Uzbekistan is squeezing Washington for more money to transport military supplies along the Northern Distribution Network (NDN). On February 1, just days after Uzbek leader Islam Karimov met with NATO representatives in Brussels, Tashkent announced it was raising transit fees for goods headed for Afghanistan via Uzbek railroads. The hike may be punitive, imposed by Karimov in a fit of pique over a disappointing foreign trip, a source suggests.
No representatives from NATO, the Pentagon’s US Transportation Command (USTRANSCOM), Uzbek Railways, or the commercial shipper that blew the whistle on the “significant” price hike was prepared to say at this time how much rail tariffs in Uzbekistan have increased.
The revelation comes at the same time the Defense Department’s Office of the Inspector General has decided to look into contracting and transit practices all along the NDN. Uzbekistan is a key node on the NDN with large quantities of non-military goods passing through the Termez-Hairaton border crossing with Afghanistan.
FMN Logistics, the Washington DC-based logistics company that revealed the tariff increase in a statement on February 3, described the hike as “significant.” But company representatives declined to specify the dollar amount when contacted by EurasiaNet.org.
Karimov visited NATO headquarters in Belgium on January 24. The cost of sending goods through Uzbekistan “was not discussed” during the Uzbek strongman’s meetings with NATO officials, a NATO spokesperson said on February 9.
A source familiar with NDN-related developments said the rail tariff hike “may be coincidental, but probably isn’t.”
“Karimov’s visit to NATO and the European Union didn’t quite play out as he hoped, what with everyone involved denying they had invited him. This is unlikely to have pleased him,” the source noted.
The increasing costs of NDN rail traffic will be easily absorbed by the US defense budget, said Cynthia Bauer, a spokeswoman for USTRANSCOM. “Globally within the US Defense Transportation System, tariff adjustments are expected and part of the cost of doing business,” Bauer said. “With this in mind, a hike in fees in Uzbekistan has little effect on the United States moving commercial-type cargo into Afghanistan.”
“We have been pleased with the ability of the government of Uzbekistan and the governments of the countries involved in the Northern Distribution Network to expedite our cargo,” she added. Other Pentagon agencies, such as the Inspector General’s Office, may or may not agree with USTRANSCOM’s assessment. International monitoring groups have deemed Uzbekistan as one of the most corrupt countries in the world.
In January, Russian Railways increased rail tariffs for freight by 10 percent and is suggesting an additional increase of 11.7 percent in 2011 to cover “operating costs.” Uzbekistan increased rail tariffs twice in 2010. Tajik sources said the cumulative effect of the 2010 Uzbek hikes was to increase their transit costs by 21 percent.
According to FMN Logistics, the latest Uzbek rail tariff hike is specifically limited to “consigned shipments for United States and International Security Assistance Force (ISAF) non-lethal rail cargo into and out of Afghanistan.”
The NDN is a transit network that enables goods to move from various ports in Western Europe, though Russia, the Caucasus, Central Asia and into Afghanistan. It was developed to supplement a supply line via Pakistani that has proven vulnerable to attack by Islamic militants.
NATO has also successfully developed alternate routes to Afghanistan, including the use of the Iranian port of Bandar Abbas. In 2009 German companies began commercial negotiations with Iran to open new transport routes for non-military goods to Afghanistan. US officials at that time indicated they would not oppose NATO members using an Iranian transit corridor.
According to the FMN Logistics website, the company provides “full supply-chain management to ensure the smooth transit of [European Union] government cargo from various Ports of Entry including Riga, Latvia; Poti, Georgia; Mersin, Turkey and Bandar Abbas, Iran, through to multiple NATO/ ISAF camps in North and South Afghanistan.”
Deirdre Tynan covers Central Asian affairs for EurasiaNet.