Validation Meeting for the Study Project on

Commercialization of KTI Railway Corridor

Virtual Meeting

19 May 2020

Key recommendations for

study project on commercialization of

KTI railway corridor

Sandeep Raj Jain

Economic Affairs Officer

Transport Connectivity and Logistics Section

Transport Division

Outline

1. Main features of the KTI railway

corridor

2. Main findings of the studies

under this study project

3. Corridor Management

Mechanism and way forward

Key features of the KTI railway corridor

✓ KTI corridor is rail bypass of Caspian Sea with few

border crossings helps avoid expensive feeder sea

lines

✓ The traffic along the KTI corridor has increased

gradually from around 0.53 MT in 2015 to 1.44 MT

in 2018 an average growth of 28 percent per year

✓ Freight traffic along the corridor is imbalanced with

77 percent traffic flowing in North- South direction

✓ Currently the corridor is used to transport mainly

bulk cargo which is more sensitive to transport

costs than time

✓ Groups of commodities transported in N-S

direction are grains, agricultural products, chemicals

and for S-N direction are minerals and oil products,

foodstuff, construction materials

Main recommendations

Study to address physical and non-

physical barriers along KTI corridor

✓ Dealing effectively with the Break of gauge

including 1520 mm connectivity between Iran

and Turkmenistan

✓ Development and terminal/dry port at Incheh

boron in Iran and Bereket in Turkmenistan

with warehousing and customs clearance

✓ Management of wagons (including issue use of

Iranian wagons on 1520 area); mutual

acceptance of technical inspections; introduce

schedule trains; reduce turnaround time

✓ Review of railway and customs operations

along the corridor with possibility of joint

controls

Main recommendations

Study to address physical and non-

physical barriers along KTI corridor

✓ Technical interoperability -harmonize (axle

load and train length)

✓ Electronic information exchange for

information for completion of railway

operations and customs formalities-

electronic linkages between railways and

customs information system be explored

✓ Harmonized customs/border formalities

along the KTI corridor including acceptance

of consignment note as customs transit

declaration

✓ Performance of KTI railway corridor to

identify bottlenecks; initial estimates travel

time 21.5 hrs. for 942 km KTI

Main recommendationsStudy on enhancing freight flows along KTI

corridor✓ Positive trade dynamics would not itself lead to

changes in competitive position of KTI corridor

though it would double the trade flows- more

needs to be done to attract trade flows

✓ Reduction of transportation price is a key factor for

the enhancement of KTI corridor

✓ Linkages of KTI corridor with other transport

routes/corridors: NS ( India- Iran- TKM- KAZ-

Russian Federation and EW (China- KAZ-TKM-

Iran-Turkey) as it is not linked to major production

center and is not ocean to ocean corridor for

container

✓ Study indicates that taking proactive measures

activating intermodal corridor with India could

increase the traffic through KTI corridor

additionally by 0.6 MT

✓ Tariffs along KTI corridor should be uniform and

easily accessible to market players

KTI corridor management mechanism

For countries to work together in a coordinated way for

operationalization of KTI corridor an institutional

mechanism is required to be formalized through

MOU/agreement

The MOU would explicitly state the common willingness of

the three countries to work together to promote the traffic

and efficient operation of transport services; and indicate

the management mechanism principles

It is vital to preserve the independence of the countries in

adopting the decisions. Therefore,

▪ participation in activities for achieving the goal of the

MoU would be on a voluntary basis

▪ all decisions would be taken by consensus

▪ all provisions of the MoU would be without prejudice to

the competence of the States regarding the organization

of the railway transport services on their territory

KTI Corridor Management Structure

STEERING COMMITTEE

RAILWAY ADVISORY

GROUP

BORDER CROSSING ADVISORY

GROUP

NATIONAL RAILWAY

COMPANIES

MINISTERIAL MEETING

STATES GOVERNMENTS

constitute constituteSTATES

AUTHORITIES

consultation TRANSPORT MARKET

Features of KTI Corridor Management Mechanism

Three layered hierarchical structure (a) Ministerial Meeting; (b) Steering

Committee; (c) Advisory Groups

Ministerial Meeting: Highest authority, composed of minister in charge of

railway and chaired by one of them in rotation, meets annually, discuss and

approve all major decisions

Steering Committee- executive body of the corridor, appointed by the

governments, selects chair by rotation for two years; coordinate activities

as per mandate received from ministerial meeting; meets 2 to 3 times year

and takes decisions by consensus; prepares agenda and documents for the

MM. Between two consecutive meetings, the designated members of the

Steering Committee will work from their countries to make progress on

the tasks as agreed

Representatives of the forwarding companies, main customers, and owners

of private railway fleet can be invited to examine on-going issues of

relevance to the Steering Committee

Features of KTI Corridor Management Mechanism

Advisory Groups are ad-hoc structures created on voluntary

commitment of the three countries for addressing specific

issues which require professional expertise

The Steering Committee has the decision power to

recommend the creation of as many Advisory Groups as

necessary for the resolution of the urgent tasks agreed in the

Annual Action Plan for the implementation of the KTI Rail

Corridor

The Advisory Groups will meet as necessary, but at least four

times a year and shall agree on all issues, by consensus. The

agreements achieved in the Advisory Groups shall be

presented to the Steering Committee for approval

Two Advisory Groups are recommended to be created at the

initial stage of implementing the proposed management

structure of the KTI Rail Corridor, as follows: (i) Railway

Advisory Group, and (ii) Border Crossing Advisory Group

Measuring performance of the KTI corridor

Corridor Capacity

• Volume of provided

capacity

• Volume of used capacity

Corridor Operations and

Infrastructure Quality

• Number of train runs

• Punctuality of trains at

origin

• Punctuality of trains at

destination

• Planned average speed vs

actual average speed

Market Development

• Traffic volume (annual

tons-km and train-km)

Customs Procedures

Efficiency

• Planned time for the

custom procedures by

border crossing point

• Realized time for the

custom procedures by

border crossing point

Corridor Traffic Safety

Proposed key performance indicators

Way forward

Complete online meetings with

Turkmenistan and Kazakhstan

Finalize the MOU or intergovernmental

agreement for operationalization of KTI

freight transport corridor

Website for KTI corridor

Meeting of heads of railways for

MOU/intergovernmental agreement

Preparation of evaluation report and

project closure

http://www.unescap.org/our-work/transport

Thank you

for

your attention