Kyrgyzstan will need to spend 8 billion dollars on the China-Kyrgyzstan-Uzbekistan (CKU) rail line. Funding is the main obstacle to the construction of the route. Kyrgyzstan has not yet been able to find enough money to complete its part of the route.
Akylbek Zhaparov, the head of the Kyrgyz cabinet of ministers, provided an update on the status of the CKU line at an agricultural forum earlier this week. “Approximately 8 billion dollars, more or less, will be mobilised for the construction of the CKU line,” he said.
Funding for the Kyrgyz part of the route has been a major obstacle for its construction. The total cost of the rail line through Kyrgyzstan’s mountainous terrain remained unclear for a long time. The path of the rail line also was a point of contention. Kyrgyzstan insisted that the CKU line pass through its major urban centres, whereas China and Uzbekistan preferred a quicker route that bypasses them.
It now seems that these issues have been solved. “All procedures have been completed. This year, we are awaiting the start of the construction of the CKU line,” Zhaparov said. A feasibility study is underway for the realisation of the line.
Kyrgyz financing
While Kyrgyzstan has now named a sum to be spent on the line, it remains unclear where the money is going to come from. The country has a large national debt and is legally barred from drawing too much money from a single international investor. It can legally borrow up to 45 per cent of its external debt from a single foreign source. The country already owes 42 per cent of its debt to China alone, and it would likely have to borrow from China if the country were to borrow money for the CKU line, which it is reluctant to do.
Regardless, Zhaparov expressed optimism about the meaning of the line for Kyrgyzstan. “It will give us access to the so-called Middle Corridor, which includes Kyrgyzstan, Uzbekistan, Turkmenistan and the Caspian Sea, to Europe and the global network of rail and maritime routes. Kyrgyzstan will finally lose its status as a dead-end country without access to the sea,” he said.
Also read:
- Uzbekistan wants a joint venture with China and Kyrgyzstan for CKU line
- Kyrgyzstan struggles to find money for CKU line construction
- Kyrgyzstan Railways deny CKU line being indefinitely postponed
