator. Cargo arriving by sea can be transferred to rail for shipment through Kazakhstan toward Central Asia and Europe. In a written response to The Times of Central Asia, Kazakhstan’s Ministry of Transport said the Lianyungang terminal handled 2.39 million twenty-foot equivalent units (TEU) from 2015 through 2025. Annual throughput rose from 167,000 TEU in 2015 to 271,700 TEU in 2025. A further 140,100 TEU passed through the terminal during the first half of 2026, down 3.2% year on year. According to Samruk-Kazyna, the network extends inland to a terminal in Xi’an and includes Khorgos Gateway at the Kazakhstan-China border. The fund said a dry port in Chengdu would be added in 2027. At the western end, Kazakhstan-based PTC Holding and Georgian partners developed a multimodal terminal that opened in Poti in June 2025 after investment of more than $30 million. The operator currently lists annual throughput capacity at up to 100,000 TEU. Between the terminals in China and Georgia lies Kazakhstan’s rail network, which carries cargo to the Caspian ports of Aktau and Kuryk. These links form Kazakhstan’s section of the Trans-Caspian International Transport Route, known as the Middle Corridor. The route connects China with Europe across the Caspian Sea and the South Caucasus. Kazakhstan is pursuing further terminal projects along the route. In July 2026, Kazakhstan and Azerbaijan were preparing to begin construction of a joint intermodal terminal at Alat. Work was awaiting completion of the Port of Baku’s updated master plan. In June 2026, Kazakhstan’s government said work would begin on terminals in Budapest and Constanța. Later that month, KTZ Express signed an agreement with Midia Marine Terminal for a joint project at Romania’s Port of Midia. The European projects have yet to reach the operating stage. The value of this terminal network becomes clearer from the way the Middle Corridor operates. Containers must move between rail and ships for the Caspian crossing, so faster transit across Kazakhstan cannot determine the total journey time. The World Bank has identified the Caspian and Black Sea crossings as bottlenecks requiring greater vessel availability and higher port productivity. Transit times vary by destination. Turkish officials reported in August 2025 that a freight train from China had reached Turkey in 15 days, while earlier journeys often took more than 20 days because of customs procedures and weather on the Caspian Sea. A 15-day journey should therefore be treated as a benchmark rather than a guaranteed...

Middle Corridor

Baku-Tbilisi-Kars Railway Boosts Kazakhstan’s Middle Corridor Role

The Baku-Tbilisi-Kars railway entered full-scale operation on June 2, a development expected to increase freight transport along the Trans-Caspian International Transport Route and support Kazakhstan’s role as a key transit hub between China and Europe. The railway is a joint strategic project of Azerbaijan, Georgia, and Turkey and serves as one of the main overland links connecting Central Asia with European markets through the South Caucasus. The 827-kilometer line has been operating at limited capacity since 2017. Full commercial operation became possible following the completion of rehabilitation and construction work on the Marabda-Kartsakhi section in Georgia. According to Georgia’s Ministry of Economy and Sustainable Development, the project included the construction and modernization of bridges, railway stations, overpasses, traction substations, a cross-border rail tunnel linking Georgia and Turkey, and upgrades to the Akhalkalaki International Railway Station, one of the corridor’s key logistics hubs. The completion of the project is expected to increase the railway’s annual cargo-handling capacity to 5 million metric tons, allowing it to accommodate growing freight volumes moving between Asia and Europe. “The full-scale operation of the Baku-Tbilisi-Kars railway is an important event not only for Georgia, Azerbaijan, and Turkey, but for the entire region and Central Asia,” Georgia’s Minister of Economy and Sustainable Development Mariam Kvrivishvili said during the inauguration ceremony. She described the railway as a critical transport link connecting Europe, Central Asia, and China. According to Kvrivishvili, container traffic through Georgia involving China and Kazakhstan increased by 33% in 2025, while the number of containers transported along the Baku-Tbilisi-Kars route was nearly six times higher than in the previous year. Kazakhstan was represented at the ceremony by Deputy Transport Minister Zhanibek Taizhanov, showing the strategic importance Astana places on the corridor. Authorities in Kazakhstan view the full launch of the Baku-Tbilisi-Kars railway as a significant step in developing the country’s transit potential and improving logistics links between China, Central Asia, the Caucasus, and Europe. The railway forms a key component of the Middle Corridor, which has gained increasing attention in recent years as governments and logistics companies seek alternatives to traditional Eurasian trade routes.

Rail Freight

Kazakhstan and Russia Digitalize Rail Freight Transportation

Kazakhstan’s national railway operator, Kazakhstan Temir Zholy (KTZ), and Russian Railways have signed a joint action plan to develop the digitalization of bilateral rail freight transportation. The document was signed on May 28 during Russian President Vladimir Putin’s state visit to Kazakhstan. According to KTZ, the plan aims to create a unified digital space between the railways of Kazakhstan and Russia. The company said the move would improve the efficiency of transportation processes, speed up cargo handling, and introduce modern digital solutions on international routes. Implementation of the plan is expected to support seamless transit, remove digital barriers, expand electronic document exchange, and develop paperless technologies in freight transportation. The parties also agreed to gradually increase the number of trains passing through nine interstate railway crossings on the Kazakhstan-Russia border. KTZ described the signing as an important step in developing transport and logistics cooperation between Kazakhstan and Russia, saying it would also strengthen Kazakhstan’s role as a key economic bridge between Russia and the countries of Central Asia. According to KTZ, rail freight between Kazakhstan and Russia totaled 92.1 million tons in 2025, up 3.5% from 2024. The growth was driven primarily by transit operations. Russian cargo exports through Kazakhstan increased by 16.1% to 17.3 million tons, while cargo exports from Kazakhstan transiting through Russia rose by 20.4% to 21.5 million tons. The growth trend has continued this year. In the first four months of 2026, exports from Kazakhstan, including coal, ferrous metals, and fertilizers, transiting by rail through Russia increased by 70,000 tons to 7 million tons. Russian cargo transported to and through Kazakhstan, including oil products, ferrous metals, grain and food products, exceeded 12 million tons, an increase of about 20%.

North-South Highway

Kyrgyzstan to Temporarily Open Alternative North-South Highway from June to November

Kyrgyzstan’s alternative North-South highway will be open to traffic from June to November 2026, the Ministry of Transport and Communications has announced. Preparatory work for the seasonal opening is currently underway, including the implementation of additional safety measures. The long-anticipated 433-kilometer highway is a strategic transport corridor linking Balykchy in the Issyk-Kul Region with Jalal-Abad in southern Kyrgyzstan. Approximately 200 kilometers of the route pass through areas where no roads previously existed. Key engineering achievements along the route include Kyrgyzstan’s longest tunnel, located at the Kok-Art mountain pass, and two major overpass bridges. Once operational, the highway is expected to reduce travel time between Jalal-Abad and Balykchy from 13 hours to just six. Currently, the only route connecting Kyrgyzstan’s northern and southern regions is the Bishkek-Osh highway. The new North-South corridor is expected to improve both passenger and freight transportation between the regions, particularly given the absence of a direct railway connection. Construction of the North-South highway began in 2014, but the opening has been repeatedly postponed. The highway is expected to become fully operational year-round in 2028, according to Minister of Transport and Communications Talantbek Soltobaev. He said that in 2026 the highway would only operate during the summer season. “Until we resolve safety issues, we will be closing the highway for the winter,” the minister said, referring to the need to eliminate risks associated with rockfalls, avalanches and other natural hazards along certain sections of the road.

transport corridor

Kyrgyzstan Tests Alternative Transport Route to Russia That Bypasses Kazakhstan

Kyrgyzstan and Russia are advancing plans for an alternative transport route that would bypass Kazakhstan. The proposed Southern Transport Corridor would connect the Russian port of Astrakhan across the Caspian Sea to the Turkmenbashi port in Turkmenistan and then continue overland through Turkmenistan and Uzbekistan to Kyrgyzstan. The first test cargo shipments along this corridor have already been completed, according to Russian media reports citing Kyrgyzstan’s First Deputy Prime Minister Daniyar Amangeldiyev. Amangeldiyev said Kyrgyzstan views the development of this southern route via the Caspian Sea as a promising alternative for trade between the two countries. “We’re working in this direction. We have a strategic partnership in this area and a shared vision. We are currently in negotiations,” he told Russia’s TASS news agency on April 3 on the sidelines of the CIS International Economic Forum in Moscow. Discussions on establishing the new transport corridor date back to October 2024, during the visit of then–prime minister of Kyrgyzstan Akylbek Japarov to Moscow. For Kyrgyzstan, the Southern Transport Corridor offers a way to reduce dependence on transit through Kazakhstan. At present, most cargo traffic between Russia and Kyrgyzstan passes through the territory of Kazakhstan. Trucks from Kyrgyzstan often face delays of several days at the border, creating significant obstacles for cargo transport, particularly for perishable agricultural goods. The new corridor is expected to help alleviate these bottlenecks and provide an alternative route linking Kyrgyzstan with the European part of Russia. Kazakhstan would continue to serve as the primary transit route for trade with Russia’s Siberian, Ural, and Far Eastern regions.