ADB
zbekistan's rail links will be strengthened
domestically and internationally by a railway rehabilitation project for which the
Asian Development Bank today approved a loan of US$70 million.
Railways are the country's backbone. Upgrading the 341-kilometer (km) part of the
main railway route which crosses through the provinces of Bukhara, Dzhizak, Navoi
and Samarkand will boost internal trade by cutting travel and business costs and will
attract more investors from East Asia and Europe. Internally, some 5.5 million people
from the four affected provinces will have better access to economic opportunities.
"An efficient railway will help open up vast mineral and agricultural resources, spur
development of new industries and businesses, and generate jobs, particularly for
the poor," notes Randhir Soin, ADB's mission leader for the project. Better transport
will also expand tourism to historic cities such as Bukhara and Samarkand on the
famed Silk Route.
The project will provide equipment for track laying and maintenance, install
fiber-optic telecommunication systems, develop human resources, strengthen
institutions, and establish a revolving fund for former railway employees to start up
small businesses. Together with another ongoing ADB-assisted rail project, this
project will complete improvement of 800km of the main railway route from Keles
bordering Kazakhstan to Khodjadavlet, near the border with Turkmenistan.
Uzbekistan's strategic location makes it ideal for transporting goods by land from
East Asia to Europe. "The government realizes that it needs to develop the regional
transport corridor and ease existing trade barriers to take advantage of the Central
Asian market with nearly 60 million people," adds Mr. Soin.
The ADB is also providing technical assistance to studies to further develop the rail
network, draw up policies and procedures for the small business revolving fund,
broaden passenger and tourist markets and conduct soil investigations along the
route.
The total cost of the project is US$155 million. The ADB loan will come from its
ordinary capital resources and will be repayable over 25 years, including a 5-year
grace period. The interest rate will be determined according to ADB's pool-based
variable lending rate for US dollar loans. Uzbekistan Railways, the
government-owned joint stock company set up in 1994, will provide US$80 million
while the OPEC Fund will finance US$5 million.
Uzbekistan Railways will be the executing agency for the project, which is due for
completion by mid-2005.
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