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Home»Finance»Explaining South Korea’s Railway Ambitions in Central Asia
Finance

Explaining South Korea’s Railway Ambitions in Central Asia

August 16, 2024No Comments7 Mins Read
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Explaining South Korea’s Railway Ambitions in Central Asia
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Earlier this month South Korea and Tajikistan signed an agreement to start a feasibility study for the Jaloliddini Balkhi-Jayhun-Nizhny Panj Railway project. The project is a 51-kilometer railway line that would extend Tajikistan’s railway network to the border crossing with Afghanistan at Nizhny Panj, also known as Panji Poyon in the Pamirs. The purpose of the feasibility study, expected to cost $4 million, is to determine whether, and under what conditions, the railway project would be technically, financially, and economically viable.

The planned route travels from Dushanbe, Tajikistan’s capital, directly by rail to the town of Jaloliddini Balkhi and then to Nizhny Panj. This would remove the need to transfer goods from railway to road. From Nizhny Panj, goods would be trucked across the bridge spanning the border and the Panj River to Sher Khan Bandar in Afghanistan.

After the goods cross over into Afghanistan, they would be transferred back onto rail and travel to Kunduz and Mazar-i-Sharif to either the Torkham border with Pakistan or toward Turkmenistan. The 65-km railway route from Kunduz and Mazar-i-Sharif and further on to Turkmenistan has not been constructed yet. The extension would make up the proposed Turkmenistan-Afghanistan-Tajikistan railway corridor. 

The Korean International Cooperation Agency (KOICA), a government agency under the Ministry of Foreign Affairs of South Korea responsible for providing development assistance, is funding the feasibility study.

The View From Tajikistan

This proposed railway corridor is important for two reasons. First, it would boost Tajikistan’s transit potential as it would allow Turkmenistan railway traffic to reach Tajikistan without having to transit Uzbekistan. Turkmenistan, Tajikistan, and Uzbekistan have a history of distrust and imposing high transit fees on trucks crossing through their borders. Another reason why this railway corridor is important is because it would allow Tajikistan to reap export and transit revenues and attract greater transit flows.   

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Tajikistan has planned to promote international freight transit through its territory but its options are limited because it is almost completely transport dependent on Uzbekistan. As such Dushanbe has prioritized achieving transport independence to the extent it realistically can.

In 1999, President Emomali Rahmon pushed for the construction of the transcontinental highway via Tashkent to Dushanbe or through Termez to Dushanbe, with further links to the Karakorum highway to Pakistan. However, several years later, the routes connecting Tajikistan with China, Afghanistan, and Kyrgyzstan are being emphasized. The Jaloliddini Balkhi-Jayhun-Nizhny Panj Railway project falls under the latter route. 

For Tajikistan, transport projects like this are regarded as ways to promote the country as a transit hub, which many in Central Asia are currently competing for. 

This is an ambitious railway project. The challenge is that Tajikistan is landlocked and quite a vast country. To obtain access to seaports, which are important for economic growth, requires extensive and functioning railway infrastructure. Most of the country’s infrastructure dates to the Soviet era and is in need of repair and rehabilitation. 

Major challenges to the rail project include instability and environmental constraints. While the project is driven mainly by Tajikistan, the bulk of the route is actually through Afghanistan. It starts from the middle of Tajikistan but has to cross Afghanistan to reach any ports. Hence Afghanistan is a significant stakeholder and there are different requirements that have to be balanced. Environmental considerations are also a challenge. The railway line will mostly be running through the mountainous and rugged terrain of the Pamirs.

The View From South Korea

South Korea has long flirted with the idea of a rail line all the way across Asia to Central Asia. Back in 2015 the speaker of South Korea’s National Assembly, Chung Ui-hwa, met with Rahmon and expressed his desire for South Korea to cooperate with Tajikistan on transportation infrastructure. This also included railways. 

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South Korea’s interest in Tajikistan’s railway is part of its wider plan to form a Trans-Korean Railway corridor. First conceptualized in October 2013 by then-South Korean President Park Geun-hye, a “New Northern Policy” was announced, which was further cemented in 2017 by then-President Moon Jae-in. The aim of the policy was to reconnect the railways between North and South Korea and establish a new transportation network not only on the Korean Peninsula but throughout all of Northeast Asia. This would allow rail freight to travel between South Korea, North Korea, Russia and China – as far as Central Asia, too. 

While the inter-Korea portion of the railroad has become less and less feasible amid deteriorating political relations, Seoul is still demonstrating interest in the Eurasian sections.

In August 2023, the Korea Railroad Corporation, the national railway operator in South Korea, won the contract to provide consulting services for the “Preliminary Survey for Construction and Operation of Tajikistan’s Urban Railway.” This ran from August 2023 to June 2024 and was the first such South Korean consulting project in Central Asia. 

For South Korea, railway infrastructure in Tajikistan is important for a variety of reasons. Most importantly, it plans to connect the rail network of Tajikistan to the wider Trans-Korean railway corridor and therefore helps reduce dependence on sea routes passing through the South China Sea, the Malacca Strait, and the Suez Canal. Events occurring in these major shipping routes have antagonized countries relying on them and have been a source of confrontation. As such it has caused a lot of trade insecurity and instability, which has caused many countries to adopt a more proactive corridor approach in their foreign policy strategy and search for alternative transport routes. 

But current inter-Korean relations have been mostly hostile and the future of the Jaloliddini Balkhi-Jayhun-Nizhny Panj Railway project linking into a Trans-Korean railway network remains uncertain. In February 2024 North Korea’s parliament voted to abolish all economic cooperation agreements with South Korea and key projects have been suspended.  

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Railway projects, like all other infrastructure projects in the transport industry are long-term and as a rule do not provide immediate returns. So foreign investors like the Korean Railroad Cooperation that will be conducting the feasibility study need to sense lasting stability in the country before making any investments. The payoffs of this rail line are difficult to envision at this stage because of poor regional cooperation in Central Asia.

For railroads to function effectively, a degree of political acquiescence is a necessary precondition. While efforts are been made by the countries of Central Asia to harmonize their cross-border systems, they are still very far from establishing an integrated domestic transport network. To develop Tajikistan and the wider region’s transit potential, the countries need to establish a non-discriminatory policy on their transit tariff fees, establish intermodal logistic centers, resolve border disputes, and invest in new roads and railways while repairing existing ones.

Conclusion

It is clear that transit corridors are important. Each integration endeavor in Central Asia advances in two dimensions: geopolitical and economic. Geopolitical factors could inhibit the economic and commercial viability of these projects. 

With sizable infrastructure projects like this, it is important to take the long view.  When the Russia-U.S.-Europe relationship returns to some degree of normality, the strengths of these Central Asia transport corridors will enhance the transit benefits, making it a strong competitor to other major shipping routes, like the South China Sea, the Gibraltar Strait, and the Suez Canal. This would increase the importance and influence of Central Asia in world affairs.

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