Bishkek adamant China-Kyrgyzstan-Uzbekistan railway will be built, but remains short of a few billion dollars

By bne IntelliNews October 31, 2023

Though Kyrgyz officials keep assuring sceptics that the China-Kyrgyzstan-Uzbekistan (CKU) railway—a two-decade-old “dream”—will be built, Bishkek remains short of the few billion dollars it would need to construct its part of the route over difficult mountainous terrain, which would require more than 50 tunnels and 90 bridges.

Despite the monumental financing and engineering challenge, Kyrgyz Transport and Communications Minister Tilek Tekebaev rejected any type of postponement of the CKU project due to funding questions when he recently spoke to RFE/RL’s Kyrgyz media outlet Radio Azattyk.

"Information suggesting that 'the project is temporarily suspended' is inaccurate. We are actively engaged in discussions with China and Uzbekistan… [and] work will resume once the financing model for the project is finalised. It's essential to approach this extensive project with careful consideration," he said.

Rayimkul Mendekeev, director of the Scientific and Technical Centre at Kyrgyz State Technical University, was cited as suggesting two potential avenues for financing.

"The first option involves executing the project as a public-private partnership, attracting investors with government participation," Mendekeev told National Radio. "The second option entails obtaining a loan, a method utilised in the past for funding railway construction."

The second option was worse for Kyrgyzstan due to the existing debt that Bishkek has with China, which currently stood at some $2bn, he added.

In March 2021, Kyrgyz President Sadyr Japarov expressed concern about the debt. He described it as a “significant threat” to the country’s sovereignty.

As of 2021, Bishkek's overall debt-to-GDP ratio was 60%, with 40% of Kyrgyzstan's total debt owed to China’s EXIM Bank.

While China backs the plan to realise the CKU, it is not thought to be a priority project for Beijing, given that there are well-developed rail import-export connections to China’s west that run through Kazakhstan. The CKU would cut journey distances for many freight shipments, but the sheer cost and complexity of delivering the project to obtain some more advantageous freight options remains a major deterrent to progressing such an investment to completion.

The CKU would traverse 454 kilometres (282 miles), with 280 km of that in Kyrgyzstan and roughly 100 km in Uzbekistan.

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