ASTANA TAKES NEW DIRECTION FOR RAILWAY CONSTRUCTION

In addition to developing the Aktau seaport on the Caspian Sea, Kazakhstan is also

putting more emphasis on developing domestic and international rail lines.

In recent years the government has made significant strides toward reducing

Kazakhstan’s dependence on the Russian transport network. A railway line from

Altynsarino to Khromtau, connecting the northern and central regions of the country

with oil-producing west Kazakhstan was completed in late 2004. Prior to that

project, trains had to cross Russian territory, a detour running some 2,000

kilometers.

Building new railway lines is both an economic necessity and a political advantage

for Kazakhstan. Russian rail cargo tariffs are roughly triple those in Kazakhstan.

The Altynsarino-Khromtau route reduces grain transport costs by $20 per ton. The

endless discussions between Russian and Kazakh officials conducted in the framework

of Eurasian Economic Community and the Single Economic Space have led nowhere, and

those organizations are becoming less relevant as time passes. The grim prospect of

developing new transport arrangements within the framework of fragile post-Soviet

intergovernmental structures has prodded Astana to adopt a more pragmatic policy in

its drive to reach the markets of Asia, the Caucasus, and Europe (Gudok, January

22).

Kazakhstan’s Transport Ministry has made a conspicuous shift from routes through

politically explosive Russian regions to more promising Chinese routes in an effort

to reach distant markets. During an international conference in Almaty on September

23, Kazakh leaders broadly outlined plans to open a new transport “corridor” linking

Europe and Asia. The audience included representatives from Russia, China,

Uzbekistan, the United States, Germany, and Turkey.

It is no coincidence that plans for the international rail line passing through

Kazakhstan arose shortly after Kazakh President Nursultan Nazarbayev visited China

in May 2004. Upon his return from Beijing, Nazarbayev ordered the Transport Ministry

and Kazakh National Railways to conduct a feasibility study of the project. With

amazing speed, on July 4, 2005, the transport ministers of China and Kazakhstan

signed a joint statement on cooperation in railway construction. The official

explanation for the speedy development of transport cooperation with China was

Kazakhstan needed to abandon Russian standards and lay the narrow-gauge railroads

used in China and European countries if it hoped to reach these new markets (Aikyn,

September 24).

However, there is more to Kazakhstan’s new Chinese-oriented transport-communications

policy than just technical specifications. The project is to be implemented in two

phases. First, a 302-kilometer line will be constructed from the Dostyk (Druzhba)

terminal on the Chinese border to Aktogay railway station in Kazakhstan. This should

increase the cargo capacity up to 40 million tons per year. Phase two will extend

the line 2,420 kilometers to link Aktogay with Aktau seaport. This impressive

railroad artery will open a door to European markets via Turkmenistan, Iran, and

Turkey.

While China will spare no effort in developing the Trans-Kazakhstan route to ship

its goods to Europe and Iran through Aktau, Japan has also shown considerable

interest in the project and is likely to join at some point. The Kazakh government

is quite aware that a project of this scale will need assistance from a powerful

international consortium.

Astana, in reality, cannot contribute much in financial and project management

terms, but the construction of the railway will require a huge army of local

workers, which is a blessing for Kazakhstan’s labor market. Many forecasts predict

thousands of new jobs in eastern and central Kazakhstan, Aktobe, Mangystau, and

Kyzylorda. New settlements and villages should appear in the vast wilderness along

the railroad.

These developments also have an immense symbolic value for the Kazakh railway

industry, which is seeking to maintain its independence amid calls for economic

integration with Russia. In another twist of this strategy, Kazakhstan opened a

short, but politically important, railway line connecting Shar settlement in eastern

Kazakhstan with Ust Kamenogorsk, thus abandoning the old route running through the

Russian section of the border (Liter, October 1).

In its effort to accelerate the construction of new railway lines, Astana intends to

attract private investment and set up mixed state- and privately-owned enterprises

offering private investors substantial tax cuts.

Beijing is undertaking similar efforts. Kaltay Sambetov, deputy director of the

Kazakh National Railway Company, returned from a session of the Kazakh-Chinese joint

railway commission in China and told the Russian newspaper Gudok that China is

developing the infrastructure of Alashankou terminal with amazing speed and planning

to lay a second railway line from Urumchi in Xingjian Uighur Autonomous Region to

Alashankou (Gudok, October 8).

Kazakhstan will take advantage of the intensifying economic ties with China to gain

more independence from Russia in shaping its own transport communications strategy.

While Moscow may see this development as politically discouraging, it does carry

considerable economic benefits for Russia. Kazakhstan needs Russian assistance to

renew its dilapidated locomotive fleet and railway carriages. The projected railway

route could open new market opportunities for Russian goods as well.