Rail­road to Pros­per­ity

Afghanistan’s min­eral de­posits, es­ti­mated at about $3 tril­lion, re­main un­tapped in the ab­sence of a rail­way net­work.

Southasia - - CONTENTS - By S. Khalique The writer is an an­a­lyst based in Karachi and con­trib­utes on se­cu­rity and eco­nomic is­sues.

Afghanistan’s min­eral de­posits, es­ti­mated at about $3 tril­lion, re­main un­tapped in the ab­sence of a rail­way net­work.

Through­out the 19th century, the Bri­tish Em­pire was wor­ried that Rus­sia might in­vade In­dia through Afghanistan, thereby threat­en­ing the for­mer’s rule in the sub­con­ti­nent. Even though a full-scale Rus­sian in­va­sion and oc­cu­pa­tion of In­dia was un­likely, there were con­cerns that any such move to­wards In­dia would tie up the Bri­tish sources in deal­ing with both the Rus­sians as well as a pos­si­ble In­dian up­ris­ing. For Great Bri­tain, the In­dian North West Fron­tier, now part of Pak­istan, had great strate­gic im­por­tance. Thus, it was im­per­a­tive to limit ac­cess to the In­dian sub­con­ti­nent and al­low only one route into Afghanistan with the sole pur­pose of de­ploy­ment of troops from Karachi to counter any threat to In­dia. So while the rail­way net­work in In­dia de­vel­oped through­out the 19th and 20th cen­turies, Afghanistan was left to make do with a road net­work.

To­day, there is a rail ser­vice be­tween Mazar-i-Sharif in Afghanistan and Uzbek­istan in the north. The Afghan govern­ment ex­pects to have the line ex­tended to Kabul and then to the east­ern bor­der town of Torkham, con­nect­ing it with the rail­way net­work in Pak­istan. The work is be­ing car­ried out by China’s Met­al­lur­gi­cal Group Cor­po­ra­tion (MCC) and is ex­pected to be com­pleted this year. The project was paid for with a $165 mil­lion grant from the Asian De­vel­op­ment Bank. An­other 330-km rail­way project be­tween Mazar-i-Sharif and Turk­menistan was launched in June 2013. Sim­i­larly, In­dia is fi­nal­iz­ing a plan to con­struct a 900-km rail­way line that will con­nect the Chaba­har Port in Iran, be­ing built with In­dia’s help, to the min­eral-rich Ha­ji­gak re­gion of Afghanistan.

It is im­por­tant that these am­bi­tious rail­way plans are com­pleted be­cause now Afghanistan needs a proper rail­way net­work more than ever. Con­sider, for ex­am­ple, the Naibabad freight ter­mi­nal near the north­ern Afghan town of Mazar-i-Sharif where wheat and con­struc­tion ma­te­ri­als that come from Uzbek­istan are un­loaded. These are then loaded onto trucks that carry the cargo through the Hindu Kush Moun­tains to the rest of the coun­try be­cause Afghanistan has only 47 miles of rail track.

The Karzai govern­ment had hoped to change this by con­struct­ing a 2,237 mile na­tional rail­way line to trans­port not just food and other goods but some­thing more vi­tal to the strug­gling na­tion’s econ­omy: its vast nat­u­ral re­sources, in­clud­ing iron, cop­per, and gold. In 2010, the Pen­tagon es­ti­mated that Afghanistan is sit­ting on min­eral de­posits worth about $1 tril­lion. In 2011, the Afghan govern­ment put the value at $3 tril­lion. This po­ten­tial wealth has re­mained un­tapped be­cause there is no way to safely and re­li­ably ship the min­er­als from the coun­try’s mines.

Re­ports in­di­cate that Afghanistan’s 25-year eco­nomic plan aims to con­nect the coun­try to the out­side world via an es­tab­lished rail­way net­work – tracks that run through Asia, Europe, and the Mid­dle East. “The need to de­velop a rail­way net­work that car­ries Afghanistan’s min­er­als to coun­tries with sea­ports is grow­ing by the day,” said Joji Tokeshi, Coun­try Di­rec­tor for the Asian De­vel­op­ment Bank in Kabul. In fact, the ADB pro­vided a $165 mil­lion grant that cov­ered most of the cost of build­ing the short rail­way net­work from Uzbek­istan’s bor­der to Mazar-i-Sharif in 2011. Even so, the con­struc­tion of a na­tional rail­way has proved to be an im­pos­si­ble task, given the volatile po­lit­i­cal and law and or­der sit­u­a­tion in the coun­try.

Govern­ment of­fi­cials say that it has be­come in­creas­ingly dif­fi­cult to pro­tect trains and tracks from at­tacks by the Tal­iban and other mil­i­tants – an is­sue that will be­come more press­ing af­ter the Afghan forces take over from the U.S. forces later this year. A U.S. army ma­jor claims that this is prob­a­bly the big­gest chal­lenge that the new govern­ment of Afghanistan is faced with – that is, hav­ing se­cu­rity while build­ing the net­work and then later main­tain­ing the rail line. At the mo­ment, there are 470 po­lice of­fi­cers as­signed to pro­tect Afghanistan’s ex­ist­ing rail track which is about 0.02 per­cent the length of the pro­posed rail line. The U.S. forces have rec­om­mended that the vil­lagers along the pro­posed routes should be given a stake in the project and also pro­vided

mon­e­tary as­sis­tance to im­prove their liv­ing con­di­tions. This way, they will help in keep­ing the tracks safe. So, while se­cu­rity may be a chal­lenge, it is not im­pos­si­ble to over­come.

Then there is also the mat­ter of ac­quir­ing the money to fi­nance the rail net­work which Afghanistan doesn’t have at the mo­ment. The govern­ment has tried to get for­eign cor­po­ra­tions to foot a por­tion of the bill. Com­pa­nies that win lu­cra­tive min­ing con­tracts in Afghanistan must agree to build tracks con­nect­ing the mines to rail lines in neigh­bor­ing Iran and Pak­istan. That hasn’t worked out very well.

When Chi­nese in­vestors, led by the state-owned China Met­al­lur­gi­cal Group, won a $3 bil­lion bid to mine cop­per at Mes Ay­nak, 31 miles south of Kabul, they pledged to lay a stretch of rail track. Yet, seven years later, the project is stalled amid se­cu­rity con­cerns and the dis­cov­ery of Bud­dhist ar­ti­facts at the site. Ge­o­log­i­cal sur­veys last year also found that Afghanistan lacks the re­serves of phos­phates nec­es­sary to smelt cop­per, push­ing the project back fur­ther. Ac­cord­ing to Ab­dul Jamil Hares, the for­mer Afghan Deputy Min­is­ter of Mines, ne­go­ti­a­tions were un­der­way to find a way around this.

An $11 bil­lion iron ore project in Bamiyan prov­ince, 62 miles west of Kabul, is also de­layed. A group led by In­dia’s state-con­trolled Steel Author­ity of In­dia won’t be­gin con­struc­tion in part be­cause it wants the Afghan govern­ment to con­trib­ute to the cost of the rail­road. Al­though the In­dian group re­mains com­mit­ted to the min­ing project, it also ex­pects the Afghan govern­ment to pro­vide them with some ba­sic fa­cil­i­ties, such as the rail net­work con­nect­ing the mine to the port.

Mean­while, donor agencies such as the ADB along with the U.S. ad­vi­sory team are try­ing to get things mov­ing by draw­ing up plans for a 209-mile sec­tion of rail­way line in the north. Lay­ing rail tracks na­tion­wide will cost about $2 mil­lion per kilo­me­ter on flat lands and as much as $17 mil­lion per kilo­me­ter through moun­tain­ous re­gions, say of­fi­cials.

Only time will tell whether or not these projects will see the light of day but one thing is for sure: Afghanistan needs these rail­way net­works if it hopes to es­tab­lish it­self as a trad­ing hub in Cen­tral Asia.

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