Afghan, Tajik, Turkmen heads lay foundation of regional railway

Wed Jun 5, 2013 9:55am EDT

* Three landlocked states seek access to new Eurasia markets

* Gas-rich Turkmenistan starts construction, Asian banks mum

* A North-South regional railway was launched in May

By Marat Gurt

ATAMURAT, Turkmenistan, June 5 (Reuters) - Landlocked neighbours Afghanistan, Tajikistan and Turkmenistan announced on Wednesday the construction of a regional railway which would allow them to expand trade with former Soviet countries and reach markets in south Asia.

The new 400 km (250 mile) route, expected to cost $1.5 billion, will turn Turkmenistan into a major railway transit country linking Russia and other former Soviet states with south Asian countries like Pakistan and India.

It will also allow Tajikistan to import oil products and other vital cargo bypassing Uzbekistan, with which it has strained political relations and which has blocked the existing Soviet-era railway in the past.

Boosting trade with other parts of Eurasia would help Afghanistan as well, which could also turn into a transit nation for goods flowing from Europe and central Asia to the south.

Turkmen President Kurbanguly Berdymukhamedov, joined by his Afghan counterpart Hamid Karzai and Tajikistan's Imomali Rakhmon, cemented a symbolic golden capsule with a message to future generations into the foundation of the future railway near the town of Atamurat in southeastern Turkmenistan.

"One can call it a road of life," Rakhmon said after the ceremony. "In the age of globalisation and integration, it will boost investment and trade."

The project aims to link the neighbours' existing rail networks with other parts of Eurasia, primarily with the countries of the post-Soviet Commonwealth of Independent States and the Baltic region.

Agreeing to start the project in March, the two post-Soviet Central Asian nations and Afghanistan invited the Islamic Development Bank and the Asian Development Bank to fund construction of the new railway.

The two lenders have expressed interest in the project but have so far made no clear commitment to finance the railway's construction.

Turkmenistan, which holds the world's fourth-largest natural gas reserves and is much richer than its volatile neighbours, will finance the construction of an 85-km (53-mile) stretch running from Atamurat to Imamnazar at the Afghan border, though it will look for external funding for other infrastructure.

Afghanistan, ravaged by decades of civil war and foreign occupation, has offered Turkmenistan to build a 35-km (22-mile) stretch from the Turkmen border to the Afghan town of Andhoi.

Another, longer stretch, would eventually link Andhoi to Pyandzh in southern Tajikistan.

For fast-growing Turkmenistan, which was once one of the poorest Soviet republics, this is the second large-scale regional railway project.

Last month Berdymukhamedov and Kazakh President Nursultan Nazarbayev opened a North-South corridor railway linking oil-rich Kazakhstan and the Persian Gulf across Iran.

Kazakhstan, central Asia's largest grain exporter, plans to sell its wheat to the region via this link, which was financed by the Asian Development Bank and Islamic Development Bank. (Writing by Dmitry Solovyov; Editing by Mark Potter)