VZCZCXRO1412
RR RUEHAST RUEHBI RUEHCI RUEHDBU RUEHLH RUEHLN RUEHNEH RUEHPW RUEHSK
RUEHVK RUEHYG
DE RUEHNT #1255/01 2011009
ZNR UUUUU ZZH
R 201011Z JUL 09
FM AMEMBASSY TASHKENT
TO RUEHC/SECSTATE WASHDC 1159
INFO ALL SOUTH AND CENTRAL ASIA COLLECTIVE
CIS COLLECTIVE
RHMFIUU/HQ USCENTCOM MACDILL AFB FL
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHNT/AMEMBASSY TASHKENT
RUEKJCS/SECDEF WASHINGTON DC

UNCLAS SECTION 01 OF 02 TASHKENT 001255 
 
SIPDIS 
DEPT FOR SCA/CEN 
 
E.O. 12958: N/A 
TAGS: MARR ETRD ECON PREL AF UZ
SUBJECT: UZBEKISTAN:  ADB SIGNS MOU ON AFGHAN RAILWAY 
 
REF: TASHKENT 1245 
 
¶1. (SBU) SUMMARY.  Hong Wang, the ADB's visiting Director for 
Transport and Communications, told us on July 16 that he expected 
to sign an MOU with the GOU to build a rail link from Hayraton to 
Mazar-i-Sharif in Afghanistan.  He said construction would begin 
this October, and an ambitious timetable has completion scheduled 
for October of next year.  The budget will be between $120-150 
million.  In a follow-up conversation the next day, ADB country 
director Hong Wei told us the MOU had been signed following an 
evening meeting with First Deputy Prime Minister Rustam Azimov. 
END SUMMARY 
 
 
 
ADB TO FINANCE AFGHAN RAILWAY 
 
----------------------------- 
 
 
 
¶2. (SBU) Hong Wang, Director of the Asian Development Bank's (ADB) 
Transport and Communications Division, has been in Tashkent this 
week to discuss construction of a 70-80 km rail link from Hayraton 
to Mazar-i-Sharif in Afghanistan.  The GOU has long advocated this 
link, and the ADB has been conducting a feasibility study since 
early this year.  Wang said he would meet with First Deputy Prime 
Minister Rustam Azimov that evening and that he expected an MOU to 
be signed within a day.  In accordance with this MOU, the contract 
to build the railway will be awarded in mid-October with completion 
scheduled within 12 months.  This will be a fixed price, fixed 
schedule contract with penalties to be imposed for failure to meet 
either price or schedule.  The budget is expected to be $120-150 
million USD.  Uzbek Railways has the inside track for this 
contract, and no other serious contenders are expected.  This will 
be the first time that Uzbekistan builds a rail line outside its 
borders.  An independent Supervisory Consultant will be chosen to 
oversee construction.  Following completion, Uzbek Railways will 
maintain and operate the new line for three years. 
 
 
 
¶3. (SBU) The new rail line will be built to the wider Russian gauge 
to make it compatible with shipments coming through Russia and the 
CIS.  Wang told us that in addition to the Uzbek line, there are 
also short rail lines coming into Afghanistan from Pakistan and 
Turkmenistan.  The ADB at present envisions these lines being 
extended to the Afghan ring road using the gauge standards of the 
existing lines, with trans-loading facilities then moving the loads 
to cars of a uniform gauge that will be standardized within the 
ring road.  This is all considered Phase 1 of the Project.  Phase 2 
will begin with a feasibility study on extending the line from 
Mazar-i-Sharif to Herat on the Iranian border. 
 
 
 
¶4. (SBU) The GOU has raised the issue of security during 
construction and is looking for assurances from the Government of 
Afghanistan.  Wang that both Kabul and local government in 
Mazar-i-Sharif have said they are committed to ensuring the safety 
and security of the project.  Wang said that Uzbek Railways expects 
to have up to 500 Uzbek workers in Afghanistan during construction. 
 
 
 
MOU SIGNED - NEXT STEPS 
 
----------------------- 
 
 
 
¶5. (SBU) On July 17 ADB Country Director Hang Wei told us that Hong 
Wang had met with First Deputy Prime Minister Rustam Azimov the 
previous evening and that the MOU on the Hayraton to Mazar-i-Sharif 
link had been signed.  According to Wei, the Uzbeks will send a new 
team of engineers into the field to choose the final routing and 
prepare a final cost estimate.  (NOTE:  Although the route from 
Hayraton is flat with few obstacles, some route variations are 
possible and one short bridge may be required.)  Wei said one issue 
of concern is the source of the rails used in the construction. 
Uzbekistan traditionally buys rails from Russia or Ukraine, but the 
ADB's mandate does not extend to purchases from these countries.  A 
waiver for this purchase may be required, or other sources for 
rails will need to be identified.  Nevertheless, Wei said the GOU 
 
TASHKENT 00001255  002 OF 002 
 
 
had agreed to the schedule, and he is optimistic that construction 
will begin on schedule in October. 
 
 
 
¶6. (SBU) ADB's next step will be to convince its Board of Directors 
that the project can be completed within the accelerated timeline. 
Wang requested that we express our support of the project to the 
U.S. representative on the board. 
 
 
 
COMMENT 
 
------- 
 
 
 
¶7. (SBU) We often hear reports that Hayraton is a major bottleneck 
for supplies being sent to NATO forces via the Northern 
Distribution Network (reftel).  The facilities in Hayraton are 
limited and out-of-date.  The new rail link to Mazar-i-Sharif, 
which is located on the Afghan ring road, will do much to eliminate 
this bottleneck.  The news that the ADB has concluded an MOU for 
construction of this link is very welcome news indeed. 
BUTCHER