Ensuring sustainability of transportation system discussed

On 25 May 2020, President of the Republic of Uzbekistan Shavkat Mirziyoyev held a meeting on ensuring sustainable functioning and consistent development of the transport industry.

Transport links around the world have virtually ceased due to the coronavirus pandemic. Carriers suffer serious losses. So, it is expected that civil aviation alone will lose US$113 billion by the end of this year.

To date, domestic transport enterprises have suffered a loss of 340 billion UZS due to quarantine restrictions. And this figure will increase further until the stabilization of the epidemiological situation.

In this regard, a number of measures are being taken in the industry to mitigate the impact of the pandemic and economic support for enterprises. For example, the joint stock companies Uzbekistan Airways and Uzbekistan Airports, the most affected by the quarantine, were granted deferred loans for US$122 million and tax credits for more than 60 billion UZS. Interest-free loans in the amount of US$50 million were provided from the Anti-Crisis Fund as working capital.

Issues of ensuring the stable operation of the transport sector in the new conditions were discussed at the meeting.

The Ministry of Transport was tasked with developing a business model to overcome the consequences of the pandemic for Uzbekistan Airways and Uzbekistan Airports.

Instructions were given to enter the freight market on the Europe – China route, to optimize current and investment costs.

The issues of attracting new air carriers to the civil aviation market in order to increase competition, transfer Uzbekistan Airways to the management of a prestigious foreign company were considered.

Plans to announce a tender for modernization of airports, to transfer the activities of the international airports of Andijan, Bukhara, Urgench and Karshi into a public-private partnership were announced.

During the pandemic, demand for rail transport increased sharply. In particular, the share of railways in international freight traffic increased from 75 to 87 percent. This is a good opportunity to increase the number of customers by improving the quality of services and reducing costs.

However, the obsolescence of fixed assets in the system of Uzbekistan Railways, the abundance of non-core assets in the structure of society complicates the development of main activities.

In this regard, instructions were given on optimizing non-core enterprises as part of Uzbekistan Railways, improving tariff setting mechanisms, updating the wagon and locomotive fleet.

At the meeting, attention was paid to supporting enterprises engaged in the international transport of goods by road.

As a result of reforms over the past three years, the number of vehicles used in international freight transportation tripled in Uzbekistan, the share of domestic enterprises in foreign trade – from 37 to 48 percent.

Measures were identified to further increase the number of domestic carriers and their share in foreign trade to 60 percent. It was noted that one freight transport can provide work for up to five people, which can create 30 thousand new jobs in the industry.

Instructions were given for modernization of buses serving domestic routes in the Republic of Karakalpakstan and the regions, stable provision of such enterprises with financial resources.

The Head of the state touched upon the issue of internal roads, noting their poor condition and people’s discontent with their quality. The need for reconstruction of 80 thousand kilometers of internal roads, introduction of the principle of “user pays”, which is widely used throughout the world, was emphasized.

It was determined that a tender will be announced for Tashkent – Andijan toll road project, which includes the construction of an alternative tunnel at Kamchik pass.

Responsible persons submitted reports on projects implemented in the transport sector.