China strengthens its positions in CA due to new railway

The signing of an agreement on the Uzbekistan-Kyrgyzstan-China railway project during the Samarkand SCO Summit on September 14, 2022,  testifies to the upcoming reconfiguration of transport communications in Central Asia. Previously  it was oriented almost exclusively to Russia. In the context of a military confrontation with the US and the EU in Ukraine, Moscow has nothing to oppose to this project yet, Ritmeurasia writes.

The cooperation agreement on the construction of the railway, which should connect the three countries, was signed on September 14 by the Ministry of Transport of Uzbekistan, the Ministry of Transport and Communications of Kyrgyzstan, and the State Committee for Development and Reforms of China during the Samarkand SCO Summit.

The document provides that all work on the development of a feasibility study for the construction of a road through the territory of Kyrgyzstan, which was previously a stumbling block, should be completed in less than a year – in the first half of 2023. In addition, the agreement establishes the procedure for financing and distribution of costs in the development of a feasibility study for a road that should connect the western regions of the China with Kyrgyzstan and Uzbekistan.

The route of the future railway is not limited to the interior regions of Central Asia, which in essence are a transport dead end. By themselves, the Central Asian states with their relatively poor population and not very significant domestic markets by the standards of China do not represent any special economic value for China, being interested mainly in their natural resources, the web site wrote.

China is primarily interested in transit opportunities in this project. In the future, the new railway should connect China with the countries of the Persian Gulf and the Middle East, providing access to one of the main markets for Chinese consumer goods – the EU countries. Thus, the China is creating an alternative to the Russian Trans-Siberian Railway and the railway route through Kazakhstan, insuring against new problems.

The reason for the increased attention to transport corridors that bypass Russia is obvious. After the start of the military operation in Ukraine and the imposition of sanctions against the Russian Federation, the transit of goods through its territory to the west turned out to be very difficult, which forced carriers to turn their attention to alternative, although not so convenient and cheap routes. Thus, at the beginning of this year, Russian Railways noted the intensification of transportation along the TRACECA route (Transport Corridor Europe-Caucasus-Asia), which bypasses the territory of Russia through the Caspian, Transcaucasia and the Black Sea. The volume of cargo transportation through Azerbaijan along the TRACECA corridor for the first half of 2022 increased by 19.3% compared to the same period of the previous year, reaching 24 million 253.5 thousand tons. More than a quarter of all cargo (27.3%) transported in this direction was provided by transit traffic, which grew by almost one and a half times (by 42.3%) in six months.

Previously, due to the logistical difficulties caused by the double transshipment of goods from rail to sea, as well as the associated time delays and high tariffs, the volumes of cargo transported along the TRACECA corridor were small. In 2021, only 25.2 thousand standard 20-foot containers (TEU) were transported via TRACECA, while Russian Railways transported 1.1 million containers last year out of 1.46 million sent from China to Europe by rail. That is, only about 2% of the volume of Chinese transit through Russia was transported through Transcaucasia, which TRACECA was clearly unable to compete with before the outbreak of hostilities.

However, since the end of February, the military-political situation in Eastern Europe has changed dramatically, and China has begun actively probing for alternative routes that can ensure its overland exports in the event of an aggravation of the Ukrainian crisis. So, in April, the Chinese authorities launched a new railway route from the city of Xi’an in the northwestern province of Shaanxi to Mannheim, Germany. On April 13, the first train with 42 containers with a total weight of 316 tons set off on it. Its path ran through Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, the Black Sea, Romania, Hungary, Slovakia and the Czech Republic, totaling 11.3 thousand km.

The railway corridor China-Kyrgyzstan-Uzbekistan and further through Turkmenistan to the countries of the Middle East is designed to expand the transport capabilities of the PRC by creating an alternative route not only to Russia, but also to Kazakhstan, through which the railway to the Caspian ports runs today. The idea of ​​building a railroad across Kyrgyzstan has been discussed without much success for more than a quarter of a century.

Several options for its route were proposed. Difficulties are due to the fact that the construction will be carried out in highlands at an altitude of 2000-3600 meters above sea level and due to an extremely complex relief will cost a lot. In 2006, it was decided to dwell on the Karasu -Kurshab -Torugart – Kashgar route, the total length of which was to be 268.4 km. The scale of the upcoming construction work was said by the fact that for laying the road it was necessary to build 48 tunnels, 95 bridges, 5 travels and 4 new railway stations.

However, in 2020, the Kyrgyz Railways proposed a new version of the Kashgar route-Torugart-Arp-Makmal-Jalal-Abad, where it should connect with the existing road associated with the railway network of Uzbekistan.

The final cost of the project is not yet clear. According to Ulan Kulov, the head of the capital construction department of the Kyrgyz Railways, previous studies of other routes allow it to evaluate it at $ 4-5 billion, which, by the standards of Kyrgyzstan, is simply a cosmic amount. For comparison: the entire revenue of the republican budget for 2022, signed by President Sadyr Zhaparov in December last year, is 282.1 billion soms, which in terms of the current course for January 1 gives only about 3.3 billion dollars. That is, the cost of the construction of the road is one and a half times higher than all revenues of the republican budget for this year.

It is clear that the project is trilateral, and not only Kyrgyzstan will finance it. But the question of who and on what conditions will allocate money for the construction of the railway is key to its fate.

There is no answer to the second key question about the width of the railway track. China initially insisted that the track had a European standard of 1435 mm, adopted in its own territory. This would exclude the change of wheeled carts of wagons, simplifying and reducing the logistics. However, Kyrgyzstan and Uzbekistan, where the Soviet standard of ruts of 1520 mm is adopted, threatens the appearance of an alternative railway infrastructure for which they have neither locomotives nor wagons.

In addition, the presence of a Chinese standard creates a number of new military capabilities for the PRC, including a quick transfer on this route of troops and heavy military equipment. Of course, today no one is going to fight with China in Central Asia, but one way or another, this is the possibility of politics and the military in their minds. Judging by Kulov, the latter of the projects proposed by Kyrgyzstan involves the construction of a reloading point, that is, the preservation of the Soviet standard in Kyrgyzstan. But the final decision on this issue has not yet been made.

The unresolved key issues with financing and technical standards suggests that the project may again encounter delays, or even transfer to a more distant perspective. Previously, such cases have been recorded repeatedly. According to the most optimistic forecasts, trains will go on it no earlier than 5-6 years-in 2028, nevertheless, if the project is still implemented, and the railway is launched, China will receive a new tool for its economic penetration into the region and It will be able to noticeably strengthen its positions here. In the future, this threatens Russia with a loss of influence in the southern part of Central Asia, which can go under the Chinese Economic protectorate.,
Sept. 19, 2022