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The New Silk Road

by Frank Schnittger Wed Jul 24th, 2013 at 06:42:28 AM EST

As major global corporates like HP move from seaboard to western China in search of ever cheaper labour costs they are faced with increased costs and time delays trucking their produce to Chinese ports and thence to major markets in Europe. Now the
 Kazakhstan rail network has become a major alternative route to market for China based manufacturers. It is still 25% more expensive than the sea route to Europe, but takes, on average less than 21 days, compared to 5 weeks for the sea route. The difference is significant for high value fast moving computer goods like tablet computers where inventory costs and time to market are critical. The Kazakhstan, Russia and Belarus customs union has helped to reduce customs delays and pilferage and Kazakhstan has big plans to increase through traffic:
Hauling New Treasure Along the Silk Road

Kazakhstan forecasts that rail freight will grow to 7.5 million 40-foot containers by 2020, from just 2,500 transported from western China to Europe last year. That would be a huge increase that could sorely tax Kazakhstan's rail network; Mr. Alpysbayev said plans were under way to build extra tracks to help handle the traffic. But even at 7.5 million containers, rail freight transiting Kazakhstan would still be only a tenth of ocean freight between Europe and Asia.


Kazakhastan also has big plans to improve their rolling stock:

Hauling New Treasure Along the Silk Road

The locomotive was built at a new factory in Astana, Kazakhstan's capital, by a Russian-Kazakh joint venture that licensed the design from General Electric. The locomotive's body, generator, radiator and wheels are made in Kazakhstan, but G.E. exports the diesel engine from Erie, Pa. -- although G.E. and the joint venture are making plans to start building a diesel engine factory in Astana as well next year.

One problem is that Kazakhstan uses the wider Russian gauge rail tracks (1,520 mm/4 ft 11 5⁄6 in) which means cargo has to be moved from the narrower standard international gauge (1,435 mm/4 ft 8 1⁄2 in.) Chinese flat cars at the Chinese border and again back onto narrower international gauge cars and shorter trains (due to European regulations) at the Polish border. There is also much scope for futher technological and operational improvements: Hauling New Treasure Along the Silk Road

Just as the Pony Express of the American West relied on a series of riders to carry the mail, the H.P. train relies on a new driver, assistant driver and guards to board the locomotive at stops every three or four hours. Even the locomotives are replaced with fresh ones every third or fourth stop. At each stop, railway guards dressed in black or military fatigues hustle up and down the train, checking the cars for signs of tampering. Over the course of each three-week journey, more than 100 drivers and guards board the train.
Nevertheless it looks as if long distance train transport has become a viable competitor to sea transport, even for 7,000 mile inter-continental routes. Hauling New Treasure Along the Silk Road
The Kazakhstan rail initiative has spurred regional competition. On June 21, President Vladimir V. Putin of Russia announced a $43 billion infrastructure plan focused heavily on improving rail links to China, notably through improvements to the trans-Siberian railroad. The competition is ultimately a positive for manufacturers that make goods in China, like H.P.
And as Krugman has noted "In the United States, freight rail bottomed out in the 1970s, and has since been carrying a rising share of ton-miles -- around 40 percent these days". Of course trains being an instrument of socialist collectivism as far as US Republicans are concerned, it's not a subject that gets much prominence in the US MSM. No doubt their worst fears will be confirmed when they hear that
Kazakhstan, which already has 8,700 miles of rail, is rapidly building new rail routes to its borders with China in the east and Turkmenistan to the south. One goal is to connect China through Turkmenistan to Iran, assuming that the political situation in Iran improves, said Kanat K. Alpysbayev, the vice president for logistics at Kazakh National Railways. The Kazakh rail authority is also negotiating to help fix and manage the rail network in Afghanistan, where Chinese companies are building a vast copper mine.
It will be a bitter pill to swallow for Washington neo-cons if the Chinese are set to benefit from their Afghanistan "conquest" and if the Chinese also build much closer links to the Iranian economy via an enhanced Kazakhstan and Turkmenistan rail network. It will be much harder to enforce sanctions against Iran if much of their trade no longer needs to pass through international waters and Iranian dependency on "western" trade is reduced. Railways may be about to make a comeback as an infrastructure of increasing strategic and economic significance even at current oil prices.

Display:
Perhaps DoDo can advise on whether the Kazakhstani plans to expand their rail network include any narrow gauge or electrified lines to handle the proposed massive increase in through traffic between China and Europe.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Jul 23rd, 2013 at 09:25:49 PM EST
I do of coures mean standard or international gauge as opposed to narrow guage. wikipedia reports that Kazakhstan has abandoned construction of standard gauge lines.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Jul 23rd, 2013 at 09:44:44 PM EST
[ Parent ]
There is still Russia in between, so changing the rails in Kazakhstan makes no sense. They would sooner broaden the rails in China & Europe.
by das monde on Wed Jul 24th, 2013 at 08:08:49 AM EST
[ Parent ]
The only way it would make sense is if Kazakhstan, Russia and Belarus agreed to dedicate one new standard gauge (and electrified?) line to transcontinental traffic which would probably be required if they really wanted to make serious inroads into the market share the sea lanes now enjoy. Three weeks travel time for the rail route still seems way to long to compete for the majority of intercontinental trade traffic and will continue to be a limiting factor for the volumes (and prices) the rail route can attract.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Jul 24th, 2013 at 08:19:51 AM EST
[ Parent ]
From the article, the train journey itself took 19 days (two more days by truck to the final destination), including 26 hours of special delay due to the need to correct erroneously filled out paperwork. The 18 days matches what I was aware of.

Russia showed that it could go even faster than that, when the "Trans-Siberian in Seven Days" project resulted in a regular train from May this year (see RNB25). Of course, Kazakhstan would need to complete electrification and organise through running for something similar.

The solvable time-consuming obstacles include paperwork and border handover. The NYT article doesn't mention the implementation of common consignment (see RNB18). Another step is the agreement on creating a joint operator, merging the intermodal operations of Kazakhstan, Russia and Belarus.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Wed Jul 24th, 2013 at 03:59:28 PM EST
[ Parent ]
IIRC, the idea for a standard gauge line in Kazakhstan was intended as part of a standard gauge connection linking China and Turkey.
by Gag Halfrunt on Wed Jul 24th, 2013 at 08:25:53 AM EST
[ Parent ]
Details by DoDo in this post from 2006.
by Gag Halfrunt on Wed Jul 24th, 2013 at 08:33:07 AM EST
[ Parent ]
Thanks for the link. (I really should have checked Dodo's opus before publishing!).

Note:
European Tribune - Another Great Game

The most ambitious project is Kazakhstan's New Silk Road route: avoiding mountains, and the less stable 'stans, 3940 km of new normal-gauge railway will create a direct link between the Chinese and Iranian normal-gauge networks by 2010, if construction continues as planned (currently the Eastern end parallel to the broad-gauge line is in construction). Cost is $3.5 billion, oil money can finance it.

Is this the standard gauge route which wiki says has been abandoned?

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Jul 24th, 2013 at 08:47:15 AM EST
[ Parent ]
Yes. Before it was abandoned, there was an idea to build it along another route (across southern Russia and Ukraine instead of Iran and Turkey).

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Wed Jul 24th, 2013 at 03:14:46 PM EST
[ Parent ]
Half of Kazakhstan's rail network is electrified, although the two lines to the Chinese border (the second of which opened last December) aren't yet. Basically all rail expansion projects eye transit freight.

For my most recent overview of trans-Asian rail projects, see RNB21. The first section of the Kazakhstan-Turkmenistan-Iran link mentioned therein was opened in May (see RNB25). A development since then worth to note is the launch of the construction of a Turkmenistan-Afghanistan rail link which is to be extended to Tajikistan, bypassing Uzbekistan.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Wed Jul 24th, 2013 at 03:37:16 PM EST
[ Parent ]
The NY Times has an interactive feature next to the Silk Road article.

And here is some New Silk Road Forum:

a non-profit, self-funded organisation which seeks to promote the development of links between governments, international financial institutions, corporates and professionals of various disciplines within the "New Silk Road" countries.

by das monde on Wed Jul 24th, 2013 at 09:05:53 AM EST
Thanks for the links. Makes me pine for a transcontinental train ticket to visit countries otherwise quite difficult to access!

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Jul 24th, 2013 at 09:19:11 AM EST
[ Parent ]
Googling "New Silk Road" gives more, like this recent report and this 2007 book.
by das monde on Wed Jul 24th, 2013 at 09:59:59 AM EST
[ Parent ]
In the meantime, the Nice-Moscow train costs only 231 Euro (plus the Belarus transit visa).
by gk (gk (gk quattro due due sette @gmail.com)) on Wed Jul 24th, 2013 at 10:35:37 AM EST
[ Parent ]
I'd be more interested in the southern route to China and maybe taking in Iran. I imagine it would cost thousands to by as individual tickets.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Jul 24th, 2013 at 10:44:25 AM EST
[ Parent ]
That's what I thought about the Russian train, but I was wrong. Who knows what your train will cost.
by gk (gk (gk quattro due due sette @gmail.com)) on Wed Jul 24th, 2013 at 03:32:24 PM EST
[ Parent ]
There might not be a RailEurope ticket, but it does seem possible to get to Moscow from Vienna via Kiev.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jul 24th, 2013 at 01:00:06 PM EST
[ Parent ]


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