China, Uzbekistan and Kyrgyzstan have signed an agreement on the construction of the railway between the three countries. The document specifies financing, the route to be taken, operation and maintenance. Reportedly, construction will begin in October.
The three countries took part in an online signing ceremony on Thursday, 6 June. The agreement sets in stone the legal framework for the construction of the China – Kyrgyzstan – Uzbekistan (CKU) line. The railway, which will have a throughput capacity of 15 million tonnes annually, is supposed to shorten travel times from China to destinations to its west, among which is Europe. The travelling distance to Europe could be reduced by 900 kilometres. According to the Kyrgyz president, construction will commence in October.
Land-locked Kyrgyzstan has lauded the line as improving its international connectivity, easing access to foreign markets overland. President of double-landlocked Uzbekistan, Shavkat Mirziyoyev, provided a similar comment: “This road will allow our countries to enter the wide markets of South Asia and the Middle East through the promising Trans-Afghan Corridor”, he said, referring to efforts to bridge Afghanistan by rail and reach the Indian Ocean.
The financing hurdle
The agreement comes after the three countries long struggled with funding for the route. Especially the expensive Kyrgyz section, through mountainous terrain, proved to be an obstacle. In April, a Kyrgyz government official said that the country would need eight billion dollars.
Kyrgyzstan would have to fund its own part, but it 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. It seems that the countries have found a solution, but they did not specify how the money is going to be acquired.
Bypassing Bishkek
The 523-kilometre rail line will start in Kashgar, in China’s Xinjiang region. From there, it will cross Kyrgyzstan’s southern border and continue to a gold processing plant in Makmal. Then, it will pass through the major city of Jalal-Abad and end in Uzbekistan’s fertile Ferghana valley, in the city of Andijan.
China, Uzbekistan and Kyrgyzstan reportedly also quarrelled over the route that the line should take. Perhaps understandably, Kyrgyzstan appealed for the route to make a stop in its northern capital city and financial centre Bishkek. However, it seems that the Kyrgyz had to concede on this issue.
Joint venture
The operation and maintenance of the line was a less controversial issue. Earlier this year, Uzbekistan proposed that the three countries establish a joint venture to that end. Kyrgyzstan and China were quick to respond positively.
The shape or form that the joint venture will take remains unclear for the time being, as the involved parties have made no comment on the matter.
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