A Possible End to China-Kyrgyzstan-Uzbekistan Railway Line?
Author: Meray Ozat
Oct 6, 2023
Just five months after China and Kyrgyzstan agreed to begin the construction of the China-Kyrgyzstan-Uzbekistan (CKU) railway, the landmark project has been reportedly postponed indefinitely. In fact, it was one of the hallmark agreements of the Xi’an Summit in May 2023, where officials finally decided on a specific agenda and construction timeline to be started in the Fall of 2023. The CKU railway an ambitious project with an estimated total cost of the project amounts to $4.5 billion, was filled with optimism as it connects the railway systems of China to Uzbekistan and Kyrgyzstan, and potentially to the European railway network through Turkmenistan, Iran, and Türkiye. However, this recent unofficial announcement has cast doubt on the project’s progress. While Kyrgyzstan and Uzbekistan are unhappy about the possible delay, Kazakhstan and Russia, with their access to the only route connecting China with Europe, can secure their economic revenues, competitiveness, and regional influence.
Although the agenda of the project has been finally settled, financial terms remain a contentious issue. Kyrgyzstan and Uzbekistan lack the financial capacities to support the project, both facing substantial debts. Kyrgyzstan, in particular, carries a significant debt burden, with approximately $1.8 billion out of the total foreign debts of $4.8 billion owed to China. As a result, the project may necessitate full funding from the Chinese side. Given the challenging economic conditions of these Central Asian governments, China may be hesitant to provide additional loans for the construction of such multi-billion-dollar projects in Central Asia.
While China is capable of financing the project independently, the CKU railway project no longer appears to be a top priority, especially due to its limited potential. The CKU railway project is not designed to deliver goods to Europe. To access Europe, China already has a pre-existing Dostyk-Orenburg-Brest route that passes through the Trans-Siberian Railway with an annual capacity of 600,000 TEU (approximately 20-foot container). Although CKU could offer China an alternative route to avoid Russian territory through the New Silk Road Transport system, the railway also lacks modern infrastructure with only a single non-electrified track that makes it incapable of transiting Chinese goods to Europe.
The CKU project has also encountered various challenges since its initiation with disagreements among the three participating countries on various issues including the length of the railway and widths of the tracks. The Kyrgyz side demanded longer routes within its territory to benefit local infrastructure and population, whereas China and Uzbekistan preferred shorter and cheaper option. While almost half of the planned railway passes through the territory of Kyrgyzstan, its rugged terrain with extensive mountainous regions and Soviet-era tracks that do not meet international standards makes another challenge for the construction of the infrastructure.
In addition to the financial and technical considerations, China also has other domestic and diplomatic concerns. The realization of the CKU project could hinder relations with its two stronger and more influential allies in the region, Russia and Kazakhstan, as the project may negatively influence the competitiveness of routes that pass through the two countries. Additionally, the growing geopolitical tensions over the Taiwan Strait and South China Sea have emerged as a more serious concern and higher priority for the Chinese government.
Kyrgyz officials, however, have denied the suspension of the project a few days after it was reported in the Silk Road Briefing. On October 1, Deputy Chairman of the Cabinet of Ministers of Kyrgyzstan Bakit Toroboyev clarified that the project is still underway with continuous developments and frequent bilateral meetings with relevant stakeholders. He emphasized that all parties are working closely together to realize the project soon. The Chinese side, in turn, has not made any official announcements regarding the suspension of the CKU project, leaving the validity of the information still uncertain.
The CKU project, initially proposed in the 1990s, has a long and complex history. After decades of preparation, this project was finally settled with a total length of over 523 kilometers (about 325 miles) with 213 kilometers in China, 260 kilometers in Kyrgyzstan, and 50 kilometers in Uzbekistan. China viewed the project optimistically as it provides a shorter route from China to Europe and the Middle East than the existing corridor by 900 kilometers (approximately 559 miles). As a more effective alternative to the current route that passes through Russia, the CKU project can also diminish Chinese dependence on Russia and mitigate economic costs associated with Western sanctions on Russia.
Since the construction timeline was set, China, Uzbekistan, and Kyrgyzstan have had frequent bilateral talks in the past months. On September 26, the Uzbek Minister of Transport, Ilhom Mahkamov, met with the Chinese Minister of Transport, Li Xiaopeng, where they discussed the steps needed for the realization of the CKU railway project. The parties also convened at the Global Sustainable Transport Forum held in Beijing between September 24-25. As part of the forum, the five Central Asian Ministers of Transport met with the Chinese Minister of Transport during the First Meeting of the China-Central Asia Ministers of Transport, with a primary focus on the progress of the CKU railway project. All parties showed confidence in its promising development as a result of the discussion.
While the suspension is not confirmed officially, delays to the CKU project have become normal, as it has experienced various obstacles over the decades that led to frequent interruptions and adjustments. Despite the project details having been settled for the most part, the prospects of the project remain murky, especially with the spread of the unofficial announcement of the postponement. Continuous challenges and obstacles might potentially lead to fatigue among investors and possible cancellation of the project.