Kazakhstan - Transforming Rail and Connectivity in Kazakhstan Project (Middle Corridor Development)

Overview & Synopsis

Transforming Rail and Connectivity in Kazakhstan (Middle Corridor Development) for Kazakhstan has the development objectives of improving rail connectivity along the Kazakhstan segment of the Trans-Caspian Transport Corridor and strengthening the financial sustainability of the national railway operator, Kazakhstan Temir Zholy (KTZ), with Phase 1 focused on improving connectivity and resilience along the Kyzylzhar–Mointy section. Component 1: Railway Connectivity will finance a 322.3 kilometer greenfield Mointy–Kyzylzhar rail link that shortens the corridor by 149 kilometers, decongests existing bottlenecks, and increases throughput to about 28 train pairs per day by providing a single-track 1,520 millimeter main line engineered for future double tracking and electrification, with frequent passing sidings, integrated signaling and telecommunications, and double-stack container capability; Sub-components include (i) civil works and systems comprising earthworks, permanent way, autoblocking signaling, telecommunications, and power supply integrated into operational readiness, (ii) climate resilience measures such as elevated embankments, enhanced drainage, and artificial structures sized for one-in-one-hundred-year flood events to withstand extreme temperatures and precipitation, and (iii) passenger access and gender inclusion through three new passenger stations and support for female technical internships with contractors to strengthen women’s participation in highly skilled roles. Component 2: Institutional and Implementation Support will deliver targeted technical assistance and capacity building to enhance KTZ’s financial sustainability and project execution; Sub-components include (i) a tariff reform transition plan to implement a full cost recovery methodology and eliminate cross-subsidies in domestic freight, (ii) measures to enhance private sector participation and diversify access to finance by evaluating local bond financing, public private partnerships, and opportunities in domestic mainline operations, intermodal and last-mile logistics, (iii) preparation for an initial public offering through a needs assessment and corporate governance strengthening, and (iv) implementation support to improve financial management, environmental and social risk management, external auditing, monitoring and evaluation, results measurement, impact assessment, and operation of grievance and stakeholder engagement systems.