Uzbekistan Building Blocks for Integrated Transport and Logistics Development
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Report No: AUS0000970 . Public Disclosure Authorized Uzbekistan Building Blocks for Integrated Transport and Logistics Development Policy Paper Public Disclosure Authorized May 2020 Transport Global Practice Public Disclosure Authorized . Public Disclosure Authorized © 2019 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 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Acknowledgments This paper was written by Sevara Melibaeva (Senior Transport Economist and Task Team Leader), Richard Bullock (Railway Consultant), Asif Faiz (Transport and Highways Consultant), Jean Acri (Road Transport and Logistics Consultant), Jeffrey Delmon (Senior Infrastructure Finance Specialist), Jan Havenga (Logistics Consultant), Zane Simpson (Logistics Modeling Consultant), and Nursulu Isabaeva (Consultant). The team thanks Binyam Reja (Practice Manager for Transport in Central Asia, China, and Mongolia) for the guidance provided throughout the preparation. Valuable contributions and inputs were provided by Antoine Kunth (Senior Railway Specialist), Alexandra Spernol (Road Engineering Consultant), James Reichert (Senior Transport Specialist), Daniel Saslavsky (Economist), Cecilia Briceno-Garmendia (Lead Transport Economist), Mathilde Lebrand (Economist), Mansur Bustoni (Transport Specialist), Megersa Abera Abate (Transport Economist), Ruxandra Brutaru (Airline Consultant), Andres Ricover (Airports Consultant), and Anita Shrestha (Transport Specialist). The team acknowledges the following peer reviewers for their valuable comments during the preparation of this paper: Richard Martin Humphreys (Lead Transport Economist), Baher El-Hifnawi (Program Leader), Martha Lawrence (Senior Transport Specialist), Daniel Alberto Benitez (Senior Transport Economist), and Lincoln Flor (Senior Transport Economist). The authors are grateful to the Government of Uzbekistan for its support and collaboration in the preparation of this document, in particular the counterparts in the Ministry of Investments and Foreign Trade, Ministry of Finance, Ministry of Transport, Uzbekistan Railways, State Statistics Committee, State Customs Committee, Committee for Automobile Roads of the Ministry of Transport, and Associations of Freight Forwarders and Customs Brokers. Contents Abbreviations and Acronyms ................................................................................................................................. v Executive Summary .............................................................................................................................................. vi 1. Introduction ....................................................................................................................................................... 1 Country background .......................................................................................................................................... 1 Transport sector background ............................................................................................................................. 2 Objective of the Policy Paper ............................................................................................................................. 3 Structure and methodology of the report .......................................................................................................... 3 2. The Institutional and Policy Framework for Transport ....................................................................................... 5 The Ministry of Transport (MoT) ........................................................................................................................ 5 Institutional structure and governance in the road sector ................................................................................ 6 Institutional structure and governance in the railway sector .......................................................................... 12 Policy framework for road freight and logistics services ................................................................................. 15 Institutional structure and governance in the aviation sector ......................................................................... 18 3. The Road Sector ............................................................................................................................................... 21 Sector overview ................................................................................................................................................ 21 Mainstreaming road asset management practices ......................................................................................... 25 Mobilizing funding for maintenance and preservation of road assets ............................................................ 26 Developing domestic road construction and consulting capacity .................................................................... 27 4. The Railway Sector ........................................................................................................................................... 29 Sector overview ................................................................................................................................................ 29 Opportunities for restructuring UTY ................................................................................................................ 32 Establishing an independent rail freight business unit or company ................................................................ 33 Establishing a separate independent railway infrastructure business............................................................. 34 Supporting passenger rail service .................................................................................................................... 35 5. The Aviation Sector .......................................................................................................................................... 36 Sector overview ................................................................................................................................................ 36 Reforming the air transport sector .................................................................................................................. 39 Restructuring Uzbekistan Airways in a more competitive market ................................................................... 40 Investing in airports ......................................................................................................................................... 43 6. Logistics ........................................................................................................................................................... 46 International transport corridors ..................................................................................................................... 46 International logistics centers .......................................................................................................................... 48 Challenges in connectivity ................................................................................................................................ 50 Flows and costs on the main logistics corridors ............................................................................................... 53 Main contributors to high logistics costs ......................................................................................................... 55 Managing transport and logistics as a strategic commodity .......................................................................... 57 7. Opportunities for Innovation in Financing Infrastructure ................................................................................. 60 Potential financing options .............................................................................................................................. 60 Proposed actions for leveraging private sector investments ........................................................................... 63 Instruments to support infrastructure financing ............................................................................................. 66 Potential sources