Manila, Philippines – An ADB-funded railway modernization project has recently been completed that is promoting economic growth, development of new industries and businesses, regional linkages, and more productive use of natural and agricultural resources in Uzbekistan.

The US$70 million project was approved in October 2000 to rehabilitate 341 kilometers of railway track between Dzhizak and Khodjadavalet, which carries the highest volume of traffic in Uzbekistan’s railway network. The project was closed at New Year.

It is expected that some 5.5 million people from four provinces traversed by the project line – Bukhara, Jizzakh, Navoi, and Samarkand – will have better access to economic opportunities, with freight transport users and passengers enjoying the most direct benefits.

With railways the primary mode of transportation in Uzbekistan, a better railway system boosts internal trade by cutting travel and business costs. It is also vital in expanding tourism to historic cities such as Bukhara and Samarkand on the famed Silk Route.

In addition, Uzbekistan’s location leaves it well placed to provide a vital link in the transportation of goods by land from East Asia to Europe from where it can attract more investors. The improved railway will also better link the country to the regional transport corridor, opening up the Central Asian market of nearly 60 million people.

“ADB is happy to assist the Government of Uzbekistan in making its railway more efficient,” said Hong Wei, ADB’s Country Director in Uzbekistan, during a ceremony to mark the project completion in December. “An efficient railway will help open up vast resources, spur development of new industries and businesses, and generate jobs, particularly for the poor.”

The project provided equipment for track laying and maintenance, installed fiber optic telecommunications systems and computerized financial accounting systems, and established a revolving fund to provide start-up capital for small business ventures by former railway employees. It also carried out restructuring and policy reform initiatives to improve the efficiency and service of the national railway company, Uzbekistan Temir Yullari’s (UTY).

The loan was accompanied by a technical assistance grant to plan the development of the network; set up the revolving small business fund; develop and market passenger services for tourists; and study the adverse effects of soil salinity on infrastructure along the project route and propose protection and mitigation measures.

The total cost of the project was $155 million. The $70 million loan from ADB’s ordinary capital resources has a term of 25 years, including a grace period of 5 years.