Railway Communications for the Development of Trade Relations of Kyrgyzstan

June 18, 2012

Bishkek, June 18, 2012 – Today, a joint conference was held by the Ministry of Transport and Communications (MOTC) and the World Bank to discuss issues of the railway sector of the Kyrgyz Republic. The event was hosted by Mr. Sheraly I. Abdyldaev, Deputy Minister of Transport and Communications and was attended by the World Bank experts, including Mr. Alexander Kremer, Country Manager, representatives of relevant ministries and departments, as well as the civil society.

The aim of the event was to convene members of the expert group for the development of railway construction projects, specifically for the preparation of the proposed new rail link between China and Uzbekistan through the territory of the Kyrgyz Republic.

According to the Deputy Minister of the Ministry of Transport and Communications, a number of important steps were made over the past months that would bring us closer to the start of this proposed Project. Mr. Abdyldaev said that the preparation of a feasibility study, including technical designs (FS) has commenced and would be completed within one year. He stated that no state guarantees will be provided for the associated investments under this proposed Project and informed that a Memorandum of Understanding has been signed in March 2012. Within this framework agreement, China Road and Bridge Corporation will prepare technical designs to be further evaluated by relevant Kyrgyz agencies.

The Deputy Minister emphasized that the support from the World Bank   to review the financial and economic feasibility of the proposed new rail link in the Kyrgyz Republic is important to analyze the Project’s viability and sustainability.   Additionally, the support which is financed by a grant from the Trade Facilitation Trust Fund in the amount of USD 980,000 is to assist the Government of the Kyrgyz Republic to review options for the potential financing structure of the proposed Project.

Mr. Alexander Kremer, Country Manager of the World Bank, stated that the Bank feels privileged to have been asked by the Government of the Kyrgyz Republic to provide advice on the proposed Project. He stated that the support will focus on the protection of the financial and economic interests of the Kyrgyz Republic, as well as on transparency of the process for potential private sector investments.

Ms. Cordula Rastogi, Senior Transport Economist and Task Team Leader for the Project, briefed the audience about the specific activities and timeframe of the support provided by the World Bank. She noted that the new rail link is a Project that needs to address several challenges, including the  challenging terrain and related length of structures such as bridges, and tunnels. At the same time, it is estimated that the proposed rail link will shorten the route from China to Europe by about 900 kilometers.

The presentation of Mr. Vasile Nicolae Olievschi, Railway Expert of the World Bank, focused on sharing global knowledge and international experience in the reform of the railway sector relevant to the Kyrgyz Republic. He presented options to improve railway sector performance, described their purpose, structure and main components. He also shared his views on the principles of management of state railways based on the recently developed Railway Reform Toolkit prepared by the World Bank.

This conference was one of the first steps of the Ministry of Transport and Communications of the Kyrgyz Republic aimed at involving stakeholders into discussion of the proposed China-Kyrgyzstan-Uzbekistan railway construction project. Proposals and recommendations raised during the conference will be applied in future work of the Ministry. The issue will be re-submitted for public consultation at a later stage.