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24x7Report > Blog > Finance > Why Has High Speed Rail Failed in Kazakhstan?
Finance

Why Has High Speed Rail Failed in Kazakhstan?

Last updated: 2024/11/09 at 5:00 PM
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Why Has High Speed Rail Failed in Kazakhstan?
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Excessive-speed practice journey generally is a difficult prospect for any nation. To attain speeds of 250 kilometers per hour, high-speed rail (HSR) requires extensive expanses of flat, unpopulated land to barrel by means of, one thing that has seen such makes an attempt flounder not too long ago within the United States and the United Kingdom. 

Nonetheless, if there may be one factor that Kazakhstan isn’t wanting, it’s extensive expanses of flat, unpopulated land. 

Touring between its far-flung cities is an train in endurance, with even the “specific” service traversing the 1,200-kilometer distance between the capital, Astana, and Kazakhstan’s largest metropolis, Almaty, taking a minimal of 15 hours. 

It was unsurprising subsequently, when a north-south high-speed hyperlink was proposed in January 2013. Kazakhs have been promised that six trains a day would ferry passengers between Almaty and Astana in 5.5 hours, reducing at the very least 10 hours off the grueling journey.

On the time it didn’t appear so daring. In 2011, China had not too long ago opened its first high-speed line, with trains taking just below 5 hours to cowl the space between Beijing and Shanghai – virtually the identical as that between Almaty and Astana.

Kazakhstan’s preliminary plan included a bridge spanning 20 kilometers throughout Lake Balkhash, Asia’s third largest lake, and was supposed to be accomplished earlier than the 2017 Astana Expo.

Extra schemes adopted, together with a high-speed line to Russia. At a press convention held in Astana in 2014, Russian Railways President Vladimir Yakunin was full of optimism: “I personally don’t see something futuristic within the mission to create high-speed visitors from Minsk to Almaty by means of the territories of Russia, Belarus, and Kazakhstan,” he proclaimed.

Because it seems, this future has taken some time to materialize. Certainly, even on the time, Kazakhstan’s then-President Nursultan Nazarbayev was already backtracking on the Astana-Almaty line.

“I wish to have such a railway,” he stated. “However this concept requires cautious calculation earlier than we start financing.” 

Rationalization

Inhabitants has turned out to be a key sticking level. Beijing and Shanghai could also be separated by the same distance as Astana and Almaty, however they’re each megacities, with populations in extra of 20 million folks, greater than the whole thing of Kazakhstan.

“The rationale HSR labored in China and Uzbekistan has to do with the inhabitants density: between main city areas, the distances are shorter,” stated Dennis van der Laan, editor of RailFreight.com. “Almaty is an enormous metropolis of 2-3 million folks, Astana about 1 million, however with such a big distance between them, I feel they’ve calculated that the quantity of passengers touring on that line isn’t going to be sufficiently big to justify the immense prices that you simply’re going to incur.”

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However a rational, penny-pinching Nazarbayev was not what folks have been used to. This was a person who, in any case, had overseen the relocation of the nation’s capital metropolis from Almaty to Akmola in 1997 (renamed Astana in 1998) and spent twenty years furnishing it with a collection of extravagant eyesores – a $400 million shopping mall within the form of a tent, or the $652 million presidential palace, for instance.

Sadly, by 2014, Kazakhstan had entered a courageous new world. Shale oil producers in america created a provide glut, which despatched the worth of crude oil down 60 percent between June 2014 and January 2015. For Kazakhstan, whose largesse had been underpinned by sky-high oil costs, the results have been ruinous. Certainly, it was solely this 12 months that Kazakh GDP regained the degrees of 2014; GDP per capita has nonetheless but to recuperate.

Over the previous decade, Kazakhstan has increasingly drawn on its sovereign wealth fund for day-to-day working of the nation. With cash tight, consciousness of unscrupulous officers utilizing these sorts of enormous initiatives for graft has additionally grown.

“Clearly I’d be glad to see quick trains like in China,” stated Asem Bolatbekova, a producer dwelling in Almaty, who prefers to fly when she returns to her hometown within the jap metropolis of Öskemen. “However I’m undecided if it’s the precedence; there’s at all times the probability that the cash for these initiatives will find yourself in somebody’s again pocket.” 

Prioritization of Freight

Some funding has however made its means into the railways. Certainly, over the past six years, the nation’s observe and rail operator, Kazakhstan Temir Zholy (KTZ), has added 2,500 kilometers of observe to its community, costing over $35 billion. 

In March, Nazarbayev’s successor, Kassym-Jomart Tokayev, inaugurated a KTZ facility in Xi’an, China. There is also a grand plan to redevelop over 200 stations, to construct a new generation of diesel locomotives, in addition to investing one other $2.9 billion in building four extra lines – two to extend provide from China; one other to bypass Almaty; and new line to the Uzbek border, higher connecting Kazakhstan to the Eurasian heartland.

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It’s all a part of a technique to modernize the railway community. 

“Kazakhstan is making an attempt to place itself as a transit hub between East and West,” stated van der Laan. “There are two predominant routes for China-Europe visitors: one is the so-called Northern Route, which works from China to Russia after which by means of Belarus into Poland; the opposite is the so-called Center Hall, which works by means of Kazakhstan, throughout the Caspian Sea and into the Caucasus. From there you’ll be able to both cross the Black Sea or undergo Turkey.”

Whereas the Center Hall is longer and extra advanced, the struggle in Ukraine has made Western nations much less prepared to make use of a Russia-dominated route, and instability within the Crimson Sea has additionally helped folks view it as a viable different. Volumes have grown significantly, from 1.5 million tons in 2022 to 2.7 million in 2023 and 1.6 million within the first six months of 2024.

“This 12 months they’re really aiming to hit 5 million tons,” stated Rauf Aghamirzayev, an impartial Azerbaijani skilled within the subject of transport and logistics. “The potential is nice, however there are nuances. The Northern Route was expanded earlier than the struggle; we’re not but their rivals.”

That stated, even the route from China by way of Russia usually passes by means of Kazakhstan. In all, some 80 percent of Europe-China land freight in some unspecified time in the future transits by means of the nation. 

Which means that in relation to constructing new strains, high-speed rail for passengers isn’t the primary merchandise on the Ministry of Transport’s to-do listing.

“Freight is the one which generates most income. In order that’s prone to have precedence,” stated van der Laan.

That is demonstrated by a simple statistic: rail is accountable for transporting over 50 p.c of freight across the nation, nevertheless it solely accounts for 15 p.c of passengers.

Competitors From the Sky

In the meantime, the necessity for high-speed rail is additional mitigated by the expansion of home air journey. A key issue on this has been the emergence of low-cost carriers, notably FlyArystan, which now accounts for 37 percent of the home market. Air journey in Kazakhstan noticed 14 percent growth between January-July 2024 in comparison with the identical interval final 12 months.

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FlyArystan’s mother or father airline, Air Astana, floated on the London Inventory Trade earlier this 12 months, exhibiting investor confidence within the sector. Till that time, it had been owned collectively by Kazakhstan’s sovereign wealth fund, Samruk Kazyna (51 p.c), and British protection agency BAE Programs (49 p.c), and had been accused of monopoly pricing. 

Each of those developments counsel that costs for flights ought to fall within the coming years. Proper now, air journey is dear in comparison with rail. When bought every week upfront, a one-way airplane ticket from Almaty to Astana prices round $50-60; a third-class sleeper practice ticket prices $20, whereas a seat on the 23-hour stopping service is as little as $15.

“Flying is a bit costly for many of the inhabitants, particularly for those who ebook last-minute,” stated Bolatbekova. “In case you ebook a month upfront, it’s okay, however last-minute the worth for a spherical journey can go as much as $200. For lots of people that’s merely not reasonably priced, even when it would sound low-cost to a Western traveler.”

If You Can’t Beat ‘em, Be part of ‘em

That stated, a part of the success of HSR in neighboring Uzbekistan is that overseas vacationers have confirmed to be dependable purchasers of tickets. Bullet trains ferry guests between the cities of the traditional Silk Highway, with many glad to pay $50 for the comfort and luxury of a four-hour journey between Tashkent and Bukhara. 

This has not gone unnoticed in Kazakhstan. So whereas the grand route connecting Kazakhstan’s two predominant cities could seem far off, a shorter, extra possible route has been proposed to hyperlink Shymkent and Turkestan (the location of Kazakhstan’s most famed non secular shrine) with the Uzbek capital, Tashkent. Introduced in 2021 by Tokayev, it was set to be in operation by 2024.

Nonetheless, that too has stalled. The Kazakh Deputy Minister of Transport Maksat Kaliakparov stated in February that the fee could be some 322 billion tenge (round $660 million), with “the sources of financing to be decided.” 

He went on to say that, because of this, “the mission has been suspended for now.” 

In essence, in relation to transport, freight stays the precedence. For these desirous to get across the nation, a sluggish practice or an costly flight is about nearly as good as its going to get for the foreseeable future.

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TAGGED: Failed, High, Kazakhstan, Rail, Speed

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