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HomeUncategorizedKazakhstan plans to increase the transit 35M tons of cargo by 2030Enhancing...

Kazakhstan plans to increase the transit 35M tons of cargo by 2030Enhancing logistics and railway services with the UAE

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Astana – The Republic of Kazakhstan plans to increase the transit of cargo through its territory to 35 million tons annually by 2030. It is expected to become the largest country for transporting and transiting goods in Eurasia, and is working to develop the transport sector and integrate it into European and Asian countries, harmonize national transport legislation with international rules, and facilitate the investment climate. In order to enhance the sustainable growth of the role of transport in the economy, by allocating large investments and developing the transport infrastructure, as Kazakhstan is considered a key axis in the development and success of the Middle Corridor (the Trans-Caspian International Transport Route (TITR), in line with its goal of becoming a center for transport and services. Logistics, after the volume of transport in this corridor reached 771 million tons in the first quarter of 2024.

At the same time, AD Ports Group of Abu Dhabi signed an agreement with Kazakhstan’s Temir Zholy JSC (Kazakhstan Railways), the Kazkah national railway company, a cooperation agreement with the aim of forming a joint venture to enhance rail connectivity, maritime shipping services, development of operations in Kazakhstan’s ports, accelerate digital transformation and connectivity in Central Asia.

Transport Sector

Major segments of the transport sector of Kazakhstan include rail, road, marine, aviation, and pipeline transport. This transportation industry contributes 11 percent to the national GDP as of Feb. 9, 2022. At a plenary session of the Fifth Kazakhstan Global Investment Roundtable Conference in Astana on Oct. 19, 2022, Deputy Chair of Kazakh Transport Committee Kassym Tilepov said nearly $35 billion were invested in Kazakhstan’s transport sector over the past five years, with 2,500 kilometers of new railways also being built. 

Being landlocked, Kazakhstan has to bear high transportation and transit costs. For instance, shipping containers from any Central Asian city to Shanghai is five times more expensive than from Poland or Türkiye via ship.

Despite this, Kazakhstan has immense geostrategic significance, enormous natural resources, and vast potential for transit and trade. Compared to 2020, in 2021, an increase of 47 percent was observed in the number of TEUs (twenty-foot equivalent unit is a conventional unit for measuring the capacity of freight vehicles) transiting through Kazakhstan. In fact, consequent upon the special military operation in Ukraine, disruptions in the primary supply chains have reinforced Kazakhstan’s transport and transit potential. 

The railway brings 52.2 percent cargo turnover, as rail transport has a significant role in transcontinental and transit operations between Europe and Asia. Kazakhstan’s rail transport is an active part of the Euro-Asian Transport Link (EATL) and its intermodal services. Then, the Trans-Caspian International Transport Route (TITR), also called the Middle Corridor, is a realistic alternative to the China-Europe cargo train. Rail freight transport under TITR carries bulk commodity shipments of oil, ferrous, metals, coal, grain, and other goods. The government of Kazakhstan has planned to invest $1.6 billion in the modernization of railway projects and about $4 billion in the depot, rail carriage renovation, and overhaul of rail locomotives. 

The government of Kazakhstan is working to increase cargo terminals. The Almaty International Airport has excellent potential for cargo transportation, where a new terminal is being developed with a financial package of $372.2 million from the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD). Air Astana, the national carrier, will buy two freighters in 2024. The government is determined to establish Kazakhstan as an air cargo hub between China and Europe.

Also, Kazakhstan plays a vital role in making the New Silk Road in the 21st century. A network of regional, national, and international highways has been developed across the country. Kazakhstan accounts for 70 percent of the land transit traffic from China to Europe and vice versa. During the sixth Kazakhstan-China Business Council meeting held in Beijing on Sept. 11, 2019, President Kassym-Jomart Tokayev said, “Five railway and six international automobile routes pass through the territory of Kazakhstan, which connects China and other Asian countries with Europe and the Middle East. This makes it possible to deliver goods to Europe from China through Kazakhstan in 15 days, while shipping by sea takes two to three times longer. And the state program of infrastructure development Nurly Zhol being implemented in Kazakhstan, coupled with the Chinese project One Belt – One Road, will revive the former greatness of the Silk Road.” 

A total of 51 mega projects of the Belt and Road Initiative worth $35 billion are operating in Kazakhstan, out of which $3.5 billion is invested in Khorgos dry port. With access to wider trade networks, massive savings in logistics, and reasonable earnings through logistic centers, BRI not only helps Kazakhstan become an eminent regional player but also penetrates the global markets.  

Three Caspian Sea ports of Kazakhstan offer tremendous opportunities to develop intermodal transportation and forwarding services. Last March, Kazakhstan, Türkiye, Georgia, and Azerbaijan signed a declaration on the Middle Corridor with a resolve to integrate the corridor into the international transport system. Development work at Aktau and Kuryk ports continues to increase capacity and construct shipyard, berths, and port area dredging.

By 2030, the volume of cargo transit through Kazakhstan’s territory is expected to reach 35 million tons per year. This goal is outlined in the approved Concept for the Development of the country’s transportation and logistics potential, as reported by the railway portal Railway Supply.

Kazakh authorities hope to achieve these figures not only by creating new alternative transportation corridors but also by implementing several infrastructure projects.

Adjustments are underway in the project and estimate documentation for the construction of a bypass railway line at the “Almaty” station. This will relieve the Almaty junction by 40%, reducing cargo delivery times to 24 hours.

The construction of a new railway line “Darbazam – Maktaaral” between Kazakhstan and Uzbekistan is planned. It will alleviate the congestion at the “Saryagash” station, connect the Maktaaral district to the main railway network, and expand transit routes to Iran, Afghanistan, Pakistan, and India.

The construction of the “Bakhty – Ayagoz” railway line is also planned. It is essential for unburdening the border railway stations “Dostyk” and “Altynkol” and increasing transit capacity between China and Kazakhstan.

A container hub with a capacity of up to 300,000 TEUs is being established at the Aktau seaport. In the Kuryk port, the Kazakh company “Semurg Invest” has initiated the construction of a multifunctional terminal called “Sarzha.”

Middle Corridor

The Middle Corridor is bridging the gap between China and Europe by passing through Kazakhstan, Azerbaijan and Georgia. It is approximately 3,000 kilometres shorter than Russia’s Northern Corridor. This corridor reduces the transit time between China and Europe from 19 days. Not only does it extend to 12 days, but it also addresses sanctions compliance issues by bypassing Russia.

The corridor is poised to have a major impact on global trade, and potentially reshape the world’s geopolitical and economic landscape. However, this requires concerted efforts from all stakeholders, including national governments, private investors, regional and international bodies.

Following the outbreak of war between Russia and Ukraine, the traditional Northern Corridor in which Russia participates has become less attractive. Ultimately, the Middle Corridor emerged not just as an option, but as an imperative for countries seeking to limit geopolitical risks through stable trade routes. While Kazakhstan has maintained a neutral stance in the Ukrainian crisis, it has recognized the advantages of embracing the Middle Corridor given its potential to boost regional and global trade.

 In 2022, cargo shipments along the Central Corridor reached nearly 1.5 million tons, while the Northern Route saw a 34% decline in freight volume.

Meanwhile, a tripartite agreement was signed between Kazakhstan, Azerbaijan and Georgia in 2023 to establish a joint logistics company that enhances the potential of the Middle Corridor. Subsequently, one transport operator has been registered in the Astana International Financial Center, and this operator is expected to begin formal operations by the end of 2024, with Turkey likely to join by early 2025. This joint venture aims to remove operational obstacles hindering the flow of goods on All the way through simplifying shipping regulations, standardizing tariffs, and simplifying customs.

Significant infrastructure development is currently underway to realize the full potential of the Trans-Caspian International Transport Route, with China agreeing to run a 10-container train every month through the Middle Corridor.

 In January this year, the European Union announced an investment of US$10.75 billion in the development of transportation and logistics projects in Kazakhstan and other countries in Central Asia. This initial investment will be followed by an additional investment of US$19.9 billion to simplify highways, railways and seaports in Aktau. and Correct, ensuring smooth delivery of goods from China to Europe.

In August 2023, Kazakhstani PTC Holding began construction of an intermodal terminal in the Georgian port of Poti on the Middle Corridor, which will have a capacity of 80,000 TEUs per year. Another important development is the reopening of the Baku-Tbilisi-Kars railway line (829 km) after modernization and completion works. This railway is vital to the Middle Corridor as it connects Türkiye to Central Asia and China via Georgia and Azerbaijan. Experts from the World Bank believe that by 2030, the Middle Corridor will have the capacity to handle between 10 and 11 million tons of cargo annually, and Kazakhstan’s contribution will be essential, as it acts as a transit hub and major exporter of goods and materials from its mining and agricultural industries to the European Union.

UAE and Kazakhstan

On the other hand, the draft agreement that was signed between the two countries under the terms of the agreement, the JV, owned 51% by AD Ports Group and 49% by KTZ, will aim to establish a dynamic regional logistics hub, leveraging AD Ports Group’s expertise in management, operations, and development of logistics operations and digital transformation, in addition to leveraging Kazakhstan Railways’ regional knowledge and practices for advanced vessel operations, logistics enhancement, including hopper wagons, port developments, and railway infrastructure expansion. The ambitious initiative aligns with AD Ports Group’s and KTZ’s objective of transforming the regional logistics landscape.

Yerlan Koishibayev Deputy CEO for Logistics of Kazakhstan Temir Zholy JSC (Kazakhstan Railways), said, “The new joint venture will focus on expanding port infrastructure on the Caspian Sea, creating trade hubs and bringing advanced digital technologies. Cooperation between Kazakhstan Railways and AD Ports Group will contribute to the development of transport and transit potential of Kazakhstan, increase export directions and create a market for Kazakhstani goods in the Arabian Gulf countries.” The JV will be implemented in phases, with both entities collaborating to develop maritime electronic systems, vessel operations, port and trade development, in addition to railway infrastructure expansion. These ambitious plans promise to transform the global logistics landscape, enhance trade flows and maritime efficiency, and propel the Central Asia region into a new era of economic growth and logistical opportunities.

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