Construction on the China-Kyrgyzstan-Uzbekistan (CKU) rail line will start in October 2024, according to Kyrgyz president Sadyr Zhaparov. Negotiations on the line have been long ongoing, and many uncertainties around financing remain.
The CKU line is supposed to shorten travel times between China and Europe by 8 days and reduce the distance by 900 kilometres. The bulk of the work will have to be done in mountainous Kyrgyzstan. The landlocked country stands to profit from better connectivity with the outside world, but faces immense construction costs due to its unfavourable geography.
In April, president Zhaparov announced that “all procedures have been completed. This year, we are awaiting the start of the construction of the CKU line”, indicating that the three countries had resolved issues surrounding financing and the route of the line.
Funding
A rail line through Kyrgyzstan is bound to be a costly affair. The CKU line is projected to need more than 50 tunnels and 90 bridges through the mountainous terrain. Meanwhile, Kyrgyzstan 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.
A Kyrgyz economist told RFE/RL that “without the support of large international and regional investors, as well as possible financial assistance from international financial organisations, independent financing for the Kyrgyz Republic may prove to be an impossible task.”
How much will it cost?
A feasibility study completed in the summer of 2023 indicated that the total cost of the project would amount to 4,7 billion dollars. However, a Kyrgyz politician in April stated that the Kyrgyz section of the CKU line would cost a grand total of 8 billion dollars, much higher than previously estimated.
The Uzbek deputy transport minister has not provided yet another figure for the total cost of the entire project: 5,1 billion dollars. The various estimates do not provide much clarity as to how much the countries will need to spend. However, it is clear that total expenditures will run into the billions of dollars.
CKU intermodal route. Image: © Kashkar Zhongcheng International Logistics
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Kyrgyzstan struggles to find money for CKU line construction
