ADB funded Uzbekistan rail project to accelerate regional trade

ISLAMABAD: The Asian Development Bank (ADB) is extending $100 million to upgrade a key railway in Uzbekistan which will stimulate local growth and boost regional trade.

ADB's Board of Directors has approved the loan for the Railway Electrification Project which will finance the electrification of a 140-kilometer stretch of rail line between Marakand in Samarkand province and Karshi in Kashkadarya province, says a press release received here from Manila, Philippines here on Thursday.

The railway is part of the Central Asia Regional Economic Cooperation Corridor 6 that runs north to south, linking Europe, through Central Asia, to the Middle East and South Asia. In Uzbekistan, the route carries about 10 million tons of freight annually, including about 1.6 million tons of humanitarian relief goods for Afghanistan—more than half its imports.

The northern part of the railway is electrified, but the southern part, including the section from Marakand to Karshi, uses diesel locomotives which are slower and carry less freight. In addition, passenger and freight traffic has been growing steadily, putting existing facilities under strain and creating bottlenecks.

"This upgrade will improve regional connectivity along a vital transit route, cut transport costs, lessen greenhouse gas emissions and boost trade," said Zheng Wu, a Transport Specialist at ADB's Central and West Asia Department.

The project runs through remote, underdeveloped districts in the two provinces and better transport links will allow them to step up exports of their main commodities including cotton, horticulture products, marble, oil and gas.

The ongoing upgrade of the line, including a separate section being cofinanced by the Government of Japan, will also allow Afghanistan to take advantage of the ADB-funded Hairatan to Mazar-e-Sharif railway, which provides a critical link to Uzbekistan and beyond.

Along with physical improvements, which include an overhead power line, traction substations, modern signaling and telecommunication equipment, the project will provide training and other support to state-run rail operator, Uzbekistan Temir Yullari, to manage the new system. ADB is the lead development partner in Uzbekistan's rail transport sector and the project builds on two earlier railway modernization and rehabilitation investments.

The Government of Uzbekistan and Uzbekistan Temir Yullari will provide counterpart funds equivalent to $76 million for a total investment cost of $176 million. The state rail operator will execute the project which is due for completion by March 2016.