Multidimensional logistics

Strengthening cooperation between Uzbekistan and Russia has yielded dividends. This is evidenced by the uptick in the volume of railway transportation between the two countries, Hikmatulla Rakhmetov, First Deputy Chairman of the Board of Uzbekistan Temir Yullari, JSC (Uzbekistan Railways, UTY), told 1520 International.

– Hikmatulla Narzullaevich, in which direction are relations between Russian and Uzbekistan railways currently trending?

– Russian Railways, OJSC, and UTY have enjoyed a long and fruitful cooperation.

According to our data, in the first 10 months of 2023, almost 9.6 million tons of cargo were transported between the two countries. Over the same period last year, there has been a 2.7-million-ton increase. The main cargo nomenclatures who saw volumes rise were oil cargo, chemicals, mineral fertilizers, assembled cargos, grain, milling products, and ferrous metals.

Recall that in early October, Oleg Belozerov, CEO and Chairman of Russian Railways Management Board, and Zufar Narzullaev, Chairman of the Management Board, met up in Moscow, where they discussed all areas in which the two companies are to work together. The meeting resulted in a signed memorandum setting the course for deepening cooperation in the field of railway transportation between Russia and Uzbekistan. We will continue expanding the bilateral and transit railway links between the countries as well as realizing the potential of existing and developing promising international multimodal transport corridors.

– Which areas of logistics is UTY currently focused on developing?

– We are paying considerable attention to developing international transport corridors (ITC). The Ministries of Transport of the Russian Federation, Kazakhstan, and Uzbekistan have already signed a memorandum for the Belarus-Russia-Kazakhstan-Uzbekistan-Afghanistan-Pakistan ITC. Negotiations are now underway with Pakistan, Afghanistan, and Belarus on joining this memorandum and establishing railway tariff discounts along the entire route. This should bring about an increase in the transportation volume along the ITC in 2024.

Per a signed memorandum between Uzbekistan, Turkmenistan, Iran, and Turkey for the development of the Uzbekistan-Turkmenistan-Iran-Turkey ITC, an agreement has been reached to apply railway transportation discounts which will help reduce costs by an average of 15-20%.

The participating countries have also struck agreements for an alternative corridor between Kyrgyzstan, Uzbekistan, Turkmenistan, and Russian Caspian Sea ports. In 2024 we plan to organize a test dispatch of trains along this route.

– What internal transformations are underway in the company?

– Today a radical railway transport reform is gaining momentum in Uzbekistan, which began on October 10, 2023 according to the decree of the Uzbek President. The document approved a number of measures to reorganize the structure of the UTY.

Responsibility for the functioning and development of the infrastructure facilities and locomotive fleet is currently in the hands of the established Temiryulinfratuzilma JSC.

Temiryulkargo is yet another organization that has been allocated into a separate company. The international multimodal transportation operator Temiryulkargo, JSC, will operate and maintain cargo car, container, and door-to-door transportation, establish logistics centers and terminals, and organize cargo logistics supply chains by arranging multimodal logistics terminal operation on the territory of other countries and other logistics services.

The new organization features cargo insurance and terminal services as well. We believe that the operation of Temiryulkargo JSC will provide a means to abandon the practice of state regulation and switch to a market-based tariffs setting mechanisms for cargo cars and containers.

In addition, the reform will accelerate the development of the private car fleet operators market as well as provide railway transport market entities equal access to railway infrastructure and locomotive traction railway transport market entities. The drafted organizational structure envisages that following the transformation, the new companies will be subordinated to UTY’s management. 

I would like to note that before beginning to reform the industry, representatives of Uzbekistan's railway industry, including the UTY’s management, held a number of meetings with foreign colleagues, one of the covered topics being their prior experience in reforming the railway industry. 

Now, according to industry transformation process coordination contracts previously concluded with international consultants, we expect to develop optimal interaction schemes between structural enterprises, and with the management apparatus.

Interviewed by Sergey Volkov