Transport & Logistics - The Times Of Central Asia

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Transport & Logistics

Will Construction Of Kyrgyzstan’s “Chinese Railroad” Start This Year?

The China-Kyrgyzstan-Uzbekistan railroad construction project is the largest project in Kyrgyzstan’s transport sector, according to the authorities in Kyrgyzstan, and its implementation will help realize the transit potential of the republic while connecting it with the countries of southeast Asia. The new railroad will be important not only for the three named countries through which it will pass; it will also shorten the route from East Asia to the Middle East and Southern Europe. The total length of the Kyrgyz branch will be 280 kilometers. It’s worth noting that Beijing developed a feasibility study for this project back in the early 2000s, whereby the route was first determined. The Chinese study proposed building a shorter route across the territory of Kyrgyzstan, which would have been about 250 kilometers long. But the authorities in Kyrgyzstan at the time proposed lengthening the route by over 100 kilometers in order to add more villages to the route, thereby securing access to the economic benefits of the railroad for more citizens. For the longest time, authorities in the three countries couldn’t agree on which gauge to set. This hinged on the fact that China, Turkey and Iran are building using the European gauge of 1.435mm, while Central Asian countries use the Russian standard of 1.620mm. As a result, the parties decided on a so-called transition from one gauge to the other. According to some reports, this transition will be located in Kyrgyzstan in the village of Kazarman. China will build its part of the railroad line to this settlement on its own. Financing for the Kyrgyz part of the railroad will be determined by the authorities in Kyrgyzstan in concert with their counterparts in Uzbekistan and other investors. The project’s cost is estimated at $4.7 billion. In the future, Kyrgyzstan plans to connect the new route with the northern part of the railroad in order to re-export Chinese goods to Russia. Chinese leader Xi Jinping recently hosted President Shavkat Mirziyoyev of Uzbekistan on a state visit to Beijing, where the two leaders discussed the China-Kyrgyzstan-Uzbekistan railroad, among other economic issues. In a conversation with his Uzbek counterpart, Xi Jinping noted that the countries should speed up negotiations and start construction of the railroad as soon as possible, which is a key component of China’s “One Belt, One Road” mega-project.

Transport & Logistics

Kazakhstan Leads Initiatives for Central Asian Trade and Connectivity

Kazakhstan's strategic location as the gateway from China's western border to Europe makes it a linchpin in the Trans-Caspian International Trade Corridor (TITR). The TITR starts from China, transits the whole width of Kazakhstan, crosses the Caspian Sea to Azerbaijan and Georgia, eventually reaching Europe via Turkey or the Black Sea. Although it is sometimes also called the "Middle Corridor", this latter term more properly refers to the TITR segment running from Kazakhstan to the South Caucasus. Started over six years ago as an autonomous bilateral initiative between Kazakhstan and Azerbaijan to bolster cross-Caspian trade, the Middle Corridor project antedates the TITR. The TITR, as well as the more limited Middle Corridor, have drawn considerable support from international financial institutions (IFIs) like the Asian Development Bank, European Bank for Reconstruction and Development and the World Bank, as well as national development organisations including the U.S. Agency for International Development. The network of the TITR association now counts eleven participating states (Azerbaijan, Belarus, China, Estonia, Georgia, Kazakhstan, Latvia, Lithuania, Poland, Turkey and Ukraine) as well as 25 transport and logistics companies including ports, vessels, railways and terminals. Kazakhstan's role and leadership Kazakhstan, given its geographic centrality in the region, may rightly be considered the keystone of the TITR in Central Asia, just as Azerbaijan is its keystone in the South Caucasus. Under the leadership of President Kassym-Jomart Tokayev, the country has taken significant steps towards realising the potential of this important trade route, cementing its role as a crucial Eurasian transit hub. One example demonstrating Kazakhstan’s key role is the country’s targeting of a substantial increase in cargo traffic along the TITR, with an ambitious goal of 500,000 containers per year by 2030. The roadmap between Azerbaijan and Kazakhstan for the development of the Middle Corridor across the Caspian Sea is one component of Tokayev’s vision. It complements the broader economic objectives that Tokayev has established for his country's progress, but more importantly, his active engagement with IFIs and neighbouring countries underscores his commitment to greater collaborative development and regional integration. Understanding the challenges and the impact for key countries The Middle Corridor saw a 33 per cent surge in container traffic in 2022, but this has fallen significantly in 2023. That is because the dynamic growth revealed limitations such as issues at border crossings, transhipments and co-ordination, all producing lengthy transport delays. To address these challenges, Kazakhstan—along with Azerbaijan and Georgia—has initiated upgrades to the corridor. In November 2022, the three countries signed a roadmap that outlined priority actions and investments for optimising the corridor's efficiency and increasing its capacity. The TITR diversifies trade routes and reduces the dependence of countries in Central Asia and South Caucasus on Russian imports. Opening up new markets in the Middle East and North Africa (and eventually in South and Southeast Asia) will accelerate economic growth by promoting the production of more complex and value-added products. A World Bank study forecasts a 30 per cent increase in trade along the route, with Kazakhstan’s exports...

Transport & Logistics

How Will Free Trade Zone Between EAEU and Iran Affect Kazakhstan?

The free trade Agreement between the Eurasian Economic Union (EAEU) and Iran will ensure an increase in annual mutual trade to U$18-20 billion in the near future, Andrey Slepnev, a member of the Board for Trade of the Eurasian Economic Commission said during a briefing. The free trade agreement between the EAEU and Iran is scheduled to be adopted on December 25th 2023. “Iran is a large market, our neighbor, and a key country in the international North-South transport corridor,” said Slepnev. “We consider this new agreement as one of the elements of this corridor." Slepnev stated that currently trade between EAEU countries with Iran is carried out, among other things, within the framework of the interim agreement adopted in 2019, which covers about 360 commodity items. But even this has made it possible to double mutual trade in three years, from $2.5 billion to more than $5 billion, and in 2022 to bring it to $6.2 billion. “The conclusion of a full-scale agreement will allow us to double trade in a short time. The first target we are focusing on is $18-20 billion, which is quite realistic to achieve in the foreseeable future," said Slepnev, adding that implementation of the agreement will be carried out on the basis of the WTO. For this purpose, work will be carried out on the harmonization of regulations, since Iran is not a WTO member. In addition, the parties will strive to increase the volume and channels for making payments in their national currencies. “In Kazakhstan, we see prospects for the supply of traditional Kazakh products to Iran; first of all, wheat, barley, agri-food products, metals, and chemical products. This agreement will allow Kazakhstan to increase its presence in the Iranian market," he added. Slepnev stressed that the expansion of the EAEU trade partnership with third countries will make it possible to use and actively develop the transit and transport potential of EAEU countries. Trade with Iran naturally involves the use of the North-South corridor, and will also contribute to the communications in the East-West corridor, which runs through the countries of Central Asia and Russia. “The demand for these intercontinental transport corridors is constantly increasing in the context of international tension. Economically, we live in a time when the one who is faster wins, so our advantage is speed and convenience," Slepnev concluded.

Transport & Logistics

Kazakhstan Launches Construction of New Railroad to China

The Prime Minister of Kazakhstan, Alikhan Smailov, via a teleconference on December 20th officially inaugurated the construction of a new railway line, Bakhty-Ayagoz, with a total length of 272 km in the Abay Region of southern Kazakhstan. The project is being implemented upon the instruction of President Kassym-Jomart Tokayev to increase the transport and transit potential of Kazakhstan. The project also involves the opening of a third border crossing with China, Bakhty-Chuguchak. The railway line will increase the throughput capacity between Kazakhstan and China from 28 million to around 48 million tons, lessen the burden on the southern checkpoints, and attract additional volumes of transit. It is planned that the double-track line will begin operating in 2027. The large-scale project will be realized with the participation of a private investor on PPP principles. During the ceremony, the Prime Minister stated that last year Kazakhstan's railroads transported the largest volume of cargo since the country’s independence, which amounted to 245 billion tons/kilometer. These rates have been maintained in the current year, despite the geopolitical situation and infrastructure constraints.[/vc_column_text][vc_single_image image="12823" img_size="full" el_class="scond-image" parallax_scroll="no" woodmart_inline="no"][vc_column_text woodmart_inline="no" text_larger="no"]"Over the past five years, the volume of transit container transportation has grown 3.2-fold. Existing transit corridors are being expanded, and new ones are being opened. The Trans-Caspian International Transport Route, North-South and Southern corridors have become particularly relevant," Smailov said. At the same time, the throughput and infrastructure capacities have reached their peak. To address this strategic issue, a decision was made to implement a number of infrastructure projects in the rail industry. The new line is expected to help increase Kazakhstan's exports and the transit of goods from Russia to China and back.