Almaty–Issyk-Kul Altnernative Road Economic Impact Assessment

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• Publisher: Asian Development Bank
• Year: 2020
• ISBN:
  9789292626433
• Topic: Technology & Engineering
• Subtopic: Civil Engineering
• Index: Technology & Engineering

Almaty, a vibrant metropolis in Kazakhstan, is only 80 kilometers away from lake Issyk-Kul in the Kyrgyz Republic, renowned for its mountains and moderate summers. However, the two destinations are separated by two magnificent mountain ranges. To bypass these mountains, the existing road stretches over 460 kilometers, leading to long travel times. This economic impact assessment analyzes what impact a more direct road between the two destinations would have for tourism and economic development in both Kazakhstan and the Kyrgyz Republic. The publication provides economically viable solutions that, within a supportive policy environment, would lead to strong economic development within the region.

1

Introduction

1.1 Almaty–Bishkek Economic Corridor

1.     The Almaty–Bishkek Economic Corridor (ABEC) is the pilot economic corridor under the Central Asia Regional Economic Cooperation Program. The ABEC initiative taps into the economic potential of Almaty (Kazakhstan) and Bishkek (Kyrgyz Republic), which are only about 240 kilometers apart from each other.

2.     The ABEC pursues development mainly in three sectors: tourism, agribusiness, and connectivity. This economic impact assessment (EIA) for an alternative road between Almaty and Issyk-Kul aims at increasing connectivity between parts of the ABEC region, for which tourism is of special interest.

3.     The ABEC region (Map 1) comprises the two cities of Almaty and Bishkek, Almaty and Zhambyl oblasts on the Kazakh side of the border, and Chuy and Issyk-Kul oblasts on the Kyrgyz side. Whenever this study uses statistical data, the data will include a total of six geographic units: one city and two oblasts on each side of the border.

Map 1: The Almaty–Bishkek Economic Corridor: Geographic Definition

Source: DIVA-GIS. http://www.diva-gis.org.

1.2 Almaty and Issyk-Kul: Destination Details

4.     Almaty is a modern and vibrant city with a population of 1.9 million and has an international airport, which is Central Asia’s busiest air hub. It has the potential to become increasingly attractive for tourism other than the established business travel, as it is situated in immediate proximity of scenic mountains and natural and cultural monuments. A considerable share of Almaty’s population is able to afford traveling, making it a large and nearby potential market for visitors to Issyk-Kul.¹

5.     Issyk-Kul is situated south of the Tian Shan mountain range and is famous for its large lake (fed by warm springs) and the impressive mountain ranges on both the north and south shores of the lake. Tourism has been the most important economic factor in Issyk-Kul, with many tourism facilities going back to the former Soviet era. With about 23,000 accommodation beds, Issyk-Kul accounts for 78.7% of all domestic and international tourist arrivals of the Kyrgyz Republic.²

Cholpon-Ata on Lake Issyk-Kul. Beach resort at the lakeside.

Almaty from Shymbulak Mountain Area. View into the valley toward Almaty.

6.     The influence the topography has on connectivity and economic bonds between Kazakhstan and the Kyrgyz Republic cannot be overstated. Lake Issyk-Kul is surrounded by mountain ranges with many peaks higher than 5,000 meters of altitude. Issyk-Kul can only be accessed from the east (via road) and from the west (via road and railroad).

7.     While the direct distance between Almaty and Cholpon-Ata on the north shore of Lake Issyk-Kul is only 80 kilometers, the actual travel distance is 460 kilometers, as the road bypasses the Tian Shan mountain range. The average travel time is 6.5 hours, not including border crossing time, reported to often be in the range of 1 hour. While the most direct route crosses the border near Kant (Kyrgyz Republic), that border crossing point (BCP) is largely used by trucks on their way through Naryn to the People’s Republic of China and is therefore avoided by other vehicles. The Sartobe–Tokmok BCP used to be for bilateral exchange only but opened to third-country nationals in March 2020. The Korday–Ak-Jol BCP is often used by international travelers.

8.     For travelers whose starting point or destination is the eastern part of Issyk-Kul, the existing road through Kegen (Kazakhstan) and Karkyra BCPs provide a more direct route to and from Almaty and may be more attractive. It is being rehabilitated and will be open year-round after the rehabilitation is complete.

9.     The only functional airport in the Issyk-Kul area is Issyk-Kul International Airport in Tamchy on the north shore of the lake, which has a few seasonal air connections to cities in Central Asia and the Russian Federation.

1.3 Alternative Road

10.     A new alternative road between Almaty and Issyk-Kul has been in the governments’ and people’s minds for decades; there were plans for a new road in the former Soviet era. In 2007, the European Bank for Reconstruction and Development (EBRD) developed a pre-feasibility study, which analyzed three alternatives in the area between Uzunagash (Kazakhstan)–Kemin (Kyrgyz Republic) and estimated their cost. However, the study was not followed by a more detailed feasibility study. In 2012, the governments of Kazakhstan and the Kyrgyz Republic agreed on a memorandum of understanding committing to build an alternative road between Almaty and Issyk-Kul.

11.     An alternative and more direct road connecting Almaty and Issyk-Kul would lower travel times and travel cost, inducing more frequent travel between the two destinations. This can be expected to have effects on the regional economy on both sides of the border. A new road is intended to be a tool for regional economic development, as it may lead to additional spending, especially in tourism, and stimulate investment. All of these activities would contribute to economic growth.

12.     The EIA is based on three alignments of an alternative road crossing the Tian Shan mountain range (Map 2). While it must be based on specific alignments and their estimated cost, all considered alignments should be understood as representing possible options, which may be planned and complemented in more detail in future studies. The economic impacts of any considered alignment are at the center of this study’s interest. It will inform the governments of the Republic of Kazakhstan and the Kyrgyz Republic as well as private-sector stakeholders about the potential economic outcomes an alternative road would have.

Map 2: Existing Almaty–Issyk-Kul Road and Three Alternatives

Sources: Environmental Systems Research Institute Inc. and the GIS user community.

13.     While the alignments, as presented in Map 2, all connect Almaty and Issyk-Kul, they are in fact situated far from each other and may serve different transportation markets. However, they would all serve visitors originating from the Almaty region or Almaty International Airport and traveling to Issyk-Kul or vice versa. The different alignments are presented and analyzed in more detail in Chapter 3.

2

Objective and Study Approach

2.1 Objective

14.     The EIA will enable ADB and the governments of Kazakhstan and the Kyrgyz Republic to assess the economic outcomes of an investment in a new alternative road between Almaty and Issyk-Kul. The results of the study should demonstrate the relationship between the investment, the traveler benefits, and the short- and long-term economic impacts on each side of the Kazakh–Kyrgyz border. The EIA is also a tool for government and stakeholder involvement, and it can be further used to communicate options concerning economic development and financing.

2.2 Study Approach

15.     This report documents the critical steps, which precede the actual EIA, as well as the methodology and results of the EIA. Data collection as the foundational basis of the study is described in Chapter 2, section 2.3. A comprehensive, albeit approximate, analysis of the different alignments and their cost follow in Chapter 3. Based on travel times resulting from the selected alignments and on additional considerations, changes in travel behavior are assumed and travel demand is estimated (Chapter 4).

16.     The EIA, described in further detail in Chapter 5, is designed to integrate all relevant impacts on the regional economies in both countries. The impacts are summarized and presented in the form of the return on investment (Chapter 6). Financing options for the alternative road are laid out in Chapter 7.

2.3 Sources

17.     The main data sources for this study were government agencies of Kazakhstan³ and the Kyrgyz Republic.⁴ Each agency endeavored to respond to the data requests, but obviously not all of the requested data was available, leaving data gaps. Publicly available statistics were retrieved, and data related to specific road infrastructure projects were received from various sources.

18.     The data obtained included demographic data for cities and oblasts, economic data about employment and income, tourism data (using the ABEC Tourism Master Plan as an additional source), infrastructure data, traffic data (e.g., for current or recent road projects), and financial and tax data. Legal information was also useful. The EIA is based on input–output economic tables, which were used to build a multiregional input–output (MRIO) economic model to determine magnitudes of economic impacts caused by the alternative road.

19.     Meetings were held with representatives of the involved government agencies of both countries. During the initial phase in August 2019, meetings held in Bishkek and Nur-Sultan aimed at presenting this study’s scope and learning about the respective agencies’ perspectives on an alternative road between Almaty and Issyk-Kul. A joint meeting, held during project implementation in Almaty in November 2019, produced answers to specific questions regarding design of the alternative road and travel demand. Toward the end of the project, meetings with representatives of agencies provided feedback on the EIA’s findings and a draft of this report.

20.     Additional meetings were held with individual nongovernment organizations during the initial phase of this study to obtain information about current conditions and the organizations’ perspectives on any such road.⁵

21.     Interviews were conducted in the initial phase of the project, especially with individuals with firsthand knowledge about the tourism industry in Issyk-Kul, to learn about current conditions in the regional industry. Additional interviews with individuals in Almaty, Issyk-Kul, and Bishkek provided information on their travel behavior and how they spend their leisure time (Chapter 4, section 4.3.2).

3

Alignment Analysis and Cost Estimates

3.1 Overview

22. The study includes three different alignments: the western, direct, and eastern alignments. The west...

Table of contents

• Front Cover
• Title Page
• Copyright Page
• Contents
• Tables, Figures, Box, and Maps
• Acknowledgments
• Abbreviations
• Executive Summary
• 1 Introduction
• 2 Objective and Study Approach
• 3 Alignment Analysis and Cost Estimates
• 4 Travel Demand Estimates
• 5 Economic Impact Assessment
• 6 Return on Investment
• 7 Financing and Funding
• 8 Conclusions
• Footnotes
• Back Cover