Geographic Focus: Republic of Kazakhstan, Kyrghyz Republic, Republic of Tajikistan, Turkmenistan, Republic of Uzbekistan

Project budget : EURO 2,000,000

Contractor : CIE

Implementation timetable : August 1997 to July 1998

Background and Objectives. Fundamental adjustments are required in the railway sector, including the railway's relationship to the Government, its institutional and management structure, its physical assets and labour force, its operating and maintenance practices and its tariffs and debt collection abilities. The intention of this ongoing project is to help to develop an effective, financially self-sustaining industry, including assistance in the detailed design and implementation of a railway restructuring programme and the definition of a programme of priority investments needed to support the restructuring, providing the basis for the appraisal of loans from IFIs. The EBRD was closely involved in all phases of the project.

Key Issues and Achievements. The project (i) developed restructuring strategies for the railway sector and elaborated detailed restructuring plans, including the future relationship between Railway and Government; (ii) defined investment packages suitable for financing by IFI; (iii) established a plan for a project implementation unit and its co-operation with the existing railways, as well as the required planning and implementation instruments both for urgent measures and overall requirements for the period 1998-2002;
(iv) provided commercial and financial orientation for future investment planning;
(v) assessed environmental obligations and regulations within the 5-year restructuring plan.

The project has sought to rehabilitate and preserve critical infrastructure and equipment, and to identify selective, high-yielding new investments to substantially reduce costs of present operations, or to penetrate new markets. Domains such as telecommunications, track and rolling stock maintenance, and optimisation of traction by electrification or re-motoring of locomotives have been identified as apt for external financing. The project facilitated external funding for the Railways of Kazakhstan, Uzbekistan and Turkmenistan, particularly from the EBRD, the ADB and the OECF (loans to the Kazakh and Uzbek Governments were signed, whereas an OECF loan to the Turkmen Government is under negotiation). Proposals were made to set-up Management Information Systems, and it was demonstrated that outside investment is urgently needed.

Module E of this project "Telecommunication Studies", undertaken by sub-contractor UIC (Union Internationale des Chemins de fer) prepared a technical and economical study for an optical cable system for communication and signalling for the Trans-Caucasian Railways, to be implemented in 2000-2001.