Infrastructure Development - The Times Of Central Asia

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Building Bridges Across Eurasia: Kazakhstan’s Strategic Push for Transport Integration

The development of the economic systems of Europe and Asia is outpacing the level and pace of integration in the transportation systems of the countries located between them. This problem can be solved by creating an overland chain across the entire Eurasian space. As part of the development of its transit potential, Kazakhstan has started to form the backbone of such a terminal network. All work on creating transport networks has been entrusted to the national company, Kazakhstan Temir Zholy (KTZ), which plans to integrate all modes of transport to offer a comprehensive range of client services under a 'one-stop-shop' principle and enhance international operations. Establishing a terminal network outside of the republic will improve freight logistics and help build efficient supply chains. This decision is driven by market demands for cargo delivery, which go beyond mere transportation needs and require the provision of a comprehensive transportation product by a single logistics operator. Where Cargo Flows Begin Developing cooperation with China plays a crucial role in integrating Eurasian transport space. In 2023 alone, transit freight traffic between Kazakhstan and China reached a record 28.3 million tons. This success was partially due to the development of a terminal network in China - the Kazakhstan-China logistics terminal in the Pacific port of Lianyungang has been operating for ten years, and the largest dry port in Central Asia, Khorgos – Eastern Gate, operates on the border. The transport system between these two ports facilitates the delivery of goods from China's eastern coast to Europe via the Caspian Sea, ensuring the shortest delivery times. Adding the new Kazakh terminal in Xi'an to this transport chain has optimized logistics processes and boosted transportation performance. In the first eight months of 2024, container transit from China along the Trans-Caspian International Transport Route (TITR) increased 20-fold thanks to the freight terminal in Xi'an, a project was implemented in partnership with the Chinese company, Xi'an Free Trade Port Construction and Operation. Focusing on EAEU Transport Potential Significant steps have been taken to harness the transport potential of the Eurasian Economic Union (EAEU) countries. In April, construction began on a new terminal at the Selyatino station near Moscow. A trilateral Kazakhstan-Russia-China agreement on creating the CRK Terminal transport and logistics center has been signed by KTZ, SlavtransService, and Xi'an Free Trade Port Construction and Operation. This logistics hub, based in one of the largest dry ports in Selyatino, will develop direct transport links between Xi'an, Russia, and other countries. Its launch is expected this year. Additionally, in the fall of 2024, KTZ signed a Memorandum of Understanding with Chinese and Belarusian partners to build a new logistics terminal in the Belarusian city of Svisloch. Caspian Priority To further integrate Kazakhstan into the key Trans-Caspian International Transport Route (TITR) plans are underway to create an inter-modal freight terminal in Azerbaijan's Alyat port. An agreement for the project's implementation has been signed between SK-AIH Investment Fund Ltd, KTZ, Baku International Sea Trade Port CJSC, and Xi'an Free Trade Port Construction and...

Traffic public transport City Agglomeration Infrastructure Development Construction Transport

Astana’s Long-Awaited LRT Project Set to Launch Next Year

Zhenis Kassymbek, the Akim (governor) of Kazakhstan’s capital Astana, has announced that the city’s first light rail transit (LRT) line will launch by the end of next year, marking a significant milestone in a 13-year-long construction project fraught with delays and controversies. The LRT project, envisioned as a high-speed transport system running on elevated tracks to bypass traffic, began construction in 2011. Initially, the line was slated for completion by 2017 to coincide with the EXPO international exhibition. It was intended to connect the Astana-Nurly Zhol railway station with the capital’s airport. While the railway station opened on time, the LRT project was halted in 2013 due to high costs and concerns over its financial viability. The project was revived in 2015 when Astana’s Akimat signed a construction deal with a consortium of Chinese companies, China Railway International Group Limited and Beijing State-Owned Assets Management Co., Ltd. However, further delays occurred when funds — amounting to over 80 billion tenge ($200 million at the time) — were frozen in the accounts of the now-defunct Bank of Astana. Construction began with the installation of support pillars, but the Chinese contractors abandoned the project due to funding issues. In 2019, Kazakhstan’s investigative authorities intervened. Talgat Ardan, the former head of Astana LRT, and Kanat Sultanbekov, an ex-deputy mayor of Astana, were accused of embezzling nearly 30 billion tenge. This included inflating project costs and awarding overpriced contracts. Both were sentenced in absentia to seven years in prison in May 2023. Despite initial skepticism from President Kassym-Jomart Tokayev, who questioned the project’s ridership potential given its 22-kilometer length and route, the decision was made to proceed. Former Akim Altay Kulginov argued that dismantling the incomplete infrastructure would cost more than completing it. Under Kassymbek, construction has progressed. “The first LRT trains will arrive in August or September next year. We expect to have 15 trains operational by fall, with technical testing by the end of 2024 and full service in early 2026,” Kassymbek stated during a briefing. The elevated tracks are nearing completion, with rail-laying in progress. Signal installation is set to begin in spring. The Akimat anticipates the line will serve approximately 20,000 passengers daily. The fare for LRT rides has yet to be finalized. Kassymbek announced that the pricing would remain affordable. However, he stopped short of providing specifics. In 2017, the proposed fare was 300 tenge per ride, three times the cost of a bus ticket at that time. Current bus fares in Astana range from 110 tenge for regular routes to 250 tenge for express routes. Given the LRT’s total project cost of $1.88 billion, fares significantly higher than bus rates may be needed to achieve profitability. Despite this, the LRT could address pressing issues, such as Astana’s daily traffic jams. Currently, buses are the only public transport option in the city. “We aim to expand roads, increase bridges, and enhance public transport to encourage residents to switch from private vehicles,” Kassymbek said. He also suggested that Turkestan and...

Infrastructure Development GDP Economic Growth Government cabinet reduce poverty small and medium businesses Economic Reforms

Kyrgyzstan Unveils Ambitious Growth Plans at People’s Kurultai

On December 20, Bishkek hosted the third People’s Kurultai (Congress), a platform for direct dialogue between representatives of local communities from across Kyrgyzstan and the country’s top leadership. The event featured opening remarks by President Sadyr Japarov and a detailed address by newly appointed Chairman of the Cabinet of Ministers, Adylbek Kasymaliyev, who outlined the government’s economic priorities and strategic plans for the future. Japarov set the tone for the event by sharing his vision for Kyrgyzstan’s development priorities. He announced that construction of the long-anticipated China-Kyrgyzstan-Uzbekistan railway will commence on December 27. Kasymaliev, in his address, emphasized Kyrgyzstan’s ability to sustain economic momentum, citing the country’s 9% annual GDP growth rate over the past three years. He highlighted key initiatives aimed at transforming Kyrgyzstan’s economic landscape, including: Strategic Infrastructure Projects: Kasymaliyev underscored the significance of the China-Kyrgyzstan-Uzbekistan railway, which is expected to create new economic centers and logistics hubs, effectively positioning Kyrgyzstan as a "land port" in the region. Hydropower and Renewable Energy: As a reliable partner in Central Asia’s hydropower sector, Kyrgyzstan will continue collaborating with Kazakhstan and Uzbekistan on the flagship Kambarata-1 hydroelectric power plant. Kasymaliyev also announced plans to expand solar and wind energy, eliminate state monopolies in the energy sector, and create conditions to attract private investment. Agriculture and Food Security: The government will prioritize agricultural processing to add value to raw products, ensuring food security and bolstering rural economic development. Construction as an Economic Driver: With construction contributing 7.4% of Kyrgyzstan’s GDP - a tenfold increase since 2013 - Kasymaliyev called the industry a vital indicator of economic growth. He noted that construction has significantly improved citizens' well-being over the past three years. Government’s Strategic Goals Kasymaliyev laid out an ambitious roadmap for the Cabinet of Ministers, aiming for the following by 2030: Economic Growth: Maintaining a GDP growth rate of 9% and achieving a GDP of $30 billion. Income Growth: Raising GDP per capita from $2,500 to $4,000. Economic Transition: Shifting from a services-oriented economy to an industrial-agrarian model. Support for Small and Medium Businesses: Increasing their share in GDP from the current 40.5% to 50%. Poverty Reduction: Lowering the poverty rate to 17%. Education Expansion: Ensuring 80% of preschool-age children have access to kindergarten. Kasymaliyev’s address underscored the government’s commitment to comprehensive economic reforms and regional cooperation. His plans reflected an optimistic vision for Kyrgyzstan’s development while addressing key challenges in energy, infrastructure, and social services.

US sanctions International Finance Infrastructure Development EU Sanctions Sanctions Russia

U.S. Sanctions on Gazprombank Put Uzbekistan’s $4.8 Billion Copper Ambitions at Risk

Uzbekistan faces a significant economic challenge as U.S. sanctions on Russia’s Gazprombank disrupt the $4.8 billion Yoshlik mine expansion project. The project, managed by state-owned Almalyk Mining and Metallurgical Combine (MMC), is critical to Uzbekistan’s plan to nearly double its copper production by 2026, according to The Diplomat. However, with Gazprombank now excluded from the international payments system, the project’s financing is at risk. The Russian Government directly owns 36.44% of Gazprombank's capital. Financing Challenges The Yoshlik mine expansion aims to increase copper output by 78% and gold production by 50%, making it a cornerstone of Uzbekistan’s economic development strategy. However, Almalyk MMC’s reliance on Gazprombank leaves it vulnerable to delays and potential secondary sanctions. This situation exacerbated earlier difficulties after U.S. and EU sanctions in 2022 suspended an $800 million tranche from Russian development bank VEB.RF, another key financial backer. Almalyk MMC must now urgently secure alternative financing to keep the project on track. Russia’s Role in Uzbekistan’s Economy Russia remains Uzbekistan’s largest trading partner, and remittances from Uzbek workers in Russia account for 18% of Uzbekistan’s GDP. Russia’s involvement in the Yoshlik project began in 2021 when Gazprombank and VEB.RF pledged $2 billion to finance mining equipment purchases. Impact on European and British Partners The Yoshlik project also involves significant participation from European and British firms: Germany: Engineering firms such as Thyssenkrupp have supplied critical equipment. Germany’s KfW IPEX-Bank recently arranged $2.55 billion in financing for the project. However, U.S. sanctions on Gazprombank could create legal and logistical hurdles, putting pressure on Germany’s government to reassess its support for exports to Uzbekistan. United Kingdom: The UK has taken a complex position. While it sanctioned Gazprombank in 2014, British firms, including Weir Group, remain involved in the project. In 2024, the U.K.’s export credit agency guaranteed a refinancing deal through Spain’s Santander Bank, reflecting the mine’s importance to British exporters. As reported by TCA, earlier this week, the UK Export Finance (UKEF) guaranteed a €12.6 million ($13.25 million) loan to the Almalyk Mining and Metallurgical Complex to refinance the purchase of fully automated vehicles. Urgency for Alternative Financing For Uzbekistan, securing alternative sources of funding is critical. Almalyk MMC must navigate a challenging sanctions landscape while keeping the Yoshlik project on schedule. Failure to do so could not only isolate the company but also hinder Uzbekistan’s broader economic goals, particularly its ambitions to expand its mining sector and boost foreign investment.

Issyk-Kul Economy Air Transport Infrastructure Development Airports international tourism

Kyrgyzstan Opens Airport in Karakol – More New Routes Coming Soon

On December 11, Kyrgyzstan’s President Sadyr Japarov inaugurated the reconstructed international airport in Karakol, the main city of the Issyk-Kul region. Situated southeast of Lake Issyk-Kul, Karakol is Kyrgyzstan’s winter tourism hub and home to the nation’s largest and most popular mountain ski resort. President Japarov highlighted the reopening of the Karakol International Airport as a pivotal move toward strengthening regional connectivity, boosting tourism, and enhancing Kyrgyzstan’s international profile. “This is just the beginning,” Japarov remarked, announcing plans for a major new development: a “Kyrgyz Courchevel,” envisioned as Central Asia’s largest and most modern ski resort. Located 70 kilometers from the airport, the year-round facility is planned to accommodate up to a million tourists per season. Kyrgyzstan’s government is also prioritizing the modernization of regional airports to improve domestic air connectivity. Renovation projects are underway in Naryn, Kazarman, Kerben, and Batken, while construction of a new airport in the southern city of Jalal-Abad is set to begin soon. Starting in May, the government plans to launch domestic flights on routes including Kazarman-Bishkek, Naryn-Bishkek, Kerben-Bishkek, Karakol-Osh, and Talas-Osh. These flights will be operated by the state-owned Asman Airlines. This follows the reopening of the Talas airport in May, as previously reported by The Times of Central Asia, marking its return to operation after decades of inactivity since the Soviet-era. Originally built in 1979 to accommodate planes and helicopters, the airport had long been out of service until its recent renovation. To support the enhanced domestic air network, Kyrgyzstan’s Manas International Airport Open Joint Stock Company has procured two Bombardier Dash 8 Q400 aircraft for Asman Airlines. Manufactured in Canada, the Dash 8 Q400 is a short-haul plane capable of carrying up to 80 passengers over distances of up to 2,000 kilometers.

Logistics multimodal transportation International Transit TITR Infrastructure Development Transportation

Kazakhstan Building Five Cross-Border Trade Hubs

Kazakhstan is advancing plans to establish five cross-border trade and economic hubs, aiming to position the country as a key global transport and logistics center. The initiative was reviewed at a government meeting on December 10. Strategic Hub Development Minister of Trade and Integration Arman Shakkaliyev reported that significant progress has been made on the hubs, with rail and road links already in place. The planned hubs are: The Khorgos Hub: Located on the border with China. The Caspian Hub: Situated along the Trans-Caspian International Transport Route (TITR). The Eurasia Center for Cross-Border Trade: Positioned at the border with Russia. The “Central Asia” International Center for Industrial Cooperation: At the border with Uzbekistan. The Industrial Trade and Logistics Complex: At the border with Kyrgyzstan. Additionally, container hubs are planned for the ports of Aktau and Kuryk in the Mangistau region. Multimodal air hubs are also under development at airports in the cities of Astana, Almaty, Shymkent, and Aktobe. Broader Economic Goals Prime Minister Olzhas Bektenov underscored the strategic importance of these projects, emphasizing their potential to reduce transit times, boost industrial production, increase tax revenues, and create new jobs. Bektenov highlighted that the network of hubs will form a unified trade and transport space with Kazakhstan’s key trading partners. “This will significantly increase trade turnover between the countries and strengthen strategic relations with neighboring states,” he said. The prime minister also stressed the importance of leveraging major transport corridors such as the East-West, North-South, and Trans-Caspian International Transport Route corridors to enhance access to the markets of China, the Persian Gulf, the Caucasus, and Europe.