UZBEKISTAN
Uzbekistan, the heart of the Silk Road

Introduction - Investment climate - Financial development - Energy - Mining - Trade and industry -
Agriculture - Telecommunication - Transportation - Tourism - Conclusion


Transportation following
the ancient network od the Silk Road

This sector enjoys the history dating back to the Great Silk Road times, and has therefore an extensive and favourable infrastructure covering the whole country. Moreover, Uzbekistan benefits from a very strategic geographical location, which today is profitably exploited particularly by two most substantial incomes of the economy: tourism and natural resources. Today, the current infrastructure meets satisfactorily the domestic needs, but there are still many undergoing and future projects and programs aiming particularly at the regional coverage and the revival of the Silk Road countries.

Uzbek Railways

Uzbekistan has the most extensive network of railways and roads in the whole Central Asia, and a reliable airline company maintained by Lufthansa. The ongoing development focuses primarily at transportation of the country's various natural resources from the remote locations, and at further trading and exportation outside Uzbekistan. A new airport was opened recently at one of the mineral resources centres, Uchkuduk, and Tashkent airport will be undergoing heavy renovation in the near future. Concerning the railway lines, there are various projects to link Uzbekistan with the Trans Asian line from Istanbul to Beijing, as the road projects focus on the connection with Pakistan and China, and eventually with the Indian Ocean. Furthermore, under the TACIS Programme, the construction of the Trans-Caucasus line will provide Uzbekistan with long waited ports in the Black Sea. All these plans play an essential role in bringing the country to the world market, as Uzbekistan is a double land-locked country and cannot easily benefit from low cost and easy transportation options. One should also bear in mind, that these aims to adjoin Uzbekistan with Asia and Europe coincide with the historical routes, and widen the opportunities not only for trade and cargo, but also for tourism and transit passenger transportation to the region which was not that easily accessible for decades.

More concretely, feasible studies have been conducted and it was successfully acknowledged that Uzbekistan's geostrategic position, specifically Tashkent region, is the most favourable regarding the goods traffic between Europe, Far East, Russia and Central Asia. As a result of the research The Overland Port Project was established and it will gradually build storage terminals, containerisation, further transportation as well as a logistics and control centre, aiming at the reduction of trading cost. This project is an integral part of The Special Industrial Area Project, which according to the preliminary estimations and desires will attract foreign investors in the areas of high technology and particularly communication and other infrastructure.

In a double land-locked country like Uzbekistan, railways play a major role in the transportation of goods domestically and also internationally. The percentage of exported goods by railways is as high as 80%, and therefore The State-Joint Stock Company Uzbek Railways, created in 1994, is viewed to contribute more to the economy of the country rather than to tourism or passenger transportation. Actually it was only in 1998 when its passenger carriages were introduced. At the beginning of the independence, in early 90's, the government acknowledged a priority to develop this transportation sector under a resolution "On a general railway electrification programme for the period of 1993-1995 until 2000", as only 20-25 % of carrying capacities were currently being used, and a lot of potential was foreseen. Until now, year 2001, the Railways has faced a lot of new lines and construction, but is still eager to attract more foreign investors forinvestment projects on major activities of the company planned to be implemented till 2010, mainly in strengthening the communication channels, buying new carriages and modernizing the existing, constructing new railway lines, and implementing projects for speeding up the traffic of carriages.
The Chief of the Uzbek Railways, Mr. Ravshan Zakhidov confirms this "Along with the construction works held with the company's own funds, the company is working on attraction of foreign investments. It actively cooperates with the following financial institutions: the Japanese bank international cooperation (former Fund for overseas economic cooperation); the Asian development bank, the European bank for reconstruction and development, the KfV bank (Kreditanshtalt fur Videraufbau)".

Uzbekistan Airways

Uzbekistan inherited a sound, working airline from the Soviet Union, which is today maintained by Lufthansa. Over the years much has been done to improve this airline, Uzbekistan Airways, which now offers flights to and from more than 20 destinations all over Europe, the US and South East Asia and more than 30 cities in the CIS. Uzbekistan Airways motto is "safe and comfortable flights" - a goal that has made itthe best Central Asian airline.

However, competition in the passenger flight is constantly increasing and many other companies are entering the market such as e.g. Transaero which has a leading role not only in Russia, but also in Uzbekistan, where it occupies one of the leading roles among the other airlines. "I would say Transaero is one of the companies from former Soviet Union that brought the comfort level to Uzbekistan that has not ever been brought here. In other words we are considered the high service pioneers here in Uzbekistan. We brought the western way of service starting from ticket sales through the whole flight time," affirms the General Manager of Transaero office in Tashkent, Mrs. Nora Rakhimova. The airline, which is the second largest in terms of sales and passenger turnover in Russia and the third in the number of passengers, has been founded in 1990. Due to its constant increase in services and display of a high level of professionalism, Transaero also joined the 100 biggest airlines in the world. It not only offers a high level of flight safety but also international standard of regularity and punctuality and international standard of client service.

Compared to its neighboring countries, the transport infrastructure in Uzbekistan is more developed, since it possesses the largest network of railways and roads in Central Asia. Nevertheless, it still needs certain improvements in terms of linking the most remote regions of the country with the center and also ameliorate the current roads. Currently, Uzbekistan is trying to accelerate the process of improving the infrastructure by capitalizing its own potential and thus attracting investors that realize that Uzbekistan is one of the most significant emerging markets in Central Asia.

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© World INvestment NEws, 2001.
This is the electronic edition of the special country report on Uzbekistan published in Forbes Global Magazine.
August 6th, 2001 Issue.
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