You are currently viewing Between Scylla and Charybdis: The Fate of the Trans-Kyrgyz Railway

Competition, albeit latent, can be both counterproductive and beneficial for the project. Until recently, Russia was sceptical about the Trans-Kyrgyz Railway project, reasonably believing that this project would not be a global competitor to the Trans-Siberian Railway, despite the shorter, but more complex route to Europe. Russian Railways were even officially present in the working group for the development of the Trans-Kyrgyz Railway project (or as it is called, the Chinese-Kyrgyz-Uzbek Railway), but somehow quietly and imperceptibly withdrew from it. Moreover, the very sensitive issue of track gauge (the Stephenson standard of 1435 mm in China, and the Russian 1520 mm standard in Kyrgyzstan and Uzbekistan) was resolved rather strangely — the Chinese track goes deep into Kyrgyzstan and there the train is either reloaded or undergoes a change of wheel pairs.

It is impossible to discuss the development prospects of a particular railway without taking into account the seismic danger of the region. The problem with a railway, unlike a hydroelectric power station or a nuclear power plant, is its length, which significantly reduces the chances of building it in a strictly safe zone. This factor can play a large role in increasing the costs of strengthening the railway track and the costs of rolling stock. The latter is especially important, since it is obvious from the current situation that only Chinese rolling stock is possible. Accordingly, its maintenance will require the use of additional labour resources from China along the entire route.

The formation of an Uzbekistan-Kyrgyzstan consortium would allow, without an overly active role of China, for an optimal formula for attracting investments to be found. In particular, the Republic of Uzbekistan could provide a state guarantee for at least half of the railway building cost and thereby provide a crystallisation point for the consortium, which would attract institutional investors, in addition to international development institutions and, in fact, the Chinese banks themselves, led by Eximbank. Private investors would also be ready to get the securities issued by the consortium within the framework of, for example, an IPO on the Hong Kong Stock Exchange.

Thus, this project could either be narrowly regional and take into account the interests of the two Central Asian countries as much as possible, attract loans from international development institutions and diversified investments for this project in a balanced manner via the most transparent and extremely market conditions. Secondly, it could look at the interests of geopolitical actors and neighbours in the region, which, in fact, are multidirectional.

The second option is preferable — a full-scale consortium with the participation of the Shanghai Cooperation Organization countries, since the Chinese-Kyrgyz-Uzbek railway directly or indirectly affects the interests of key geopolitical actors on the Eurasian continent. The Chinese-Kyrgyz-Uzbek railway could become a pilot project within the framework of the emerging network of SCO/Greater Eurasian Partnership transport corridors, which are really important in the formation of a new geopolitical and geoeconomic reality.

The Valdai Discussion Club was established in 2004. It is named after Lake Valdai, which is located close to Veliky Novgorod, where the Club’s first meeting took place.

 

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