Infrastructure - The Times Of Central Asia

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CKU Railway

Opinion: China-Kyrgyzstan-Uzbekistan Railway Opens New Options Beyond Europe

The China-Kyrgyzstan-Uzbekistan railway is often presented as a new route to Europe, but its first benefits are likely to be felt closer to home. It could give Central Asian shippers more choice and governments more room to negotiate transport costs, even where sanctions restrict access to European markets. Excavation of the 209.6-meter Kosh-Dobo North No. 2 tunnel was completed on August 5. Work is also underway on other tunnels along Kyrgyzstan’s mountainous section of the railway. CKU is advancing as falling Caspian water levels make the Middle Corridor more expensive to maintain. That could increase demand for alternative routes, although each comes with its own costs and restrictions. Kyrgyz officials have high expectations. Deputy Prime Minister Edil Baisalov told TCA that “this railroad will virtually transform Kyrgyzstan.” Fulfilling that ambition will require the country to earn more than transit fees. Much depends on Makmal, where a transshipment station and possible logistics center are planned. The Torugart-Makmal section will use the Chinese standard gauge of 1,435 mm, while the Makmal-Jalal-Abad section will use the 1,520 mm gauge common across the post-Soviet rail system. Changing gauge adds time and expense as cargo moves between trains. The planned station will handle transfers between the two systems, as well as cargo sorting and train assembly, operations which could support local logistics businesses, provided there is enough traffic. Warehousing and customs services would give Kyrgyzstan a chance to earn more from that traffic. Whether Makmal develops into a wider logistics hub will depend on the services available and their cost to shippers. The mountainous terrain makes the line expensive and slow to build. It also limits the options for competing routes through the Tien Shan. That may strengthen Kyrgyzstan’s negotiating position, but only if the railway offers a reliable service at competitive rates. The trans-Caspian Middle Corridor avoids Russia and Iran, making it more attractive to European companies concerned about sanctions. Yet, as TCA has reported, falling Caspian water levels are raising the cost of the route through Aktau and Kuryk. Low sea levels around Aktau and Kuryk reduce loading efficiency and increase transport costs. Kazakhstan has dredged Kuryk and launched deeper work at Aktau, aiming for a 7.7-meter depth in the operational part of the port. The Caspian route remains workable, but maintaining it requires continuing investment. If those costs rise, shippers will have more reason to compare alternatives. There are also delays to address. In a recent TCA interview, the TITR secretary general stressed the need to speed up the route and ease Caspian bottlenecks as freight volumes grow. A southern route could avoid Caspian transshipment. From Uzbekistan, cargo can move through Turkmenistan and Iran to Turkey. Uzbek, Iranian, and Turkish officials have already discussed linking this corridor with the CKU railway. Some freight already travels south on existing lines. In September, a 55-container block train was dispatched from Kazakhstan’s Altynkol station after crossing from China. Its announced route ran through Uzbekistan and Turkmenistan to Iran via the Sarakhs border station. It carried...

Water Security

Opinion: Chinese Firms Expand Their Role in Kyrgyzstan’s Water Infrastructure

Kyrgyzstan plays a central role in Central Asia’s water system and is of growing interest to China. According to figures cited by President Sadyr Japarov in April 2026, approximately 50 billion cubic meters of surface runoff are generated annually within the country. About 12 billion cubic meters are used domestically, while around 7 billion, or 14% of the total, flow to China. Kyrgyzstan has five main water-management basins. The Issyk-Kul–Tarim management area includes both the closed Issyk-Kul basin and rivers flowing toward China, making its transboundary component a distinct area of bilateral cooperation. The Aksu River, which originates in Kyrgyzstan and feeds the Tarim River in China’s Xinjiang Uyghur Autonomous Region, is particularly important. Estimates put its contribution at 70–80% of the Tarim’s flow. Given Xinjiang’s importance to China’s domestic stability and the Belt and Road Initiative, these shared waters have economic and long-term geopolitical significance for Beijing. Legal and Regional Context Kyrgyzstan and China established a strategic partnership in 2013, but no publicly available bilateral agreement specifically governs the allocation and management of their shared waters. Neither country is a party to the 1992 UNECE Convention on the Protection and Use of Transboundary Watercourses and International Lakes or the 1997 UN Convention on the Law of Non-navigational Uses of International Watercourses. The significant asymmetry in the countries’ economic and negotiating capacities makes the absence of a dedicated water-sharing framework a potential source of vulnerability for Kyrgyzstan. Its importance could grow as water stress intensifies and economic activity in the shared basins expands. For Central Asia, China’s involvement has broader implications. Kyrgyzstan is an upstream country whose rivers supply its downstream neighbors. Chinese participation in water infrastructure adds another external actor to a sector that has historically been one of the most sensitive areas in regional relations. The Changing Nature of China’s Presence China’s involvement in Kyrgyzstan’s water sector includes bilateral assistance for irrigation as well as construction contracts financed by multilateral institutions. These channels coexist, making it important to distinguish Chinese funding from work undertaken by Chinese companies. Kyrgyzstan’s chronic electricity shortage and need to modernize its water and energy infrastructure have created opportunities for greater Chinese involvement. The upgrading of bilateral relations to a comprehensive strategic partnership in the new era in 2023 provided an additional political framework, with hydropower identified as a priority for practical cooperation. Agreements totaling more than $1 billion were signed at the Kyrgyz-Chinese business forum in Urumqi in August 2023, underscoring the broader expansion of economic ties. Chinese companies are also winning contracts funded by international financial institutions. In September 2025, a Sinohydro Bureau 16–Sinohydro joint venture signed a contract for water-conveyance structures and the powerhouse for the second generating unit at Kambarata-2, financed by the Eurasian Fund for Stabilization and Development. The tender had been launched in 2024. The Asian Development Bank lists a $12.8 million contract dated July 2025 for an Issyk-Kul wastewater treatment plant, awarded to a joint venture involving China Road and Bridge Corporation. That contract includes three years...

Astana Finance Days 2026

Astana Finance Days: From BlackRock to Mining and Data Centers

In a trading hall in Astana, BlackRock was explaining why investors have become more cautious. A few floors away, geologists were pitching 23 mining projects, while financiers debated how many megawatts the next wave of artificial intelligence will require. That was how the first day of Astana Finance Days unfolded, as Kazakhstan brought together financial groups managing more than $26 trillion in assets – and sought to show them where that money could be put to work in Central Asia. The ninth Astana Finance Days is taking place on September 9–10 at the Astana International Financial Centre (AIFC), Kazakhstan’s special financial jurisdiction with its own regulator and a court system based on English common law principles. According to the organizers, around 8,000 participants from 90 countries registered for the forum. Institutions represented include BlackRock, Goldman Sachs, Capital Group, Brookfield, Rothschild & Co., Hong Kong Investment Corporation, and IFC Asset Management Company. The stated $26 trillion refers to the combined assets under management of participating firms worldwide – not investment pledged to Kazakhstan. More concrete signals emerged on the sidelines. Meshal Jaber AlFaras, Janus Henderson Investors’ head of the Middle East, Africa, and Central Asia, said the investment group is considering direct investments in Kazakhstan and plans to expand its presence in the country. Janus Henderson manages around $500 billion in assets. AlFaras did not disclose potential projects or investment amounts. A New Price for Risk One of the first day’s most prominent discussions took place at the Astana International Exchange (AIX), the AIFC’s stock exchange. Ben Powell, Chief Investment Strategist for the Asia-Pacific region at the BlackRock Investment Institute, spoke about how geopolitics is reshaping capital flows. “Today, we are in a structurally new regime – moving into a more complicated world where geopolitical fragmentation is intensifying, alliances are breaking down, and international relationships are changing. Of course, this affects investors. They need to completely rethink their approaches to investing,” Powell said. Higher inflation and interest rates, he continued, are changing attitudes toward risk. For smaller emerging markets, that means greater scrutiny of currency stability, regulation, and liquidity. A few halls away, that global discussion was already turning into pitches for specific mineral projects. From the Geological Map to the Investor Fifteen companies brought 23 mining projects to Astana Finance Days. Most are still at the exploration stage. In the industry, such companies are known as juniors. They search for mineral deposits and try to demonstrate that the resources they discover can eventually be mined profitably. For an ordinary bank, the risk is high: a promising area on a geological map does not yet guarantee a working mine. At the forum, companies briefly pitched their projects before moving into individual negotiations. More than ten Kazakh and international investors and strategic partners attended the pitch session. The Junior Mining Platform, launched this spring, is intended to turn this search for capital into a permanent mechanism. Private investors take on early geological risk; as reserves are confirmed and technical uncertainty declines, larger...

GDP Forecast

Kazakhstan Forecasts GDP Growth Above 5% in 2027–2029

Kazakhstan’s government has approved a socioeconomic development forecast and draft republican budget for 2027–2029, projecting average annual real GDP growth above 5% as manufacturing, agriculture, construction, transport, and other non-oil sectors expand. The forecast was prepared with reference to the global economic outlook and conditions in external markets. The accompanying draft budget, approved at the same government meeting chaired by Prime Minister Olzhas Bektenov, will be submitted to the Kurultai for consideration. Under the government’s baseline scenario, real GDP is projected to grow by 5.3% in 2027, 5.5% in 2028, and 5.4% in 2029. Nominal GDP is expected to rise from KZT 199.3 trillion in 2027 to KZT 245 trillion in 2029, an increase of almost 23%. Non-oil sectors are expected to provide the main impetus for expansion. Manufacturing output is forecast to grow by an average of 5.9% a year, substantially faster than the 2% projected for mining. Metallurgy, mechanical engineering, construction materials, chemicals, and food production are expected to make the largest contributions. Oil exports and the broader mining sector will remain central to the economy and public finances, but the forecast assumes that manufacturing and other non-oil activities will account for a larger share of new output. TCA reported in July that Kazakhstan’s economy expanded by 4.1% in the first half of 2026 despite an 8.4% decline in oil production. The non-oil economy grew by more than 5%, with manufacturing, construction, trade, and transport accounting for more than 80% of overall growth. Manufacturing output increased by 9.8%. Agriculture is expected to expand by at least 5% annually. Construction is projected to remain among the fastest-growing sectors, increasing by 16% in 2027 and 17.3% in 2029. Deputy Prime Minister and Minister of National Economy Serik Zhumangarin said the expansion would be supported by transport and logistics, energy, and water projects, together with the modernization of housing, utilities, and social infrastructure. The services sector is also expected to maintain strong momentum. Trade is forecast to expand by an average of 5.7% annually, information and communications by 9.2%, and transport and warehousing by 10.4%. The transport forecast builds on rapid expansion along the Trans-Caspian International Transport Route, or Middle Corridor. Annual freight volumes through Kazakhstan have risen from 0.8 million to 4.5 million tons over seven years, while delivery times fell from approximately 28–32 days to 13–17 days. The route still carries substantially less cargo than established northern corridors, and participating countries continue to work on remaining bottlenecks. Infrastructure spending is a central element of the draft budget, but Bektenov said it must be accompanied by stronger financial discipline. Under President Kassym-Jomart Tokayev’s instructions, accelerated construction of infrastructure and social facilities has been designated as a principal budget priority. Government bodies were told to meet the approved economic targets, while administrators of budget programs were directed to increase the return on every tenge spent. The headline budget deficit is forecast to fall from 2.3% of GDP in 2027 to just 0.4% in 2029. However, the non-oil deficit, which measures the...

Transport Infrastructure

Kazakhstan’s Largest City to Bring Back Trams as Almaty LRT Targets 2027 Launch

Kazakhstan’s largest city plans to bring back tram service more than a decade after it was suspended. Almaty aims to launch the first light rail transit (LRT) line by the end of 2027, dedicating part of one of the city’s busiest transport corridors to the new system. For Almaty, the project is primarily an attempt to cope with growing pressure on its roads. The city had a population of about 2.37 million as of June 1, 2026, while many more people commute daily from the surrounding metropolitan area. Rail-based public transportation is currently limited to a single metro line, whose first section opened in 2011 after more than two decades of construction. The first phase of the LRT will run for 18.3 kilometers. Preparatory work is underway, including the removal of infrastructure from the former tram system and the relocation of utility networks. City authorities have said late 2027 remains the target for launching the line, although the timing could change depending on the manufacture and delivery of the trains. Unlike Astana’s LRT, the Almaty line will run entirely at street level, with no elevated sections planned. Trains will operate on dedicated tracks, including along Bauyrzhan Momyshuly and Tole Bi streets. On these sections, two center lanes will be allocated entirely to the LRT once the line begins operating. Before the main construction work can proceed, 375 sections of utility infrastructure must be relocated, including water, sewer, heating, gas, and electricity networks. This work is already creating additional traffic problems along Tole Bi, one of Almaty’s main thoroughfares. In some places, the roadway has been narrowed and traffic temporarily redirected into opposing lanes. The trains will be capable of speeds of up to 65–70 kilometers per hour, but their average operating speed will be considerably lower, at around 30–35 kilometers per hour. The main reason is that stops will be spaced about 700 meters apart on average. The line’s main advantage is expected to come less from the trains’ speed than from physically separating the LRT from regular road traffic. For Almaty, this marks a return to a familiar form of transportation. Trams first appeared in the city in 1937 and remained part of its transport system for almost eight decades. Service was suspended in 2015 following two serious accidents, and the network was never restored. The idea of replacing the old tram system with a modern LRT has been discussed for years. The project has repeatedly changed and been delayed, with different financing models and routes considered. The current line is part of a broader overhaul of Almaty’s transport system, which also includes expansion of the metro, bus rapid transit (BRT) corridors, and dedicated bus lanes. Under the city’s long-term master plan, the LRT network is expected to reach 76 kilometers by 2040. Kazakhstan has already gained its first experience operating this type of transport in the capital. Astana’s LRT began carrying passengers in 2026 after years of construction and repeated delays. During its first two weeks of full...

Digitalization

Kazakhstan to Pilot Unified Smart Turmys Utilities Platform

Kazakhstan will begin pilot operation of the first modules of its Smart Turmys digital platform in the fourth quarter, bringing utility billing, subscriber records, and resource consumption data into a single system. The initiative forms part of a broader effort to modernize the country’s ageing housing and utilities sector by combining infrastructure renewal with digital management tools. Industry and Construction Minister Yersayin Nagaspayev announced the timetable at a government meeting. Prime Minister Olzhas Bektenov instructed the industry and energy ministries to accelerate the platform’s implementation and adopt common standards for utility meters and software by September 1. According to the ministry, Smart Turmys will maintain a unified subscriber registry, provide digital accounting of utility payments, and monitor the consumption of electricity, gas, heat, and water. Officials say the system should improve transparency and help reduce resource losses. The platform will sit alongside Kazakhstan’s Unified Payment Document system, which allows households to receive a single bill covering multiple utility services. The system is already used in 38 cities, 170 districts, and more than 4,500 rural communities. By 2029, the government aims to achieve full metering coverage across utility infrastructure in cities of republican and regional significance. Digitalization is being implemented alongside large-scale physical upgrades. Under Kazakhstan’s national modernization program, more than 800 billion tenge, approximately $1.7 billion, is planned for 45 projects to construct or reconstruct sewage-treatment facilities. Five projects were completed during the past two years. Work is underway in three cities and is scheduled for completion before the end of 2026. The government also hopes the investment program will support domestic manufacturers. Officials say Kazakh companies can supply a significant share of the pipes, cables, reinforced concrete structures, and pipeline fittings required for utility modernization, reducing reliance on imported equipment. For Kazakhstan, the digital push is primarily a response to decades of underinvestment in Soviet-era infrastructure. Much of the country’s utility network was built several decades ago. High-profile failures, including the heating-system collapse in Ekibastuz during the winter of 2022-23, highlighted the economic and social costs of delayed maintenance. Better data may help operators track consumption and resource losses, but the platform cannot substitute for repairs to ageing pipes, heating systems, and treatment facilities. The Smart Turmys project forms part of a broader modernization strategy. As The Times of Central Asia previously reported, the national project has a budget of 13 trillion tenge, equivalent to approximately $27.5 billion at the official July 28 exchange rate. The program combines repairs to power plants and engineering networks with digital technologies intended to improve the management and resilience of public utilities.