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ADB Proposed Project:48025-002: CAREC Corridors 2 and 3 (Marakand-Bukhara) Railway Electrification Project

26 August 2014

Project Rationale and Linkage to Country/Regional Strategy

Uzbekistan is doubly land-locked and highly dependent on land transport to support its domestic economy and external trade. Of the six Central Asia Regional Economic Cooperation (CAREC) Corridors, three corridors cross the territory of Uzbekistan. These corridors catalyze economic development in Uzbekistan and the region by improving national and regional connectivity. As a result, the country has the potential to become a key link in the growing trade between East Asia and Europe and to capture a significant volume of transit traffic. Development experience in the world has shown that freight traffic tends to grow at a higher rate than gross domestic product as a country is still moving up the economic chain. As the Uzbek and regional economies grow, the demand for freight transport will increase, posing higher capacity requirement for the country s road and railway systems. For moving commodities and goods in bulk, railway transport has a competitive advantage over road transport, and is environmentally more acceptable. Railways carried about 60 million tons of freight and 15 million passengers annually over past decade, and remain key to Uzbekistan s economy. Two CAREC Corridors Corridor 2 which links East Asia with the Mediterranean and Corridor 3a which links the Russian Federation with the Middle East pass through Tashkent, Samarkand, Marakand, Navoi, and Bukhara, before crossing over to Turkmenistan. With electrification of the line from Marakand to Bukhara, diesel locomotives will be replaced by more efficient electric traction on the entire route from Keles on the border with Kazakhstan to Bukhara. This will boost domestic and regional trade and connectivity, and cut transport costs. The state joint-stock company Uzbekistan Temir Yullari (UTY) is solely responsible for the management and operation of the nation-wide 4,669 km railway network (including 788-km electrified). The rail system, managed by UTY, needs modernization and reforms to mitigate institutional constraints which limit the sector s potential to provide efficient transport. ADB has provided support to the railway sector by providing two loans for rehabilitation and modernization of infrastructure, and a loan for electrification of railway line. Investments in system modernization and improvement, including electrification, will revitalize the railway system. Changeover from existing diesel traction to electric traction after railway electrification will increase hauling capacity on existing tracks, cut operating cost and reduce emissions of greenhouse gases. In the railway subsector, the Government has formulated the Railway Electrification Program up to 2020 and prioritized a three-part 5-year investment plan, which inter alia covers development of railway infrastructure, railway electrification, and modernization of rolling stock. These elements form the strategic framework for development of the railway subsector. The Government s request for assistance to electrify the Marakand-Bukhara railway line falls under this program. The project supports the Government s electrification program for efficient and environmentally friendly electrified rail transportation to meet increased trade flows and regional transit traffic. This is also consistent with the country s Welfare Improvement Strategy for 2013 2015 which emphasizes among others the continued modernization and development of transport infrastructure. The project fits with ADB s Strategy 2020, and is included in the Country Operations Business Plan (2014 -2016). It also aligns with the Uzbekistan Transport Sector Strategy (2006- 2020) and supports the CAREC Transport and Trade Facilitation Strategy 2020.


Stimulated economic growth and increased regional trade along CAREC Corridors

Project Outcome


Description of Outcome

Improved railway operation and logistics services on the Marakand-Bukhara railway line


Implementation Progress


Description of Project Outputs

Upgraded railway infrastructure along the Marakand-Bukhara line Strengthened UTY's institutional capacity


Safeguard Categories


Environment: B

Involuntary Resettlement: B

Indigenous Peoples: C


Stakeholder Participation and Consultation


During Project Design Meetings with relevant government agencies, NGOs and/or community-based organizations, and focus group consultations with local communities and/or affected people, supplemented by surveys, will be conducted.


During Project Implementation UTY, the consultants, and ADB will continue to conduct needed stakeholder consultations during project implementation.