Details and a Lack Thereof: The China-Kyrgyzstan-Uzbekistan Railway

Kyrgyz President Sadyr Japarov may have jumped the gun when he announced in early May that construction of the China-Kyrgyzstan-Uzbekistan (CKU) railway would begin in October. But recent developments do markedly advance the project. On June 6, in a virtual ceremony hosted by China, Japarov, President Xi Jinping of China, and President Shavkat Mirziyoyev of Uzbekistan signed a trilateral intergovernmental agreement on the CKU railway that, for the first, time hints at a framework to realize the route.

But for all the fanfare, and despite the publicized details, much remains uncertain about the financing and impact of the project.

The Details We Have

The announcement of the agreement was heavy on optimism and light on details. Per a Chinese Foreign Ministry readout, the signing “will provide a solid legal basis for the construction of the project, marking the transition of the railway project from a vision to reality, and demonstrating to the international community the firm determination of the three countries to promote cooperation and seek development together.” The CKU railway is positioned, in the Chinese readout, as “a strategic project” and “a landmark project of Belt and Road cooperation.”

A few days later, the Kyrgyz parliament published the agreement and on June 18, Azamat Sakiev, the head of Kyrgyz Railways, spent two hours answering questions from lawmakers. While there’s no contesting the agreement is concrete progress, there seems to be much yet in need of settling before tracks can be laid.

The agreement, which the Kyrgyz parliament approved in three simultaneous readings at once on June 19, contains 13 sections, which are characterized as confirming the “intentions of cooperation and determine measures to support” construction of the project. Importantly, the document notes the railway will run on the “Kashgar-Torugart-Makmal-Jalalabad-Andijan” route.

The route charts north from Kashgar and crosses from China’s Kizilsu Kyrgyz Autonomous Prefecture in Xinjiang through the Torugart Pass, which cuts through the Tian Shan mountains at 3,752 meters (12,310 feet). The railway will then head northwest to Makmal – home to what was at one point in time the largest gold mine in the Soviet Union. From there, the railway will cut southwest toward the Kyrgyz city of Jala-Abad and then west toward Andijan in Uzbekistan. Much of this route is extraordinarily remote; the Torugart Pass is one of only two border crossings between Kyrgyzstan and China.

China’s National Development and Reform Commission (NDRC) and the Kyrgyz and Uzbek transport ministries are responsible for coordinating the agreement’s implementation. But the real work – in the areas of commerce, technology, financing, engineering construction, operation, and so on – falls to the three national railways.

While China is responsible for construction on Chinese territory and Uzbekistan for modernization of its own railways, when it comes to Kyrgyzstan – where the bulk of the work will take place – a Joint Project Company will be established. China will hold a controlling 51 percent stake in the company, and Kyrgyzstan and Uzbekistan 24.5 percent each. Kyrgyzstan is specifically responsible for “the timely implementation of work to assess social and environmental impact, protect cultural monuments, ensure safety, as well as for work on land acquisition, demolition of facilities, and resettlement of land plots required for this project, at its own expense.”

Furthermore, Article 9 of the agreement obligates Kyrgyzstan to provide support and “convenient conditions” in land for construction, building materials, electricity and water supplies, as well as visa exemptions for Chinese and Uzbek personnel. The Kyrgyz side also agreed to release “construction machinery, equipment, mechanisms, vehicles, construction and other materials necessary” from customs duties and tax payments.

The Chinese side also has dibs on the execution of engineer, procurement and construction work – Krygyz and Uzbek entities may participate in “partial subcontracting work.”

The agreement signed on June 6 has a term of five years, with an automatic renewal unless one of the parties in forms the others of its intent to exit.

The Details We Want

Importantly, the agreement signed contains no figures for the cost of construction or expected revenues. It does not specify the scale or pace of construction, either, or lay out how Kyrgyzstan will go about acquiring the land and managing expected public protests on account of environmental concerns.

In his testimony, Kyrgyz Railways head Sakiev provided additional details, though journalists noted that some of the numbers don’t quite add up. Sakiev said construction would cost $4.7 billion; other estimates, such as from chairman of the Cabinet of Ministers Akylbek Japarov have been as high as $8 billion.

Sakiev said that the Chinese government had pledged a $2.35 billion low-interest loan and Uzbek media reported that the remaining amount would be financed by the three parties in accordance to their share – floating $573 million as the bill for both Kyrgyzstan and Uzbekistan. But Sakiev said that Kyrgyzstan would have to cover $700 million, and when an MP mentioned that Kyrgyzstan would be on the hook for closer to $1 billion during the hearing Sakiev did not challenge it.

Kyrgyz officials have said that the country expects to earn up to $200 million annually from the transit of goods alone.

The agreement does not specifically lay out the financing plan, meaning it remains one of the topics to be settled between the three governments.

Another point of opacity is exactly how many tunnels and bridges will need to be constructed in Kyrgyzstan to realize the railway. Kyrgyzstan’s official news agency Kabar reported that 81 bridges and 41 tunnels would have to be built; another Kyrgyz new service, Tzarbek reported that the project would need 95 bridges and 48 tunnels. A feasibility study was completed last summer, but the results were not released publicly.

The Risks Ahead

The two major hurdles that the CKU railway has long faced are the financing question discussed above and the geopolitical situation. Ostensibly, the CKU railway would provide China a route that ultimately connects to Europe without Russia’s involvement. As such, Russia has long opposed the railway. But Russia’s clout has diminished since its full-scale invasion of Ukraine; Moscow needs the support of Central Asian states – and China – far more than they need Russia’s support. The project also has yielded little critique from the West, as regional connectivity remains a top agenda item for Europe and the United States in Central Asia.

The risks ahead derive from these two challenges. When it comes to the geopolitical situation, the future is unwritten. Kyrgyzstan is notoriously unstable politically, with three revolutions in about 30 years. While it is entirely plausible that any Kyrgyz government would support this project, Sinophobia in Kyrgyzstan – particularly related to mining and road projects, environmental concerns, the presence of Chinese workers, and the exclusion of Kyrgyz companies – are all nationalistic flashpoints in the making. The Japarov government recently flaunted that it had nearly doubled revenue, but if the Kyrgyz people don’t start seeing the effects of that influx, Bishkek could rumble.

The financing remains unclear, and the terms appear to prioritize China and Chinese companies. The construction of so many bridges and tunnels, in addition to being significant feats of engineering in of themselves, are also ripe opportunities for inflation of costs, the cutting of corners, and corruption.

In 2018, Bishkek’s main power plant broke down in the middle of a cold snap, less than six months after a Chinese-managed modernization project was completed. Although the breakdown caused a political firestorm in Kyrgyzstan – including the jailing of two former prime ministers – China’s role in the corruption related to the project was little remarked upon by the Kyrgyz government. In February 2024, the plant experienced a massive pre-dawn explosion.

While there is a huge difference between a power plant and a railway, there is little difference in how corruption in the procurement processes necessary for all infrastructure projects operates. Given the provisions of the CKU railway agreement, and a 2022 Kyrgyz law that paved the way for state-controlled companies – like Kyrgz Railways – to purchase goods and services without a public tender process, the opportunities for corruption are manifold.

In the case of the power plant, documents shared after the 2018 breakdown listed pliers being bought for more than $600. A top official at the plant who had been fired immediately after the breakdown shared the documents and commented to the media that when he and others raised concerns about the high costs, he was told to stick to technical details and leave the financing alone.

Given Kyrgyzstan’s autocratic turn since 2020, we can expect more of the same attitude.