The World Bank explains that its loan will help to pay for the construction of a 127-kilometer, electrified, high-capacity rail line across the Bosphorus strait. INRAIL will also bypass the Istanbul metropolitan area, significantly improving capacity along the route.

A transformative project for Türkiye

INRAIL will be a highly impactful project for transport and the broader economy of the area, says the World Bank. “This project is a strategic and transformative investment for Turkey. By eliminating the critical railway bottleneck in the Bosphorus strait, it will enhance the resilience and efficiency of railway infrastructure, increasing Turkey’s competitiveness and strengthening its role as a logistics hub”, the Bank quotes its Türkiye Country Director, J. Humberto Lopez, as saying.

“Indeed, the project will accelerate growth, create jobs, and contribute to more sustainable transportation. Furthermore, INRAIL will benefit the wider region by enabling the transport of goods between Europe and Central Asia, connecting to other international corridors such as the Middle Corridor and the Development Route, which provides traffic between Europe and the Gulf via Iraq. In fact, this is much more than just building a bridge; it’s about connecting continents.”

In total, rail freight capacity across the Bosphorus should grow from 3 million tonnes annually to 50 million tonnes.

This funding will be allocated to two major project components: railway connectivity and institutional support.

“Beyond enabling critical infrastructure investments, this project supports important reforms that will strengthen Kazakhstan Temir Zholy’s financial sustainability and long-term competitiveness,” said Andrei Mikhnev, World Bank Country Manager for Kazakhstan and Turkmenistan.

“By combining phased investments, institutional reforms, and private capital mobilization, we are helping build a modern rail system that will deliver lasting economic and environmental benefits for Kazakhstan and the wider region.”

A new railway, tariffs and IPO support

The project will finance a new 322.3-kilometre railway line between Moyynty and Kyzylzhar in Kazakhstan. It will shorten the east-west corridor by 149 kilometres and enable double-stack container operations. The railway will be equipped with modern signalling and telecommunication systems, with the possibility of future expansion and electrification.

In terms of institutional support, the project will aid railway operator KTZ to implement tariff reforms, explore alternative financing mechanisms, improve financial and environmental management and prepare for the upcoming initial public offering (IPO).

The World Bank says that the project will contribute to a tripling of the freight volume on the Middle Corridor by 2030. It should also help to halve end-to-end transit times along the route. Additional benefits include a reduction in carbon emissions, improved market access, lower trade costs, job creation and local economic development.

A key feature of the project’s approach is the gradual reduction in reliance on sovereign guarantees. The initiative is a component of the joint plan for developing Kazakhstan’s Middle Corridor, which leverages the combined expertise and financial instruments of the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA).

Support for Syria as well?

Several Middle Eastern media outlets also report World Bank support for Syria’s rail network. Reportedly, Syria will receive 50 million dollars in financing to develop rail transportation. This would include a purchase of 15 new locomotives and personnel training. However, this funding does not seem to be confirmed by the World Bank.

The potential of the Middle Corridor is limited by bottlenecks, which mostly exist at the intersections of railways and ports, such as Aktau and Kuryk in Kazakhstan and Turkmenbashi in Turkmenistan. Pryce also emphasised the importance of harmonised approaches to digitalising procedures and regulations, which would ensure smooth operations for corridor users.

Multilateral development banks lack the necessary funds to meet current investment demands, Pryce added, and said that the World Bank is addressing this by refining its partnership model, which involves attracting private capital and collaborating with governments.

Kazakh expectations

The Kazakh Ministry of Finance expects the Middle Corridor freight volume to grow to 7,2 million tonnes by 2027. In 2024, that number was 3,3 million tonnes. For 2025, it expects the corridor to reach 5,2 million tonnes, and 6 million tonnes in 2026.

The expectation for 2027 is a step back from earlier projections. In May, Deputy Foreign Minister Roman Vasilenko said that Kazakhstan plans to increase the freight volume on the Middle Corridor to 10 million tonnes by 2027, according to publication LogiStan.

Such a railway would cover a big part of the 2023 Development Road (IDR) plan. That plan hopes to link the Umm Qasr port to Türkiye, creating a logistics link that could reach all the way into Europe.

“As Iraq shifts from reconstruction to development, enhanced trade and connectivity can stimulate growth, create jobs, and reduce oil dependency”, commented Jean-Christophe Carret, World Bank Middle East Division Director. “The IREM project is vital for transforming Iraq into a regional transport hub and helping achieve the IDR’s goals of improved connectivity and economic diversification and growth.”

The Umm Qasr – Mosul railway is expected to move 6,3 million tonnes of domestic freight and 1,1 million tonnes of imports and exports by 2037. That includes bulk commodities, but also containerised ones.

“The issue of updating the fleet of locomotives for UZ is critical and urgent. The collaboration of the World Bank and the EBRD is an example of how one of the largest international financial institutions joined forces to implement such a large-scale project. Obtaining new and high-tech electric locomotives will significantly increase the efficiency of freight transportation”, UZ’s CEO Yevhen Lyashchenko stated.

Switzerland also steps in

At the same time, Switzerland also announced an extra grant of approximately 10 million euros for UZ. The money is supposed to be spent on rail fasteners in order to securely fix the rail in place. It will facilitate the restoration of railway infrastructure, primarily in the directions of transport corridors bordering EU countries, in the direction of ports and the Trans-European Transport Network.

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The World Bank carried out an extensive study on the route. The financial institution argues that the CTC route can play an important, if not the most important, role in developing the Middle Corridor with efficiency and agility. However, it claims that “despite some investments taking place, the CTC is not meeting its potential capacity to facilitate container cargo movement between China, Central Asia, and Europe, due in part to physical and nonphysical barriers along the corridor in Azerbaijan and Georgia”. As a result, it came up with some proposals.

A shared customs environment

“A one-stop-shop solution would be the ideal model that Georgia and Azerbaijan could implement in customs processes along the CTC route”, says the study. According to the World Bank, “customs in Azerbaijan and Georgia have improved in recent years. Based on survey results, there are no significant issues in Georgia, while in Azerbaijan, users noted that customs have made some positive changes in recent years”.

Yet, more improvements could help the two countries develop their shared route. In the short term, the World Bank advises the two countries to focus on “improving customs procedures including information flow and move to a one-stop-shop solution”. On top of that, they should invest in training the customs employees and make them eligible to work in coordination with other countries.

In the long run, Azerbaijan and Georgia should focus on developing a single customs area with simplified procedures and efficient operational times to avoid border delays. Additionally, the two countries are advised to create a ‘green corridor’ where customs checkpoints will no longer be used, and trains will be able to transit seamlessly and without stops.

Tariff coordination the weakest point

One of the CTC’s disadvantages is the lack of sufficient transparency in several procedures. For instance, the World Bank emphasises that “there is limited information on how tariffs are set and what factors affect them. Moreover, the coordination required to establish a unified tariff for the entire length of the route seems to be lacking. According to survey respondents, simplifying tariffs and aligning corridor participants’ interests would greatly reduce the cost of transportation. This lack of coordination was underscored as the weakest point affecting the corridor”.

Transparency is also crucial for the rest of the Middle Corridor. Not only in terms of tariffs but also in terms of capacity allocation and who gets prioritised over whom. The World Bank says that an open access model would be ideal in this case. “Open access is a way to ensure that all possible clients feel they have fair, transparent, and nondiscriminatory access to infrastructure and services, and at the best available tariffs. Implementing an open access policy in Azerbaijan and Georgia might improve the use of existing infrastructure while making the corridor more attractive to private operators”, states the institution.

A well-structured joint venture between the parties and a Corridor Management Information System (CMIS) would be a good solution to tackle the issues mentioned above. The idea of a joint venture between the countries is already being considered, with information citing that 2023 will be the year of its establishment. However, the World Bank warns that to establish the joint venture, the parties involved should dive deep into it and ensure that they will create a business model commercially attractive. As for the CMIS, it would contribute to making the corridor accessible through a “single window for commercial, operational and financial purposes”.

Block trains a top priority

As part of the joint efforts between Azerbaijan and Georgia, the organisation of “block container train schedules that will allow seamless container shipments with predictable capacity” is a top priority. For this purpose, the countries are advised to set up a tactical operating team responsible for ensuring on-time delivery of block trains.

Infrastructure is an integral component of launching efficient, well-organised and punctual block trains. Therefore, Azerbaijan and Georgia should “reconfigure existing infrastructure including block length, passing sidings and speeds to meet container block train operations”, says the institution. Nevertheless, infrastructure should be generally improved also to facilitate multimodal/intermodal transport. Among other things, the World Bank explains that it is pivotal to improve intermodal connectivity in the South Caucasus and, specifically, the intermodal port infrastructure in the Caspian and Black Seas.

Additionally, it is essential to “reconfigure the Akhalkalaki Intermodal Station in Georgia to allow two 750-meter-long trains to park side by side for rapid container transhipment”. Finally, for intermodal infrastructure and transport to work like a Swiss clock, the financial institution suggests the creation of an “intermodal transport unit that would work on a strategic level to develop intermodal freight and on a tactical level to ensure that containers are not delayed on vessels and in port”.

Track Access Charges Summit

On 20 and 21 April, the Track Access Charges Summit takes place. During this hybrid event, the most recent developments in track access charging (TAC) will be discussed over two days by experts from all over the world. The World Bank will be also represented there with a presentation on the CTC  and Middle Corridor tariff model and the needed developments to make it more efficient.

Are you interested in attending and finding out more on the topic? You can still register here.

Also read:

• Middle Corridor room for 60-80 weekly trains this fall, is this enough?

• Middle Corridor joint venture to be established in 2023

• Capacity or not, the Middle Corridor is on the rise

• Middle Corridor unable to absorb northern volumes, opportunities still there

The aggrevated LPI combines the four most recent LPI editions. Scores of the 2012, 2014, 2016 and 2018 LPI surveys were used to generate a “big picture” to better indicate countries’ logistics performance, the World Bank explained. The countries are evaluated based on six factors, being customs, infrastructure, international shipments, logistics competence, tracking and tracing and timeliness.

Germany remains on top

Germany is considered to be the best performing country in the field of trade logistics. Only in 2012 its top position was taken over by Singapore, but it has remained the leading country since 2014. “Germany remains Logistics World Champion! Proud to be part of it!” commented DB Cargo on Twitter.

The aggrevated LPI showed a shared second place for the Netherlands and Sweden, followed by Singapore and Belgium, also equal in ranking. Singapore is the only non-European country in the top five. Also the top 20 is dominated by European countries, accounting for 14 ranks. Other countries in the top 20 are Japan, Hong Kong, UAE, Canada and Australia.

Noteworthy

The worst performing countries in the field of trade logistics are Somalia, Haiti, Afghanistan, Sierra Leone and Syria. Noteworthy is a 27th place for China and a 31st for Poland, both important countries on the New Silk Road. Similarly, Kazakhstan ranks 77 and the Russian federation 85, while Turkey and Iran rank 37 and 81 respectively.

Although holding a shared third place, Belgium scores highest in terms of international shipments and equally high as Germany in timeliness. Also Sweden and Hong Kong score better than Germany in terms of international shipments. The World Bank comments: “Each year’s scores in each component were given weights: 6.7 per cent for 2012, 13.3 per cent for 2014, 26.7 per cent for 2016, and 53.3 per cent for 2017. In this way, the most recent data carry the highest weight.”

The two routes cover a total length of 3,360 kilometres and are the first of a series of new freight-only routes along India’s busiest freight corridors. The Western DFC covers a distance of 1,483 kilometer, starting at Mumbai and passing through the states of Maharashtra, Gujarat, Rajasthan and Haryana to terminate in Uttar Prada. The Eastern DFC covers a total distance of 1,839 kilometres and connects Punjab, Haryana, Uttar Pradesh, Bihar, Jharkhand and West Bengal.

Shorter transit times

Construction of the two corridors will transform the way goods are transported in India, according to World Bank, which supports the project financially. “The DFC lines are being built for maximum speeds of up to 100 kilometer per hour, compared to current average commercial freight speed of about 25 kilometer per hour. The lines will also have a carrying capacity of 6,000 to 12,000 gross ton of freight trains at 25-ton axle load. The DFCs will allow much shorter transit times from freight source to destination. And in some cases reduce the delivery time to more than fifty per cent.”

Higher loads of cargo will be transported faster, cheaper and more reliably, the World Bank summarised. An official of Indian Railways was cited as promising a substantial reduction of the rail freight tariffs once the lines were commissioned in the India Times of this week.

Re-build Railways

The Re-build Railways Plan further includes measures to improve the safety of India’s railway system, such as a tie up with an Australian company called Track IQ that will provide a sensor-based system to detect rail cracks. “Making railways safer is the first priority. We are tying up with Australia to get the technology. We have set the target to reduce accidents by fifty per cent in next two years”, the Indian Railway official was cited.

Indian Railways has increased spending on its railway structure in the past four years. In addition to the Western and Eastern DFC, four more DFCs are planned for the future: the East-West, North-South, East Coast and South West Dedicated Corridors.

India’s positioning on the southern fringes of the ‘New Silk Road’ linking Asia with the west means it is ideally situated to accommodate Eurasian rail transshipments. While much of the current focus is on the Russian transit routes, the so-called ‘southern corridor’ is also likely to take off in a similar way.

Trans-Asian Railway

It is is part of the long-term Trans-Asian Railway programme, a United Nations project designed to establish an integrated freight rail network across Europe and Asia. The southern corridor will go from Europe to south east Asia, connecting – among others – India and ultimately China and the Far East.

Until then India is focusing strongly on strengthening its domestic freight infrastructure, and through the state-run Dedicated Freight Corridor Corporation of India Ltd, it has already developed the Western Dedicated Freight Corridor (WDFC) and Eastern Dedicated Freight Corridor (EDFC), which connect Maharashtra & Haryana, and Punjab & Bengali states respectively.

‘Criss-cross movements’

It is now says planning a southern version, connecting Tamil Nadu and Karnataka states with western states like Goa and Maharashtra. The announcement was made by Suresh Prabhu, Indian Railway Minister, during a visit to Tamil State. He said that the 890 kilometres-long SDFC would see ‘smooth movement’ of freight traffic. The ‘criss-cross movement’ of freight across the country would also be possible, boosting India’s freight movements, he added.

The SDFC would pass through the Bangalore-Chennai Industrial Corridor, an area also being promoted by Japan & India, along with a major seaport in Mangalore and Whitefield ICD, one of India’s major inland container depots, through a tunnel in the Western Ghats region. There are also proposals to extend this line to Mangalore in Karnataka state, where it will be able to connect with India’s biggest petrochemical complex and an international air cargo facility serving Europe and the Gulf states.

Further developed

The WDFC is 1,504 km and the EDFC, which is 1,856km, are being further developed with funding from the Indian Railway Ministry, the World Bank, Japan International Cooperation Agency (JICA) and through public-private partnerships. Indian Railways has also announced three more dedicated freight corridors in its 2016-17 budget that includes an East-West Dedicated Freight Corridor (EWDFC) connecting Bengal-Maharashtra; the 2,173km North-South Dedicated Freight Corridor (NSDFC) connecting Delhi-Tamil Nadu; and the 1,100km East Coast Dedicated Freight Corridor (ECDFC) connecting Andhra Pradesh-Bengal.

The Dedicated Freight Corridor Corporation of India Limited is a corporation run by the Indian Ministry of Railways and is responsible for planning and development, sourcing funds, construction, maintenance and all other operations of DFCs across the country.