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ADB-Funded Uzbekistan Rail Project to Accelerate Regional Trade

Thursday 29 September 2011

MANILA ADB press release) – The Asian Development Bank (ADB) is extending US $100 million to upgrade a key railway in Uzbekistan which will stimulate local growth and boost regional trade.

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CAREC Corridor 6 (PDF)
The north-south corridor linking Europe through Central Asia to the Middle East and South Asia (CAREC Corridor 6) transits Uzbekistan from Keles on the border with Kazakhstan to Tashkent, Samarkand, Karshi, and Kumkurgan, before reaching Termez on the border with Afghanistan. The corridor annually carries about 10 million tons of freight, including 1.6 million tons of humanitarian relief goods to Afghanistan (more than half its imports). Afghanistan expects more traffic from Uzbekistan and its northern neighbours via the corridor, especially after the ADB-funded Hairatan to Mazar-e-Sharif railway in northern Afghanistan was completed in 2010. The corridor will also enable the Uzbekistan provinces of Samarkand, Kashkadarya, and Surkhandarya to increase exports of cotton and its by-products, horticulture products, marble, oil, and gas. Overall, rail traffic is increasing and inadequate rail line capacity in some sections of the route creates bottlenecks. The Asian Development Bank loan will be used to support the government’s program to electrify the railway from Marakand to Karshi by providing a fund to procure works, materials and equipment for this program. The Project, the electrification of 140 km of the existing railway, will include (i) traction substations, supervisory control and data acquisition system, signalling and telecommunication systems, maintenance facilities and associated civil works; and (ii) strengthening institutional capacity through improved management practices.

ADB’s Board of Directors has approved the loan for the Railway Electrification Project which will finance the electrification of a 140-km stretch of rail line between Marakand in Samarkand province and Karshi in Kashkadarya province. The railway is part of the Central Asia Regional Economic Cooperation Corridor 6 that runs north to south, linking Europe, through Central Asia, to the Middle East and South Asia. In Uzbekistan, the route carries about 10 million tons of freight annually, including about 1.6 million tons of humanitarian relief goods for Afghanistan – more than half its imports.

The northern part of the railway is electrified, but the southern part, including the section from Marakand to Karshi, uses diesel locomotives which are slower and carry less freight. In addition, passenger and freight traffic has been growing steadily, putting existing facilities under strain and creating bottlenecks.

“This upgrade will improve regional connectivity along a vital transit route, cut transport costs, lessen greenhouse gas emissions and boost trade,” said Zheng Wu, a Transport Specialist at ADB’s Central and West Asia Department.

The project runs through remote, underdeveloped districts in the two provinces and better transport links will allow them to step up exports of their main commodities including cotton, horticulture products, marble, oil and gas. The ongoing upgrade of the line, including a separate section being co-financed by the Government of Japan, will also allow Afghanistan to take advantage of the ADB-funded Hairatan to Mazar-e-Sharif railway, which provides a critical link to Uzbekistan and beyond.

Along with physical improvements, which include an overhead power line, traction substations, modern signalling and telecommunication equipment, the project will provide training and other support to state-run rail operator, Uzbekistan Temir Yullari, to manage the new system. ADB is the lead development partner in Uzbekistan’s rail transport sector and the project builds on two earlier railway modernization and rehabilitation investments.

The Government of Uzbekistan and Uzbekistan Temir Yullari will provide counterpart funds equivalent to $76 million for a total investment cost of $176 million. The state rail operator will execute the project which is due for completion by March 2016.

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