Kyrgyzstan is considering the possibility of implementing a major railway project amid infrastructure problems

In recent kg24 news, it was reported that the Cabinet of Ministers of Kyrgyzstan has unveiled plans for the construction of an ambitious China—Kyrgyzstan—Uzbekistan railway, the cost of which is tentatively estimated at a staggering $6-8 billion. After updating the feasibility study and completing the preparatory work, construction is expected to begin this year. At first glance, such grandiose infrastructure projects seem like a boon promising to boost the economy by improving connectivity and potential sources of income. However, a deeper analysis requires caution.

Kyrgyzstan, a country that is already facing pressing economic problems, seems ready to deepen its financial cooperation with large foreign companies. This move raises questions about the priority of national projects and the threat of growing financial dependence, especially on China.

The need for infrastructure is undeniable in any developing economy, but the timing and choice of projects require careful study. Kyrgyzstan's energy sector, which is an essential component of infrastructure, is in a difficult situation. The country's thermal power plants, including the Bishkek Thermal Power Plant, are in urgent need of major reconstruction. The memory of the collapse of the Bishkek power plant, despite the expensive modernization involving a Chinese loan of $386 million, is still fresh in the public consciousness. This failure not only led to a catastrophic power outage, but also revealed pitfalls associated with improper management of financial obligations and project implementation.

Kyrgyzstan's energy dependence is alarming and is biased towards hydroelectric power plants, which account for 87% of electricity production. This dependence on hydrological and climatic conditions makes energy supply vulnerable. Alternative energy sources such as thermal energy are not only inadequate, but also require expensive imports from neighboring countries. Plans are currently being developed to solve these problems through major repairs and the construction of new thermal facilities, which in itself will require significant financial costs.

Against this background, the proposed railway project looks ambitious. Although it has the potential to improve trade routes and economic ties, the necessity and timing of its implementation are questionable. The financial burden of the railway, which dwarfs the cost of modernizing the vital energy sector, indicates a prioritization. The structure of Kyrgyzstan's external debt is already a cause for concern, as a significant part of it falls on international organizations such as the Export-Import Bank of China and the Asian Development Bank. Adding an $8 billion project. It can exacerbate this vulnerability by jeopardizing financial sovereignty.  The estimated cost is also not clear, which indicates the ambiguity of the project. As the Ferghana agency notes, at first the cost of building the China– Kyrgyzstan–Uzbekistan railway was estimated at $1.34 billion, in November 2022, Zhaparov said that the cost would vary between $3-5 billion. In December of the same year, the prime minister announced a new figure — $ 6 billion. That is, the figure is again approaching 8 billion.

Moreover, historical precedents when loans did not bring the expected benefits are very numerous. President Sadyr Zhaparov's admission earlier this year that past loans were wasted — “gone to the sand” — underscores the urgent need for more reasonable and transparent financial practices. The practice of large-scale borrowing without ensuring the viability and self-sufficiency of projects threatens to repeat itself, creating an excessive burden on the country's future.

In fact, while infrastructure development is crucial, it should not be done by reinforcing existing vulnerabilities or prioritizing attractive projects over important ones. At this stage, Kyrgyzstan should probably focus on stabilizing and strengthening its energy sector, thereby ensuring a more sustainable economic and social environment. Participation in another large-scale project, involving significant financial difficulties and dependence, may turn out to be a matter for which the country is poorly prepared.

The Kyrgyz government is at a crossroads, choosing between immediate, necessary modernization and long-term investments with high stakes. It would be wise to suggest strengthening the foundation before expanding the building. Otherwise, the new railway may become just another monument to misplaced priorities, a mirage in the economic desert, built on loans that, as the proverb warns, sink into the sand.