Unlocking the Trans-Afghan Railway’s transformative potential

The Trans-Afghan Railway project represents a game-changing opportunity to build critical commercial ties throughout Eurasia, connecting China, Iran, Pakistan, and Afghanistan. However, its success hinges on unwavering determination to overcome the inescapable challenges of finance, security, and geopolitics.

F.M. ShakilSEP 4, 2023

Photo Credit: The Cradle

In a promising development for regional connectivity and trade, the Trans-Afghan Railway project received a much-needed boost when officials from Afghanistan, Uzbekistan, and Pakistan convened in Islamabad on 17 July. This ambitious initiative, six years in the making, seeks to forge a vital rail link between the three “stans.”

The tripartite agreement has garnered enthusiastic support from key stakeholders, including Pakistan’s finance and railway ministers. Together, the railway and transport authorities of these countries endorsed a proposed 573-kilometer rail connection, poised to connect Tashkent, Kabul, and Peshawar.

The envisioned route maps a connection from the holy city of Mazar-e Sharif in northern Afghanistan to the Kharlachi border crossing in Pakistan’s Kurram tribal district, potentially reducing travel time between Uzbekistan and Pakistan by five days and slashing transport costs by around forty percent.

Already in 2011, a 75-kilometer railway segment linking Hairatan in southern Uzbekistan to Mazar-i-Sharif marked a successful milestone for this endeavor. Although there has been a lull in activity, the July meeting unveiled ambitious plans to complete the railway by 2027, with the capacity transport up to 15 million tons of cargo annually by 2030.

Already in 2011, a 75-kilometer railway segment linking Hairatan in southern Uzbekistan to Mazar-i-Sharif marked a successful milestone for this endeavor.

The vision for regional connectivity

Uzbekistan, a landlocked Central Asian country, is driving the Trans-Afghan Railway initiative with renewed vigor to establish connectivity with Pakistan’s seaports, including Karachi, Gwadar, and Bin Qasim, thus gaining access to Persian Gulf and European markets.

This strategic move by Tashkent aims to bolster its transportation networks and foster the flow of trade across Eurasia. The prolonged conflict between Russia and Ukraine has prompted significant geopolitical realignment and instability, necessitating a reassessment of global supply routes.

Uzbekistan, in particular, finds itself in a transformative phase, where infrastructure projects once considered unviable are now making strides. The Trans-Afghan Railway project, championed by Uzbekistan, holds the promise of becoming a transformative force, connecting Tashkent to prominent export markets such as China and the EU.

Speaking to The Cradle, Zia Ul Haq Sarhadi, a director and coordinator of the Pakistan-Afghan Joint Chamber of Commerce and Industry (PAJCCI) says:

“The whole shebang of Southeast Asia and the Middle East getting cozy with Central Asia and the Caucasus depends on Afghanistan and Pakistan. If they manage to wrap up the Trans-Afghan Railway Line, it will be a game-changer for a united Eurasia. There is, however, a pressing need for the regional countries to get on board with this new corridor and put their reservations to rest. It’s crucial to address their concerns and clear the air so that this railway link can truly become the beating heart of regional trade, connecting China, Iran, Pakistan, Afghanistan, and the Central Asian nations.”

Is the trans-Afghan Railway just a pipe dream?

The envisioned trade route, which seeks to establish a connection between Uzbekistan and Pakistan via Afghanistan, carries profound geopolitical significance. Yet, its realization appears to be mired in a web of financial and security challenges, casting a shadow of uncertainty over its prospects.

One notable stumbling block is the improbable prospect of US financial institutions providing funding for such an ambitious project within the volatile terrain of Afghanistan. Furthermore, Pakistan’s past track record in handling similar initiatives has raised doubts, further complicating the project’s outlook.

Pakistan, known for its two-faced foreign policy, has often struggled to weather the storm when faced with pressure from Washington and the EU. Last month, Pakistan formally communicated to Tehran its inability to fulfill its contractual obligation to complete the Iran-Pakistan (IP) gas pipeline project due to external factors beyond its control. Pakistan has also requested Tehran to suspend the project and cited the pressure exerted by the US as a significant factor influencing this decision.

Earlier this year, Tehran had cautioned Islamabad that failing to meet its obligations by March 2024 would entail a hefty penalty of around $18 billion. Iran had claimed to have completed its part of the pipeline, stretching from the Persian Gulf to the border of Pakistan’s southwestern Baluchistan province.

Adding to the uncertainty, Pakistan abruptly halted the importation of crude oil from Russia just weeks after receiving its initial shipment, citing perceived limited advantages and a commitment to establishing long-term deals for discounted crude oil imports. This decision came a month after receiving the first shipment in June, following months of deliberations and public declarations.

Lawmakers in Peshawar, where the proposed railway corridor would culminate, express concerns about the feasibility of such a project given Islamabad’s current economic challenges. Doubts linger about the capacity of the Pakistani establishment to independently pursue policies that genuinely prioritize the economic well-being of the general population.

According to former senator and Awami National Party spokesperson Zahid Khan, the initiative remains largely on paper and will likely remain a distant dream until Pakistan can assert greater autonomy in shaping its economic policies, aligned with its unique regional circumstances. He tells The Cradle:

“Such projects are just an eyewash to deflect the public anger from the core realities at a time when the economy was on the rope and masses took to the streets to protest over the soaring food inflation and inflated power bills.”

Khan further underscores that Islamabad’s credibility suffered when it backed away from the IP gas pipeline project and rejected Russia’s crude oil imports, all while the nuclear-armed state grappled with a persistent energy crisis.

Taliban’s railway diplomacy

The complexity of the trans-Afghan Railway project lies in the financial capacity of its partners, none of whom can independently shoulder the multi-billion-dollar burden. In 2020, the tripartite team jointly sought funding for the project from the US International Development Finance Corporation (DFC) and other international financial institutions. However, contradictory estimates emerged, with Tashkent estimating $4.6 million and Islamabad estimating a substantial $8 billion, highlighting the financial challenge at hand.

Last month, the Taliban’s acting minister of commerce and industry, Nooruddin Azizi, decided to reach out to Russia and Kazakhstan to join forces in constructing a railroad that would connect the landlocked countries of Central Asia to the Arabian Sea coast.

This decision aligns with the Taliban’s broader vision, capitalizing on global shifts following the Russia-Ukraine conflict. It provides them with an opportunity to pave the way for economic development through enhanced regional connectivity.

By extending an olive branch to Kazakhstan and Russia, the Taliban aims to achieve multiple objectives, fostering regional connectivity through the Trans-Afghan Railway project. This endeavor not only brings Kabul closer to lucrative export markets in Central Asia but also lays the groundwork for stronger ties between these states.

Chinese considerations 

China, and potentially the Asian Infrastructure Investment Bank (AIIB), emerge as probable sources of financial assistance for the trans-Afghan Railway project. Beijing’s expanding trade volume with Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan, and Turkmenistan positions it as a key player in the region.

Based on the most recent data compiled by China’s General Administration of Customs (GTU) and released for the initial half of 2023, it is evident that Beijing’s exports to Central Asia amounted to approximately $26.4 billion during the first six months of the year. In contrast, the country recorded imports worth nearly $13.5 billion, primarily driven by the importation of oil and natural gas.

Chinese-Uzbekistan trade, in particular, witnessed substantial growth of 26.8 percent compared to the previous year, reaching over $6.1 billion. Chinese exports to Uzbekistan totaled approximately $5.46 billion, with imports from Uzbekistan valued at $629 million. China’s increasing bilateral trade with Central Asia illustrates its significant economic interests in the region.

Establishing a reliable railway corridor would serve China’s interests by facilitating cost-effective and efficient transportation of transit goods. Nevertheless, the project still faces numerous challenges and uncertainties that may influence Chinese decision-makers in allocating vital resources.

Security risks and countermeasures 

In an article published in the Hasht-e Subh Daily news website, Afghan railway engineer Nazir Ahmad Rasa claimed that the Trans-Afghan Railway project was directly threatened by ISIS. As a result, Afghanistan, Uzbekistan, and Pakistan will need to allocate a lofty budget to procure armored vehicles and recruit security personnel to safeguard the technical team.

“Given the occurrence of many operations conducted by ISIS in Kabul and Herat provinces, together with their explicit threats targeting this project, it is plausible to assert that this situation may provide a significant obstacle to its advancement,” Rasa explained.

He went on to add that the ongoing military operations conducted by the Tehrik-i-Taliban Pakistan (TTP) and other militia factions against the Pakistani government posed an additional risk to the execution of this project.

In response to security concerns in Afghanistan, Zia Ul Haq Sarhadi cites recent developments involving Pakistan facilitating cargo from China to Afghanistan under the Transports Internationaux Routiers (TIR) Convention.

This initiative promises a more efficient and cost-effective trade route, reducing travel time by approximately 70 percent and logistics costs by over 30 percent.

Sarhadi points out to The Cradle that goods from China are now being transported to Afghanistan through Pakistan’s Khunjerab Pass in the Gilgit-Baltistan region, which he sees as a positive sign for the security situation in the Islamic Emirate: “This development is a clear sign that the security situation in Afghanistan is not all doom and gloom,” he says.

He emphasizes that China’s successful transport of goods along the Silk Route from Kashghar to Afghanistan indicates that security may not be a major impediment to completing the Trans-Afghan Railway project.

“This ambitious endeavor would connect China, Iran, Pakistan, and Afghanistan to the Central Asian markets,” Sarhadi says.

Achieving the full realization of the Trans-Afghan Railway project holds immense potential for transforming the region, enabling the establishment of vital trade routes spanning across Eurasia and delivering substantial benefits to several developing countries. Nevertheless, the project necessitates an unwavering commitment from all stakeholders involved, in the face of economic and political pressures.