This looks potentially significant, although the words if feasible are probably quite important. I will try to study the announcement in more detail later this week.

MINISTER SHAHRANI SIGNS HISTORIC RAILWAY AGREEMENT

Kabul: September 22, 2010

Mines Minister Wahidullah Shahrani today signed an historic agreement with the China Metallurgical Company (MCC) for a railway to connect Kabul to Pakistan and Uzbekistan.
This northern railway project is part of the Aynak Copper Mine Contract, signed between the Government and MCC. The contract specifies that MCC constructs a railway, if feasible, from northern Pakistan through Kabul to southern Uzbekistan. This rail link will connect Afghanistan to the railways of Pakistan, India, and South East Asia and to the extensive rail system of China, Europe and Central Asia.

Minister Shahrani said, ‘When complete, the railways will give substantial benefits for the Afghan economy in trade, employment and cheaper prices. This northern railway is part of a wider plan to extend the Afghan rail network to connect Afghanistan to ports in Iran and Pakistan.’

The next step is for MCC to commission and fund a competitive tender for a feasibility study to examine the preferred route proposed by the Government’s Inter-Ministerial Railway Committee. It will take up to two years for the detailed route study and another six months to complete the full feasibility study.

The feasibility of the second part of the railway, from Kabul through Bamyan, Doshe, Kunduse, Niadabob, Hairetan and on to Uzbekistan, will be studied for an additional 18 months with construction to follow.

MCC will build the railway according to the ‘BOOT’ principle – ‘Build, Own, Operate and Transfer’. MCC will own the railway until it has recovered its capital costs through collecting transport fees. The details of the BOOT Agreement will be negotiated once the Government have approved the feasibility study prepared by a independent contractor funded by MCC.

The railway will be designed to have the size and capacity to carry the heaviest of loads – copper cathodes, copper concentrates, and commercial goods for transit, agricultural products, passengers and normal freight.

MCC will employ Afghan labor as much as possible in the construction and operation of the railway. Prior to the transfer of ownership to the Government, MCC will complete a training program for Afghan workers to operate the railway. The training will range from

basic functions to high level executive management.
Estimated costs for the entire railway range from US $ 4 –5 billion. Completion of the entire route could be within five years from starting the detailed route survey.

Benefits
The opening the new railway will bring many benefits to Afghanistan. Costs of goods and services will fall due to lower transportation costs. Huge economic and social development opportunities will arise along the rail route as companies switch from road to rail transport. The mining and extractive industries will become more cost effective along the resource corridor developed with the railway.
Source: Ministry of Mines, 2010-09-22