Particularities of transport corridors 

The particularities of the region’s landscape limit the possibilities for creating transport corridors and for transportation of cargoes. So, having no natural access to the sea, three of the five countries have to mainly use land routes for transportation of cargoes.

In terms of price and speed of delivery, rail transportation is optimal. However, the development of the railway infrastructure in the region is rather varied, for a number of political and economic reasons. 

For example, in Kazakhstan, the largest transit country of the region, it is one of the means of transport that have been developing in the most dynamic way. And in Kyrgyzstan that borders Kazakhstan, the construction of railways has been on hold since the collapse of the USSR. Now the lion's share of the cargoes within the territory of the country is transported by trucks. 

Truck transportation is the kind of transportation that is the most common for Kyrgyzstan and Tadzhikistan. In Uzbekistan and Kazakhstan, the most dynamically developing means of transport is railway.

Air transportation shall not be discussed within the present context. Due to its high cost, this means of transportation is used rather infrequently and cannot yet compete with road and rail transport in terms of volumes of transported cargo. 

An additional factor that impacts the speed and the cost of delivery of cargoes is the need for customs procedures at the border crossings. Transit traffic across Central Asia is governed by a number of multilateral agreements, which, in theory, are meant to facilitate transportation of goods, with no additional checking. The most important of such agreements are 

  • The TIR Convention (Transports Internationaux Routiers), the Customs convention on international cargo transportation under the simplified procedure. The Agreement has been signed by 68 countries, including: Russia, European and Asian countries, China, Iran, Turkey, etc. 

  • Treaty on the Eurasian Economic Union, which allows free cargo transportation from one Member State to another. The EAEU includes Russia, and Kazakhstan and Kyrgyzstan, two of the five countries of Central Asia. 

  • Free trade agreement of CIS, which provides for duty-free exports of the majority of commodity items within the participating countries. 

  • WTO (World Trade Organization) membership, which is the organization aimed at liberalization of international trade. The WTO includes more than 160 countries. Out of all of the states of Central Asia, Uzbekistan has the status of observer, and Turkmenistan is not a member of the organization. 

In addition to the aforementioned factors, it is necessary to address several important issues that are not discussed in the present publication, but are directly connected to the problem of logistics in Central Asia.

First of all, transportation of cargoes by any means of transport are to match three key criteria: speed, cost and quality. They include the following features 

For railway transport they are 

  • availability of own rolling stock (their number, operational status, carrying capacity), 

  • availability of alternative transit routes, 

  • presence of related procedures (loading and unloading), etc.

For transportation by truck: 

  • availability of own automotive equipment, cost of fuel, 

  • road surface quality, 

  • availability of the necessary infrastructure - of storage rooms for the cargo,

  • weather conditions, etc.

Secondly, changes in the political situation directly affect logistics in Central Asia. For example, it was influenced by the change in the political course in Uzbekistan after the transit of power. 

Political processes in the region show little predictability and can lead to serious malfunction in the implementation of current or planned logistic projects in the region. 

Thirdly, the logistics of the countries of Central Asia are affected by regional competition for transit flows, investments, and sales markets. The case in point is the recent one-and-a-half-month closure of the border between Kazakhstan and Kyrgyzstan.

The transport connectivity of the five countries of the Central Asian region lies within the framework of several continental projects. 

I Transport Infrastructure of the USSR

It is on its basis that current logistics projects are being implemented. 

Prior to the breakup of the Soviet Union in 1991, the territory of the present-day Central Asia was connected by two railway projects - the Orenburg-Tashkent railway (connecting Central Asia and Russia) and the Central Asian railway. 

The Central Asian railway passed through the Turkmen, Uzbek, Tadzhik, and Kazakh SSRs and, in part, through the Kyrgyz SSR. After 1991, the unified railway network was divided between the countries of the region. Each country was left with its separate map tile.

After 1991, for now independent states, the priority task was to develop an independent logistics infrastructure that would connect remote areas to large cities. The second strategically important task was to find the access to new markets by evading the already existing routes. Thus, the countries would get their income from transit, while expanding the opportunities in the market of transport services and reducing the cost of exports and imports. 

Goals: The priority direction for the development of logistics of the USSR was the railway transport, which offered the best cost/speed ratio of long-distance cargo transportation. Then, the cargoes were delivered from the railway junction to the destination stations by trucks.

Markets: The Central Asian railway, like the entire logistics network of the Soviet Union, was aimed more on transportation within the country. In fact, it was an independent and relatively self-sufficient system, which met the needs of the economy and military security. After 1991, this system broke up into separate fragments. Later, on their basis, the now independent countries have created their own railway infrastructure. 

Issues and particularities: The Soviet standards for construction of the railroad tracks differ from the European standards, first of all, in terms of the wheel track spacing - 1,540 mm instead of 1,435 mm. Subsequently, the difference in standards has complicated connecting the Central Asian projects with those in a number of other countries.

Potential - The existing infrastructure was success precisely due to it being well-connected and in-country-oriented. USSR-wide, the system responded to the primary tasks of the transport structure, ensuring that the central part of the Union is connected with remote areas, facilitating the access to mineral deposits and the delivery of raw materials to large industrial centers. 

Shortly before the collapse of the USSR, the Central Asian railway network was to be connected with the PRC railway system through the Alashankou station in the XUAR. 


II Chinese overland Silk Road

The project of the Chinese Silk Road passing through Central Asia makes part of the initiative “One Belt - One Road”. It includes construction of alternative overland roads through the region, which will provide additional access to the markets and resources of the Persian Gulf countries, and those of the European Union and of the Eurasian Economic Union. 

Photo source: www.riss.ru 

Goals: Within the framework of the initiative “One belt - One road”, a complex of measures is being implemented: 

  • Construction of railway infrastructure;

  • Construction of new highways, expansion and rehabilitation of the existing ones;

  • Establishment of free trade zones;

  • Simplification of customs procedures, regulation of tariff policy;

  • Redistribution of domestic freight markets, etc.

Financial support of the project is regulated by bilateral agreements, funds are provided from international financial structures with their headquarters located in China:

The Asian Infrastructure Investment Bank finances infrastructure projects of the APR countries. The participating countries are Russia, India, Pakistan and all of the Central Asian countries, except Turkmenistan. 

The Silk Road Foundation is the Chinese state investment foundation aimed at financing the infrastructure projects implemented along the overland and the sea part of the Silk Road. Among the countries of Central Asia, projects in Kazakhstan are still the ones of choice.

Existing facilities in the railway industry: 

  1. In the direction China - Europe, the transit traffic across Kazakhstan and Russia is carried out through: 

  • Trans-Asian Railway (TAR). It has two branches: 

- the Northern one. Starting in Lianyungang (China), passing through Dostyk-Astana-Petropavlovsk (Kazakhstan), and then to Ekaterinburg-Moscow (Russia) through Brest (Belarus) to Hamburg (Europe). 

- the Central one, which crosses the Kazakh-Russian border in the western regions of Kazakhstan, partially repeating the path of the Northern branch. Lianyungang - Dostyk - Astana - Ozinki - Moscow - Brest - Hamburg. Estimated travel time is 12 to 14 days. 

  • The Chongqing - Duisburg corridor. The path starts in the PRC, passes through Kazakhstan, the south-western part of Russia, Belarus, Poland and goes to the countries of Western and Central Europe. Estimated travel time is 16 days.

  • Trans-Caspian International Transport Route (TCITR) is the transit route from China to Europe passing through Turkey or Ukraine. To date, it is almost out of service due to its complexity and high costs of transportation. The logistics are complicated by the transhipment of cargoes across the Caspian and the Black Seas, and by crossing the customs borders of five states. Estimated travel time can be up to 17 days.

 

  1. In the direction of China - the countries of the Persian Gulf there are several projects: 

  • The route China - Iran is the transit route passing through Kazakhstan and Turkmenistan. It is considered the fastest route in this direction. The train travel time is 14 to 16 days. This is an alternative to the existing sea route from the PRC to Iran, which takes twice as long. 

  • The construction of the railway on the route PRC - Kyrgyzstan - Tadzhikistan - Afghanistan - Iran is under study.

  • Iran - China project. The idea of launching the route China (Urumqi) - Kazakhstan –Uzbekistan –Turkmenistan – Iran (Mashhad) with the destination in Tehran, has been voiced. This version is different from the already existing route China-Iran due to involvement of Uzbekistan. 

Facilities in the field of road construction are mainly concentrated in Kyrgyzstan and Tadzhikistan. Today, China is actively financing rehabilitation and modernization of roads that have transit potential; the country participates in opening of new border crossings with the countries of Central Asia; it finances rehabilitation of the roads connecting industrial centres with major end markets. 

  1. Destination China - Uzbekistan, transit route passing through Kyrgyzstan and Tadzhikistan. This is an extensive network of highways, which provides the transit corridor to the Fergana Valley.

  2. Direction "Western China - Western Europe", the project envisages construction of roads passing through Kazakhstan. However, China’s participation in this project seems to be a pure formality. The lion’s share of financing comes from Western financial institutions. 

Issues and particularities: When implementing logistics projects, Beijing has faced a number of particularities: 

  • of technical nature (difference in the wheel track spacing);

  • of economic nature (Beijing implemented some of the land Silk Road projects on credit. There is a risk that the borrowing countries are not able to pay it within the stipulated time limits);

  • increased geopolitical risks that are often connected with large projects that disrupt the usual balance of power and change the distribution of spheres of influence; 


III American New Silk Road

The concept of the project is to connect the countries of Central and South Asia into one economic macro-region. This requires implementation of large-scale infrastructure projects (CASA-1000, TAPI gas pipeline) and re-orientation of the existing transport routes to the south through Afghanistan. For Central Asia, this project provides access to new markets, reducing the role of Chinese and Eurasian transport routes, and increasing the economic security of participant countries. 

The goals of the New Silk Road concept are:

  • building the transport infrastructure for the path from Central Asian countries through Afghanistan to India and Pakistan;

  • ensuring the trade integration of the countries of the region with Afghanistan and the countries of South Asia through simplification of border procedures, reduction of non-tariff barriers, and, subsequently, opening of the markets. 


Photo source: www.caa-network.org 

Financial support of the project is carried out with the participation of international financial institutions:

  • Asian Development Bank;

  • World Bank;

  • Islamic Development Bank; 

Issues and particularities: The project of the New Silk Road is currently less interesting, compared to the Chinese “Silk Road”, in terms of several key indicators:

  • Lack of financial support for the project - after the completion of construction of several sections of the railway and the highways, international organizations have hoped for financial participation of the countries taking part in the project. However, the countries of Central Asia are not interested in expanding and rehabilitating their transport infrastructure at their own expense; 

  • The unresolved issue of transport security on the southern route passing through Afghanistan, which include the pending issue of ensuring the safety of the infrastructure that is being built, impacts the dynamics of the project; 

  • Lack of transportation experience along the southern vector - the historical transport routes of Central Asia did not include the Afghan direction; 

  • The counteractions of competitors (especially China) that have been implementing their own logistic projects in Central Asia;

  • Insufficient understanding of the benefits from the elites and the businessmen of the region. Local residents, including the decision makers, have not got sufficient information on the prospects and benefits of the New Silk Road project. 

Thus, without addressing these issues, while maintaining the current dynamics of implementation of the Chinese and Russian logistic projects, it will be difficult to come up with alternative routes, even if they are of strategic importance for the region.

Denis Berdakov, political scientist